27 November
2024
Karelian Diamond Resources
plc
(“Karelian” or “the
Company”)
FINAL RESULTS FOR THE YEAR
TO 31 MAY
2024
NOTICE OF ANNUAL GENERAL
MEETING
Karelian Diamond Resources
plc (AIM: KDR), the diamond exploration company focused on
Finland, announces its Audited
Accounts for the year ended 31 May 2024. Details of these can
be found below and a full copy of the Annual Results can be viewed
on the Company’s website. During the period progress
was made in developing the Company’s prospects in both Finland and Ireland.
Highlights of the period
included:
-
The long awaited decision
regarding mine boundaries for the Lahtojoki diamond deposit were
finalised, post year end, at a hearing of the Finnish Land Court
resulting in no change to the existing boundaries. This decision
was an essential step as the Company proceeds with its plans for
the proposed development of the Lahtojoki diamond
deposit.
-
Additionally, regarding
the appeals by two landowners the majority of the items were
rejected by the Land Court. Three items were referred back to the
Land Survey to
review.
-
Analysis of basal till
samples excavated at various target locations in the Kuhmo region
of Finland, suggests that the
Company’s search for the source of the green diamond the Company
discovered has narrowed, with garnets, identified in two sample
locations. This suggests close proximity to a kimberlite
source.
-
The Company’s exploration
programme for Nickel, Copper and Platinum - Group Elements in
Northern Ireland adds a
significant, exciting and possibly very important wing to the
Company’s diamond exploration and development programme in
Finland. The Company now holds three prospecting licences,
totalling an area of approximately 750Km², in Northern
Ireland.
-
Samples from a stream
sediment sampling programme over the prospecting licences
dispatched for analysis and an independent assessment carried
out.
Brendan McMorrow,
Chairman of Karelian,
said:
“I have pleasure in
presenting the Company's Annual Report and Financial Statements for
the year ended 31 May 2024. However, it is also tinged with
great sadness as I do so following the passing of our founder and
Executive Chairman, Professor Richard
Conroy. It now falls to myself and the team to continue
Richard’s work and I look forward with confidence to continued
success for the Company both in Finland, where we are looking to open a
diamond mine, and in Northern
Ireland where we have potential Nickel, Copper and Platinum
- Group Elements deposits.”
Annual Report and Accounts
for the year to 31 May
2024
The full audited annual
report and accounts for the year to 31 May
2024 has been posted to shareholders and will be published
on the Company's website (www.kareliandiamondresources.com)
shortly. Key elements can also be viewed at the bottom of this
announcement.
Annual General
Meeting
The Annual General Meeting
of the Company ("AGM") will be held at The Conrad Dublin Hotel,
Earlsfort Terrace, Dublin at
12.30pm on 18
December 2024. A copy of the notice of AGM can be viewed on
the Company's website.
Further
Information:
|
Karelian Diamond Resources
plcBrendan McMorrow,
ChairmanMaureen Jones, Managing
Director |
+353-1-479-6180 |
|
Allenby Capital Limited
(Nomad)Nick
Athanas / Nick
Harriss |
+44-20-3328-5656 |
|
Peterhouse Capital
Limited (Joint
Broker)Lucy
Williams / Duncan
Vasey |
+44-20-7469-0930 |
|
CMC Markets (Joint
Broker)Douglas
Crippen |
+
44-20-3003-8632 |
|
Lothbury Financial
ServicesMichael
Padley |
+44-20-3290-0707 |
|
Hall
Communications
Don
Hall |
+353-1-660-9377 |
http://www.kareliandiamondresources.com |
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Chairman’s
statement
Dear
Shareholder,
I have pleasure in presenting the Company's Annual
Report and Financial Statements for the year ended 31 May
2024. However it is also tinged with great sadness as I do so
following the passing of our founder and Executive Chairman,
Professor Richard Conroy after a
brief illness.
Richard’s accomplishments across the diverse range of
medicine, politics and indeed mineral exploration garnered respect
from all. His entrepreneurial and inquiring spirit was
excited by the opportunities in mine exploration and development,
and his skills, honed in zinc and gold projects in Ireland, spread to Finland where his vision of the Karelian
Craton having the potential for a significant European diamond mine
is being steadily realised by the Company. Equally, the
Company’s recent progress on its Copper, Nickel and Platinum-Group
Elements project in Northern
Ireland held true to his belief in the potential of
Ireland to provide a European
solution to the shortfall in critical minerals necessary for a
modern economy. In Karelian Diamond Resources, we intend to
continue to build on his substantial legacy and deliver on
Richard’s vision for the company.
The Lahtojoki Diamond
Deposit
The mine boundaries for the Lahtojoki diamond deposit
were finalised, post year end, at a hearing of the Finnish Land
Court resulting in no change to the existing boundaries. This
decision in relation to the boundaries was an essential and long
awaited step as the Company proceeds with its plans for the
proposed development of the Lahtojoki diamond
deposit.
Additionally, regarding the appeals by two landowners
regarding the amount of compensation payable to them, the majority
of the items upon which they had based their claims were rejected
by the Land Court, except for three items which were referred back
to the Land Survey to review. The appellants were also required to
contribute to the Company’s legal
costs.
We will provide further updates on this matter as and
when we are in a position to do so.
Diamond Exploration Programme in Finland
The Company is, however, not only involved in the
development of the Lahtojoki diamond deposit in Finland, which it owns, but is also active in
an increasingly exciting diamond exploration programme in
Finland.
Diamond kimberlites are generally found in Cratons.
These are areas of ancient crustal stability such as those found in
Southern Africa and in
Canada. The Karelian Craton which extends across Finland, is one of the largest Cratons in the
world and has been proven to contain world class diamond deposits.
In general terms the larger the Craton, the larger the
kimberlites.
The presence of the Lahtojoki diamond deposit
confirms that the Finnish section of the Karelian Craton is
diamondiferous, and the sheer size of the Karelian Craton in
Finland suggests the potential for
the occurrence of a world class diamond
deposit.
