it takes years of slow patient work...

Richard Conroy, Sharetalk, 2018

...but not fourteen years to go from one unevaluated, previously discovered kimberlite to two, and one minor untested discovery.

the diamond prospectivity, demonstrated by the world class Lomonosova and Grib diamond deposits

Chairman's Statement 2018

...has not been replicated in Finland by the Company in all this time.

one explores to become a producer...

Martin Doyle, 2019

Companies involved in diamond exploration normally follow the route of exploring to make a discovery, evaluating that discovery, and developing it if warranted. As discoveries move up the development "pipeline", they decrease in risk, but increase in cost, and new opportunities are added from the bottom, by ongoing exploration and discovery. Discoveries should be advanced quickly. If further progress is not warranted, they should be disposed of to facilitate work on the next opportunity.

What is NOT DONE is to abandon or suspend potentially viable projects to avoid expenditure. Karelian's "pipeline" looks something like this:

Current Assets

Lahtojoki

Most understood diamondiferous Kimberlite in Finland. Previous companies have spent several £Million taking it this far so it has exceptional value-added.

Seitapera

Has been held by the Company for over fourteen years, and has had significant Company expenditure on drilling, yet has never been robustly tested for diamond content.

Riihivaara

Is a small dyke of limited potential, notwithstanding it may lead to bigger discoveries in the region. It has yet to be tested for diamonds.

New Claims

At Liperi and Salla, are grass-roots projects, and require basics exploration in areas remote to the other projects.

The Rio Database

Is an asset covering extensive ground that can be put to productive use. The Company has had access to this facility and the Partner's goodwill for nine years, with only one year remaining of this access.


Proposed Actions

Resource Development

The Company will immediately test Lahtojoki to answer the fundamental question "what are the diamonds worth". Without this knowledge no resource development is possible. Landowner negotiations, environmental permits or a mining license application are subsequent to this testing. Testing requires a processing plant to recover sufficient quantities of diamonds. The Company will seek to raise finance for such a sampling program as a first priority. This acquisition will enable the company to test and evaluate other and future discoveries.

Prelminary Assessment

Seitapera has not been advanced in seven years. It will be provisionally tested to see if it has merit, or otherwise disposed of. The testing can only be done by small-scale bulk sampling, which will require, but will not compete with, the facility used to test and evaluate Lahtojoki.

Evaluation

The Riihivaara dyke is of interest if it is high grade, wide and extensive, or if it leads to related dykes or even kimberlite pipes. If it is not diamondiferous it is of no further interest. It can and will be easily tested for micro-diamonds, and if sufficiently positive, testing of its dimensions and the search for related kimberlites close-by will be considered.

Exploration

The only exploration that will be prioritized will be for additional targets surrounding Lahtojoki. Other existing reservations and claims, including recently awarded ones, will be reviewed, including the rationale for taking them. If warranted, they may be retained. The existing Company, Government (GTK) and Rio Tinto databases will be reviewed, and new reservations may be considered. The Company will alternative strategies for  this work given its re-focussing on its more advanced projects.

Joint Ventures

With one year remaining of the Joint Venture Agreement with Rio the company will seek to renew this agreement. Topics for discussion will include syndicating part of these data to other interested parties on a regional basis. It is worth highlighting that the current agreement requires the Company to bulk sample any discoveries, further supporting the acquisition of the processing plant referred to above.

Cash

The new board will seek to strengthen the capital position of the company and address the outstanding liabilities.


Our Mission Statement

We anticipate a balanced portfolio of projects, prioritizing on the most advanced projects with significant value already added, and applying strategies and operations in-line with industry best-practice .

Management will be engaged on its merits' to competently advance the Company, answerable to, and regardless of, Shareholder make-up.

We promise a Management Team who have a professional record and experience in the business, and who are not currently major Shareholders, and thus pre-occupied with maintaining control in the face of poor performance.

Management will primarily be incentivised by share performance, reflecting results achieved, and not full salaries.

Unnecessary and unwarranted expenditure will be avoided.

We undertake to devote the maximum possible funds to on-the-ground activities and to the acquisition of capital and mineral assets. Management overheads and expenditure will be constantly reviewed and held at levels appropriate to the value of the Company and to meeting regulatory requirements.

We undertake to provide regular, objective and factual updates to all Shareholders on an impartial basis, in accordance with Market Regulations.

We will honestly comment and report on projects, strategies and potential in the context of what has been achieved, and what is possible or probable in a local and regional context.

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