The information contained within this announcement is deemed by the Company to 
    constitute inside information as stipulated under the Market Abuse Regulations 
                              (EU) No. 596/2014 ("MAR").                           

                            Karelian Diamond Resources plc                         
                             ("Karelian" or "the Company")                         

                                                                    31 January 2017

                             DIAMOND DISCOVERY IN FINLAND                          

      * Diamond Discovery in Till Sample in Eastern Finland

      * The Diamond is a Clear, Pale Green Dodecahedron and Measures 0.7 x 0.75 x
        0.7 mm

      * High Concentrations Of Kimberlitic Indicator Minerals Discovered in
        Association



    Karelian Diamond Resources plc ("Karelian") (AIM: KDR, ESM: KDRI), is pleased
    to announce that it has received results from sampling undertaken by the
    Geological Survey of Finland ("GTK") on behalf of the Company. A diamond was
    discovered in one of seven samples from the Kuhmo region of Eastern Finland.

    The diamond is a clear, pale green dodecahedron and measures 0.7 x 0.75 x 0.7
    mm. To put the rarity of this discovery in context, ODM Laboratory* has
    processed more than 50,000 exploration till samples and has recovered less than
    10 naturally occurring diamonds. This is a very rare and significant discovery.

    This is significant because the diamond discovery allied with high
    concentrations of Kimberlitic Indicator Minerals ("KIMs") discovered in the
    area strongly suggest that a diamondiferous kimberlite is present.

    The KIMs include 13 purple to red peridotitic garnets (G9/10 Cr-pyrope), 3
    orange mantle garnets, 2 Cr-diopside and 178 chromite grains in the 0.25 to 0.5
    mm size range, plus 1 purple to red peridotitic garnet (G9/10 Cr-pyrope) and 6
    chromite grains in the 0.5 to 1.0 mm size range.

    These samples will go for further analysis.

    *ODM Laboratory holds a Certificate of Authorization from the Association of
    Professional Geoscientists of Ontario and is used by diamond explorers in all
    parts of Canada and the world. During the Canadian diamond rush of the 1990s
    and early 2000s, ODM contributed to many kimberlite discoveries by processing
    and logging more than 50,000 samples.

    This release has been approved by Kevin McNulty PGeo, who is a member of the
    Company's technical staff and holds a BSc/MSc in Geology and Remote Sensing, in
    accordance with the guidance note for Mining, Oil & Gas Companies issued by the
    London Stock Exchange in respect of AIM Companies, which outlines standards of
    disclosure for mineral projects.

    Professor Richard Conroy, Chairman, Karelian Diamond Resources plc commented:

    "This is very exciting news to find such a diamond in till which is a very rare
    event and makes me very excited about the potential of the area and the
    discovery of the source of this diamond."

    Further Information:

    Professor Richard Conroy, Chairman, Karelian Diamond  Tel: +353-1-661-8958         
    Resources plc                                                                      
                                                                                       
    David Hart / James Thomas / Nick Harriss, Allenby     Tel: +44-20-3328-5656        
    Capital Limited (Nomad)                                                            
                                                                                       
    Ger Heffernan / Jan Fitzell, IBI Corporate Finance    Tel: +353-7662-34800         
    Limited (ESM Adviser)                                                              
                                                                                       
    Jon Belliss / Elliot Hance, Beaufort Securities       Tel: +44-20-7382-8300        
    Limited (Broker)                                                                   
                                                                                       
    Michael Padley, Lothbury Financial Services Limited   Tel: +44-20-3290-0707        
                                                                                       
    Don Hall, Hall Communications                         Tel: +353-1-660-9377         

    www.kareliandiamondresources.com