Stornoway Diamond Corporation
TSX : SWY

Stornoway Diamond Corporation

May 05, 2009 08:30 ET

Stornoway Reports Complete Diamond Results From Aviat 200 Tonne Bulk Sample

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 5, 2009) - Stornoway Diamond Corporation (TSX:SWY) and Hunter Exploration Group (Hunter) are pleased to report the second and final tranche of results from the processing of a total of 191 tonnes of kimberlite collected during 2008 from the ES1 kimberlite, the largest body within the Eastern Sheet Complex ("ESC") of the Aviat Project, Nunavut. The second tranche of sample, collected at the "AV2" outcrop, returned 213.2 carats of diamonds from 148.3 tonnes (dry weight) of kimberlite, representing a diamond recovery of 144 carats per hundred tonnes (cpht) for stones retained on a +1 DTC screen. The three largest diamonds recovered from this sample are 3.99, 1.72 and 1.22 carats, described as an off white clivage, grey clivage and a white octahedron, respectively. The 3.99 carat stone represents the largest diamond recovered to date from the Aviat project.

A total of 302.7 carats of diamonds have now been recovered from the 190.9 tonnes (dry weight) of kimberlite collected in 2008 from two localities within the ES1 kimberlite. This represents an overall diamond recovery of 159 cpht for stones retained on a +1 DTC screen. The first tranche of sample, collected at the "AV6" outcrop and previously reported (Stornoway press release of February 19, 2008, available at: http://www.stornowaydiamonds.com/investor_relations/news_releases/2009/index.php?&content_id=466) returned 89.6 carats of diamonds from 42.7 tonnes (dry weight) of kimberlite, representing a diamond recovery of 210 cpht. The two outcrop samples were processed separately, but represent exposures of the same "ES1" kimberlite sheet. Diamond recovery data for the latest sample, following Dense Media Separation ("DMS") processing and utilizing both x-ray sorter and grease table recovery circuits, are as follows:



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Stones Carats
(retained (retained Diamond Largest
Dry Weight on +1 on +1 Content(1) Diamonds
Sample (tonnes) DTC screen) DTC screen (cpht)(2) (carats)
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ES1 Part 2
("AV2"-2008) 148.27 5,399(3) 213.15(3) 144 3.99, 1.72, 1.22
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ES1 Part 1
("AV2"-2008) 42.67 2,447(3) 89.55(3) 210 0.81, 0.77, 0.67
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Total ES1 190.94 7,846(3) 302.70 159
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(1)The estimated diamond content, expressed as carats per hundred tonnes,
may not be representative of the overall diamond content of the body due to
a number of factors, including location/size of the samples and processing
parameters.
(2)Carats per hundred tonnes
(3)Represents only stones retained on a +1 or greater DTC screen, as
discussed below


Matt Manson, President and CEO, stated: "We are encouraged by another high grade sample from Aviat, and the recovery of the largest diamond to date at the project. Individual large tonnage samples from the volumetrically significant ES1 kimberlite have now returned diamond contents of up to 210 cpht. The next stage in the project will be to determine a representative diamond valuation on the more than 340 carats returned to date from ES1, and to undertake a desktop analysis of viable mining methods for this large potential deposit."

The Aviat Project is located on the Melville Peninsula in eastern Nunavut, Canada, and is a joint venture between Stornoway (90%) and Hunter (10%). Stornoway holds 100% of the diamond marketing rights. A map outlining the series of significantly diamondiferous kimberlite pipes and sheets discovered to date is available at http://www.stornowaydiamonds.com/Kimberlite-Bodies-October-6.jpg.

A conceptual study at Aviat authored by SRK Consulting (Canada) Inc. ("SRK") an independent, international consulting practice (Stornoway press release of October 7, 2008, available at: http://www.stornowaydiamonds.com/investor_relations/news_releases/2008/index.php?&content_id=446), concluded that based on the drilling undertaken to date, the ESC contained an estimated 12.4 to 16.0 million tonnes of kimberlite material within four separately distinguishable kimberlite sheets of the ESC. The ES1 sheet (subject of the sampling reported above), spans an area of some 260 hectares and represents about 78% of the total kimberlite volume. Based on the limited micro and macro diamond data collected during the 2003 to 2007 field campaigns, SRK estimated a total diamond content of 235 carats per hundred tonnes (cpht) +/- 30 cpht at a bottom cut-off of +1.0mm (approximately equivalent to a +2 DTC sieve). The study assumed 100% recovery of stones of all size fractions ("total diamond content"). No corrections were applied for breakage and/or loss of smaller diamonds that would typically occur during recovery of diamonds in a commercial DMS plant. SRK has stated that in a commercial DMS plant it is not unreasonable to expect a 15-20% reduction in recovered diamonds from the total diamond content estimation assuming a similar bottom cut-off of +1.00 mm. The conceptual range of total content of kimberlite material and the estimate of total diamond content, taken together, imply between 24.1 to 40.3 million carats in the ground, after an allowance for approximately 5% internal dilution within the conceptual model. This conceptual study did not include Aviat's pipe-like kimberlite bodies (AV1, AV4 and AV9), kimberlite sheets outside of the currently defined ESC (such as AV1W and AV5) or drill intersections of as yet un-named kimberlite sheets that have not yet been integrated into the overall geologic model. The ESC remains open down dip to the southeast, and across the Centennial Fault to the west.

