0.54 Carat Diamond Recovered From AV9 Kimberlite Pipe

VANCOUVER, BRITISH COLUMBIA, Mar 07, 2011 (MARKETWIRE via COMTEX News Network) --

Stornoway Diamond Corporation (TSX: SWY) and Hunter Exploration Group are pleased to provide new microdiamond results from the AV9 kimberlite and the related Eastern Sheet Complex at the Aviat Project, located on the Melville Peninsula of Nunavut. These results are consistent with previous high diamond recoveries from the project, which incorporates an extensive system of kimberlite pipes and near surface kimberlite sheets with significant tonnage and grade potential. The 90% owned Aviat Project is Stornoway's key pipeline project after the bankable feasibility stage Renard Diamond Project located in north-central Quebec. The eastern arctic continues to be a focus for diamond exploration in Canada, where significant discoveries have been identified in several kimberlite fields throughout the region over the past ten years.

The new results reported today represent micro-diamond data for over one tonne of kimberlite recovered by drilling in 2008 but not processed until recently. This work comprises part of Stornoway's ongoing assessment of the grade potential at Aviat ahead of future, larger scale sampling. In total, 677 diamonds (stones retained on a 0.106mm square mesh sieve) were recovered from 927 kilograms of drill core from the AV9 kimberlite pipe and a total of 226 diamonds were recovered from 226 kilograms of drill core from the Eastern Sheet Complex ("ESC"). The largest diamonds recovered were 0.545 carats and 0.156 carats from AV9, and 0.092 carats from the ESC. The results of this work are summarized in the table below.

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                   NUMBER OF DIAMONDS PER SIEVE SIZE
                        (MM SQUARE MESH SIEVE)
------- --------------------------------------------------- ---------------
Sample
weight  0.106  0.150 0.212 0.300 0.425 0.600 0.85 1.18 1.70          Total
(dry;      to     to    to    to    to    to   to   to   to  Total  Carats
kg):    0.150  0.212 0.300 0.425 0.600 0.850 1.18 1.70 2.36 Stones +0.85mm
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Sample: AV9
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927.17    221    183   109    73    48    28    7    6    2    677   1.091
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Sample: ESC
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225.62     70     53    40    32    22     4    0    4    1    226   0.227
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Matt Manson, President and CEO, commented: "These new microdiamond results confirm the high diamond contents and competitive size distribution characteristics typical of the Aviat Project, one of the most significant diamond occurrences to have been discovered in the eastern Arctic. Of particular significance are the large diamonds recovered from AV9, the kimberlite pipe located at the heart of Aviat's complex of diamondiferous kimberlite sheets. Stornoway's principal near term focus is the completion of the Renard Feasibility Study, expected within the third quarter of this year, and the development of Renard into Quebec's first diamond mine. However, Aviat represents a credible internal growth opportunity for the company with a substantial inventory of diamonds. As Renard progresses, we will continue to advance our pipeline of projects with particular emphasis on discovery and the establishment of new resources."

AV9

The AV9 kimberlite was discovered in 2007 (see SWY Press release August 23, 2007) and was the third kimberlite pipe discovered within the prospective Tremblay Corridor, host to the AV1 and AV4 kimberlite pipes. In 2008, a total of 1,144 meters of drilling in nine holes was completed at AV9 to better determine the internal geology and geometry. The pipe measures approximately 45 by 135 meters and kimberlite has been confirmed to a depth of 175 meters. Previous microdiamond results from the discovery phase of drilling returned 236 diamonds from 307 kilograms of drill core (see SWY Press Release December 12, 2007). The new microdiamond results expand the inventory of diamond data available for assessment at AV9, and show the pipe to have similar diamond content characteristics to the AV1 kimberlite pipe, which returned a mini-bulk sample diamond content of 89 carats per hundred tonnes ("cpht") in 2008 (Stornoway Diamond press release dated March 13, 2008).

Eastern Sheet Complex (ESC)

The ESC comprises a series of stacked, shallowly dipping kimberlite sheets covering a minimum 260 hectare area adjacent to the AV9 kimberlite pipe. Sheets vary in thickness between 0.9 meters and 1.7 meters average true thickness, and extend from surface to a minimum of 100 meters below surface. A 2008 conceptual geological model developed by SRK Consulting (Canada) Inc. ("SRK"; Stornoway Press Release dated October 7, 2008) included an estimate of total kimberlite in four separate bodies of between 12.4 and 16.0 million tonnes. An estimate of total diamond content, determined using both micro and macro diamond data, was 235 +/- 30 cpht (undiluted) at a bottom cut-off of +1.0mm. The conceptual range of kimberlite and the estimate of total diamond content imply a Potential Mineral Deposit in the ESC of between 24.1 and 40.3 million carats of diamonds, after an allowance for approximately 5% internal dilution within the model. The study assumed 100% recovery of stones of all size fractions, and no corrections were applied for breakage and/or loss of smaller diamonds that would typically occur during recovery of diamonds in a commercial plant. Such losses can be expected to comprise 15-20% when compared to the total diamond content model. The reader is cautioned that the potential quantity and grade of any potential mineral deposit is conceptual in nature, and it is uncertain if further exploration will result in the target being delineated as a mineral resource.

