Stornoway Announces $8.5 Million Exploration Program at Churchill is Underway, Including a 500-Tonne Mini-Bulk Sample


Shear and Stornoway to Acquire Additional Interest in Churchill Project

Stornoway Diamond Corporation (SWY:TSX) and Shear Minerals Ltd. (SRM:TSXV) today announced the approval and commencement of a $8.5 million exploration program for the 2007 Churchill Diamond Project, Nunavut. This year's program will focus on a further assessment of three significantly diamondiferous kimberlite dykes discovered in 2006 and will also include further exploration drilling of prospective, unexplained geochemical and geophysical targets. 

Mobilization of a 40-person temporary field camp located at Josephine Lake is complete and the 2007 exploration program at Churchill is now underway. The program will include the collection of mini-bulk samples of up to 500 tonnes from the Kahuna and Notch kimberlites with the aim of recovering approximately 200 carats of diamonds from each to better estimate grade and provide a preliminary assessment of diamond value. The Kahuna and Notch kimberlites returned encouraging initial diamond sample grades and appear to contain the highest tonnage potential of the four diamond bearing kimberlites discovered last summer. Mini-bulk sampling will be conducted in April to mid May and will be taken from several locations along the strike length of the kimberlite dykes. Core drilling, commencing at Kahuna, will also be undertaken to help delineate the known kimberlites and provide an initial assessment of size and tonnage.

The Kahuna, Notch, Jigsaw, and PST003 kimberlites are vertically emplaced dykes up to 3.5 metres in width, which returned a total of 16.42 carats from the processing of 17.26 tonnes, producing sample grades ranging from 0.39 to 2.04 carats per tonne. In each case, diamond populations are dominated by clear white (colourless) stones with high value characteristics which indicate the potential for high average diamond values.

Other work at Churchill in 2007 will include:

  • Snowmobile ground geophysics to collect detailed magnetic data at 40m line spacing within corridors of high interest G10 chemistry.
  • Ongoing exploration drilling to find the source of 17 pyrope dispersion trains.
  • Ongoing till sampling and prospecting throughout the summer season.
  • Structural study and interpretation.
  • Ongoing environmental baseline data collection.

"We are taking a twin-track approach at Churchill this year," says Pamela Strand, President and CEO of Shear Minerals. "Firstly, we want to prove-up and expand what we have found so far. Secondly, we want to continue exploration on other areas of the property which exhibit compelling but unexplained mineral chemistry."

Ms. Strand says the goal of this year's accelerated program is to better understand the size of the most prospective bodies identified to date and to determine their potential to host commercial size, gem quality diamonds. "This, in turn, will enable us to begin developing a resource model to examine the overall economic potential of the project," says Ms. Strand.

Shear and Stornoway currently own a 51.89% and a 35.61% interest respectively in the Churchill Diamond Project and announce that they have entered into an agreement to acquire the remaining 12.5% interest owned by BHP Billiton. Under the terms of the purchase agreement dated April 20, 2007 Shear and Stornoway will each acquire 50% of the BHP Billiton interest for the sum of $4 million each, to be paid by $1.25 million cash and the issuance of common shares valued at $2.75 million. The Shear common shares will be issued at a deemed price of $0.70 per share and the Stornoway common shares at a deemed price of $1.25 per share. The agreement is subject to regulatory approvals and will close no later than July 19, 2007. Upon closing, Shear and Stornoway will own a 58.14% and 41.86% interest, respectively in the project.

The Churchill Diamond Project is comprised of mineral rights to more than 2 million acres located near the communities of Rankin Inlet and Chesterfield Inlet in the Kivalliq region of Nunavut. To date the partners have discovered 52 kimberlites on the Churchill and Churchill West projects including four kimberlite dykes that host significant diamonds. The 2007 field program is under the supervision of Jennifer Burgess, P. Geol., a Qualified Person under NI 43-101.

On behalf of the Board
/s/ "Eira Thomas"
Eira Thomas
Chief Executive Officer