Stornoway Options Lac de Gras Diamond Properties


Stornoway Diamond Corporation is pleased to announce that it has entered into an option agreement with Strongbow Exploration Inc. to earn up to a 60% interest in three properties representing more than 185,000 acres of prospective diamond claims located in the Lac de Gras region of the Northwest Territories. Since 1991 some 250 kimberlites have been discovered in this region of the central Slave Craton, which is home to Canada's two producing diamond mines.

Under the terms of the agreement Stornoway may earn a 51% interest in the LDG, Starfish and Daring Lake properties by spending $3 million within three years, and may increase this interest to 60% by completing a feasibility study.

Known kimberlites occur within five kilometers of all four sides of the 123,000 acre LDG Property, and the Diavik diamond mine is situated just across Lac de Gras, some 15km from the northern claim boundary. Past till sampling work has returned elevated kimberlite indicator mineral grains counts thought to be derived from within the property, and historical ground geophysical surveys have delineated anomalies that remain untested and unexplained at the present time.

The Starfish Property comprises nine target specific, non-contiguous, mineral claims representing some 21,000 acres, from 12 to 40km west of the LDG Property. Detailed geophysical surveys and till sampling completed on the property have defined eight high priority drill targets.

The 26,000 acres Daring Lake Property lies at the south end of Yamba Lake, just west of the Ekati Mine property. Recent airborne geophysical surveys and indicator mineral sampling suggest that the claims may host at least one kimberlite.

Eira Thomas, President of Stornoway declared a conflict of interest with regard to any potential transaction with Strongbow Exploration. For that reason, the Corporation appointed an independent committee to evaluate and structure the proposed transaction. The evaluation assessed the technical merits of the properties from a geological perspective, and provided expertise in determining the terms of the joint venture agreement. The committee recommended the proposed transaction for approval by the independent Board members.

An exploration program will commence immediately on these properties, and is expected to extend through until September. Ground geophysical surveys are underway at the LDG Property where some forty new grids are planned. A drill rig has been mobilized to the Starfish Property and the first of eight planned holes is in progress. The drill rig will subsequently move to the LDG Property to test targets identified from both current and past ground geophysical surveys. This initial phase of drilling will concentrate on anomalies beneath larger lakes that must be drilled from the ice. Additional drilling planned for later in the summer of 2004 will test targets that are on land or under smaller water bodies. Once the snow has melted, till sampling programs will be undertaken on both the LDG and Daring Lake properties.

On behalf of the Board


/s/ "Bruce McLeod"
Bruce McLeod

For further information, please contact the Company at 604-687-7545 or (888) 338-2200

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