In 2009, 148 tonne and 43 tonne samples collected from surface exposures of the ES-1 sheet within the ESC returned diamond contents 144 cpht and 210 cpht respectively and included the recovery of a 3.99 carat diamond (Stornoway Diamond Press Release dated May 5, 2009). Previous microdiamond results from the 2007 drilling campaign comprised 518 diamonds from 358.7kg of drill core (Stornoway Diamond Press Release dated January 28, 2008). The new microdiamond data reported today are consistent with the previous sampling, and the previous estimates of total diamond content, and demonstrate the lateral consistency of diamond content over the breadth of the 260 ha ESC.

A graphical illustration of the Aviat Project and the kimberlite bodies discussed in this press release can be found on Stornoway's website at:

http://www.stornowaydiamonds.com/_resources/Aviat_Kimberlite_Pipes.pdf

Scientific and Technical Data

Caustic dissolution data described above are based on work completed by Microlithics Laboratories, Thunder Bay, Ontario, an independent mineral process laboratory. As part of Stornoway's ongoing QA/QC programs all materials are subject to audit, and any significant changes will be reported when available.

Stornoway's diamond exploration programs are conducted under the direction of Robin Hopkins P.Geol. (NT/NU), Vice President, Exploration, a Qualified Person under NI 43-101. Mr. Hopkins has reviewed the contents of this press release.

About Stornoway Diamond Corporation

Stornoway Diamond Corporation is one of Canada's leading diamond exploration and development companies, involved in the discovery of over 200 kimberlites in seven Canadian diamond districts. The Company benefits from a diversified diamond property portfolio, a strong financial platform and management and technical teams with experience in each segment of the diamond "pipeline" from exploration to marketing.

On behalf of the Board

STORNOWAY DIAMOND CORPORATION

Matt Manson, President and Chief Executive Officer

This document contains "forward-looking information" within the meaning of Canadian securities legislation and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. This information and these statements, referred to herein as "forward-looking statements" are made as of the date of this document and the Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by law.

Forward looking statements include any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects", "anticipates", "plans", "projects", "estimates", "assumes", "intends", "strategy", "goals", "objectives" or variations thereof or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements.

All forward-looking statements are based on Stornoway's or its consultants' current beliefs as well as various assumptions made by and information currently available to them. Many of these assumptions are set forth in the news release and include: (i) estimates of contained carats; (ii) the amount and classification of indicated and inferred mineral resources and potential mineral deposits; (iii) estimated completion date for the Feasibility Study; (iv) receipt of regulatory approvals on acceptable terms within commonly experienced time frames; (vi) anticipated timelines for the commencement of mine production. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Many forward-looking statements are made assuming the correctness of other forward looking statements, such as statements of net present value and internal rate of return, which are based on most of the other forward-looking statements and assumptions herein. The cost information is also prepared using current values, but the time for incurring the costs will be in the future and it is assumed costs will remain stable over the relevant period.

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that estimates, forecasts, projections and other forward-looking statements will not be achieved or that assumptions do not reflect future experience. We caution readers not to place undue reliance on these forward-looking statements as a number of important factors could cause the actual outcomes to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates assumptions and intentions expressed in such forward-looking statements. These risk factors may be generally stated as the risk that the assumptions and estimates expressed above do not occur, including the assumption in many forward-looking statements that other forward-looking statements will be correct, but specifically include, without limitation, risks relating to variations in the grade, kimberlite lithologies and country rock content within the material identified as mineral resources from that predicted, variations in rates of recovery and breakage; the greater uncertainty of potential mineral deposits, developments in world diamond markets, slower increases in diamond valuations than assumed, risks relating to fluctuations in the Canadian dollar and other currencies relative to the US dollar, increases in the costs of proposed capital and operating expenditures, increases in financing costs or adverse changes to the terms of available financing, if any, tax rates or royalties being greater than assumed, results of exploration in areas of potential expansion of resources, changes in development or mining plans due to changes in other factors or exploration results of Stornoway or its joint venture partners, changes in project parameters as plans continue to be refined, risks relating to receipt of regulatory approvals or settlement of an Impact and Benefits Agreement, the effects of competition in the markets in which Stornoway operates, operational and infrastructure risks and the additional risks described in Stornoway's most recently filed Annual Information Form, annual and interim MD&As, and Stornoway's anticipation of and success in managing the foregoing risks. Stornoway cautions that the foregoing list of factors that may affect future results is not exhaustive. When relying on our forward-looking statements to make decisions with respect to Stornoway, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Stornoway does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by Stornoway or on our behalf, except as required by law.

Contacts:
Stornoway Diamond Corporation
Matt Manson
President and CEO
416-304-1026

Stornoway Diamond Corporation
Nick Thomas
Manager Investor Relations
604-983-7754 or Toll Free: 1-877-331-2232
info@stornowaydiamonds.com