LONDON (ShareCast) - AIM-listed explorer Karelian Diamond Resources knocked the wind out of its recently surging shares as it announced plans to raise cash at discount to its newly inflated share price.

Karelian, which has been on the charge after revealing before Christmas it was applying to expand its Kuusamo exploration project in Finland after encouraging geophysics surveys, said it was raising £750,000 at 2p.

Its shares had almost touched 5p last week - a three-year high - but the company said it was placing the 37.5m new ordinary shares "on the back of demand from private retail clients".

It explained the placing proceeds would be used to accelerate existing programmes across its various diamond prospects in Finland.

Shares in Karelian were down 23% to 3.45p.

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