The company said the placing and subscription were comprised of 13mln shares at a price of 4p each, a 19.2% discount to its closing price on Thursday, to raise GBP520,000.
In conjunction with the placing and subscription, Karelian said certain parties including its chairman Richard Conroy and managing director Maureen Jones have capitalised on amounts owed to them totalling GBP80,000 through the issue of 2mln new shares.
Each share issued in the fundraising also carries a warrant to subscribe for one new share at a price of 8p each. Should all the warrants be exercised, the company said it will generate an additional GBP1.3mln in funding.
Karelian said the funds will be used to conduct drilling at the Lahtojoki deposit and investigate the prevalence of pink diamonds discovered at the site. The group also said it will continue work to identify other potentially diamondiferous kimberlite structures in the vicinity of the Lahtojoki South exploration area.
The company added that the planned work at Lahtojoki is intended to elevate the deposit to test mining stage and bulk sampling in the lead up to the anticipated granting of its mining permit, which is currently in the final stages of the formal approval process.
“I am delighted with the success of the fundraising which comes as we look to receive a full Mining Permit for our Lahtojoki diamond deposit, with its exciting potential for pink diamonds, and also progress with our promising diamond exploration programme both around Lahtojoki and in the known diamondiferous Kuhmo region of Finland”, Conroy said in a statement.
Shares in Karelian were 4% lower at 4.8p in early afternoon trading on Friday.