28 February 2023
Karelian Diamond
Resources plc
(“Karelian” or “the Company”)
Half-yearly
results for the six months ended 30 November
2022
Karelian Diamond Resources plc (AIM: KDR), the diamond
exploration company focused on Finland, announces its unaudited results for
the six months ended 30 November 2022. Details of these can
be found below and a full copy of the statement can be viewed on
the Company’s website. The period was one of significant
progress.
Highlights of the half-year period
included:
- Date received for the crucial proceedings meeting of the
National Land Survey in respect of the Lahtojoki diamond deposit
establishment of the mining concession area and land
possession.
- Post period, the meeting of the National Land Survey was held
and compensation to landowners, amounting in total €162,815, was
announced.
- The Company continues to look to progress its highly exciting
diamond exploration programme in the Kuhmo region of Finland.
- Progress has also been made in relation to Karelian’s very
interesting nickel, copper and platinum mineralisation exploration
project in Northern Ireland.
- Prospecting licences extending the Company’s exploration area
in Northern Ireland were
granted.
Professor Richard Conroy, Chairman of Karelian, said:
“We are very pleased that the National Land Survey’s
procedures regarding the Lahtojoki diamond deposit in
Finland, which were crucial to the
development of a mine, have been concluded and that the Company now
has land possession and that in Northern Ireland Prospecting
Licences have been granted in relation to the Company’s highly
interesting nickel, copper and platinum exploration.”
Further Information:
Karelian Diamond Resources PLC
Professor Richard Conroy, Chairman |
+353-1-479-6180 |
Allenby Capital Limited (Nomad)
Nick Athanas / Nick Harriss |
+44-20-3328-5656 |
First
Equity Limited (Broker)
Jason Robertson |
+44-20-7330-1883 |
Lothbury Financial Services
Michael Padley |
+44-20-3290-0707 |
Hall
Communications
Don Hall |
+353-1-660-9377 |
http://www.kareliandiamondresources.com
Chairman’s Statement
Dear Shareholder,
I have great pleasure in presenting the Company’s Half-Yearly
Report and condensed Financial Statements for the half year ended
30 November 2022.
The period was one of highly significant progress as we received
a date for the crucial, and long awaited, proceedings of the
National Land Survey of Finland in
relation to the Lahtojoki diamond deposit in the Kuopio-Kaavi
region of Finland. Post period, as
announced by the Company on 14 December
2022, the National Land Survey proceedings were completed
and the compensation to be paid to landowners in relation to the
establishment of the mining concession area and land possession for
the duration of the mine was granted.
A mining concession had already been approved by TUKES (the
Finnish mining authority) and the National Land Survey, on the
order of TUKES, was carrying out the proceedings to establish the
mining concession for the applied area. The process involved
two public meetings in relation to ground rental compensation for
the local landowners and had been delayed by the onset of Covid-19,
which prevented the holding of public meetings until mid-December 2022.
At the public meeting, held in the Municipal Hall of Tuusneimi
in Finland on 14 December 2022, the National Land Survey
announced that the compensation to be paid by the Company amounts
in total to €162,815. This compensation is to be paid within
three months from 28th December 2022
and the Company expects to fund this through existing cash
resources.
Land possession for the duration of the mine is a major step
forward in the Company’s proposed development of the Lahtojoki
diamond deposit. The diamond mining project covers 71
hectares (c.176 acres) and the actual Lahtojoki kimberlite pipe has
a surface area of 16 hectares (c.40 acres). The deposit, as
well as containing high quality colourless gem diamonds, also
contains pink diamonds which are highly sought after and can
command prices up to 20 times that of normal colourless gem
diamonds.
The development of a diamond mine at Lahtojoki will, I believe,
not only bring significant benefits to the Company, but also to the
entire surrounding Kuopio-Kaavi area and, when in production, will
be the first diamond mine in Europe outside Russia.
The Company will also be looking to progress its highly exciting
diamond exploration programme in the Kuhmo region of Finland where twenty-three kimberlite targets
have been identified up-ice of the Company’s discovery of a green
diamond.
Progress has also been made in relation to Karelian’s highly
interesting nickel, copper and platinum mineralisation exploration
project in Northern Ireland. Applications for exploration
licences to extend the Company’s exploration area to include
adjacent prospective acreage have been granted. Anomalous
amounts of chromites which have been observed in stream sediment,
raise the exciting prospect of the possible presence of nickel,
copper and platinum in the Company’s exploration acreage, although
this remains to be confirmed.
