FUNDRAISING OF £290,000 & OPERATIONAL AND CORPORATE UPDATE

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.

Karelian Diamond Resources plc

("Karelian" or the "Company")

20 March 2026

FUNDRAISING OF £290,000

OPERATIONAL AND CORPORATE UPDATE

Karelian Diamond Resources PLC (AIM: KDR), the diamond and natural resources exploration company focused on Finland and Ireland , is pleased to announce a fundraising of £290,000. The fundraise has been undertaken via an issue of unsecured convertible loan notes ("CLNs" or "Loan Notes") to a combination of new investors and existing shareholders in the Company (the "Fundraise").

Highlights

Key Terms of CLNs

Further Background

The Company has decided to raise these funds via an issue of unsecured convertible loan notes rather than through a conventional placing of new equity. In making this decision, the Board was mindful of the absolute need to avoid immediate and potentially material dilution for shareholders, with Karelian's share price currently at a level which the Board believes undervalues the current and future prospects of the Company.

With this in mind, the Board is particularly pleased that a number of new investors and existing shareholders have recognised this material undervaluation of the Company's shares, by subscribing for Loan Notes with a conversion price of 1.5 pence per share, compared to the closing mid-market price of 0.375 pence of the Ordinary Shares of Karelian on 19 March 2026.

Operational Update

The Company has been progressing with follow on exploration work building on the outcomes of Dr Larry Hulbert's report (announced by the Company in June 2024) and in late 2025 entered into an enterprise partnership with Trinity College Dublin on a work programme jointly funded by Research Ireland to be carried out on the Platinum Group Element potential of the Company's licence areas in Ireland over the coming years.

In June 2025 the Company announced that it had identified the site of the historic Cappagh Copper Mine as a significant new target for investigation within the relevant licence area (KDR4). This provides the Company with a tangible copper target in addition to the targets identified by Dr Hulbert's report and an initial exploration programme has been planned to help unlock the full potential of the Company's licence areas.

A clear work programme and strategy have been identified for the Company's exploration assets in Finland as the Company is focusing its efforts on carefully progressing exploration work, positioning the Company well for a recovery in the retail sentiment towards natural diamonds while seeking an industry focused partner to progress its assets including the Lahtojoki Deposit. Carrying out an initial drilling programme in the current weather window at the geophysical "Anomaly 5" target in the Kuhmo region is part of this strategy. It lies up-ice of the green-diamond find and carries a near-source kimberlitic indicator minerals signature from glacial till sampling.

Corporate Update

The Board is also working on a plan to address the payables owing to current and former board members in relation to both salaries and directors' fees which continue to be deferred by both current and former directors. The plan would look to effectively align the payments of amounts owed with future Company success.

In addition, as most recently announced on 2 February 2026, the Company remains in discussions to formalise an extension of the term of its existing convertible loan of £112,500 with Conroy Gold and Natural Resources plc (the "Conroy CLN") (details of which were originally announced on 19 May 2023). The term of the Conroy CLN ended in November 2024 and the parties have already agreed in principle to extend the term of the Conroy CLN to, as a minimum, 30 November 2026. As previously announced the parties are also in discussions to amend the conversion price of the Conroy CLN as part of the variation agreement. This remains subject to,   inter alia , finalisation of a variation agreement and any necessary regulatory approvals under the AIM Rules for Companies. At this stage the parties have not reached agreement on the terms of any variation and a further announcement will be made in due course.

The Company has also appointed AlbR Capital Limited as Corporate Broker to the Company.

Mr Brendan McMorrow, the Company's Chairman, commented:

"The Board welcomes this fundraising which supports the Board's view of the Company's assets being materially undervalued at present as both new and existing shareholders have taken part at a clear premium to the current market price of our Ordinary Shares. The Company is looking forward to progressing with the work programmes on its highly prospective Nickel, Copper and Platinum Group Element targets in Northern Ireland together with the ongoing drilling programme in the current weather window at its Anomaly 5 prospect in Finland. The completion of this fundraise at a significant premium underpins the Board's confidence regarding the prospects for the Company."

Further Information:

http://www.kareliandiamondresources.com