Stornoway Diamond* (SWY : TSX : $0.64), Net Change: 0.03, % Change: 4.92%, Volume: 2,085,430
Shiny Happy People holding...Shares of Stornoway Diamond rallied on Wednesday after the company released an exploration
update for its 50%-owned Renard diamond project in Northern Quebec. Salient points: 1) It appears exploration potential at
depth, particularly on Renard 65 and Renard 4, is excellent. A winter drill program, including three holes totalling 1,711 m has
been completed. Each hole tested the depth extent of the Renard 3, 4 and 65 kimberlite pipes and each hole demonstrated that
each pipe is larger than expected at depth, although the complete microdiamond analysis is still to 2-3 months away. While it is
believed that the pipes will carry diamonds, the grade has yet to be established; 2) The extension of Renard 65 is particularly
important, as it has the largest in surface area and, therefore, can have the greatest impact on overall resource. A Bay Street
analyst notes that Renard 65 is also important in that surficial testing of diamond content returned poor results; he expects that
testing at depth will demonstrate similar diamond content and distribution to that of its cluster peers. The hole testing Renard 3
terminated early in kimberlite and so the theory that Renard 2 and 3 may coalesce at depth remains untested; 3) An extensive
summer drill program is planned, leading to additional news flow. The recently-updated preliminary econmic dealt with a
conceptual mine-life of 25 years based on a production rate of 1.8 Mt/a and a total diamond production of 30 million carats. As
Canaccord Adams Senior Mining Analyst Eric Zaunscherb has noted in the past, it is probable that the mill will be upsized to
7,000 t/d from the planned rate of 5,000 t/d to match the designed capacity of the planned shaft. Completion of a full feasibility
study and a production decision are anticipated by the end of 2011.