The Company has carried out an extensive and
systematic exploration programme for diamonds in Finland using, inter alia, geology,
geophysics, kimberlitic indicator trains, airborne and UAV
(unmanned aerial vehicle) drone surveys together with excavation
and drilling and the analysis of basal till samples. The programme
led to the previous discovery of a green diamond in the Kuhmo
region of Finland – the best
possible kimberlitic indicator.
Analysis of basal till samples excavated at various
target locations in the Kuhmo region of Finland, suggests that the Company’s search
for the source of the green diamond has narrowed, with garnets
identified in two sample locations which suggest close proximity to
a kimberlite source.
Exploration for Nickel, Copper and Platinum Group
Metals in Northern
Ireland
It is not entirely unusual for a company engaged in
diamond exploration to be successful in Nickel, Copper and
Platinum- Group Elements exploration. One of the most
successful discoveries in this context was the Voisey’s Bay nickel
–copper – cobalt deposit in Labrador,
Canada, one of the largest nickel discoveries in the
world.
The Company’s exploration programme for Nickel,
Copper and Platinum-Group Elements in Northern Ireland adds a significant, exciting
and possibly very important wing to the Company’s diamond
exploration and development programme in
Finland.
The Company now holds three prospecting licences,
totalling an area of approximately 750Km2, in Northern Ireland. Samples from a stream
sediment sampling programme over the prospecting licences were
previously dispatched to Overburden Drilling Management Limited
(“ODM”) in Canada for mineral
concentration, picking and analysis for indicator mineralogy using
ODM’S trade-marked metamorphic/ magmatic massive sulphide indicator
minerals (MMSIMS) technique. ODM has been a key contributor
to numerous discoveries world-wide, including the Voisey’s Bay
discovery in Canada. The results
of this programme, taken in conjunction with results from a
previous programme indicate a highly anomalous river catchment
area. Five samples each yielded over 1,000 indicator minerals for
Nickel, Copper and Platinum
mineralisation.
An independent assessment by Dr Larry Hulbert, an internationally recognised
expert in Nickel, Copper and Platinum – Group Elements, confirmed
the potential for Nickel, Copper and Platinum-Group Elements in the
Company’s licence areas in Northern
Ireland. Dr Hulbert’s review also noted marked resemblances
to the Baraga Basin in
Michigan that hosts the world
class Eagle and Eagle East Nickel - Copper and Platinum–Group
Elements deposits and recommended that the Eagle deposit should
serve as Karelian’s exploration
model.
Environmental, Social and Governance
Issues
Environmental, social and governance (ESG) issues are
becoming increasingly critical in the Mining industry. Great
emphasis is placed by the Company on these issues and the Company
is committed to high standards of corporate governance and
integrity in all its activities and operations, including rigorous
health and safety compliance, environmental consciousness and the
promotion of a culture of good ethical values and
behaviour.
Financials
The loss after taxation from continuing operations for
the financial year ended 31 May 2024
was €237,160 (31 May 2023: loss of
€291,467) and the net assets of the Company at 31 May 2024 were €9,741,609 (31 May 2023: €9,786,074). During the year there
was a fundraising of £250,000 at 2.5
pence per ordinary share. Post year end a further
fundraising of £328,747 at 1.5 pence
per ordinary share was
concluded.
Directors and
Staff
I would like to express my very deep appreciation of
the support and dedication of Directors, staff, and consultants
which has made possible the continued progress and success which
the Company has achieved.
Future
Outlook
I look forward with confidence to continued success
for the Company both in diamond exploration and development in
Finland and in Nickel, Copper and
Platinum-Group Elements exploration in Northern
Ireland.
Brendan
McMorrow
Chairman
26
November 2024
Professor Richard Conroy – an
Appreciation
Professor Richard Conroy (1933 – 2024) – Former Chief
Executive and Chairman of the Board of
Directors
Professor Richard T. W. L. Conroy, who died on the
14th October 2024, was a proud
Irishman whose life in all its forms was an inspiration to all,
especially those close to him and those who will remember him for
his devotion to family, his great faith and enduring courtesy, and
for his work in public office, medicine, education and natural
resources exploration and
development.
His was a long and
productive life exemplified by his many undertakings and
achievements. He leaves a rich legacy not least amongst those who
loved and admired him as family, neighbours, colleagues, and all
who enjoyed his friendship, and amongst those dedicated colleagues
and associates inspired by his incredible intellect, energy and
passion.
Born in Birmingham in 1933, Richard returned to
Ireland at age 5, prior to the
demise of his father, himself a Professor of
Spanish.
A gentleman, entrepreneur,
businessman, diplomat and politician, Richard was deeply devoted to
his family, and generous in contributing his deep knowledge,
experience, and expertise to a wide range of disciplines across the
many and varied fields in which he was successful. Qualified
as a medical doctor, his pioneering work on the study of Circadian
Rhythms gained him his PhD. In 1969 he was appointed Professor of
Physiology at the Royal College of Surgeons in
Ireland - one of the youngest ever professional
appointments in the British Isles, and a post he held until his
retirement in 1998.
A Founder Fellow of the
Faculty of Occupational Medicine and an eundem Fellow of the Royal
College of Physicians of Ireland,
Richard brought his business acumen to the fore as Chairman of
Tallaght Hospital Board, successfully overseeing its construction
and commissioning, under budget and on
time.
A proud Irishman and
member of Fianna Fail, he was
elected a member of Seanad Eireann on two separate occasions
(1977-1981 & 1989-1993) holding posts as Government spokesman
in the Upper House on Industry and Commerce, Foreign Affairs, and
Northern Ireland. In local government, he served as a
member of Dublin County Council for Ballybrack (1991-1994) and Dún
Laoghaire-Rathdown County Council (1994-1999) holding the position
of ‘Cathaoirleach’ (Chairman). Until his death, Richard also
represented Ireland as member of
the Executive Council and Chairman of the Irish group on the
Trilateral Commission - a body founded in 1973 to foster closer
cooperation between Western
Europe, Japan, and
North
America.
