Stornoway Diamond Corporation

Stornoway Diamond Corporation

April 26, 2007 17:55 ET

Stornoway to Sell Interest in Buffalo Hills Project for $17.5 Million

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - April 26, 2007) - Stornoway Diamond Corporation (TSX:SWY) is pleased to announce that its wholly owned subsidiary, Ashton Mining of Canada Inc. ("Ashton"), has entered into an agreement with Diamondex Resources Ltd. ("Diamondex") and Shore Gold Inc. ("Shore") under which Ashton has agreed to sell its interest in the Buffalo Hills property in north central Alberta for a total consideration of $17.5 million. The agreement provides that Shore and Diamondex will pay $8.75 million and $6.25 million respectively in cash, and Diamondex will pay a further $2.5 million in the form of common shares of Diamondex.

The Buffalo Hills Project is a joint venture with EnCana Corporation and Pure Diamonds Exploration Inc. To date, the joint venture has discovered a total of 38 kimberlites on its properties, of which 26 are diamondiferous. Stornoway, through Ashton, holds an approximate 45 percent interest in the project, and has the option to increase its interest to 72.5 percent by funding the next $15 million of exploration expenditures before April 30, 2010. Under the option agreement, Ashton has a commitment to spend at least $4 million by the end of 2008, of which $2 million must be spent by the end of 2007. A $2.2 million winter exploration program undertaken this winter fulfills that initial commitment.

The closing of the sale is subject to a number of conditions, including:

(a) satisfactory completion of due diligence by Diamondex and Shore;

(b) the execution a formal purchase and sale agreement; and

(c) receipt of all necessary regulatory approvals and third party consents.

The transaction is also subject to a 30-day right of first refusal of the two joint venture partners.

Stornoway Diamond Corporation

Stornoway Diamond Corporation is one of Canada's leading diamond exploration and development companies. The Company and its affiliates have been responsible for discovering over 150 kimberlites and six new Canadian diamond districts. Stornoway's management and technical team has a proven track record in wealth creation for shareholders and direct operating experience in each segment of the diamond "pipeline" from exploration to marketing.

On behalf of the Board


Eira Thomas, 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 The Company disclaims any intention or obligation to revise or update such statements.

Contact Information