Stornoway Diamond Corporation
TSX : SWY

Stornoway Diamond Corporation

October 31, 2006 09:00 ET

Stornoway Increases Stake in Contact to 93.0% and Offer Expires

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 31, 2006) - Stornoway (TSX:SWY) announces that it has taken up and accepted for payment an additional 1,576,774 shares or approximately 3.6% of the outstanding, Contact common shares, under its takeover bid offer for all of the common shares of Contact Diamond Corporation. Stornoway now holds approximately 40.8 million, or approximately 93.0% of the outstanding, Contact common shares.

As Stornoway has acquired more than 90% of the outstanding Contact common shares, it intends to immediately exercise its statutory rights to acquire the remaining Contact common shares.

Under the terms of the Contact offer, Contact shareholders are offered 0.36 of a Stornoway common share per Contact common share. The aggregate number of Stornoway common shares to be issued will be approximately 568,000 in respect of the acquisition of the Contact common shares taken-up on October 30, 2006.

On behalf of the Board

STORNOWAY DIAMOND CORPORATION

Eira Thomas, President

Important Notice:

This press release is not an offer of Stornoway shares or any other securities for sale in the United States. The Stornoway shares will not be registered under the United States Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration.

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