Stornoway Diamond Corporation (TSX-SWY) is pleased to announce the receipt of a positive economic study for the Renard Diamond Project, located at the Foxtrot Property in North Central Québec. The Foxtrot Property is a 50:50 joint venture with SOQUEM INC. ("SOQUEM"). The study comprises a National Instrument ("NI") 43-101 compliant resource estimate and a diamond processing plant design prepared by AMEC Americas Limited ("AMEC"), and a mine plan, capital and operating cost estimate, and an economic assessment prepared by Agnico-Eagle Mines Limited ("Agnico"). AMEC's plant design, and elements of Agnico's mining study such as the cost estimation, have been completed to a pre-feasibility standard. However, the more conceptual nature of the mine plan, and the inclusion of inferred resource from AMEC's mineral resource estimate in the economic assessment, dictates that the two studies, in combination, comprise a "Preliminary Assessment" under the definitions contained within NI 43-101. An independent Technical Report summarizing the results of the Preliminary Assessment will be filed within 45 days of the date of this release. Highlights are as follows:

Highlights

• A NI 43-101 compliant mineral resource comprising 7.0 million carats of Indicated Resource (11.6 million tonnes at an average grade of 60 carats per hundred tonnes, or "cpht") and 4.5 million carats of Inferred Resource (7.2 million tonnes at an average grade of 63 cpht).
• Project capital cost of C$308 million (including contingency) and average life of mine operating cost of C$50.39/tonne in a conceptual mine plan utilizing both open pit and underground mining.
• An economic assessment based on a base case 5.8 million carat resource with a pre-tax IRR of 13.9% (11.8% after tax), and an NPV of C$52 million (calculated before tax at an 8% discount rate). Pre-tax IRR increases to 16.4% (13.9% after tax), with an NPV of C$78m, based on an economic assessment that applies an alternate diamond price to the Renard 4 kimberlite pipe.
• Extensive upside identified in the form of an additional 9 to 21 million carats classified as potential mineral deposit (14 to 32 million tonnes ranging from 31 to 164 carats per hundred tonnes). The reader is cautioned that the potential quantity and grade of any potential mineral deposit is conceptual in nature, and it is uncertain if further exploration will result in the target being delineated as a mineral resource.

CEO Eira Thomas stated, "The completion of this study marks a significant milestone for Stornoway and the Renard Diamond Project. We have established an economically attractive, high value, core resource that will grow over the next twelve months, improving overall project economics and providing significant upside for our investors. This result also provides the partners with a high degree of comfort as we work to progress Renard through feasibility and towards construction as expeditiously as possible. More than ever, we remain confident that Renard will become Québec's first diamond mine in a few short years."

President Matthew Manson stated, "This first formal economic study has confirmed our view that a potentially successful mining operation can be established at Renard supported by a high margin, core resource. Of particular importance is the large amount of potential resource upside that has been identified, and which we will evaluate in the coming year. With limited additional investment and in a timely fashion, we see opportunity to significantly extend the preliminary mine life and enhance the project's economics prior to a formal production decision. This will now be the prime focus of the joint venture."

Mineral Resource Estimate

The NI 43-101 estimate of Indicated and Inferred Resource, summarized in Table 1, was prepared by AMEC utilizing geological models prepared in detail for each kimberlite body by Stornoway personnel, and reviewed by AMEC, and a database established over several years of exploration drilling and diamond sampling. The mineral resource estimate comprises the integration of kimberlite volume, density, petrology and diamond content data obtained from 58,876 meters of diamond drilling, 5,173 meters of reverse circulation drilling, 552.7 carats (5,573 stones) of diamonds recovered from reverse circulation drilling and 7,626.1 carats (69,357 stones) of diamonds recovered from surface trenching and bulk sampling.

Diamond Grades and Tonnages
Diamond grades were calculated separately for different lithological phases within each kimberlite body by integrating diamond recovery data from reverse circulation drilling with the diamond size frequency distribution characteristics of each unit as determined from the bulk samples. Where reverse circulation data were not available, such as with the Lynx dyke, or where the reverse circulation drill holes were judged to be unrepresentative of kimberlite geology as determined from diamond core drilling, such as with Renard 3, grades were determined primarily from bulk sample recoveries.

For each kimberlite body, diamond resource grades are equal to or less than the diamond recoveries shown by the geologically representative dataset, and are estimated on a +3 DTC sieve size cut-off with allowance for the non-recovery of small diamonds typical in a commercial diamond production plant. AMEC is confident that the resource grades have not been over-stated.

