Karelian Diamond Res. Fundraising and Debt Capitalisation

 
TIDMKDR 
 
PRIOR TO PUBLICATION, THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT WAS 
DEEMED BY THE COMPANY TO CONSTITUTE INSIDE INFORMATION FOR THE PURPOSES OF 
REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019/310. 
WITH THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INFORMATION IS NOW CONSIDERED 
TO BE IN THE PUBLIC DOMAIN. 
 
IN ADDITION, MARKET SOUNDINGS WERE TAKEN IN RESPECT OF CERTAIN OF THE MATTERS 
CONTAINED WITHIN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME 
AWARE OF INSIDE INFORMATION. UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A 
REGULATORY INFORMATION SERVICE, THOSE PERSONS THAT RECEIVED INSIDE INFORMATION 
IN A MARKET SOUNDING ARE NO LONGER IN POSSESSION OF SUCH INSIDE INFORMATION, 
WHICH IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN. 
 
                                                                    19 May 2023 
 
                        Karelian Diamond Resources plc 
 
                    ("Karelian Diamonds" or the "Company") 
 
  Fundraising of £100,000, Debt Capitalisation and Related Party Transactions 
 
HIGHLIGHTS: 
 
  * Financing of £362,500 including fundraising of £100,000, issue of 
    Convertible Loan for £112,500 together with Debt Capitalisation of £125,000 
    and Creditor Conversion of £25,000 
  * Fundraising, Debt Capitalisation and Creditor Conversion totalling £250,000 
    at 2.5 pence per share 
  * Convertible Loan of £112,500 issued, convertible at 5 pence per share 
  * Both the Debt Capitalisation and Convertible Loan agreed with Conroy Gold 
    and Natural Resources PLC 
  * Funds to be used to accelerate exploration programmes in Finland and 
    Ireland 
 
Karelian Diamond Resources PLC (AIM: KDR), the diamond and base metals 
exploration and development company focused on Finland and Ireland, is pleased 
to announce a fundraising of £100,000 to accelerate exploration on its 
exploration programmes for diamonds in the Kuhmo region of Finland, where 
interpretation of geophysical data has revealed a series of kimberlite targets 
(announced by the Company on 7 June 2022), and exploration for nickel, copper 
and platinum group metals in Northern Ireland. 
 
The Company has also entered into an agreement with Conroy Gold and Natural 
Resources PLC ("Conroy Gold") in relation to a debt capitalisation of £125,000 
and a further debt exchange into a convertible loan of £112,500, further 
details of which are set out below. 
 
FUNDRAISING SUMMARY 
 
  * Placing of 4,000,000 new ordinary shares (the "Fundraising Shares") of ? 
    0.00025 each ("Ordinary Shares") to raise £100,000 before expenses (the 
    "Fundraising"). 
  * The Fundraising was arranged at 2.5 pence per share (the "Issue Price"), 
    representing a discount of 3.8 per cent. to the closing mid-market price of 
    2.6 pence per Ordinary Share on 18 May 2023. 
  * In conjunction with the Fundraising, certain parties have also capitalised 
    amounts owed to them totalling £25,000 through satisfaction of these 
    amounts by the issue of 1,000,000 new Ordinary Shares at the Issue Price 
    (the "Investment Shares"). 
  * The Fundraising increases the Company's exploration capacity and 
    strengthens its working capital position. 
  * Each Fundraising Share and Investment Share carries a warrant to subscribe 
    for one new Ordinary Share at a price of 5 pence per ordinary Share 
    exercisable for a period of 18 months from Admission (as defined below), 
    creating 5,000,000 warrants (the "Fundraising Warrants"). 
  * The Fundraising has been arranged by First Equity Ltd who are acting as 
    placing agent to the Company for the purposes of the Fundraising. First 
    Equity Ltd will be issued with 400,000 warrants at a price of 2.5 pence per 
    Ordinary Share exercisable for a period of 18 months from Admission of the 
    Fundraising Shares ("Broker Warrants" and, together with the Fundraising 
    Warrants, the "Warrants"). 
  * If at any time during the warrant exercise period the volume-weighted 
    average price (VWAP) of the Ordinary Shares exceeds 7.5p for 5 trading days 
    then the Company may give warrant holders notice to exercise their warrants 
    no later than 10 days after receipt of the notice following date which the 
    warrant will lapse.  Should all the above Fundraising Warrants be exercised 
    on or before 30 November 2024, this would generate an additional £250,000 
    of funding for the Company over and above the amount secured through this 
    Fundraising. There can be no guarantee that any Warrants will be exercised 
    in the future and that additional proceeds will be received by the Company. 
 
