Stornoway Diamond Corporation (TSX-SWY), BHP Billiton Diamonds Inc. and Hunter Exploration Group are pleased to announce that final diamond results have now been received for the 2004 drilling program completed on the AV-1 kimberlite. A total sample weight of 10.4 tonnes of kimberlite from AV-1(including 7.4 tonnes previously reported on April 20, 2004) has been processed for diamonds greater than 0.85 mm using a square mesh sieve and has returned an average sample grade of 0.83 carats per tonne.

Drilling to date has defined a multiphased body, approximately 225 m in length and 50 m in width comprised of two principal rock types: macrocrystic hypabyssal kimberlite (HK) and transitional tuffisitic kimberlite (TTK). The HK occurs in outcrop and within the lake zone, whereas the TTK occurs only within the lake zone. Drilling has not yet fully constrained the body. A total of 2.2 dry metric tonnes of kimberlite from the TTK phase and 832 kg from the HK phase were collected from the spring drilling program and processed for macrodiamonds, yielding sample grades of 0.65 and 0.78 carats per tonne, respectively. Sample material was shipped to SGS Lakefield Research Limited, crushed in stages and processed through a one tonne per hour dense media separation plant to produce a series of mineral concentrates from which the diamonds were extracted. The diamond size distribution obtained from the 2.2 tonne sample of TTK is consistent with results obtained from earlier caustic fusion analysis, however, this data does not provide further support that the TTK may have a coarser diamond distribution than that of the HK phases. The diamond size distributions from the TTK and HK phases appear similar and are interpreted to be consistent with and comparable to previous results received from the processing of a larger, 7.4 tonne sample collected from a surface outcrop at AV-1 that returned a sample grade of 0.88 carats per tonne.

Eira Thomas, President and CEO stated: "We are pleased that both phases of kimberlite identified at AV-1 have returned potentially economic macrodiamond grades and appear to have similar diamond populations with comparable size distributions. In 2004, additional kimberlite bodies were discovered in close proximity to AV-1; a determination of their potential diamond content is now underway. Exploration work completed in 2003 and 2004 has identified several other high priority geophysical and geochemical anomalies that will be drill tested beginning in the first quarter, 2005. We remain confident that further diamondiferous kimberlites will be discovered at Aviat in the coming months."

The largest stone from the TTK phase weighed 0.14 carats while the largest stone from the HK phase weighed 0.17 carats. Overall, the diamond population from the TTK appears similar to the diamond population recovered from the 7.4 tonne surface outcrop sample of HK and appears to be dominated by white transparent diamonds, with lesser amounts of brown diamonds and very little fibrous material. Predominantly dodecahedral followed by octahedral crystal forms as whole crystals and fragments, were observed. A detailed diamond study, including check weighing and analysis of morphology is planned before year-end.

In addition to the material that was processed through the DMS for macrodiamonds, a further 515 kgs of kimberlite from the TTK phase was also processed for microdiamonds and returned a total of 667 diamonds. The three largest diamonds measured 2.4 mm by 1.5 mm by 1.4 mm, 2.2 mm by 1.4 mm by 1.3 mm and 2.2 mm by 1.6 mm by 0.7 mm. Detailed sieve results for this sample are reported below along with previous microdiamond results from AV-1:

 

		Sieve Size
Phase	Weight (kg)	0.106	0.15	0.212	0.3	0.425	0.6	0.85	1.18	1.7	2.36	Total
AV-1H* (Outcrop & Drilling)	1428.09	587	530	388	260	146	75	31	15	2	0	2034
AV1-TTK** (Drilling '03)	239.7	80	93	66	35	16	11	8	6	0	1	316
AV1-TTK** (Drilling '04)	514.9	191	175	153	64	53	17	9	5	0	0	667
Total	2182.69	858	798	607	359	215	103	48	26	2	1	3017

Drilling at Aviat has been concluded for the season. A total of eight holes comprising 1142 metres were completed between August 27 and October 12, 2004, testing four targets. Kimberlite was intersected in each hole with intersections ranging from 0.10m to 46.5m. The drilling season was shorter than anticipated due to limited available manpower on the part of the drilling contractor and extreme weather conditions that prevailed throughout the eastern arctic this summer.

The first hole was drilled at -45o tested a geophysical response 475 m west of the diamondiferous AV-1 kimberlite outcrop and intersected a 2.9 m kimberlite dyke, referred to as AV1A.