Block models for grade and tonnage were created for a 5mx5mx5m block size with geology and grade interpolation using inverse distance squared estimation methodology to estimate both the probability of each kimberlite phase within an estimated block and stones per tonne for each block. Nearest-neighbour interpolation of geology and grades was undertaken for validation purposes. Resource tonnages were derived by combining rock volumes from the geological solid models with representative specific gravity measurements, and are estimated to a depth of 550 meters below surface for Renard 2, and 400 meters below surface for Renard 3, 4 and 9, and 100 meters below surface for Lynx.

The NI 43-101 standard requires that a resource can be declared only if it shows a "reasonable prospect for economic extraction". In assessing whether the Renard resource met this standard, AMEC applied a break-even consideration defined as the total in-situ value of the resource divided by the total capital and operating costs required for its extraction on an undiscounted basis, based on certain resource assumptions and economic parameters supplied by Agnico and developed within the context of their conceptual mine plan studies, as detailed below. Based on its review, AMEC is satisfied that the mineral resources reported in Table 1 meet the requirement of reasonable prospects for economic extraction.

Potential Mineral Deposit
In addition to the mineral resources, AMEC has estimated potential mineral deposit totaling 9 to 21 million carats (14 to 32 million tonnes at grades ranging from 31 to 164 cpht), as summarized in Table 2 below.

The potential quantity and grade of the potential mineral deposit is conceptual in nature. There has been insufficient exploration to define this material as a mineral resource, and it is uncertain if further exploration will result in the target being delineated as a mineral resource.

The potential mineral deposit has been determined on the basis of known drill intersections of kimberlite for which insufficient diamond sampling exists to adequately estimate a diamond resource grade, or on the basis of the implied depth extent of the kimberlite pipes to 700m below surface, or on the basis of geological uncertainty in the definition of kimberlite geological models.

Preliminary Assessment

A conceptual mine plan, capital cost and operating cost parameters, and an economic assessment were prepared by Agnico based on the mineral resource block models supplied by AMEC. Process plant design, as well as capital cost and operating cost estimates for the diamond processing plant, were prepared by AMEC.

In establishing the preliminary Renard conceptual mine plan, Agnico established a "Base Case", resource of 5.8 million carats taken from the Renard 2, Renard 3 and Renard 4 kimberlite bodies only, consisting of 5.9 million tonnes of Indicated Resource at an average grade of 74 cpht and 1.5 million tonnes of Inferred Resource at an average grade of 95 cpht. The Base Case financial model applies model diamond prices for each kimberlite body of US$123/carat for Renard 2 and Renard 3 and $US80/carat for Renard 4, as determined by WWW International Diamond Consultants Ltd. ("WWW") in an open market valuation exercise conducted in March 2008 (see Stornoway press release dated April 28th 2008), and as calculated on a +3 DTC sieve size cut-off. No provision has been made for the mining of other resources such as the Lynx dyke inferred resource or the lower grade inferred resource contained within Renard 4 and Renard 9.

So as to measure the sensitivity on the project to higher diamond prices for the Renard 4 kimberlite, a second economic assessment was generated that applies the Renard 2 and Renard 3 diamond price of US$123/carat to the Renard 4 kimberlite also. This is consistent with the results of a review of the diamond size frequency data available for each kimberlite body by Mr. M.M. (Tinus) Oosterveld, a recognized expert in the statistics of diamond populations and an AMEC associate. Mr. Oosterveld concluded that there exists a "large degree of similarity in the diamond size frequency distributions" within the Renard kimberlite cluster. This "R4 Price Sensitivity Case" economic assessment utilizes the same resource as with the base case, although it is likely that achieving this higher diamond price in Renard 4 and Renard 9 will allow additional resources to be brought into the conceptual mine plan. An analysis of the impact of these additional resources on the preliminary assessment is ongoing.

Conceptual Mine Plan
The conceptual mine plan combines open pit mining and sublevel, open stope underground mining. The mining sequence and design were determined by optimizing the pit depth and underground stopes to achieve a production rate of 3,500 tonnes/day or 1.3 million tonnes per annum. The pit designs were finalized using the Lerch-Grossman ultimate pit method with an expected stripping ratio of 2.15:1. Underground stopes were designed so as to minimize dilution and maximize extraction of higher grade material. The mining levels were located where geologically convenient, resulting in stopes with heights between 40 and 100 meters. The first stopes in the mining sequence for each pipe will be backfilled with a combination of waste rock and cemented waste rock, allowing a crown pillar to be maintained for the duration of underground mining.