Finance
The Company announced on 28 November
2022 an equity fundraise of £250,000 (gross of expenses)
through a placing of 12,500,000 Ordinary shares at a price of
2 pence per share. Settlement of this
fundraise occurred in early December
2022 upon admission of the shares to trading on AIM on
5 December 2022. As such the funds
from this fundraising are not reflected in the cash balances of the
Company at the period end. The loss after taxation for the
half year ended 30 November 2022 was
€168,786 (for the six-month period ended 30
November 2021: profit of €99,165) and the net assets as at
30 November 2022 were €9,312,017 (for
the six-month period ended 30 November
2021: €9,566,375).
Directors and Staff
I would like to thank my fellow directors, staff and consultants
for their support and dedication, which has enabled the continued
success of the Company.
Future Outlook
I look forward to the Company progressing with the proposed
development of the Lahtojoki diamond deposit and to further explore
the resources both in Finland with
diamonds and in Northern Ireland
where we potentially have significant nickel, copper and platinum
group metals targets.
Yours faithfully,
__________________
Professor Richard Conroy
Chairman
28 February 2023
Condensed income statement and condensed statement of
comprehensive income
for the six month period ended
30 November 2022
| Condensed income
statement |
|
|
|
|
|
|
|
Note |
Six-month
period ended 30 November 2022
(Unaudited) € |
|
Six-month period ended 30 November 2021
(Unaudited) € |
|
Year
ended 31 May 2022
(Audited) € |
| Continuing operations |
|
|
|
|
|
|
| Operating expenses |
|
(165,140) |
|
(167,685) |
|
(369,019) |
| Movement in fair value of
warrants |
5 |
- |
|
270,496 |
|
389,904 |
|
|
|
|
|
|
|
| Operating profit/(loss) |
|
(165,140) |
|
102,811 |
|
20,885 |
|
|
|
|
|
|
|
| Interest expense |
|
(3,646) |
|
(3,646) |
|
(7,292) |
|
|
|
|
|
|
|
| Profit/(Loss) before
taxation |
|
(168,786) |
|
99,165 |
|
13,593 |
|
|
|
|
|
|
|
| Income tax expense |
|
- |
|
- |
|
- |
| Profit/(Loss) for the financial
period/year |
|
(168,786) |
|
99,165 |
|
13,593 |
Profit/(loss) per share |
|
|
|
|
|
|
| Basic and diluted earnings/(loss)
per share |
2 |
(€0.0025) |
|
€0.0014 |
|
€0.0002 |
|
|
|
|
|
|
|
|
|
|
|
|
Condensed statement
of comprehensive income
|
|
Six-month period
ended 30 November 2022
(Unaudited) € |
|
Six-month period
ended 30 November 2021
(Unaudited) € |
|
Year ended 31 May
2022
(Audited) € |
|
|
|
|
|
|
|
| Profit/(loss) for the financial
period/year |
|
(168,786) |
|
99,165 |
|
13,593 |
|
|
|
|
|
|
|
| Income/(expense) recognised in other
comprehensive income |
|
- |
|
- |
|
- |
|
|
|
|
|
|
|
| Total comprehensive
income/(expense) for the financial period/year |
|
(168,786) |
|
99,165 |
|
13,593 |
Condensed statement of financial position as at 30 November 2022
|
Note |
30 November 2022
(Unaudited) |
|
30 November 2021
(Unaudited) |
|
Year ended 31 May
2022 (Audited) |
|
|
€ |
|
€ |
|
€ |
| Assets |
|
|
|
|
|
|
| Non-current assets |
|
|
|
|
|
|
| Intangible assets |
3 |
10,989,210 |
|
10,907,401 |
|
10,910,931 |
| Financial assets |
|
- |
|
4 |
|
- |
| Total non-current assets |
|
10,989,210 |
|
10,907,405 |
|
10,910,931 |
|
|
|
|
|
|
|
| Current assets |
|
|
|
|
|
|
| Cash and cash equivalents |
|
90,177 |
|
275,141 |
|
117,868 |
| Other receivables |
|
36,034 |
|
90,255 |
|
60,178 |
| Total current assets |
|
126,211 |
|
365,396 |
|
178,046 |
|
|
|
|
|
|
|
| Total assets |
|
11,115,421 |
|
11,272,801 |
|
11,088,977 |
|
|
|
|
|
|
|
| Equity |
|
|
|
|
|
|
| Capital and reserves |
|
|
|
|
|
|
| Called up share capital presented as
equity |
|
3,191,807 |
|
3,191,807 |
|
