Stornoway Diamond Corporation ("Stornoway") and Contact Diamond Corporation ("Contact") are pleased to announce that at midnight (Toronto time) on January 17, 2007 Stornoway acquired all of the remaining outstanding common shares (the "Contact Shares") of Contact, being 3,015,852 Contact Shares, pursuant to the statutory compulsory acquisition procedures (the "Compulsory Acquisition") of the Business Corporations Act (Ontario). Contact is now a wholly-owned subsidiary of Stornoway.

Each shareholder whose Contact Shares were deemed to have been acquired under the Compulsory Acquisition will receive common shares of Stornoway ("Stornoway Shares") on the basis of 0.36 of a Stornoway Share for each Contact Share held. The aggregate number of Stornoway Shares issued pursuant to the Compulsory Acquisition is approximately 1,085,707 Stornoway Shares. After completion of the Compulsory Acquisition, Stornoway has approximately 171,552,000 common shares outstanding. In addition, Stornoway advises that 15,575,861 common shares of Stornoway are being issued to holders of shares of Ashton Mining of Canada Inc. ("Ashton"), and not 22,576,038 common shares as disclosed in its news release of January 16, 2007 relating to the completion of the amalgamation of Ashton and a wholly-owned subsidiary of Stornoway.

In order to receive certificates representing their Stornoway Shares, Contact shareholders are required to deliver the certificate(s) representing their Contact Shares to Pacific Corporate Trust Company, 2nd Floor, 510 Burrard Street, Vancouver, British Columbia, V6C 3B9, in accordance with the instructions on the Transmittal and Election Form that was delivered to shareholders of Contact on December 18, 2006.

Contact shareholders with questions or requests for copies of documents are invited to contact Nick Thomas, Manager Investor Relations for Stornoway, at 604-331-2259 or 1-888-338-2200.

On behalf of the Board
STORNOWAY DIAMOND CORPORATION
/s/ "Eira Thomas"
Eira Thomas
President