Stornoway Diamond Corporation
TSX : SWY

Stornoway Diamond Corporation

December 19, 2006 06:00 ET

Stornoway Commences Compulsory Acquisition of Remaining Contact Common Shares

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Dec. 19, 2006) - Stornoway Diamond Corporation ("Stornoway") (TSX:SWY) is pleased to announce that it has mailed a notice of compulsory acquisition to all remaining holders of Contact Diamond Corporation common shares (the "Common Shares").

Following Stornoway's offer to acquire all of the Common Shares not already owned by it, Stornoway beneficially owns approximately 93.1% of the issued and outstanding Common Shares.

Since the Stornoway offer was accepted by holders of more than 90% of the Common Shares, Stornoway is now exercising its right under the compulsory acquisition provisions of the Business Corporations Act (Ontario) to acquire all outstanding Common Shares not already owned by Stornoway on the basis of 0.36 common shares of Stornoway per Common Share. Further details are provided in the notice of compulsory acquisition.

On behalf of the Board

STORNOWAY DIAMOND CORPORATION

Eira Thomas

This news release is not an offer of Stornoway shares or any other securities for sale in the United States. The Stornoway shares to be issued pursuant to the compulsory acquisition described herein have not been, and will not be, registered under the United States Securities Act of 1933 or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

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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