3,191,807 |
| Share premium |
|
9,959,181 |
|
9,959,181 |
|
9,959,181 |
| Share based payments reserve |
|
450,658 |
|
450,658 |
|
450,658 |
| Retained losses |
|
(4,289,629) |
|
(4,035,271) |
|
(4,120,843) |
| Total equity |
|
9,312,017 |
|
9,566,375 |
|
9,480,803 |
|
|
|
|
|
|
|
| Liabilities |
|
|
|
|
|
|
| Non-current liabilities |
|
|
|
|
|
|
| Convertible loan |
|
- |
|
163,144 |
|
- |
| Warrant liabilities |
5 |
- |
|
119,395 |
|
- |
| Derivative liability |
|
146 |
|
146 |
|
146 |
| Total non-current
liabilities |
|
146 |
|
282,685 |
|
146 |
|
|
|
|
|
|
|
| Current liabilities |
|
|
|
|
|
|
| Trade and other payables: amounts
falling due within one year |
|
1,632,822 |
|
1,423,741 |
|
1,441,238 |
| Convertible Loan |
6 |
170,436 |
|
- |
|
166,790 |
| Total current
liabilities |
|
1,803,258 |
|
1,423,741 |
|
1,608,028 |
|
|
|
|
|
|
|
| Total liabilities |
|
1,803,404 |
|
1,706,426 |
|
1,608,174 |
|
|
|
|
|
|
|
| Total equity and
liabilities |
|
11,115,421 |
|
11,272,801 |
|
11,088,977 |
Condensed statement of cash flows for the six-month period ended
30 November 2022
|
Six-month period
ended 30 November 2022 (Unaudited) € |
|
Six-month period
ended 30 November 2021 (Unaudited) € |
|
Year ended 31 May
2022 (Audited)
€ |
| Cash flows from operating
activities |
|
|
|
|
|
| Profit/(Loss) for the financial
period/year |
(168,786) |
|
99,165 |
|
13,593 |
| Adjustments for: |
|
|
|
|
|
| Expense recognised in income
statement in respect of equity settled share-based payments |
- |
|
- |
|
- |
| Interest expenses |
3,646 |
|
3,646 |
|
7,292 |
| Movement in fair value of
warrants |
- |
|
- |
|
(389,904) |
| (Decrease)/increase in trade and
other payables |
191,584 |
|
38,266 |
|
75,340 |
| Decrease/(increase) in other
receivables |
24,144 |
|
562,702 |
|
(11,872) |
| Advances from/(repayments to) Conroy
Gold and Natural Resources P.L.C |
- |
|
- |
|
(70,000) |
| Net cash provided by/(used in)
operating activities |
50,588 |
|
433,283 |
|
(375,550) |
|
|
|
|
|
|
| Cash flows from investing
activities |
|
|
|
|
|
| Investment in exploration and
evaluation |
(78,279) |
|
(140,825) |
|
(144,355) |
| Net cash used in investing
activities |
(78,279) |
|
(140,825) |
|
(144,355) |
|
|
|
|
|
|
| Cash flows from financing
activities |
|
|
|
|
|
| Issue of share capital |
- |
|
- |
|
604,651 |
| Share issue costs |
- |
|
(28,656) |
|
(28,656) |
| Advances from/(repayments to) Conroy
Gold and Natural Resources P.L.C. |
- |
|
(50,439) |
|
- |
| Net cash (used in)/provided by
financing activities |
- |
|
(79,095) |
|
575,995 |
|
|
|
|
|
|
| Increase in cash and cash
equivalents |
(27,291) |
|
213,363 |
|
56,090 |
| Cash and cash equivalents at
beginning of financial period/year |
117,868 |
|
61,778 |
|
61,778 |
| Cash and cash equivalents at end
of financial period/year |
90,177 |
|
275,141 |
|
117,868 |
Condensed statement of changes in equity for the six-month
period ended 30 November 2022
|
Share
capital (including deferred share capital) |
Share
premium |
Share-based payment reserve |
Retained
losses |
Total
equity |
|
€ |
€ |
€ |
€ |
€ |
| Balance at 1 June
2022 |
3,191,807 |
9,959,181 |
450,658 |
(4,120,843) |
9,480,803 |
| Issue of share
capital |
- |
- |
- |
- |
- |
| Share issue costs |
- |
- |
- |
- |
- |
| Share based
payments |
- |
- |
- |
- |
- |
| Profit for the
financial period |
- |
- |
- |
(168,786) |
(168,786) |
| Balance at 30
November 2022 |
3,191,807 |
9,959,181 |
450,658 |
(4,289,629) |
9,312,017 |
|
|
|
|
|
|
| Balance at 1 June
2021 |
3,191,807 |
9,959,181 |
450,658 |
(4,105,780) |
9,495,866 |
| Issue of share
capital |
- |
- |
- |
- |
- |
| Share issue costs |
- |
- |
- |
(28,656) |
(28,656) |
| Share based