The potential quantity of diamonds that can be inferred from the above estimates is conceptual in nature and does not constitute a mineral resource. The reader is cautioned that to date there has been insufficient exploration to define a mineral resource according to CIM Definition Standards for Mineral Resources and Mineral Reserves for the ESC, and it is at this stage uncertain if further exploration will be able to delineate a mineral resource for the ESC.

Next Steps

Stornoway expects to conduct a market valuation exercise on the full parcel of diamonds recovered from the ES1 kimberlite sheet, once the world rough diamond market, which is currently experiencing internal financial volatility, has stabilized such that pricing information suitable for long term, advanced level, exploration planning can be obtained. Although this valuation work, being based on a small parcel of diamonds, will provide only a preliminary sense of the average diamond price at Aviat, it will be sufficient, in conjunction with the October 2008 conceptual study, to provide a qualified estimate of value contained within the ESC. This estimate will in turn support subsequent desktop studies aimed at determining optimum mining scenarios for the ESC. The conclusions of these studies will dictate the nature and type of future sampling required to obtain a National Instrument ("NI") 43-101 compliant mineral resource statement at Aviat.

Historical Diamond Recoveries

All previously reported DMS results from kimberlite outcrops considered to be part of the ES1 kimberlite sheet are provided in the table below. The weighted average diamond content for the three larger samples (211.5 tonnes) is 159 cpht. Individual differences in diamond content are interpreted as natural variations due to the relatively small sample size. The improvement evident in the three most recent samples is ascribed to the increased sample size, and the collection of fresher, more representative kimberlite. The weighted average diamond content for all six samples (218.3 tonnes) is 156 cpht, and the three largest stones are 3.99, 3.64 and 1.72 carats.



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Diamond Largest
Disclosure Dry Weight Content(1) Diamonds
Date Sample Type (tonnes) Carats (cpht)(2) (carats)
----------------------------------------------------------------------------
Outcrop ES1
Part 2
May 5, 2009 ("AV2"-2008) 148.27 213.15 144(3) 3.99, 1.72, 1.22
----------------------------------------------------------------------------
Outcrop ES1
February 19, Part 1
2009 ("AV6"-2008) 42.67 89.55 210(3) 0.81, 0.77, 0.67
----------------------------------------------------------------------------
January 21, Outcrop "AV2"
2008 (2007) 20.60 33.36 162(4) 3.64, 0.55, 0.53
----------------------------------------------------------------------------
January 11, Outcrop "AV2"
2007 (2005) 2.19 1.58 72(4) 0.19
----------------------------------------------------------------------------
July 11, Outcrop "AV7"
2006 (2005) 2.32 1.78 77(4) 0.19
----------------------------------------------------------------------------
June 21, Outcrop "AV6"
2006 (2005) 2.15 2.08 97(4) 0.10
----------------------------------------------------------------------------

(1)The estimated diamond content, expressed as carats per hundred tonnes,
may not be representative of the overall diamond content of the body due to
a number of factors, including location and size of the samples or drill
holes
(2)Carats per hundred tones
(3)Represents only stones retained on a +1 or greater DTC screen
(4)Represents only stones retained on a +0.85 mm square mesh screen


Scientific and Technical Data

Diamond results reported in this release are based on DMS processing work completed by Microlithics Laboratories, Thunder Bay, Ontario, an independent mineral process laboratory currently providing services to Stornoway. The 148.27 tonne sample was processed through a 1.5 tonne per hour (tph) DMS plant designed to recover stones retained on a 0.85mm square mesh sieve. Kimberlite was prepared through a primary jaw crusher, with -10 mm material fed directly into the DMS. All +10 mm material was subsequently reduced through secondary cone crushing. Recovery of diamonds from the DMS concentrate was carried out at Stornoway's wholly owned diamond laboratory in North Vancouver whereby concentrates were processed twice through x-ray sorter equipment to generate a final concentrate which was hand sorted to extract diamonds. A grease table finish was used to recover diamonds from all x-ray sorter rejects. Quality assurance protocols, security and actual operating procedures for the processing, transport and recovery of diamonds conform to industry standard Chain of Custody provisions. As part of Stornoway's ongoing QA/QC program, DMS tails, concentrate residues and other materials are also subject to audit. Any significant changes to the recovered diamond contents provided above will be reported when available.

Stornoway Diamond Corporation

Stornoway Diamond Corporation is one of Canada's leading diamond exploration and development companies, involved in the discovery of over 200 kimberlites in seven Canadian diamond districts. The Company benefits from a diversified diamond property portfolio, a strong financial platform and management and technical teams with experience in each segment of the diamond "pipeline" from exploration to marketing. 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 read this press release and approves of its contents.

On behalf of the Board

STORNOWAY DIAMOND CORPORATION

Matt Manson, President and Chief Executive Officer

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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