Stornoway Diamond Corporation (SWY:TSX) and Contact Diamond Corporation (CO:TSX) would like to offer the following update on the generative joint venture project originally announced on May 10, 2005 (hereby known as the MIP Project).
Following an initial desktop study that resulted in a focus on areas of Baffin Island with geology highly prospective for diamonds, the companies conducted a 76 day field program between the dates of June 10 and August 22 2005. The Iqaluit based program consisted of a 71,158 line km fixed wing aero-magnetic survey, prospecting, claim staking and till sampling. A total of 82 target specific till samples were taken and have been shipped to Microlithics Laboratories in Thunder Bay for diamond indicator analysis.
Results from the aero-magnetic survey directly led to the staking of approximately 75,000 acres in the south central region of Baffin Island. One of the three claim blocks staked contains fourteen discrete geophysical anomalies that vary in size from 125m to 800m in diameter. All of the anomalies are found in a single cluster and in an area considered to be structurally permissive to intrusion by kimberlites. These anomalies will be the focus of a follow-up program of work in 2006.
Each company will maintain a 50% interest in the MIP Project with Stornoway acting as operator. Exploration of the properties is under the direction of Robin Hopkins, P.Geol. (NT/NU), a Qualified Person under NI 43-101.
Stornoway holds varying interests, both directly and through 18 joint ventures, in 33 Canadian mineral properties representing 22.6 million acres of ground. Stornoway has been involved in the discovery of 61 kimberlites since 2002. To date; 51 of 61 have been analyzed and more than one third have proven diamondiferous. During 2005 SWY operated exploration programs on 24 properties (12 million acres) and our joint venture partners explored nine properties (10.6 million acres). In addition to work on our landholdings, Stornoway also undertook generative programs covering over 250 million acres in northern Canada. Partial results available to date from this 2005 generative exploration program have already been used to identify and acquire targeted landholdings thought to have the potential to host diamondiferous kimberlites. Additional results are pending and Stornoway anticipates continued property acquisition.
On behalf of the Board
STORNOWAY DIAMOND CORPORATION
/s/ "Eira Thomas"
Eira Thomas
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 http://www.sedar.com. The Company disclaims any intention or obligation to revise or update such statements.