News

July 26, 2010

Shares In Karelian Diamonds Soar As It Joins Forces With Rio On The Ground In Finland

By Alastair Ford

“We’re well pleased with it”, says Professor Conroy of the recent agreement between his Finnish diamond company, Karelian Diamonds, and Rio Tinto. The markets were well pleased too, pushing Karelian’s shares up by almost 200 per cent on Thursday 22nd July, the day the news was announced, and on good volumes too. The following Friday the shares then rose by a further 90 per cent or so, such that by the close of the week the overall rise amounted to a whopping 292 per cent, as Karelian closed at 4.25p.

That made Karelian easily the best performer of the week, although even after all that price strength, it still remains a minnow, capitalised at just £2.5 million. Rio Tinto’s intervention certainly makes a difference, and for several reasons. The first, general, point to make is that the Rio deal brings Karelian back to life from the state of semi-hibernation that it had gone into once the global financial crisis got underway. To be fair, and as we’ve reported here before, Karelian didn’t...