Stornoway Reports Initial 26.1 Million Carat Mineral Resource Estimate for the Qilalugaq Project, Nunavut

Stornoway Reports Initial 26.1 Million Carat Mineral Resource Estimate for the Qilalugaq Project, Nunavut  

MONTREAL, QUEBEC--(Marketwire - June 12, 2012) -Stornoway Diamond Corporation (TSX:SWY) is pleased to announce the filing on SEDAR of a National Instrument ("NI") 43-101 technical report representing the first Mineral Resource estimate for the Q1-4 kimberlite pipe located at Stornoway's 100% owned Qilalugaq Diamond Project in Nunavut, Canada. The Qilalugaq Diamond Project includes the Qilalugaq kimberlite pipes and the Naujaat system of kimberlite dykes, and has been the focus of ongoing exploration and assessment work by Stornoway since it was optioned and subsequently acquired from BHPB Billiton Diamonds Inc. ("BHPB") in July 2006 and July 2010, respectively.

Highlights of the NI 43-101 technical report include: •a total Inferred Mineral Resource for the Q1-4 kimberlite pipe of 26.1 million carats from 48.8 million tonnes total content of kimberlite with an average +1 DTC total diamond content of 53.6 carats per hundred tonnes (cpht) extending from surface to a depth of 205m;

•additional resource upside has been identified in the form of a target for further exploration for the Q1-4 kimberlite pipe of between 7.9 to 9.3 million carats from 14.1 to 16.6 million tonnes total content of kimberlite with an average +1 DTC total diamond content of 56.1 cpht, extending from 205m depth to 305m 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 target for further exploration is conceptual in nature, there has been insufficient exploration to define a mineral resource, and it is uncertain if further exploration will result in the target being delineated as a mineral resource.

Matt Manson, President and CEO, commented: "As we focus on the financing and development of the Renard Diamond Project in Québec, we continue to nurture our pipeline projects that represent the company's future growth potential. The Qilalugaq Project, along with the Aviat Project on the Melville Peninsula of Nunavut, is one of our advanced exploration projects where previous work has delineated a large potential inventory of diamonds, but where we have only limited diamond valuation data. The Q1-4 kimberlite complex at Qilalugaq is large, easily accessible from the hamlet of Repulse Bay, and exposed at surface. We are very pleased to have reported such a large maiden mineral resource estimate at a project that, with the long term positive outlook on diamond prices, is becoming increasing compelling."

Qilalugaq Mineral Resource Estimate

The Qilalugaq Project comprises 114,961 hectares of land located on the Rae Isthmus, which connects the Melville Peninsula to mainland Nunavut. BHPB discovered eight kimberlites at Qilalugaq between 2003 and 2005. Stornoway optioned the property in July of 2006, and discovered an additional eight kimberlites between 2006 and 2010. All kimberlites are diamondiferous, and occur within a 26 x 3 km structurally favourable corridor. In July of 2010, Stornoway increased its ownership in Qilalugaq to 100% by providing BHPB with a 3% royalty interest in the project.

The 12.5 hectare Q1-4 kimberlite, the largest kimberlite pipe in the eastern Canadian Arctic, is situated approximately 8 km from tidewater, and less than 9 km from the hamlet of Repulse Bay. Q1-4 is interpreted as a complex, steep-sided, diatreme to root-zone kimberlite, with a lobate external shape. It is comprised of five phases of kimberlite: A28a, A48a, A48b, A61a and A88a, and has been geologically modeled to a depth of 305m below surface (see image: http://tinyurl.com/bqvtk6j). The pipe shape was defined from drill hole data, country rock and kimberlite outcrop exposures, and magnetic geophysical surveys. Kimberlite geology has been determined using detailed logging of drill core and results of petrographic studies and includes massive volcaniclastic kimberlite classified as "tuffisitic" kimberlitic breccia, lesser coherent "hypabyssal" kimberlite, and varying proportions of country-rock xenoliths.

The mineral resource estimate was authored by Geostrat Consulting Inc. ("Geostrat"), and comprises the integration of kimberlite volumes, density, petrology and diamond content-data obtained from 5,133 m of diamond drilling, 2,714 m of reverse circulation (RC) drilling, 2.9 tonnes of samples submitted for microdiamond analysis, 257.7 tonnes of samples submitted for macrodiamond sampling with 59.2 carats of diamonds (2,054 stones) recovered from RC drilling, 7.5 carats of diamonds (205 stones) recovered from surface trenching and 2.36 carats of diamonds (69 stones) recovered from HQ diameter diamond drilling. These data summarize the results of exploration programs conducted on the Qilalugaq Property by BHPB from 2003 to 2005, and by Stornoway from 2006 to 2012.

The technical report recommends proceeding to the collection of a large tonnage surface sample at Q1-4 to establish a diamond price estimate. Stornoway has submitted an application to the relevant regulatory authorities to allow it to pursue this program of work, subject to an investment decision to proceed.

Qualified Persons for the NI 43-101 Report

Mr. David Farrow, P.Geo. (BC) of GeoStrat is the independent Qualified Person responsible for the preparation of the mineral resource estimate section for the Qilalugaq Diamond Project. Ms. Barbara Kupsch, P.Geo. (AB) of Stornoway, a Qualified Person under NI 43-101, is responsible for the preparation of the remaining sections of the technical report and conducted Stornoway's diamond exploration programs for the Qilalugaq Property. Both of these Qualified Persons have reviewed and approved the contents of this press release.

About Stornoway Diamond Corporation

Stornoway is a leading Canadian diamond exploration and development company listed on the Toronto Stock Exchange under the symbol SWY. Our flagship asset is the 100% owned Renard Diamond Project, on track to becoming Québec's first diamond mine. Stornoway also maintains an active diamond exploration program with both advanced and grassroots programs in the most prospective regions of Canada. Stornoway is a growth oriented company with a world class asset, in one of the world's best mining jurisdictions, in one of the world's great mining businesses. Stornoway's diamond exploration programs are conducted under the direction of Robin Hopkins, P.Geol. (NT/NU), a Qualified Person under NI 43-101.

On behalf of the Board

STORNOWAY DIAMOND CORPORATION

Matt Manson, President and Chief Executive Officer