A champion of the Irish
natural resource sector, Richard’s fascination with the world of
geology, the process of exploration, the joy of discovery, and his
unswerving drive to prove that Ireland is indeed a nation ‘rich in natural
resources’ together combined to find expression in a way that
younger generations now working in the sector may well reflect upon
with admiration. His activities in the natural
resource sector began with the establishment of Trans-International
Oil Exploration Ltd in 1975 – a venture that later merged with Aran
Energy and was subsequently acquired by Statoil in
1979.
Enough to light the flame
that was to inspire him throughout his commercial life, Richard
founded Conroy Petroleum and Natural Resources in 1980 which, only
six years later, went on to discover the Galmoy, Co. Kilkenny zinc and lead
deposit.
Critical for the revival
of the minerals industry in Ireland - it being the first commercial
discovery since the Navan mine in
1970 - Richard brought Galmoy from a greenfield discovery through
feasibility studies, the environmental impact phase, and the
permitting process. This vital work led to the emergence of Galmoy
as an operating mine, generating over 200 jobs within the local
area, 300 additional jobs in the wider economy, and a contribution
to the State of €65m in royalties, taxes, and rates. (Significant
in this context was the discovery along trend in 1990 of the
adjacent Lisheen deposit)
Before moving into gold
exploration with the setting up of Conroy Diamonds and Gold,
Richard’s appetite for exploration had been whetted by the success
of Stoneboy consortium whose discovery of the Pogo gold deposit in
Alaska transformed into a
world-class gold mine that is still in
production.
With Conroy Diamonds and
Gold formed, Richard turned his focus towards Clontibret in
Co. Monaghan, inspired by his
memory as a young man of a gold discovery made there in 1956, down
what was an old Antimony
mine.
Virtually in parallel, his
knowledge of Finland, the story of
a diamond found in till in Eastern
Finland, and his awareness that significant diamond deposits
existed across the border in Russia, together led Richard and Conroy
Diamonds and Gold to conduct a diamond exploration programme in
that country.
One of the first foreign
companies granted an exploration licence after Finland had opened its doors to foreign
investment, in order to facilitate this and other plans he had in
mind, Karelian Diamond Resources was formed while Conroy Diamonds
and Gold evolved into the more appropriately named Conroy Gold and Natural Resources.
Pursuing his belief - triggered by his memory of gold found there
in an old Antimony mine – Richard steered Conroy Gold and Natural Resources towards
Clontibret where - through an extensive exploration programme - a
517,00- ounce Au JORC Resource, open in all directions, has been
defined there in the heart of what later proved to be the
highly-prospective Longford-Down
Massif.
Fervent in his belief that
Ireland was an emerging gold
province with significant potential for economic scale ore bodies,
Richard’s inquisitive mind led him to explore the wider potential
of the region, a pursuit in which two district scale gold trends
were discovered: the Orlock and Skullmartin discoveries with a
combined surface gold anomalism of 90kms. This
systematic approach to exploration recently led to the discovery of
visible 123.0 g/t Au (native) gold in outcrop. In
Finland, his leadership at
Karelian Diamond Resources has moved the dial forward from a belief
that diamonds may exist there to the discovery of a new emerging
kimberlite province in that country’s Kuhmo
region.
There, the Company has
discovered the Riihivaara kimberlite and established the Seitaperä
kimberlite pipe as the largest (6.9Ha) kimberlite in Finland. In addition, the Company has
discovered a green diamond in till and identified a series of
significant regional kimberlitic indicator mineral
anomalies.
Of special interest is the
Lahtojoki diamond deposit acquired by the Company – now at an
advanced stage of being granted a mining permit to proceed with
development. A key feature of the Lahtojoki diamond deposit
highlighted by Richard is the significant percentage of coloured
(pink) diamonds believed to be present there which, upon recovery,
would create at Lahtojoki the first diamond mine in the
EU. Richard’s vision always was the discovery of world
class deposits that could be proven economic through development
into mines: a vision he demonstrated at Galmoy and Pogo, and
currently in the development of Clontibret and at
Lahtojoki.
Ever focused as he was, he
had an amazing eye for detail, a naturally inquisitive mind, and an
ability to look at things just slightly differently, manifest in
the number of successes he has seen, and in his contention that a
‘little bit of luck’ is very often the vital element that every
successful explorer needs. Intrigued by that thought,
and by the story of the discovery in 1816 of a diamond in
Co. Fermanagh known as ‘The
Brookeborough Diamond’, another major chapter in the life of
Professor Richard Conroy has opened
which, at his death, was coming to fruition. Code named
the Fermanagh Ni-Cu-PGE project, it represents yet another example
of the genius that Richard brought to his various undertakings.
With the knowledge in the mid-1990s of the discovery in Fermanagh -
revealing potential kimberlite indicator minerals – Richard felt
that further investigation was warranted, particularly in
conjunction with the TELLUS airborne geophysical
data.
As the world class Nickel
discovery at Voisey’s Bay in Canada would suggest, diamond exploration can
sometimes lead to the discovery of
Nickel-Copper-PGE. Following positive results
from a stream sampling programme on Karelian’s licences, the
exploration programme carried out by the Company in Fermanagh led
to an exciting new development: revealed in a detailed technical
review was the potential for the discovery in Northern Ireland of a major Nickel, Copper,
and Platinum Group elements
deposit.
A steadfast and consistent
voice in the support and promotion of the Irish exploration and
mining industry, and the attractiveness of Ireland as a destination for inward
investment, Richard was a popular and familiar delegate and
exhibitor at leading industry-related events. A steadfast
supporter of the Irish Association for Economic Geology, he
attended all major events, always willing to provide sponsorship
for activities - one being the Prospectors Developers Association
Convention in Toronto.
From Medicine to Mining,
Richard has left a rich and enduring legacy. Those close to him
will be sustained by the memory of an exceedingly kind and
courteous gentleman and a man of great faith; a loving family
man devoted to his late wife Pamela, and to his daughters Deirdre
and Sorca, his grandchildren, sons-in-law and their loved ones all.
