Stornoway Diamond Corporation
TSX : SWY

Stornoway Diamond Corporation

December 07, 2011 08:30 ET

Stornoway Diamond Corporation: Quebec Releases Certificate of Authorization for the Construction of the Route 167 Extension

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 7, 2011) - Stornoway Diamond Corporation (TSX:SWY) is pleased to announce that Québec ministère du Développement durable, de l'Environnement et des Parcs (the "MDDEP") issued a Certificate of Authorisation for the Route 167 Extension highway development project that will provide year round road access to Stornoway's 100% owned Renard Diamond Project by way of the communities of Mistissini and Chibougamau. The issuing of this Certificate of Authorization clears the way for the road's proponent, the Québec ministère des Transports ("MTQ"), to now commence road construction activities.

Matt Manson, Stornoway's President and CEO, commented, "Today's news is a significant milestone in the development of the Route 167 Extension, and by association the Renard Diamond Project. The granting of the road's Certificate of Authorization, following comprehensive social and environmental review, reflects the broad community consensus in support of responsible resource development in the James Bay region of Québec. Building upon the recent release of a positive feasibility study for Renard, our own permitting process, which follows a similar path with the same permitting agencies, remains on schedule for completion during 2012."

The Route 167 Extension Project, like the Renard Diamond Project, falls under the environmental protection regimes of the James Bay and Northern Québec Agreement (the "JBNQA") and the Canadian Environmental Assessment Act. Stornoway expects to file an Environmental and Social Impact Assessment for the Renard Diamond Project shortly and, subject to a schedule to be established by the Review Committee of the JBNQA ("COMEX") and the Canadian Environmental Assessment Agency, and the satisfaction of all regulatory requirements, it is currently expected that public hearings will be held in the first half of 2012 and that the project will be eligible for the receipt of Québec and Federal Certificates of Authorization by the middle of 2012.

The Route 167 Extension will be constructed as a 243 km-long, 70 km/hour two lane gravel-top highway under the supervision of the MTQ. The road will be designated as a multi-service provincial highway connecting Renard to the end of the current Route 167 at Lac Albanel (Temiscamie), and will provide access to a number of other prospective mining projects as well as the new Albanel-Temiscamie-Otish Park. Starting in 2015, Stornoway has agreed to contribute $44 million to the road's $332 million construction cost, amortized over a ten year period, and to contribute to the cost of road maintenance (Stornoway Diamond Corporation press release dated August 1st, 2011).

About the Renard Diamond Project

The Renard Diamond Project is located approximately 250 km north of the Cree community of Mistissini and 350 km north of Chibougamau in the James Bay region of North-Central Québec. In November 2011, Stornoway released the results of a Feasibility Study for Renard that highlighted the potential of the project to become a significant producer of high value rough diamonds over a long mine life. Current NI 43-101 compliant Probable Mineral Reserves stand at 18.0 million carats, with a further 17.5 million carats classified as Inferred Mineral Resources and 23.5 to 48.5 million carats classified as non-resource exploration upside. All kimberlites remain open at depth. Pre-production capital cost stands at C$802 million, with a life of mine operating cost of C$54.71/tonne giving a 68% operating margin over an initial 11 year mine life. Production start-up is scheduled for 2015. Readers are referred Stornoway's press release dated November 16th, 2011, and to the technical report filed on www.sedar.com and dated February 3rd 2011, for further details and assumptions relating to the Renard Diamond Project.

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.

On behalf of the Board

STORNOWAY DIAMOND CORPORATION

Matt Manson, President and Chief Executive Officer

This press release contains "forward-looking information" within the meaning of Canadian securities legislation and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. This information and these statements, referred to herein as "forward-looking statements", are made as of the date of this press release and the Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by law.

Forward-looking statements relate to future events or future performance and reflect current expectations or beliefs regarding future events and include, but are not limited to, statements with respect to: (i) the amount of mineral resources and exploration targets; (ii) the amount of future production over any period; (iii) net present value and internal rates of return of the mining operation; (iv) assumptions relating to capital costs, operating costs and other cost metrics set out in the Feasibility Study; (v) assumptions relating to gross revenues, operating cash flow and other revenue metrics set out in the Feasibility Study; (vi) assumptions relating to recovered grade, average ore recovery and other mining parameters set out in the Feasibility Study; (vii) mine expansion potential and expected mine life; (viii) expected time frames for completion of permitting and regulatory approvals and making a production decision; (ix) future exploration plans; (x) future market prices for rough diamonds; and (xi) sources of and anticipated financing requirements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects", "anticipates", "plans", "projects", "estimates", "assumes", "intends", "strategy", "goals", "objectives" or variations thereof or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements.

Forward-looking statements are made based upon certain assumptions by Stornoway or its consultants and other important factors that, if untrue, could cause the actual results, performances or achievements of Stornoway to be materially different from future results, performances or achievements expressed or implied by such statements. Such statements and information are based on numerous assumptions regarding present and future business strategies and the environment in which Stornoway will operate in the future, including the price of diamonds, anticipated costs and ability to achieve goals. Certain important factors that could cause actual results, performances or achievements to differ materially from those in the forward-looking statements include, but are not limited to: (i) estimated completion date for the Environmental and Social Impact Assessment; (ii) required capital investment and estimated workforce requirements; (iii) estimates of net present value and internal rates of return; (iv) receipt of regulatory approvals on acceptable terms within commonly experienced time frames; (v) the assumption that a production decision will be made, and that decision will be positive; (vi) anticipated timelines for the commencement of mine production; (vii) anticipated timelines related to the Route 167 extension and the impact on the development schedule at Renard; (viii) anticipated timelines for community consultations and the conclusion of an Impact and Benefits Agreement; (ix) market prices for rough diamonds and the potential impact on the Renard Project's value; and (x) future exploration plans and objectives.

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that estimates, forecasts, projections and other forward-looking statements will not be achieved or that assumptions do not reflect future experience. We caution readers not to place undue reliance on these forward-looking statements as a number of important risk factors could cause the actual outcomes to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates, assumptions and intentions expressed in such forward-looking statements. These risk factors may be generally stated as the risk that the assumptions and estimates expressed above do not occur, including the assumption in many forward-looking statements that other forward-looking statements will be correct, but specifically include, without limitation, (i) risks relating to variations in the grade, kimberlite lithologies and country rock content within the material identified as mineral resources from that predicted; (ii) variations in rates of recovery and breakage; (iii) the greater uncertainty of exploration targets; (iv) developments in world diamond markets; (v) slower increases in diamond valuations than assumed; (vi) risks relating to fluctuations in the Canadian dollar and other currencies relative to the US dollar; (vii) increases in the costs of proposed capital and operating expenditures; (viii) increases in financing costs or adverse changes to the terms of available financing if any; (ix) tax rates or royalties being greater than assumed; (x) results of exploration in areas of potential expansion of resources; (xi) changes in development or mining plans due to changes in other factors or exploration results of Stornoway; (xii) changes in project parameters as plans continue to be refined; (xiii) risks relating to receipt of regulatory approvals or the conclusion of an Impact and Benefits Agreement with aboriginal communities; (xiv) the effects of competition in the markets in which Stornoway operates; (xv) operational and infrastructure risks; and (xvi) the additional risks described in Stornoway's most recently filed Annual Information Form, annual and interim MD&A, and Stornoway's anticipation of and success in managing the foregoing risks. Stornoway cautions that the foregoing list of factors that may affect future results is not exhaustive.

When relying on our forward-looking statements to make decisions with respect to Stornoway, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Stornoway does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by Stornoway or on our behalf, except as required by law.

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