Four holes were completed at the AV-4 kimberlite, an occurrence of hypabyssal kimberlite boulders, located approximately 600 m west of AV-1 and discovered by prospecting earlier in the summer. Hole 04-AV4-01, drilled at an angle of -45° beneath the AV4 boulder showing, intersected a continuous 47m section of kimberlite including both HK and TTK at a vertical depth of about 80m below surface. Hole 04-AV4-02 was drilled at an angle of -45° on the same section as 04-AV4-01 but 35m closer to the AV4 boulder occurrence. It intersected HK and TTK mixed with country rock xenoliths over a 61m interval, centered at a vertical depth of 25m. Country rock represents about 38% by volume. A 100 meter step out hole, 04-AV4-03, also drilled at an angle of -45°, intersected both HK and TTK over a downhole length of 15m, at a vertical depth of about 90m below surface. Drill hole 04-AV4-04, situated midway between 04-AV4-01 and 04- AV4-03 was drilled at -60° and intercepted 2.1 m of HK at a vertical depth of 115 m. It is interpreted that the hole may have been collared too close to the target and consequently may have missed the main body of AV-4. Drill core in the process of being logged in detail by a qualified geologist and interpretation of the drill results is ongoing. The nature, shape and size of AV4 is not known at the present time, but it appears to be a complex body similar in nature to AV1. Diamond and indicator mineral analyses are pending and expected before the end of November, 2004.

A single hole was drilled in the vicinity of the previously discovered diamondiferous kimberlite AV-2 to test a new surface showing of boulders found in 2004. Hole 04AV2-1 was drilled at -45°and intercepted two heavily altered HK dykes of 2.35m -and 2.90m width respectively, 35m east of the known body intercepted in 2003.

Hole 04AV3-1 was drilled at an angle of -45° beneath the AV3 surface showing and intersected two altered HK dykes of 0.37m and 2.15m, respectively. A second -45 hole, 04-AV-03-2, targeted a HK boulder occurrence 250 m south of the hole 04-AV-03-2 and encountered two small intersections of 0.10 and 0.23 m respectively but was terminated at 65m prior to reaching its target depth.

In the immediate vicinity of AV-1, further drilling will be required at AV-2, AV-3 and AV-4 to better understand the size and orientation of these bodies. In addition, target AV-5 which represents another surface concentration of HK boulders in close proximity to the other four kimberlite occurrences, remains to be drilled tested. Each of the kimberlite intercepts encountered from drilling to date, with the exception of those associated with the HK phases at AV-1, display poorly defined magnetic signatures and drilling has so far been confined to regions where surficial boulder and/or sub-crop concentrations are highest. Samples from the longer intercepts together with samples collected from surface will be sent for indicator mineral and caustic fusion analysis, with results expected before year-end.

Outside of the AV-1 through AV-5 kimberlite area, several priority geophysical targets remain to be tested as soon as weather conditions permit, likely late March 2005. The results of approximately 35,000 line km of recently completed heliborne magnetic and electromagnetic surveys and 6,200 line km of airborne gravity surveys completed using BHP Billiton's proprietary FalconTM gravity gradiometer system will be interpreted over the course of the winter to identify further priority targets for the new Year. The FalconTM gravity gradiometer system has been used successfully at BHP Billiton's Qilalugaq Project in the southern Melville Peninsula. At least 9 diamondiferous kimberlite bodies have been identified at Qilalugaq since 2003.

The summer prospecting program focused on the Tremblay Corridor both up and down ice of the diamondiferous AV-1 and AV-2 kimberlites. Over 100 occurrences of kimberlite boulders have been mapped within the Tremblay Corridor in proximity to anomalous till samples taken in 2002 and 2003 suggesting multiple additional kimberlite source bodies remain to be found. The Tremblay corridor extends for more than 75 km, varies between 3 and 8 km in width and contains numerous kimberlitic indicator mineral anomalies identified from the 2003 till sampling program. Pyrope garnets recovered to date from within the Tremblay Corridor consist of 40% G9A or G10A garnets, implying derivation from within the diamond stability window. During 2004 a total of 4175 till samples have been collected throughout the property, including 2700 samples within an area of 1,700km2, representing the Tremblay Corridor.

Results of the 2004 till sampling and geophysical surveying programs will be used to guide an aggressive follow up exploration program for 2005 which is anticipated to begin with ground geophysics in early March.

Diamond Exploration programs operated by Stornoway are conducted under the direction of Dean Besserer, P.Geol. (NT/NU), a qualified person under NI 43-101.

On behalf of the Board
STORNOWAY DIAMOND CORPORATION

/s/ "Eira Thomas"
Eira Thomas, President



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** Website: www.stornowaydiamonds.com Email: info@stornowaydiamonds.com **
 
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