Stornoway Diamond Corporation

Stornoway Diamond Corporation

October 18, 2006 08:30 ET

Stornoway Diamond Corporation: Four Metre Wide Kimberlite Dyke Drilled in the Josephine River Corridor, Churchill Diamond Project, Nunavut

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 18, 2006) - Stornoway Diamond Corporation (TSX:SWY) and Shear Minerals Ltd. (TSX VENTURE:SRM) are pleased to report that drilling in the Josephine River corridor has resulted in the discovery of the Kahuna kimberlite dyke with true widths in the order of 3.5-4.0m based on drilling as well as surface exposures.

Within the Josephine River Corridor, a 5.5km long linear magnetic high trend referred to as Kahuna has been drill tested at two separate sites and trenched at two sites along its length. Drill hole KD-26a intersected an 11.4m interval of coarse grained highly macrocrystic pyrope-bearing kimberlite. This hole was drilled at a -70 degree dip across the kimberlite that is interpreted as a 4m wide vertical dyke. In order to test the northern and southern extensions of the Kahuna trend, additional holes were drilled 2.0km to the south (KD-25) and 2.5km to the north (KD-32/32a) of the main Kahuna dyke; both locations intersected macrocrystic kimberlite.

Prospecting 400m to the north of KD26a set up resulted in the discovery of two surface outcrops. The kimberlite is highly macrocrystic and pyrope bearing similar to the drill core. Where the kimberlite has been exposed it measures at least 3.5m wide. A mini-bulk sample weighing 3.6 tonnes was collected from this site for macrodiamond processing.

"It is highly encouraging to locate a wider kimberlite dyke with greater tonnage potential on the Churchill Project," says Shear President and CEO Pamela Strand. "With the mini bulk sample from the new Kahuna dyke, we have approximately 20 tonnes of kimberlite that will be processed for macrodiamonds in the coming months."

Josephine River Drilling Update

A total of 15 holes were drilled (1,125m) into 11 spatially separate geophysical anomalies within the Josephine River Corridor to test possible sources of pyrope indicator mineral dispersion trains. In addition to the Kahuna kimberlite, four kimberlites were discovered of which three are classified as low diamond potential based on visual characteristics. Seven additional targets were tested but no kimberlite intersected. Two geophysical targets suggestive of kimberlite pipes were drilled. Target KD308 remains unexplained due to access given the fact that the target is located under a lake. This target will be drilled from ice in the 2007 spring drill program. KD604 was explained by a slightly magnetic gabbro intersection. Samples of kimberlite have been submitted to the SRC for diamond processing. Thirteen high interest G10 indicator mineral dispersions remain unsourced in the Josephine Corridor. The 2006 drilling program is now complete.

Below is a table with details of the kimberlite drill intercepts:

Azi- End Total
Dip muth of Over- Kimberlite Kimber-
Drill Target (degr- (degr- Hole burden Intercepts lite
Hole ID ID ees) ees) (m) (m) (m) (m)
06KD-24 KD5122S -50 270 51.5 7.6 12.2-13.6 1.4
06KD-25 Kahuna -50 120 122 5.5 35-36.9 1.9
06KD-26 Kahuna -50 270 26 11 15.5-20.1(1) 4.6
06KD-26a Kahuna -70 270 56 6.2 27.3-38.7 11.4
06KD-27 KD322_5141 -50 290 44.0 13.0 21.3-21.45(2) 0.15
06KD-27a KD322_5141 -70 290 68.0 9.0 58.15-58.3, 2.1
06KD308-01 KD308 -50 025 161.0 6.8 147.3-147.4(2) 0.1
06KD-28 FFF Area -50 290 59.0 11.6 48.7-49.3 0.6
06KD-31 FFF Area -50 300 40.0 12.5 18-18.4; 2.2
06KD-32a Kahuna -65 176 158.0 6.3 121.3-122; 9.7
North 128-134.9,
06KD-32 Kahuna -50 100 74.0 7.4 54.5-55.4, 3.0
North 56-56.2,

(1) Very crumbly clay dominated intersection with poor core recovery
(2) Green clay altered kimberlite
(3) Visual observation interprets this kimberlite as the low diamond
potential type.
(4) Kimberlite was parallel to core axis

The Churchill Diamond Project is comprised of mineral rights to more than 2 million acres located near the communities of Rankin Inlet and Chesterfield Inlet in the Kivalliq region of Nunavut. The project is owned by joint venture partners Shear, which has a 51% interest and is the operator, Stornoway (35%) and BHP Billiton (14%). To date the partners have drilled 45 kimberlites over a wide area on the Churchill and Churchill West projects. The 2006 field program is under the supervision of Jennifer Burgess, P. Geol., a Qualified Person under NI 43-101.

On behalf of the Board


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 The Company disclaims any intention or obligation to revise or update such statements.

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