May he Rest in Peace.
Ní bheidh a leithéid arís
ann, ar dheis Dé go raibh a anam
dilis.
Extract from the Independent Auditor's
Report
The following section is extracted from the
Independent Auditor's Report but shareholders should read in full
the Independent Auditor's Report contained in the Annual
Report.
In auditing the financial
statements, we have concluded that the directors’ use of the going
concern basis of accounting in the preparation of the financial
statements is appropriate.
We draw attention to Note
1 in the financial statements, which indicates that the Company
recorded a loss of €237,160 for the financial year ended
31 May 2024 and had net current
liabilities of €1,948,585 as at that
date.
As stated in Note 1 in the
financial statements, these events or conditions indicate that a
material uncertainty exists that may cast significant doubt on the
Company’s ability to continue as a going concern. Our opinion is
not modified in respect of this
matter.
Our evaluation of the
directors’ assessment of the Company’s ability to continue to adopt
the going concern basis of accounting
included
-
obtaining an understanding
of the Company’s relevant controls over the preparation of cash
flow forecasts and approval of the projections and assumptions used
in cash flow forecasts to support the going concern
assumption;
-
assessing the design and
determining the implementation of these relevant
controls;
-
evaluating directors’
plans and their feasibility by agreeing the inputs used in the cash
flow forecast to expenditure commitments and other supporting
documentation;
-
challenging the
reasonableness of the assumptions applied by the directors in their
going concern
assessment;
-
obtaining confirmations
received by the Company from the directors and former directors
evidencing that they will not seek repayment of amounts owed to
them by the Company within 12 months of the date of approval of the
financial statements, unless the Company has sufficient funds to
repay;
-
assessing the mechanical
accuracy of the cash flow forecast model;
and
-
assessing the adequacy of
the disclosures made in the financial
statements
Statement of profit or
loss
for the financial year
ended 31 May
2024
|
|
2024 |
|
|
2023 |
|
|
€ |
|
|
€ |
|
|
|
|
|
|
|
Continuing
operations |
|
|
|
|
|
|
Operating
expenses |
|
(418,312) |
|
|
(297,386) |
|
Movement in fair value of
warrants |
|
187,628 |
|
|
9,565 |
|
|
|
|
|
|
|
Operating
loss |
|
(230,684) |
|
|
(287,821) |
|
|
|
|
|
|
|
Interest
expense |
|
(6,476) |
|
|
(3,646) |
|
|
|
|
|
|
|
Total finance
costs |
|
(6,476) |
|
|
(3,646) |
|
|
|
|
|
|
|
Loss before
taxation |
|
(237,160) |
|
|
(291,467) |
|
|
|
|
|
|
|
Income tax
expense |
|
- |
|
|
- |
|
|
|
|
|
|
|
Loss for the financial
year |
|
(237,160) |
|
|
(291,467) |
|
|
|
|
|
|
|
Loss per
share |
|
|
|
|
|
|
Basic and diluted loss per
share |
|
(0.0023) |
|
|
(0.0038) |
|
|
|
|
|
|
The total loss
for the financial year is entirely attributable to equity holders
of the Company.
Statement of comprehensive
income
for the financial year
ended 31 May
2024
|
|
2024 |
|
|
2023 |
|
|
€ |
|
|
€ |
|
|
|
|
|
|
|
Loss for the financial
year |
|
(237,160) |
|
|
(291,467) |
|
|
|
|
|
|
|
Income
recognised
in other comprehensive
income |
|
- |
|
|
- |
|
|
|
|
|
|
|
Total comprehensive loss for the financial
year |
|
(237,160) |
|
|
(291,467) |
The total comprehensive
loss for the financial year is entirely attributable to equity
holders of the
Company.
Statement of financial
position
as at 31 May 2024
|
|
31
May |
|
31
May |
|
|
|
2024 |
|
2023 |
|
|
|
€ |
|
€ |
|
|
Assets |
|
|
|
|
|
|
Non-current
assets |
|
|
|
|
|
|
Intangible
assets |
|
11,690,194 |
|
11,265,894 |
|
|
Total non-current
assets |
|
11,690,194 |
|
11,265,894 |
|
|
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
|
Cash and cash
equivalents |
|
39,597 |
|
116,038 |
|
|
Other
receivables |
|
81,551 |
|
79,003 |
|
|
Total current
assets |
|
121,148 |
|
195,041 |
|
|
|
|
|
|
|
|
Total
assets |
|
11,811,342 |
|
11,460,935 |
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
Capital and
reserves |
|
|
|
|
|
|
Share capital presented as
equity |
|
3,203,532 |
|
3,200,882 |
|
|
Share
premium |
|
10,736,889 |
|
10,546,844 |
|
|
Share-based payments
reserve |
|
450,658 |
|
450,658 |
|
|
Retained
deficit |
|
(4,649,470) |
|
(4,412,310) |
|
|
Total
equity |
|
9,741,609 |
|
9,786,074 |
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
|
|
Derivative
liability |
|
- |
|
10,304 |
|
|
Convertible
loan |
|
- |
|
119,246 |
|
|
Warrant
liabilities |
|
- |
|
109,224 |
|
|
Total non-current
liabilities |
|
- |
|
238,774 |
|
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
Trade and other
payables |
|
1,903,601 |
|
1,436,087 |
|
|
Convertible
loan |
|
125,722 |
|
- |
|
|
Derivative
liability |
|
10,304 |
|
- |
|
|
Warrant
liabilities |
|
30,106 |
|
- |
|
|
Total current
liabilities |
|
2,069,733 |
|
1,436,087 |
|
|
|
|
|
|
|
|
Total
liabilities |
|
2,069,733 |
|
1,674,861 |
|
|
|
|
|
|
|
|
Total equity and
liabilities |
|
11,811,342 |
|
11,460,935 |
|
The financial statements
were approved by the Board of Directors on 22 November 2024 and authorised for issue on
26 November
2024.