payments |
- |
- |
- |
- |
- |
| Loss for the financial
period |
- |
- |
- |
99,165 |
99,165 |
| Balance at 30
November 2021 |
3,191,807 |
9,959,181 |
450,658 |
(4,035,271) |
9,566,375 |
Share capital
The share capital comprises the nominal value share capital
issued for cash and non-cash consideration. The share capital also
comprises deferred share capital. The deferred share
capital* arose through the restructuring of share capital
which was approved at an Annual General Meeting held on
9 December 2016.
Authorised share capital:
The authorised share capital at 30
November 2021 compromised 7,301,301,041 ordinary shares of
€0.00025 each, and 317,785,034 deferred shares of €0.00999
each* (€5,000,000), (30 November
2020: 7,301,301,041 ordinary shares of €0.00025 each, and
317,785,034 deferred shares of €0.00999 each*
(€5,000,000)).
*Capital reorganisation:
Following approval at an Annual General Meeting (“AGM”) held on
9 December 2016, the Company
reorganised its share capital by subdividing and reclassifying each
issued ordinary share of €0.01 as one ordinary share of €0.00001
each and one deferred share of €0.00999 each. The Deferred
Shares have no right to vote, attend or speak at general meetings
of the Company and have no right to receive any dividend or other
distribution, and have only limited rights to participate in any
return of capital on a winding-up or liquidation of the Company,
which will be of no material value. No application was made to the
London Stock Exchange for admission of the Deferred Shares to
trading on the AIM.
Consolidated shares:
On 21 December 2017, the Company
passed a Special Resolution at the Company’s AGM, that all of the
ordinary shares of €0.00001 each in the capital of the Company,
whether issued or unissued were consolidated into New Ordinary
Shares of €0.00025 each in the capital of the Company
(“consolidated shares”) on the basis of one consolidated share for
every 25 existing ordinary shares. Following the consolidation of
the ordinary shares on 21 December
2017, the warrants in issue were consolidated into one
consolidated warrant for every 25 existing warrants. The exercise
price in relation to the warrants was also adjusted at this time
(see Note 2).
Share issues during the period:
During the period ended 30 November
2022, the Company did not issue any shares.
On 27 May 2021, the Company raised
€604,651 (£520,000), through the issue of 13,000,000 ordinary
shares of €0.00025 in the capital of the Company at a price of
£0.04 per Subscription Share. On 27 May
2021, Professor Richard
Conroy capitalised loans amounting to €85,979 (£74,000) into
1,850,000 new ordinary shares of nominal value €0.00025 each. On
27 May 2021, Maureen Jones capitalised loans amounting to
€6,971 (£6,000) into 150,000 new ordinary shares of nominal value
€0.00025 each.
Share premium
The share premium reserve comprises the excess consideration
received in respect of share capital over the nominal value of the
shares issued.
Share based payment reserve
The share based payment reserve comprises of the fair value of
all share options and warrants which have been charged over the
vesting period, net of amounts relating to share options and
warrants forfeited, exercised or lapsed during the period, which
are reclassified to retained earnings.
Retained losses
This reserve represents the accumulated losses incurred by the
Company up to the condensed statement of financial position
date.
Notes to and forming part of the condensed financial statements
for the six-month period ended 30 November
2022
1. Accounting policies
Reporting entity
Karelian Diamond Resources plc (the “Company”) is a company
domiciled in Ireland.
