2012-12-11 09:39 ET - News Release

Mr. Matt Manson reports

STORNOWAY RECOVERS HIGH VALUE 9.78 CARAT STONE FROM RENARD 65 BULK SAMPLE

During the continuing processing of the Renard 65 bulk sample at Stornoway Diamond Corp.'s North Vancouver diamond recovery facility, a 9.78-carat diamond has been recovered that, with a preliminary valuation of $7,000 per carat, is one of the most valuable stones ever discovered at the Renard diamond project.

The 9.78 carat stone is an unbroken white octahedral gem. The next largest diamond in the sample is 6.41 carats in size and is also a white octahedral gem of high quality, with a preliminary valuation of $4,700 per carat. Approximately one third of the Renard 65 bulk sample's heavy mineral concentrate has now been processed and a total of eleven diamonds larger than 1.8 carats in size have been extracted. Sample processing is continuing.

Matt Manson, Stornoway's President and CEO, commented: "Our expectation for the Renard 65 bulk sample was that, as with the other Renard kimberlites, we would have recovered a number of high quality large stones given the size of the sample and its likely diamond size distribution. To have obtained two such large diamonds so early on, both of exceptional quality, is highly encouraging."

The objective of the current sampling program at Renard 65 is the recovery of a parcel of diamonds large enough for valuation purposes, with a view to the conversion of material that is currently classified as an Inferred Mineral Resource to an Indicated Mineral Resource and then, if warranted, to a Mineral Reserve for inclusion in the project's mine plan. The field portion of the bulk sample program was completed in November, and final diamond recovery results are expected in Q1 2013. Given the estimated diamond content at the sampling site, it is expected that approximately 1,000 carats of diamonds will be recovered, which will be sent to Antwerp, Belgium for valuation.

Within the larger Renard Mineral Resource inventory, Renard 65 contains an Inferred Mineral Resource of 3.7 Mcarats (representing 12.9 mtonnes at an average grade of 29 cpht) to a depth of 290m, with an exploration potential estimated at between 6.8 and 13.7 Mcarats (29.5 to 41.6 Mtonnes at between 23 and 33 cpht) from 290m to 775m in depth. The reader is cautioned that mineral resources that are not mineral reserves do not have demonstrated economic viability. In addition, the potential quantity and grade of any exploration target is conceptual in nature, and it is uncertain if further exploration will result in it being delineated as a mineral resource.

Large Diamonds in Exploration Samples at Renard

A feature of the Renard Diamond Project has been the incidence of large, high value stones that have been recovered at each stage of exploration sampling since the project's discovery in 2001. The most celebrated of these was a Renard 65 white octahedral gem of at least 4 carats discovered embedded in drill core in 2003. During the Renard bulk sampling program of 2007 a 15.46 carat top light brown "makeable" gem was recovered from Renard 2, a 10.15 carat white octahedral gem was recovered from Renard 3, and a broken 21.53 carat brown octahedral gem was recovered from the Lynx Dyke in three pieces of 11.73, 5.96 and 3.94 carats. In all, seven stones have now been recovered from Renard with values in excess of US$4,000 per carat.

About the Renard Diamond Project

The Renard Diamond Project is located approximately 250 km north of the Cree community of Mistissini and 350 km north of Chibougamau in the James Bay region of North-Central Quebec. In November 2011, Stornoway released the results of a Feasibility Study for Renard that highlighted the potential of the project to become a significant producer of high value rough diamonds over a long mine life. NI 43-101 compliant Probable Mineral Reserves stand at 18.0 million carats, with a further 17.5 million carats classified as Inferred Mineral Resources, and 23.5 to 48.5 million carats classified as non-resource exploration upside. All kimberlites remain open at depth. Pre-production capital cost stands at an estimated C$802 million, with a life of mine operating cost of C$54.71/tonne giving a 68% operating margin over an initial 11 year mine life. Readers are referred to the technical report dated December 29, 2011 in respect of the Renard Diamond Project for further details and assumptions relating to the project.

Qualified Persons

Mr. David Skelton, P.Geo. (QC), P.Geol (AB), Vice President, Project Development for Stornoway is a Qualified Person as defined under National Instrument 43-101 and was responsible for supervising the Renard 65 bulk sample program on the Renard Diamond Project. Mr Skelton has reviewed and approved the scientific and technical information contained in this release. Diamond valuations were performed by Mr. Shlomo Tidhar of Galaxy Diamond Expertise (HK), a consultant to Stornoway.

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