Statement of changes in
equity
for the financial year
ended 31 May
2024
|
|
|
Share
capital |
Share
premium |
Share-based payment
reserve |
Retained
deficit |
Total equity |
|
|
|
€ |
€ |
€ |
€ |
€ |
|
Balance at 1 June
2023 |
|
3,200,882 |
10,546,844 |
450,658 |
(4,412,310) |
9,786,074 |
|
Share
issue |
|
2,650 |
298,555 |
- |
- |
301,205 |
|
Share issue
costs |
|
- |
(108,510) |
- |
- |
(108,510) |
|
Loss for the financial
year |
|
- |
- |
- |
(237,160) |
(237,160) |
|
Balance at 31 May
2024 |
|
3,203,532 |
10,736,889 |
450,658 |
(4,649,470) |
9,741,609 |
|
|
|
|
|
|
|
|
|
Balance at 1 June
2022 |
|
3,191,807 |
9,959,181 |
450,658 |
(4,120,843) |
9,480,803 |
|
Share
issue |
|
9,075 |
610,824 |
- |
- |
619,899 |
|
Share issue
costs |
|
- |
(23,161) |
- |
- |
(23,161) |
|
Loss for the financial
year |
|
- |
- |
- |
(291,467) |
(291,467) |
|
Balance at 31 May
2023 |
|
3,200,882 |
10,546,844 |
450,658 |
(4,412,310) |
9,786,074 |
|
|
|
|
|
|
|
|
Statement of cash
flows
for the financial year
ended 31 May
2024
|
|
2024 |
|
|
2023 |
|
|
€ |
|
|
€ |
|
Cash flows from operating
activities |
|
|
|
|
|
|
Loss for the financial
year |
|
(237,160) |
|
|
(291,467) |
|
Adjustments
for: |
|
|
|
|
|
|
Movement in fair value of
warrants |
|
(187,628) |
|
|
109,224 |
|
Interest
expense |
|
6,476 |
|
|
3,646 |
|
|
(418,312) |
|
|
(178,597) |
|
|
|
|
|
|
|
|
Increase in trade and other
payables |
|
444,507 |
|
|
1,361 |
|
Increase in other
receivables |
|
(2,548) |
|
|
(18,825) |
|
Net cash from/(used) in operating
activities |
|
441,959 |
|
|
(17,464) |
|
|
|
|
|
|
|
Cash flows from investing
activities |
|
|
|
|
|
|
Expenditure on intangible
assets |
|
(424,300) |
|
|
(354,963) |
|
Net cash used in investing
activities |
|
(424,300) |
|
|
(354,963) |
|
|
|
|
|
|
|
Cash flows from financing
activities |
|
|
|
|
|
|
Issue of share
capital |
|
301,205 |
|
|
453,109 |
|
Share issue
costs |
|
- |
|
|
(23,161) |
|
Advance from Conroy Gold and Natural Resources
Plc |
|
23,007 |
|
|
119,246 |
|
Net cash provided by financing
activities |
|
324,212 |
|
|
549,184 |
|
|
|
|
|
|
|
Decrease in cash and cash
equivalents |
|
(76,441) |
|
|
(1,830) |
|
Cash and cash equivalents at beginning of financial
year |
|
116,038 |
|
|
117,868 |
|
Cash and cash equivalents at end of financial
year |
|
39,597 |
|
|
116,038 |
Extracted notes from the
financial
statements
-
Material accounting
policies
Reporting
entity
Karelian Diamond Resources
P.L.C. (the “Company”) is a company domiciled in Ireland. The Company is a public limited
company incorporated in Ireland
under registration number 382499. The registered office is located
at Shannon Airport House, Shannon Free
Zone, Shannon, Co. Clare,
V14E370, Ireland.
The principal activity of
the Company during the financial year is mineral exploration and
development.
Basis of
preparation
The financial statements
are presented in Euro (“€”). The € is the functional currency of
the Company. The financial statements are prepared under the
historical cost basis except for derivative financial instruments
which, if any, are measured at fair value at each reporting
date.
The preparation of
financial statements requires the Board of Directors and management
to use judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets,
liabilities, income and expenses. Actual results may differ from
those estimates. Estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised and in
any future periods affected. Details of significant judgements are
disclosed in the accounting policies. The financial
statements were authorised for issue by the Board of Directors on
26 November
2024.
Going
concern
In preparing the financial
statements, the directors consider it appropriate to use the going
concern assumption, which assumes the company will have sufficient
resources to enable it to meet its liabilities as they fall
due. The Company recorded a loss of €237,160 (31 May 2023: loss of €291,467) for the financial
year ended 31 May 2024. The Company
had net assets of €9,741,609 (31 May
2023: €9,786,074) at that date. The Company had net current
liabilities of €1,948,585 (31 May
2023: €1,241,046) at that date. The Company had cash and
cash equivalents of €39,597 (31 May
2023: €116,038) at 31 May 2024. As set out in the
Chairman’s statement, the Company expects to incur capital
expenditure in 2024 and 2025, consistent with its strategy as an
exploration
company.
The Directors have
considered carefully the financial position of the Company and in
that context, have prepared and reviewed cash flow forecasts for
the period to 30 November 2025. The Directors recognise
that net current liabilities of €1,948,585 (31 May 2023: €1,241,046) is a material
uncertainty that may cast significant doubt on the Company’s
ability to continue as a going concern and, therefore, that it may
be unable to realise its assets and discharge its liabilities in
the normal course of business. In this context the Board of
Directors note that the going concern is on the basis
that all directors, namely, Brendan
McMorrow, Maureen T.A. Jones,
Howard Bird, Dr. Sorċa Conroy and
Séamus P. FitzPatrick, and former Directors namely James P. Jones and Professor Richard Conroy (and his beneficiaries), will not
seek repayment of amounts owed to them by the Company of €1,476,970
(31 May 2023: €1,291,969) for a
minimum period of 12 months from the date of approval of the
financial statements, unless the Company has sufficient funds to
repay. All of these Directors and former Directors have
confirmed this to be the case. Furthermore Conroy Gold and
Natural Resources plc (a shareholder in the Company which it has a
cost sharing arrangement as set out in note 14 (b)) in the
financial statements has confirmed that it will not seek repayment
of any amounts due unless the Company has sufficient funds to repay
for a similar period. The cashflows include plans to raise
funds to carry out the activities of the company and the Board of
Directors are confident that adequate funds can be raised through
strategic partnerships or direct market fundraising to meet their
objectives. To mitigate the risk of the timing and scale of
investment not being met, the Board and management continue to take
actions to monitor and manage the cost base and project
implementation plans as
appropriate.
