Stornoway Diamond Corporation
TSX : SWY

Stornoway Diamond Corporation

May 29, 2009 13:37 ET

Stornoway Announces Closing of Flow-Through Financing

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 29, 2009) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Stornoway Diamond Corp. (TSX:SWY) ("Stornoway" or the "Company") is pleased to announce that it has closed a brokered private-placement with Sandfire Securities Inc. as lead agent, and including, Canaccord Capital Corporation and Haywood Securities Inc. (collectively, the "Agents"), consisting of 8,421,276 "flow-through" common shares ("Flow-Through Shares") of Stornoway, for gross proceeds of $1,431,617. The Flow-Through Shares were priced at $0.17 per share and will be subject to a four-month hold period expiring September 30, 2009.

The Agents received a cash commission and Compensation Warrants, both equal to 7% of the gross proceeds raised by the Agents. The 568,695 Compensation Warrants will be exercisable at $0.17 and will expire May 29, 2011.

Insiders of the Company subscribed for 297,059 Flow-Through Shares of the Company on the same terms as the arms' length subscribers.

The proceeds from the private placement will be used primarily to fund Stornoway's share of exploration on the Renard Diamond Project in Quebec. Expenditures from the Flow-Through Shares will constitute Canadian exploration expense ("CEE") (as defined in the Income Tax Act) for the 2009 tax year and will be renounced to the subscribers. A minimum of $600,000 will also qualify for a Quebec surface drilling tax credit, which will also be renounced to the subscribers.

The private placement remains subject to the receipt of final regulatory approvals.

This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and may never be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

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 six 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 news release may contain forward looking statements, being statements which are not historical facts, including, without limitation, statements regarding potential mineralization, exploration results, resource or reserve estimates, anticipated production or results, sales, revenues, costs, "best-efforts" financings or discussions of future plans and objectives. There can be no assurance that such statements will prove accurate. Such statements are necessarily based upon a number of estimates and assumptions that are subject to numerous risks and uncertainties that could cause actual results and future events to differ materially from those anticipated or projected. Important factors that could cause actual results to differ materially from the Company's expectations are in Company documents filed from time to time with the Toronto Stock Exchange and provincial securities regulators, most of which are available at www.sedar.com. The Company disclaims any intention or obligation to revise or update such statements.

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