Basis of preparation and statement of
compliance
The condensed financial statements for the six months ended
30 November 2022 are unaudited.
The condensed financial statements have been prepared in
accordance with International Accounting Standard (“IAS”) 34:
Interim Financial Reporting.
The condensed financial statements do not include all the
information and disclosures required in the annual financial
statements, and should be read in conjunction with the Company’s
annual financial statements as at 31 May
2022, which are available on the Company’s website -
www.kareliandiamondresources.com. The accounting policies adopted
in the presentation of the condensed financial statements are
consistent with those followed in the preparation of the Company’s
annual financial statements for the year ended 31 May 2022.
The condensed financial statements have been prepared under the
historical cost convention, except for derivative financial
instruments which are measured at fair value at each reporting
date.
The condensed financial statements are presented in Euro (“€”).
€ is the functional currency of the Company.
The preparation of condensed 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 financial period in
which the estimate is revised and in any future financial periods
affected. Details of critical judgements are disclosed in the
accounting policies detailed in the annual financial
statements.
The financial information presented herein does not amount to
statutory financial statements that are required by Chapter 4 part
6 of the Companies Act 2014 to be annexed to the annual return of
the Company. The statutory financial statements for the financial
year ended 31 May 2022 were annexed
to the annual return and filed with the Registrar of Companies. The
audit report on those financial statements was unqualified.
These condensed financial statements were authorised for issue
by the Board of Directors on 28 February
2023.
Going concern
The Company recorded a loss of €168,786 (30 November 2021: profit of €99,165) for the
six-month period ended 30 November
2022. The Company had net current liabilities of €1,677,047
(30 November 2021: €1,058,345) at
that date.
The Board of 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 28 February 2024. As set out further in the
Chairman’s statement, the Company expects to incur capital
expenditure in 2023, consistent with its strategy as an exploration
company. In reviewing the proposed work programme for exploration
and evaluation assets, the results obtained from the exploration
programme 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.
Statement of compliance
The Company’s financial statements have been prepared in
accordance with IFRS as adopted by the European Union (“EU”).
Recent accounting pronouncements
The Group and the Company adopted the following amendments to
standards for the first time in its interim reporting period
commencing from 1 June 2022:
- IFRS 1 amendments resulting from Annual Improvements to IFRS
Standards 2018–2020 (subsidiary as a first-time adopter) –
Effective date 1 January 2022;
- IFRS 9 amendments resulting from Annual Improvements to IFRS
Standards 2018-2020 (fees in the “10 per cent” test for
derecognition of financial liabilities) – Effective date
1 January 2022.
- IFRS 3 amendments updating a reference to the Conceptual
Framework – Effective date 1 January
2022;
- Amendment to IFRS 16 about providing lessees with an extension
of one year to exemption from assessing whether a COVID-19-related
rent concession is a lease modification – Effective date
1 April 2021;
- IAS 16 amendments prohibiting a company from deducting from the
cost of property, plant and equipment amounts received from selling
items produced while the company is preparing the asset for its
intended use – Effective date 1 January
2022; and
- IAS 37 amendments regarding the costs to include when assessing
whether a contract is onerous – Effective date 1 January 2022.
The adoption of the above amendments to standards and
interpretations has been considered for the purposes of these
interim financial statements and is either considered to be not
applicable or immaterial.
The following amendments to standards adopted and endorsed by
the EU have been issued by the International Accounting Standards
Board to date and are not yet effective for the interim period from
1 June 2022. The Board of Directors
is currently assessing whether these standards once adopted by the
Group and the Company will have any impact on the financial
statements of the Group and the Company.
- IFRS 4 amendments regarding the expiry date of the deferral
approach – Effective date 1 January
2023.
- IFRS 17 Insurance contracts – Effective date deferred to
1 January 2023;
- IAS 1 amendments regarding the classification of liabilities -
Effective date 1 January 2023;
- IAS 1 amendments regarding the disclosure of accounting
policies - Effective date 1 January
2023; and
- IAS 8 amendments regarding the definition of accounting
estimates – Effective date 1 January
2023;
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 Group and the Company.