In reviewing the proposed
work programme for exploration and evaluation assets, the results
obtained from the exploration programme, the support noted above
from the Board (and past Board members), the funds raised post year
end and the prospects for raising additional funds as required, the
Board of Directors are satisfied that it is appropriate to prepare
the financial statements on a going concern basis. The
financial statements do not include any adjustments to the carrying
value and classification of assets and liabilities that would arise
if the Company was unable to continue as going
concern.
Statement of
compliance
The Company’s financial
statements have been prepared in accordance with IFRS as adopted by
the European Union (“EU”) and the requirements of the Companies Act
2014.
Recent accounting
pronouncements
(i) New and amended
standards adopted by the
Company
The Company has adopted
the following amendments to standards for the first time for its
annual reporting year commencing 1 June
2023:
-
IAS 8 amendments regarding
the definition of accounting estimates – Effective date
1 January
2023;
-
IAS 1 amendments regarding
the disclosure of accounting policies - Effective date
1 January
2023;
-
IAS 12 amendments
regarding Deferred Tax related to Assets and Liabilities arising
from a Single Transaction – Effective date 1
January
2023;
-
IAS 12 amendments
regarding International Tax Reform and Pillar Two Model Rules –
Effective date 1 January
2023;
-
IFRS 17 Insurance
contracts – Effective date to 1 January
2023;
-
IFRS 17 amendments
regarding initial application of IFRS 17 and IFRS 9 of comparative
information;
and
-
IFRS 4 amendments
regarding extension of the Temporary Exemption from Applying IFRS 9
– Effective date 1 January
2023
The adoption of the above
amendments to standards had no significant impact on the financial
statements of the Company either due to being not applicable or
immaterial.
(ii) New standards
and interpretations not yet adopted by the
Company
Certain new accounting
standards and interpretations have been published that are not
mandatory for 31 May 2024 reporting
periods and have not been early adopted by the
Company.
The following new
standards and amendments to standards have been issued by the
International Accounting Standards Board but have not yet been
endorsed by the EU, accordingly, none of these standards have been
applied in the current year. The Board of Directors is currently
assessing whether these standards once endorsed by the EU will have
any impact on the financial statements of the
Company.
-
Amendments to IAS 21 Lack
of Exchangeability – Effective date 1
January
2025;
-
Amendments to IFRS 9 and
IFRS 7 regarding classification and measurement of financial
instruments – Effective date 1 January
2026;
-
Annual Improvements to
IFRS Accounting Standards – Volume 11 – Effective date 1 January
2026;
-
IFRS 18 Presentation and
Disclosure in Financial Statements – Effective date 1 January
2027;
-
IFRS 19 Subsidiaries
without Public Accountability: Disclosures – Effective date
1 January
2027;
-
IFRS S1 General
Requirements for Disclosure of Sustainability-related financial
information;
-
IFRS S2 Climate-related
disclosures;
-
Amendments to SASB
standards regarding enhancement of their international
applicability;
-
Amendments to IAS 7 and
IFRS 17 regarding supplier finance arrangements – Effective date
1 January
2025;
-
Amendments to IFRS 16
Leases: Lease liability in a sale and leaseback – Effective date
1 January 2024;
and
-
Amendments to IAS 1
Presentation of Financial Statements: Classification of liabilities
as current or non-current – Effective date 1 January
2024.
The adoption of the above
amendments to standards had no significant impact on the financial
statements of the Company either due to being not applicable or
immaterial.
-
Loss per
share
|
Basic loss per
share |
|
|
|
|
|
|
|
|
2024 |
|
2023 |
|
|
|
€ |
|
€ |
|
Loss for the year attributable to equity holders of
the
Company |
|
|
(237,160) |
|
(291,467) |
|
|
|
|
|
|
|
Number of ordinary shares at start of the financial
year |
|
|
94,492,749 |
|
68,542,749 |
|
Number of ordinary shares issued during the financial
year |
|
|
10,600,000 |
|
25,950,000 |
|
Number of ordinary shares at end of the financial
year |
|
|
105,092,749 |
|
94,492,749 |
|
|
|
|
|
|
|
Weighted average number of ordinary shares for the
purposes of basic and diluted loss per
share |
|
|
101,040,146 |
|
76,460,146 |
|
|
|
|
|
|
|
Basic and diluted loss per ordinary
share |
|
|
(0.0023) |
|
(0.0038) |
Diluted loss per
share
The effect of share
options and warrants is
anti-dilutive.
-
Intangible
assets
|
Exploration and evaluation
assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31
May |
|
31
May |
|
|
Cost |
|
|
2024 |
|
2023 |
|
|
|
|
€ |
|
€ |
|
|
At 1
June |
|
|
11,265,894 |
|
10,910,931 |
|
|
Expenditure capitalised during the financial
year: |
|
|
|
|
|
|
-
Licence and appraisal
costs
|
|
|
246,586 |
|
269,3143 |
|
|
|
|
|
177,714 |
|
85,649 |
|
|
At 31
May |
|
|
11,690,194 |
|
11,265,894 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration and evaluation
assets relate to expenditure incurred in the development of mineral
exploration opportunities. These assets are carried
at historical cost and have been assessed for impairment in
particular with regard to the requirements of IFRS 6:
Exploration for and Evaluation of Mineral Resources
relating to remaining licence or claim terms, likelihood of
renewal, likelihood of further expenditure, possible
discontinuation of activities as a result of specific claims and
available data which may suggest that the recoverable value of an
exploration and evaluation asset is less than its carrying
amount.
