Stornoway Diamond Corporation
TSX : SWY

Stornoway Diamond Corporation

October 03, 2011 09:10 ET

Stornoway Provides Update on Pipeline Projects

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 3, 2011) - Stornoway Diamond Corporation (TSX:SWY) is pleased to provide an update on activities at the company's diamond exploration pipeline projects. Stornoway's flagship asset is its 100% owned Renard Diamond Project in north-central Québec, currently the focus of a Feasibility Study and an associated Environmental and Social Impact Assessment. In conjunction with work at Renard, Stornoway has been pursuing vigorous programs of exploration on additional projects with the aim of discovering new kimberlite fields in under-explored regions of Canada. Stornoway's budget for its 2011 exploration programs is $5.6m, of which approximately $3.5m has been expended to date.

Matt Manson, President and CEO commented "As we work to develop Renard into Québec's first diamond mine, Stornoway has maintained a strong program of primary diamond exploration in jurisdictions of Canada which remain prospective for important new diamond discoveries. We are particularly excited about progress at our new Pikoo and Aeon projects in Saskatchewan and Québec respectively where, following this summer's work, we have now established multiple kimberlite indicator mineral anomalies, geochemical confirmation of potentially diamondiferous sources and credible geophysical targets, all under 100% claim ownership. Our goal is to drill both of these projects in 2012."

Aeon Project, Québec

The 100% owned Aeon claims were acquired in July 2011 on the basis of regional indicator mineral sampling that indicated the potential for multiple kimberlites or kimberlite clusters within two 10 km by 10 km source areas. Kimberlite indicator mineral grain counts in anomalous samples are comparable to those associated with the discovery of the Renard Diamond Project to the south, and the chemistry of the indicator minerals is suggestive of a diamondiferous source. During the summer field program, Stornoway completed a 100m spaced airborne magnetic survey at Aeon, and identified 61 targets compatible with kimberlite pipes. Only nine of these targets were explained during subsequent ground prospecting, leaving 52 prospective for kimberlite. 198 till samples have been collected adjacent to these geophysical targets to allow target discrimination ahead of potential drilling.

The 49,350 hectare Aeon Project is situated 100 kilometers north of the network of Hydro-Québec power stations located along the all-season Trans-Taiga Highway and 300 kilometers north of the Renard Diamond Project, within the region of northern Québec governed by the James Bay and Northern Québec Agreement.

Pikoo Project, Saskatchewan

The 100% owned Pikoo claims were acquired in April 2011 on the basis of indicator mineral sampling in the Saskcraton in north-central Saskatchewan that indicated the potential for multiple kimberlites or kimberlite clusters within a 15km by 20km source area. As with the Aeon Project, no kimberlites in this area have been discovered previously. During the summer field program, Stornoway completed a 75m spaced helicopter magnetic and electromagnetic survey at Pikoo, and identified 102 prominent geophysical targets. Ground verification of these targets is ongoing at time of writing, and 220 additional till samples have been collected to date to allow target discrimination ahead of potential drilling.

The 33,374 hectare Pikoo Project is located 140 km east of La Ronge Saskatchewan and 100 km west of FlinFlon Manitoba. An all-season road to the community of Deschambault Lake comes to within 6km of the property's southern boundary.

Hammer Project, Nunavut

In October 2009 Stornoway announced the discovery by surface pitting of the Hammer kimberlite at the Hammer Property, Nunavut. Hammer is a joint venture between Stornoway (75% and operator) and North Arrow Minerals Inc. (25% participating), and was first identified as a topographic anomaly at the head of a kimberlitic indicator mineral train with strong diamond inclusion chemistry. Upon discovery, a single micro-diamond was recovered from a 6 kilogram hand sample recovered from the surface pits. During the summer 2011 field season, Stornoway and North Arrow completed 21 short delineation holes at Hammer for a total of 1,800 meters of core drilling and 930 meters of kimberlite for logging and diamond recovery. The Hammer kimberlite appears to have an elongated surface expression of approximately 0.4 hectares, a confirmed depth extent of at least 200 meters, and to be composed of olivine-rich variably bedded volcaniclastic kimberlite. 200 kilograms of core sample has been submitted for microdiamond recovery, and an additional 3.4 tonnes of core will be processed through a dense media separation facility for macro-diamond recovery. At time of writing, diamond results are pending.

The 1,014 hectare Hammer Project is located approximately 500km north of Yellowknife, Northwest Territories within the Coronation Gulf/North Slave Diamond District. Adjacent to the Hammer Property,past surficial sampling work has suggested the presence of other kimberlite bodies that have yet to be discovered. During the 2011 field season Stornoway collected additional till samples in these areas and discovered kimberlite float boulders during ground prospecting. However, two short holes drilled to discover the source of the "Eokuk" indicator mineral train failed to intersect kimberlite. Within the Coronation Gulf/North Slave Diamond District, Stornoway holds variable interests in ten known kimberlites. As part of a review of this historical database, additional samples have been submitted for microdiamond recovery from several kimberlites with a view to testing for hitherto overlooked economic potential.

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.

Stornoway's diamond exploration programs are conducted under the direction of Robin Hopkins, P.Geol. (NT/NU), Vice President, Exploration, a Qualified Person under NI 43-101. Mr. Hopkins has approved the contents of this release.

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 May 2010, Stornoway filed a National Instrument 43-101 compliant technical report for the Preliminary Assessment at 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 Indicated and Inferred Mineral Resources stand at 23.8 and 17.5 million carats respectively, with a further 23.5 to 48.5 million carats classified as a non-resource, "Potential Mineral Deposit". All kimberlites remain open at depth. Readers are referred to the technical report in respect of the Renard Diamond Project for further details and assumptions relating to the project.

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 potential mineral deposits; (ii) the amount of future production over any period; (iii) expected mine life; (iv) expected time frames for completion of permitting and regulatory approvals, completion of a Feasibility Study and making a production decision for the Renard Diamond Project; (v) future exploration plans; (vi) the potential of discovering kimberlite bodies and kimberlite bodies that are diamondiferous; (vii) future market prices for rough diamonds; and (viii) 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 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 Feasibility Study and the Environmental and Social Impact Assessment; (ii) required capital investment and estimated workforce requirements; (iii) receipt of regulatory approvals on acceptable terms within commonly experienced time frames; (iv) the assumption that a production decision for the Renard Diamond Project will be made, and that decision will be positive; (v) anticipated timelines for the commencement of mine production; (vi) anticipated timelines related to the Route 167 extension and the impact on the development schedule at Renard; (vii) anticipated timelines for community consultations and the conclusion of an Impact and Benefits Agreement; (viii) market prices for rough diamonds and the potential impact on the RenardDiamond Project's value; and (ix) future exploration plans, objectives and results.

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 potential mineral deposits; (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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