- Amendments to IFRS 10 and IAS 28: Sale or contribution of
assets between an investor and its associate or joint venture –
Postponed indefinitely;
- Amendments to IAS 12 Income taxes: Deferred tax related to
assets and liabilities arising from a single transaction –
Effective date 1 January 2023;
- 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 and
classification of liabilities as current or non-current – Effective
date 1 January 2024.
2. Profit/(loss) per share
| Basic earnings per share |
|
|
|
|
|
|
|
|
|
|
Six-month period ended 30 November 2022 (Unaudited) € |
|
Six-month period ended 30 November 2021 (Unaudited)
€ |
|
Year ended 31 May 2022
(Audited) € |
| Profit/(loss) for the financial
period/year attributable to equity holders of the Company |
|
|
(168,786) |
|
99,165 |
|
13,593 |
|
|
|
|
|
|
|
|
| Number of ordinary shares for the
purposes of earnings per share |
|
|
68,542,749 |
|
68,542,749 |
|
68,542,749 |
|
|
|
|
|
|
|
|
| Basic earnings/(loss) per
ordinary share |
|
|
(€0.0025) |
|
€0.0014 |
|
€0.0002 |
|
|
|
|
|
|
|
|
|
|
Diluted earnings/(loss) per share
The effect of share options and warrants is anti-dilutive.
3. Intangible assets
| Exploration and evaluation
assets |
|
|
|
|
|
|
| Cost |
30 November 2022
(Unaudited) € |
|
30
November 2021 (Unaudited) € |
|
31 May 2022
(Audited) € |
At 1 June |
10,910,931 |
|
10,766,576 |
|
10,766,576 |
| Expenditure during the financial
period/year |
|
|
|
|
|
- License and appraisal costs
|
18,510 |
|
32,233 |
|
10,114 |
|
|
59,769 |
|
108,592 |
|
134,241 |
| At 30 November/31
May |
10,989,210 |
|
10,907,401 |
|
10,910,931 |
|
|
|
|
|
|
|
|
|
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.
4. Commitments and Contingencies
At 30 November 2022, there were no
capital commitments or contingent liabilities (31 May 2021: No capital commitments or
contingencies liabilities). Should the Company decide to develop
the Lahtojoki project, an amount of €40,000 is payable by the
Company to the vendors of the Lahtojoki mining concession.
5. 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 30 November
2022 including accrued interest was €170,436. This
agreement was varied in December 2022
post period end 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 on
20th December 2022.
6. Warrant liabilities
The Company holds Euro and Sterling based warrants. The Company
estimates the fair value of the sterling-based warrants using the
Binomial Lattice Model. The determination of the fair value of the
warrants is affected by the Company’s share price along with other
assumptions. The fair value of the warrants in issue as at
30 November 2022 was €NIL. There were
no new warrants issued during the period and none were exercised or
lapsed.
7. Related party transactions
(a) Apart from Directors’ remuneration, and loans from
shareholders, (who are also Directors), there have been no
contracts or arrangements entered into during the six-month period
in which a Director of the Company had a material interest.
(b) The Company shares accommodation and staff with Conroy Gold and Natural Resources plc which have
certain common Directors and shareholders. For the six-month period
ended 30 November 2022, Conroy Gold and Natural Resources plc incurred
costs totalling €34,846 (30 November
2021: €50,311) on behalf of the Company. These costs were
recharged to the Company by Conroy
Gold and Natural Resources plc. At 30
November 2021, Conroy Gold
and Natural Resources plc was owed €234,651 (30 November 2021: €169,804) by the
Company.
8. Subsequent events
The Company raised £250,000 through a placing of 12,500,000
Ordinary shares, settlement of which occurred in early December
2022.
As detailed in Note 5 above, the convertible loan note, which as
at 30 November 2022 amounted to
€170,436 including interest, was converted in full into new
ordinary shares in December 2022.
Subsequent to the period end the National Land Survey announced
that the ground rental compensation for the local landowners to be
paid by the Company amounts in total to €162,815. This
compensation is to be paid within three months from 28th December 2022 and the Company expects to
fund this through existing cash resources.
There were no material events subsequent to the reporting date
which necessitate revision of the figures or disclosures included
in the financial statements.
9. Approval of the condensed financial
statements
These condensed financial statements were approved by the Board
of Directors on 27 February 2023. A copy of the condensed
financial statements will be available on the Company’s website
www.kareliandiamondresources.com on 28
February 2023.