The Board of Directors
have considered the proposed work programmes for the underlying
mineral resources. They are satisfied that there are no indications
of
impairment.
The Board of Directors
note that the realisation of the intangible assets is dependent on
further successful development and ultimate production of the
mineral resources and the availability of sufficient finance to
bring the resources to economic maturity and
profitability.
Mineral interests are
categorised as
follows:
|
Finland |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31
May |
|
31
May |
|
|
Cost |
|
|
2024 |
|
2023 |
|
|
|
|
€ |
|
€ |
|
|
At 1
June |
|
|
11,223,401 |
|
10,910,931 |
|
|
Expenditure capitalised during the financial
year: |
|
|
|
|
|
|
-
Licence and appraisal
costs
|
|
|
157,299 |
|
263,421 |
|
|
|
|
|
121,038 |
|
49,049 |
|
|
At 31
May |
|
|
11,501,738 |
|
11,223,401 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Northern
Ireland |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31
May |
|
31
May |
|
|
Cost |
|
|
2024 |
|
2023 |
|
|
|
|
€ |
|
€ |
|
|
At 1
June |
|
|
42,493 |
|
- |
|
|
Expenditure capitalised during the financial
year: |
|
|
|
|
|
|
-
Licence and appraisal
costs
|
|
|
89,287 |
|
5,893 |
|
|
|
|
|
56,676 |
|
36,600 |
|
|
At 31
May |
|
|
188,456 |
|
42,493 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Cash and cash
equivalents
|
|
|
|
31
May
2024 |
|
31
May 2023 |
|
|
|
|
€ |
|
€ |
|
Cash held in bank
accounts |
|
|
|
39,597 |
|
116,038 |
|
|
|
|
39,597 |
|
116,038 |
Certain of the above bank
accounts are held for the purpose of holding collateral deposits
related to the Finnish licenses. As at 31
May 2024, a total amount of €24,500 (31 May 2023: €24,500) relates to these collateral
deposits and are treated as restricted cash
balances.
-
Non-current
liabilities
Convertible
loan
On 26 May 2023, the Company entered into a
convertible loan note agreement for a total amount of €129,550
(£112,500) with Conroy Gold and
Natural Resources P.L.C. which is both a shareholder in the company
and has a number of other connections as noted in Note 14 in the
financial statements. The convertible loan note is unsecured, has a
term of 18 months and attracts interest at a rate of 5% per annum
which is payable on the maturity or conversion of the convertible
loan. The conversion price is at a price of 5 pence per ordinary share. The shareholder has
the right to seek conversion of the principal amount outstanding on
the convertible loan note and all interest accrued at any time
during the term. The amount of €10,304 relates to
the derivative liability attached to the total convertible loan
note above and the net amount of €119,246 is recorded as the value
of the convertible loan at 31 May
2023. The loan incurred interest of €6,476 in the current
year. No interest was accrued in prior year due to it being
immaterial. The Company is in discussions to extend the term
of this loan however as at the date of signing of the financial
statements, no formal agreement has been reached as
yet.
The convertible loan
amounted to €136,026 (2023: €129,550)
at 31 May 2024 and is classified as a
current liability as at year end 31 May
2024 (see note 11 in the financial
statements).
|
|
|
|
31
May2024 |
|
31
May2023 |
|
|
|
|
€ |
|
€ |
|
Opening
balance |
|
|
|
- |
|
- |
|
Interest
payable |
|
|
|
- |
|
- |
|
Derivative
liability |
|
|
|
- |
|
10,304 |
|
Convertible
loan |
|
|
|
- |
|
119,246 |
|
|
|
|
|
- |
|
129,550 |
-
Current
liabilities
Trade and other
payables
|
|
|
|
31
May 2024 |
|
31
May 2023 |
|
|
|
|
€ |
|
€ |
|
Accrued Directors’
remuneration |
|
|
|
|
|
|
|
Fees and other
emoluments |
|
|
|
1,213,720 |
|
1,028,718 |
|
Pension
contributions |
|
|
|
263,250 |
|
263,250 |
|
Amount due to related
party |
|
|
|
144,551 |
|
5,023 |
|
Warrant
liabilities |
|
|
|
30,106 |
|
- |
|
Derivative
liability |
|
|
|
10,304 |
|
- |
|
Convertible
LoanOther
creditors and
accruals |
|
|
|
125,722282,080 |
|
-139,096 |
|
|
|
|
2,069,733 |
|
1,436,087 |
As at 31 May 2024, director fees amounting to €54,167
(31 May 2023: €44,167) due to
Brendan McMorrow are included in
Fees and other
emoluments.
It is the Company’s
practice to agree terms of transactions, including payment terms
with suppliers. It is the Company’s policy that payment is made
according to the agreed terms. The carrying value of the trade and
other payables approximates to their fair
value.
Warrant
liabilities
During the year ended
31 May 2024, 10,000,000 warrants were
issued with a sterling exercise price and expiry of 12 months.
18,500,000 warrants with a sterling exercise price and expiry
between 18 and 24 months were issued in the prior year. The fair
value amount at grant date was valued using the Black Scholes Model
and recorded as warrant
liabilities.
At 31 May 2024, the warrants in issue were fair
valued with the movement in fair value of €187,628 (2023: €9,565)
being recorded in the statement of profit or loss and a fair value
of €30,106 (2023: €109,224) recorded in the statement of financial
position. Warrants at 31 May 2024
have a 12 month expiry, hence it has been reclassified to current
liabilities. See Note 15 in the financial statements for further
details.
Convertible
loan
On 10 December 2019, the Company entered into a
convertible loan note agreement for a total amount of €145,829
(£120,000) with one of its shareholders. The total amount
outstanding as at 31 May 2022
including accrued interest was €166,790. This agreement was varied
in December 2022 and the loan note
holder exercised their conversion rights to convert the loan and
all accrued interest (totalling £138,000) into 3,450,000 new
ordinary shares in the company in the financial year ending
31 May
2023.