DEBT CAPITALISATION BY CONROY GOLD AND NATURAL RESOURCES PLC 
 
As set out in the Company's financial statements, the Company shares 
accommodation and staff with Conroy Gold which has certain common directors and 
shareholders.  As at the end of the six-month period ending 30 November 2022 
Conroy Gold was owed ?234,651. The Company has agreed with Conroy Gold that it 
will capitalise an amount equivalent to £125,000 of this balance into 5,000,000 
new Ordinary Shares at the Issue Price (the "Debt Capitalisation Shares"). 
Remaining outstanding amounts equivalent to £112,500 will be incorporated into 
a convertible loan note (the "Loan Note") with a term of 18 months attracting 
an interest rate of 5% per annum payable on the redemption or conversion of the 
Loan Note.   The Loan Note can be converted at the option of Conroy Gold at 5 
pence per Ordinary Share, which is equivalent to the exercise price of the 
Fundraising Warrants. 
 
On Admission, Conroy Gold will be interested in 5,000,000 Ordinary Shares 
equivalent to 5.29% of the enlarged issued share capital of Karelian Diamonds 
on Admission. 
 
During the year ended 31 May 2022 Conroy Gold generated a loss before taxation 
of ?256,484 on ?nil turnover. Net assets of Conroy Gold as at 30 November 2022 
were ?22,623,787. 
 
WORK PROGRAMME 
 
The additional funding raised by Karelian Diamonds will contribute to the cost 
of the work programmes detailed in the Company's announcement on 24th April 
2023 and specifically in relation to the commencement of further work in the 
Kuhmo region of Finland exploring for diamonds and in Northern Ireland for 
nickel, copper and platinum group metals. 
 
DEBT CAPITALISATION - RELATED PARTY TRANSACTIONS 
 
The issue to Conroy Gold of the Debt Capitalisation Shares and the Loan Note 
are deemed to be related party transactions pursuant to rule 13 of the AIM 
Rules for Companies. 
 
The Independent Directors (being Seamus Fitzpatrick and Dr Sor?a Conroy) 
consider, having consulted with the Company's nominated adviser, Allenby 
Capital Limited, that the terms of the Debt Capitalisation and the Loan Note 
are fair and reasonable insofar as Shareholders are concerned. 
 
ADMISSION, WARRANTS AND TOTAL VOTING RIGHTS 
 
An application will be made to admit the Fundraising Shares, the Investment 
Shares and the Debt Capitalisation Shares (totalling 10,000,000 new Ordinary 
Shares) to trading on the AIM market of the London Stock Exchange on or around 
26 May 2023 ("Admission").  The Fundraising Shares and the Investment Shares 
have been issued to a combination of mainly new investors and certain existing 
shareholders and, together with the Debt Capitalisation Shares, will represent 
approximately 10.58 per cent. of the enlarged issued share capital of the 
Company. 
 
The Fundraising and Debt Capitalisation has been conducted within the Company's 
existing share authorities and is conditional on admission of the Fundraising 
Shares, the Investment Shares and the Debt Capitalisation Shares to trading on 
AIM becoming effective. 
 
Following the Admission, the issued share capital of the Company will comprise 
94,492,749 Ordinary Shares, with one voting right per Ordinary Share. The 
Company does not hold any shares in treasury. Therefore, the total number of 
Ordinary Shares and voting rights in the Company will be 94,492,749. 
 
Following Admission, the above figure may be used by shareholders in the 
Company as the denominator for the calculations by which they will determine if 
they are required to notify their interest in, or a change to their interest 
in, the share capital of the Company under the FCA's Disclosure Guidance and 
Transparency Rules. 
 
Further Information: 
 
Karelian Diamond Resources plc 
Professor Richard Conroy, Chairman                         [phone] 
 
Allenby Capital Limited (Nomad) 
Nick Athanas / Nick Harriss                                [phone] 
 
First Equity Limited (Broker) 
Jason Robertson                                            [phone] 
 
Lothbury Financial Services 
Michael Padley                                             [phone] 
 
Hall Communications 
Don Hall                                                   [phone] 
 
http://www.kareliandiamondresources.com 
 
 
 
END 
 
 

(END) Dow Jones Newswires

May 19, 2023 02:00 ET (06:00 GMT)