EXPLORATION UPDATE - Two New Kimberlites Discovered at Qilalugaq Latest Aviat Kimberlite Proves Diamondiferous


Helicopter flight along the Naujaat 1 kimberlite dike (56 MB - MPG)

Stornoway is pleased to announce the discovery of two new kimberlites at the Qilalugaq Project, Repulse Bay, Nunavut, optioned from BHP Billiton in July, 2006. The Qilalugaq Property was originally acquired by BHP Billiton in 2002 and has undergone several phases of exploration using airborne geophysics, property wide till sampling, drilling and limited minibulk sampling. Eleven kimberlites were discovered as a result of this work, ten of which were analysed and proved diamondiferous. The largest kimberlite identified by BHP Billiton is a 14 ha (approximately) complex made up of the Qilalugaq 1, 2, 3, and 4 pipes and represents the largest kimberlite discovered in the eastern arctic to date.

During a three week reconnaissance exploration program operated by Stornoway, weathered, in situ, hypabyssal kimberlite was found along two separate parallel linear structures. These new kimberlite occurences, Naujaat 1 and Naujaat 2, have been traced at surface over strike lengths of approximately 3000m and 600m, and average 4.5 m and 2.3 m in width, respectively.

"We are pleased that in the short time since optioning the property our team was able to move quickly to get on the ground and discover two new kimberlites from prospecting. The strike length and width of both the Naujaat 1 and 2 kimberlites is impressive and they may become the focus of future drilling and minibulk sampling campaigns if initial testwork for diamonds proves encouraging", remarked Eira Thomas, President and CEO.

The average width of the first structure, where bounded by outcrop, is estimated at 4.5m. The true width/nature/continuity of the Naujaat 1 kimberlite, is unknown, although it is believed to be dyke-like in character extending over a strike length of 3000m.About 200 kilograms of kimberlite has been collected for microdiamond determination by caustic fusion analysis and a further 950kg of material for macrodiamond extraction by dense media separation (DMS). Results will be reported when available. Naujaat 1 is situated within 800m of a known kimberlite pipe, and was discovered while prospecting in the vicinity of an anomalous, unsourced, indicator mineral train. Prospecting also discovered a second new kimberlite occurrence (Naujaat 2) along a parallel structure some 500m south of the first discovery. Discontinuous exposures of kimberlite float/subcrop were found over a 600m strike length within a 2.3m wide host structure. Kimberlite from Naujaat 2 has also been collected for caustic fusion and results will be reported when available. Numerous other unsourced mineral trains remain on the property and will be investigated during 2007.

Elsewhere on the Qilalugaq Property, Stornoway has extracted in excess of 4,200kg (wet) of material from the previously drilled A28 kimberlite from two test pits; collected 240kg of kimberlite for caustic fusion and indicator mineral analyses; completed ground geophysics on seven targets, including some of the known kimberlites that had not previously been evaluated by ground geophysical techniques; collected 469 till samples, including detailed samples designed to follow-up five known anomalous areas with promising mineral chemistry; and identified kimberlite float boulders in proximity to known kimberlites.

On the Aviat Project, situated on the northern Melville Peninsula, Nunavut, Stornoway is pleased to announce that the AV7E kimberlite has been confirmed as diamondiferous. An initial sample of 79.96kg was submitted for caustic fusion and returned 66 diamonds, including two stones that reported to the 0.85 mm sieve class with dimensions measuring 1.838X1.265X0.811mm and 1.034X1.024X0.938mm. Further details are shown below.

(kg)   0.106 to 0.150mm 0.150 to 0.212mm 0.212 to 0.300mm 0.300 to 0.425mm 0.425 to 0.600mm 0.600 to 0.850mm 0.850 to 1.18mm
79.96 66 27 13 8 6 8 2 2

Diamond results from additional AV7E material collected during the spring drill program are pending and will be reported when available. Discovery of the AV7E kimberlite was previously reported in a Stornoway press release on June 28, 2006. The summer drill program has now commenced and, while focusing on unsourced anomalous indicator mineral trains derived from recently completed infield sample processing, will also test unexplained geophysical targets and further evaluate the AV7E kimberlite.

Drilling at the MIP Project, a 50/50 joint venture with Contact Diamonds, failed to intercept kimberlite although the geophysical targets were explained.

Expected Results

In addition to initial diamond results expected from the two new Qilalugaq kimberlites, Stornoway is also anticipating receiving diamond results from two new kimberlite discoveries recently announced from the Churchill Project, kimberlitic bodies being investigated through Stornoway‘s generative programs and any kimberlite intersected by the ongoing Aviat drill program. In addition, macrodiamond results for material processed through DMS are pending for kimberlites AV2, AV3, AV4, AV5 and AV8 (Aviat Project), the A28 and Naujaat 1 kimberlites (Qilalugaq Project) and other kimberlitic bodies being investigated by Stornoway‘s generative programs.

Stornoway Diamond Corporation maintains interests in more than 18 million acres, spanning 40 properties in northern Canada and Botswana, and representing one of the largest, most diversified and prospective diamond property portfolios in the world. These projects include advanced-stage exploration properties such as Aviat, Qilalugaq and Churchill, where a total of 77 kimberlites have been discovered since 2002, 40 of which have so far proven diamondiferous and several of which have been mini-bulk sampled and returned potentially economic grades.

On behalf of the Board
/s/ "Eira Thomas"
Eira Thomas

For further information, please contact Nick Thomas at 604-331-2259 or (888) 338-2200
** Website: www.stornowaydiamonds.com Email: info@stornowaydiamonds.com **

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.