On 26 May 2023, the Company entered into a
convertible loan note agreement with an 18 month term as set out in
Note 10. The convertible is classified as a current liability
for the year ended 31 May
2024.
|
|
|
|
31
May2024 |
|
31
May2023 |
|
|
|
|
€ |
|
€ |
|
Opening
balance |
|
|
|
129,550 |
|
166,790 |
|
Interest
payable |
|
|
|
6,476 |
|
3,646 |
|
Conversion to
ordinary
equity |
|
|
|
- |
|
(170,436) |
|
26 May 2023
convertible
loan |
|
|
|
- |
|
129,550 |
|
Closing
balance |
|
|
|
136,026 |
|
129,550 |
-
Commitments and
contingencies
At 31 May 2024, there were no capital commitments or
contingent liabilities (31 May 2023:
€Nil) recognised at the balance sheet date. Should the Company
decide to further develop the Lahtojoki project, an amount of
€40,000 is payable by the Company to the vendors of the Lahtojoki
mining concession.
-
Related party
transactions
-
The Company shares office
accommodation with Conroy Gold and
Natural Resources P.L.C. which has certain common Directors and
shareholders. For the financial year ended 31 May 2024, Conroy
Gold and Natural Resources P.L.C. incurred costs totalling
€115,048 (31 May 2023: €46,178) on
behalf of the Company. These costs were recharged to the Company by
Conroy Gold and Natural Resources
P.L.C.
These costs are analysed
as
follows:
|
|
|
2024 |
|
2023 |
|
|
|
€ |
|
€ |
|
Salaries |
|
|
71,738 |
|
25,558 |
|
Rent and
rates |
|
|
13,310 |
|
10,145 |
|
Other operating
expenses |
|
|
30,000 |
|
10,475 |
|
|
|
115,048 |
|
46,178 |
(b)
At 31 May 2024, the Company owed €144,551 to
Conroy Gold and Natural Resources
P.L.C. (31 May 2023: €5,023 owed to).
Amounts owed to Conroy Gold and
Natural Resources P.L.C. were included within trade and other
payables during the current year. During the financial year
ended 31 May 2024, the Company
received €23,007 from (31 May 2023:
€32,500 was paid to) Conroy Gold and Natural Resources
P.L.C. as part of the
cost sharing arrangement. During the financial year ended
31 May 2024, the Company was charged
€115,048 (31 May 2023: €46,178)
by Conroy Gold and Natural Resources
P.L.C. in respect of the
allocation of certain costs as detailed in Note 14(a). In
May 2023, Conroy Gold and Natural Resources P.L.C.
converted amounts owing to it equivalent to €143,943 (£125,000)
into ordinary equity as detailed as part of the “share issue (c)”
detailed in Note 12 and a further €129,550 (£112,500) into a
convertible loan instrument as detailed in Note 10. The
Company is in discussions to extend the term of this
loan.
(c)
At 31 May 2024, Brendan
McMorrow was owed €54,167 (31 May 2023: €44,167) in respect of his
services as a director. He invoiced the company an amount of €NIL
(31 May 2023: €9,000) during the year for other services rendered
of which €Nil (31 May 2023: €Nil) was outstanding at 31 May 2024.
These amounts are included in the trade and other payables balance
in the statement of financial
position.
(d)
Key management personnel
are considered to be the Board of Directors and other key
management. The compensation of all key management
personnel during the year was €148,250 (2023: €139,824) including
an amount of €33,250 (31 May 2023 €14,824) payable to the Company
Secretary Cathal Jones in respect of services
provided.
(e)
Details of share capital
transactions with the Directors are disclosed in the Directors’
Report.
(f)
Apart from Directors’
remuneration (detailed in Note 2 and Note 4 in the financial
statements), a convertible loan from a shareholder (which is
detailed in Note 11 in the financial statements) and share capital
transactions (which are detailed within the Directors’ Report),
there have been no contracts or arrangements entered into during
the financial year in which a Director of the Company had a
material
interest.
-
Post balance sheet
events
Post year end the Company
announced that an assessment prepared by
independent geological consultant, Dr Larry Hulbert, confirms the
potential for Nickel, Copper and Platinum-Group Elements, in the
Company’s licence areas in Northern Ireland. A series of
targets within the Company’s licence area in Northern Ireland were
identified by Dr Hulbert during the course of his review and
recommended for follow
up.
The Company announced on
13th August 2024 that it had received the decision of the Finnish
Land Court which brought finalisation to the establishment of the
mine boundaries, with no change ensuing. It further announced
that in regards to the amount of compensation payable to the two
appellant landowners, the majority of the items upon which they
based their claims were rejected by the Finnish Land Court except
for three items which were referred back to the National Land
Survey to review. The appellants were also required to contribute
to the Company’s legal costs. On 18th
October 2024, the Company announced that the sixty day appeal
period to this decision had now passed and that as such, the
decision now had gained legal
force.
On 1 July 2024, the
Company raised €386,761 (£328,747) before expenses through the
issue of 21,916,479 new ordinary shares at a price of £0.015 per
ordinary share in order to fund its exploration activities and for
working capital purposes. In addition and at the same
time as the fundraising, the Company converted amounts owing to
certain parties totalling €29,709 (£25,253) into equity by the
issuing of 1,683,516 new ordinary shares at the same
price. Each of the new shares noted above carry a half
warrant such that the holder of one whole warrant can subscribe for
one new ordinary share at a price of £0.03 per share for a period
of 12 months from the admission to trading of the new shares issued
on 1 July 2024.
There were no further
important events to note post year
end.
10 Approval of the
financial statements for the financial year ended 31 May
2024
The financial statements
were approved by the Board of Directors on 22 November 2024 and
authorised for issue on 26 November 2024. A copy
of the audited financial
statements will be available on the Company’s website
www.kareliandiamondresources.com
and will be available from
the Company’s registered office at Shannon Airport House, Shannon
Free Zone, Shannon, Co. Clare, V14E370
Ireland.