Stornoway Diamond Corporation

Stornoway Diamond Corporation

July 17, 2007 16:30 ET

Stornoway and Shear Announce Closing of Acquisition of BHP Billiton Diamond Inc.'s Interest in the Churchill Project

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 17, 2007) - Stornoway Diamond Corporation (TSX:SWY) and Shear Minerals Ltd. (TSX VENTURE:SRM) today announced that they have acquired all of BHP Billiton Diamond Inc.'s ("BHPB") interest in the Churchill Diamond Project pursuant to an agreement dated April 18, 2007. Stornoway and Shear each acquired 50% of the BHPB's 12.5% interest for the sum of $4 million each, by paying $1.25 million cash and issuing common shares valued at $2.75 million. Stornoway issued an aggregate of 2,200,000 common shares at a deemed price of $1.25 per share and Shear issued an aggregate of 3,928,571 common shares at a deemed price of $0.70 per share. Stornoway and Shear now hold 41.86% and 58.14% interests, respectively, in the Churchill Diamond Project.

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. Work is presently focused on continued exploration of new promising indicator mineral trains and geophysical anomalies as well as the evaluation of four significantly diamond bearing, vertically emplaced kimberlite dykes up to 4 m in width that have returned sampling grades up to 2.04 carats per tonne. A 400 tonne minibulk sample collected from a series of surface pits at the Kahuna dyke this past spring is now being processed for commercial sized diamonds (greater than 0.85 mm on a square mesh sieve). The 2007 field program is being operated by Shear and is under the supervision of Jennifer Burgess, P. Geol., a Qualified Person under NI 43-101.

Stornoway Diamond Corporation

Stornoway Diamond Corporation is one of Canada's leading diamond exploration and development companies, involved in the discovery of over 150 kimberlites in six Canadian diamond districts. The Company benefits from a diversified diamond property portfolio, a strong financial platform and a management team with experience in each segment of the diamond "pipeline" from exploration to marketing.

On behalf of the Board


Eira Thomas, CEO

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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