Stornoway Diamond Corporation
TSX : SWY

Stornoway Diamond Corporation

October 11, 2006 09:44 ET

Stornoway Diamond Corporation: Aviat Exploration Update

Significant Tonnage Potential Identified Additional Positive Mini Bulk Sample Results

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 11, 2006) - Stornoway Diamond Corporation (TSX:SWY) is pleased to present the following update on its 2006 summer exploration activities on the Aviat Project, located on the Melville Peninsula in eastern Nunavut. The company has now completed a drill program designed to test the source of unexplained indicator mineral anomalies at the east end of the Tremblay Corridor. As a result of this work there are 11 known kimberlite bodies: AV1, AV1 West, AV2 Upper, AV2 Lower, AV3, AV4, AV5, AV67, AV8 Upper, AV8 Middle, and AV8 Lower. All bodies tested to date have been proven diamondiferous, and together could comprise significant tonnage potential. Please refer to the summary table below for details on each of the kimberlites, and Stornoway's website (http://www.stornowaydiamonds.com/kimberlite_bodies_sept27.jpg) for a map showing kimberlite locations.

Eira Thomas, President and CEO, commented, "In 2006, for the first time, we have established significant tonnage potential at Aviat. Drilling to date suggests that a series of extensive, shallowly dipping sheets, intersected in numerous locations over a 1.5 by 3.5km area, and up to 5.25m in width, may comprise part of a contiguous system of stacked kimberlite intrusions. All the bodies tested to this point have proven significantly diamondiferous, lending strong support for the overall economic potential of the area."

Significant Aviat Tonnage Potential Identified

During the summer program, Stornoway drilled a total of 1,833m in 22 holes, resulting in kimberlite intercepts up to 5.25m true thickness. In the eastern part of the Tremblay Corridor, eight separate kimberlites intersected over an area measuring about 1.5 by 3.5km comprise shallowly dipping (8 to 20 degrees), macrocrystic hypabyssal kimberlite sheets with associated zones of kimberlite breccia. These kimberlites are thought to be part of a sequence of layered, horizontally stacked sheets separated by vertical distances of 10 to 30m. Prospecting and till sampling results indicate that additional kimberlite sources occur within the same area, and will be the object of future drilling.

The Company is investigating the hypothesis, supported by 62 drill holes completed in the area to date, that the eight eastern kimberlites represent occurrences of a single system of stacked kimberlite sheets underlying the entire 1.5 by 3.5 kilometer area. One such sheet alone would represent a substantial potential tonnage of diamondiferous material. Additional drilling is required to properly test this hypothesis, which remains conceptual at this stage.

In addition to the drill program, work completed this summer included prospecting traverses over about 775km that successfully identified 122 new kimberlite boulder occurrences, and the collection of approximately 2,100 till samples to better define 15 unsourced indicator mineral trains with promising diamond inclusion chemistry. This work has confirmed the likelihood of further discoveries in the prolific Aviat kimberlite district.

Additional Positive Mini-Bulk Sample Results

Each of the eight eastern kimberlites has been proven significantly diamondiferous (see microdiamond results as previously reported) with diamond grades from three mini-bulk samples ranging from 0.77 to 0.97 carats per tonne (stones greater than 0.85mm on a square mesh screen). Macrodiamond results are now pending for three additional mini-bulk samples collected at each of AV2 Upper (approx. 2.1 tonnes), AV4 (approx. 2.0 tonnes), AV5 (approx. 2.3 tonnes) and AV8 Upper (approx. 1.5 tonnes).

A preliminary grade of 0.86 carats/tonne for diamonds greater than 0.85mm square mesh size has been determined for the AV3 kimberlite. A total of 1.269 carats were recovered from a dry sample weighting 1,467kg - stone counts for standard sieve categories are provided below.



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Sample
Sample Weight Sieve Size
-------------------------------------------------------------------
kg (dry) 0.85mm 1.18mm 1.70mm 2.36mm
-------------------------------------------------------------------
AV3 Hypabyssal Kimberlite 1467 25 7 7 1
-------------------------------------------------------------------


The diamond recovered on the 2.36mm screen weighted 0.162 carats. The seven stones recovered on the 1.70mm screen collectively weighted 0.6195 carats. The majority of these stones are described as fragmented white tetrahexahedroids.

Diamonds were recovered through by a Dense Media Separation (DMS) plant owned by Stornoway, and operated by Microlithics Laboratories, Thunder Bay, Ontario, an independent mineral process laboratory currently providing services exclusively to Stornoway and its affiliates. The plant is being used by Stornoway to assess and evaluate diamond exploration properties in our extensive portfolio.

Detailed Results

The following kimberlite summary table is intended for reference only, and may be subject to revision based on new results or re-interpretation of existing data. Dimensions of the bodies as reported are conservative and are confined to areas that have been drill tested or subjected to surface trenching. The kimberlites remain open along strike, down-dip and in some cases up-dip as well. Not all drilling to date has conformed to a consistent grid pattern. The macrodiamond grade for kimberlite A67 is calculated as a weighted average of grades previously reported for samples collected from the AV6 and AV7 outcrops, which were originally believed to represent two separate kimberlite bodies (see discussion below).



