29 October 2008

                        Karelian Diamond Resources plc                         

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

             DELINEATION DRILLING AT SEITAPERÄ FINDS PIPE EXTENSION

  * Eight holes intersect mantle-bearing kimberlite in central portion of main
    pipe
   
  * Similar to material that yielded high micro- and macro-diamond count in
    July
   
  * Detailed examination of core prior to despatch of samples for diamond
    analysis
   
Karelian (AIM: KDR) announces that it has discovered a significant north-east
extension to its Seitaperä diamondiferous kimberlite pipe in Finland during the
delineation drilling programme. Seitaperä is already the largest known
kimberlite pipe in Finland, with a surface area of 6.9ha.

The new north-east extension, which coincides with a discrete, circular
magnetic anomaly 100m in diameter, was previously thought to be a kimberlite
dyke after sampling returned a positive micro-diamond result in April this
year. However, the latest drilling returned a continuous 80m intersection of
kimberlite across this structure, suggesting that it represents a further small
kimberlite, or "blow", within the Seitaperä complex.

The main objective of the extensive delineation drilling programme was to
accurately delineate the central portion of the Seitaperä pipe which yielded 61
micro- and six macro-diamonds in July from a single 100kg sample of kimberlite.
A total of 947m of drilling was completed in 14 holes to a maximum depth of
115m, intersecting 583m of kimberlite, representing approximately two tonnes of
material.

Eight holes drilled across the central portion of the main pipe intersected
substantial zones of primary kimberlite containing abundant mantle xenoliths,
similar in nature to the material which yielded the positive diamond result in
July.

The delineation drilling has now been completed and all the core has been
provisionally logged and photographed. Results are being integrated into a
detailed three-dimensional computer-generated model of the Seitaperä pipe's
structure. Following more detailed examination of the core, representative
intersections will be selected for micro-diamond sampling, and these will be
submitted for analysis in due course.

The drilling was laid out in a series of parallel lines 25-30m apart, with
holes drilled mainly at an inclination of 50 degrees, perpendicular to the
strike of the kimberlite pipe. Visual examination of the core has enabled the
Company to establish kimberlite/wall-rock contacts at 15 locations, at true
vertical depths of between 15m and 65m.

Professor Richard Conroy, Chairman of Karelian, commented: "Completion of the
latest drilling adds to our understanding of the structure of the Seitaperä
kimberlite, and has provided significant volumes of material for analysis as
part of our detailed evaluation of this body. All the drilling intersected
parts of the kimberlite body as anticipated, and the significant extension to
the existing pipe is an unexpected bonus."

This release has been approved by Dr. Stephen Grimmer of the Company's
technical staff, who holds a PhD in Geochemistry/MSc in Exploration Geology, 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.

Further Info: Professor Richard Conroy, Chairman Karelian Diamond Resources plc
Tel: + 353-1-661-8958

Charles Dampney, City Capital Corporation Limited Tel: + 44-20-7842-5867

Jeffrey Coburn/Virginia Bull, John East &Partners Limited Tel: +
44-20-7628-2200

Ron Marshman/Michael Padley, Lothbury Financial Tel: + 44-20-7011-9411

http://www.kareliandiamondresources.com