-------------------------------
-------------------------------
Approximate Dimensions
Implied By Current Drilling
-------------------------------
-------------------------------
Grade
(carats
per Average
tonne) or Drilled Drilled
Kimber- for Tonnes Assumed Strike Depth
lite stones processed Width/ Extent or
Kimber- Cluster greater through Thick- or Dip Dip
lite Body or than DMS ness Length Extent (deg-
Body Type Group 0.85mm to date (m) (m) (m) rees)
-----------------------------------------------------------------------
-----------------------------------------------------------------------
AV1 pipe- west 0.83 10.4 50 225 120 subver-
like tical
-----------------------------------------------------------------------
AV1
West sheet- west n/a n/a 1.2 200 100 subver-
like tical
-----------------------------------------------------------------------
AV4 pipe- west pending 2.0 23 120 100 subver-
like tical
-----------------------------------------------------------------------
AV2 sheet- east pending 2.1 1.6 150 200 approx.
upper like 10
-----------------------------------------------------------------------
AV2
lower sheet- east n/a n/a 3.3 150 200 approx.
like 10
-----------------------------------------------------------------------
AV3 sheet- east 0.86 1.5 3.5 400 200 approx.
like 8-12
-----------------------------------------------------------------------
AV5 sheet- east pending 2.3 1.5 200 150 approx.
like 10-15
-----------------------------------------------------------------------
AV67 sheet- east 0.86 4.5 4.2 1000 400 approx.
like 8
-----------------------------------------------------------------------
AV8
upper sheet- east pending 1.5 2.9 650 375 approx.
like 10-15
-----------------------------------------------------------------------
AV8
mid-
dle sheet- east n/a n/a 2.0 300 375 approx.
like 15-20?
-----------------------------------------------------------------------
AV8
lower sheet- east n/a n/a 1.0 300 375 approx.
like 10-15
-----------------------------------------------------------------------
n/a equals no macrograde available (diamonds recovered from caustic
fusion only)


Individual kimberlites are described in greater detail below, moving from west to east (refer to the map available from Stornoway's website http://www.stornowaydiamonds.com/kimberlite_bodies_sept27.jpg for kimberlite locations).

Previously reported descriptions of the AV1, AV1 West and AV4 kimberlites remain unchanged. AV1 and AV4 are complex pipe-like kimberlites situated at the west end of the known kimberlite trend. AV1 has a reported grade of 0.83 carats per tonne from a 10.4 tonne sample and mini-bulk sample results are pending for approximately 2.0 tonnes of kimberlite collected from AV4.

Based on results of drilling undertaken in 2006, the AV6, AV7 and AV7E bodies (centered about 3km east-southeast of AV1) are now thought to comprise a single continuous sheet-like body with an average thickness of 4.2m, striking roughly east-west and dipping to the south at about eight degrees. Drilling has intersected this body (herein referred to as AV67) over a strike length of 1,000m and down dip for 400m. Given the shallow dip and local variations in topography, this kimberlite sheet may also subcrop north and west of the current drilling, and may be the source of an essentially unbroken indicator mineral anomaly train that can be traced northwest for a further 1,500m. This potential extension is not proven at the present time and is not included in the above table or discussions.

Drilling at AV2 (1km east-southeast of AV67) has identified two sheets of kimberlite; AV2 Upper and AV2 Lower. Two distinct parallel kimberlite bodies have been encountered over an area of about 150m by 200m. The lower and thicker unit has a true width of about 3.3m, an east-west striking surface expression and a gentle southerly dip. No surface exposures of AV2 Lower have been discovered. Approximately 2.1 tonnes of kimberlite collected from subcrops of the AV2 Upper sheet, estimated at 1.6m true thickness, are currently crushed and awaiting DMS processing for recovery of diamonds greater than 0.85mm. Results will be reported when available.

Drill results in the vicinity of AV3 (1km east-southeast of AV2) intersected a shallowly southwest dipping kimberlite sheet over a surface area of about 400m by 200m. This body subcrops only at the north end, which was the site from samples were collected to yield the grade of 0.86 carats per tonne (diamonds greater than 0.85mm) reported above.

AV8, originally discovered as outcrop in 2005 and situated some 1.5km southeast of AV3, was drilled tested during both the spring and summer programs. Drilling intersected three distinct sheets of kimberlite (Upper, Middle and Lower), striking roughly north-south, dipping at about 10 - 20 degrees to the west, separated by a vertical distance of about 20-30m and extending over a drilled area of about 650m by 375m. The original AV8 discovery outcrop represents part of the surface trace of AV8 Upper, and is the site from which approximately 2.5 tonnes of kimberlite was removed for macrodiamond testing (DMS results pending). The Upper sheet averages 2.9m true thickness in the vicinity of the original AV8 outcrop. Drilling suggests the Middle and Lower sheets are comprised of multiple intrusions within horizons approximately 5-8m thick. Approximately 82kg of kimberlite drill core has been submitted for caustic fusion. Results will be announced when available.

Future Work Plans

Results of the 2006 work program remain outstanding, and a formalized work plan for 2007 has not yet been prepared, but exploration activities will focus on further investigation of the stacked kimberlite system, expanding the known area underlain by kimberlites, determining a source for the 15 or so currently unexplained indicator mineral anomaly trains in the Tremblay Corridor, and may potentially include the collection of a larger bulk sample(s).

About Stornoway

Stornoway Diamond Corporation maintains interests in more than 18 million acres, spanning 40 properties in northern Canada and Botswana, and representing one of the largest, most diversified and prospective diamond property portfolios in the world. These projects include advanced-stage exploration properties such as Aviat, Qilalugaq and Churchill, where a total of 78 kimberlites have been discovered since 2002, 42 of which have so far proven diamondiferous and several of which have been mini-bulk sampled and returned potentially economic grades.

The Aviat Project is a joint venture between Stornoway (70%), BHP Billiton (20%) and Hunter Exploration Group, and occupies approximately 4 million acres in eastern Nunavut on the Melville Peninsula, north of Hudson Bay.

On behalf of the Board

STORNOWAY DIAMOND CORPORATION

Eira Thomas, President

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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