Diamond Processing Plant
The diamond processing plant was designed by AMEC to process 1.3 million tonnes of kimberlite annually, expandable to 1.8 million tonnes annually. Ore preparation will include initial jaw and cone crushing followed by tertiary crushing employing a high pressure grinding rolls crusher, scrubbing and screening with vibrating screens. Ore is concentrated in a Dense Medium Separation plant and the diamonds are to be separated from heavy mineral concentrate using X-ray sorting and grease table technology. Plant utilization is estimated at 78% with rated diamond recovery of 100% of the resource grade based on a bottom size cut-off of 1mm, and an upper size cut-off of 30mm, this being optimized for large diamond recovery. Flow sheet design was based on laboratory tests and metallurgical data recorded during the processing of the Renard kimberlite bulk samples.

Capital Cost
The capital expense (cap-ex), summarized in Table 3, is estimated to be $308 million, including $73 million for a diamond processing plant. Contractors will be utilized for site infrastructure construction and pre-stripping. The capital cost contingency of $50 million, equal to approximately 20% of the total cap-ex, was calculated for individual items using a risk based system with quoted costs having the highest level of confidence.

Operating Cost
Operating costs (op-ex) are anticipated to average C$50.39/tonne, including average mining costs of C$36.98/tonne, C$14.91/tonne for ore processing and C$16.11/tonne for surface services and general administration. Mining costs are calculated as an average of the underground costs (C$22.92/tonne) and open pit costs (C$14.06/tonne) over the mine life. Operating costs were estimated through contractor quotes or real-case unit costs derived from current Agnico operations. A diamond marketing cost of 3% of revenue has also been applied.

Access
Site access is based on the assumed availability of an all-season road from the south. Should this road not be available at the time of mine construction, an additional capital cost expenditure of C$39.4 million would be incurred to construct a winter road and the additional site infrastructure that seasonal access would dictate. Annual maintenance of the winter road and the associated logistical charges for mine operation would result in an increase to project operating costs of approximately C$4.49/tonne for as long as the winter road was being utilized.

Financial Model
Financial models have been prepared on a pre-tax basis using a US dollar 3-year historical exchange rate of C$1.146, as recommended for planning purposes by Agnico, and Net Present Value has been calculated at an 8% discount rate. An annual diamond price escalation factor of 2.5% has been applied with sensitivities of 0% and 5%. The diamond price escalation factor commences in 2011 and extends through the life of mine, consistent with a consensus of recent diamond industry price forecasts. The Renard Preliminary Assessment based on both the "Base Case" and "R4 Price Sensitivity Case" is summarized in Table 4.

Next Steps

The Renard Preliminary Assessment demonstrates a project with a positive rate of return on a core mineral resource that has extensive upside potential and is strongly leveraged to growing diamond prices. Stornoway and SOQUEM consider this assessment to form a strong starting point for the potential development of Québec's first diamond mine. Stornoway is currently preparing a work program that is designed to allow for a production decision, if warranted, within two years and which will contain the following elements:

1. A resource expansion and optimization program, comprising additional drilling and diamond sampling, designed to upgrade Inferred Resources into Indicated Resources, and to bring as much potential mineral deposit as possible into a mineral resource category (year 1)
2. A Social and Environmental Impact Assessment (years 1 to 2)
3. Permitting (years 1 to 2)
4. A program of community consultation and engagement, including consultation designed to lead to the negotiation and potential execution of an Impact and Benefits Agreement (years 1 to 2)
5. Full mine feasibility (year 2)

In addition, Stornoway continues to play a strong advocacy role for the ongoing development of regional infrastructure in the James Bay region of Québec through an active engagement with government and communities. It is anticipated that a prefeasibility study for "Route Monts Otish", the proposed all-season road connecting the Renard Diamond Project with the communities of Mistissini and Chibougamau, will be completed under the auspices of Transport Québec in the first half of 2009. Stornoway considers that the first formal economic assessment of the Renard Diamond Project will represent an important incentive for regional development and investment.

Additional information on the Renard Diamond Project Preliminary Assessment, including conceptual site layouts and mine scheduling schematics, can be found on Stornoway's website at www.stornowaydiamonds.com/development/foxtrot/economic_assessment.

Qualified Persons for the NI 43-101 Report

Mr. Randall Cullen (P.Geo.) and Mr. Ken Brisebois (P.Eng.), both of AMEC Americas Ltd., are the independent Qualified Persons responsible for the preparation of the mineral resource estimate for the Renard Diamond Project. Mr. Harry Ryans of AMEC Americas Ltd., a diamond process design expert, was responsible for plant design. Mr. Normand Lecuyer (ing.) and Dr. William E. Roscoe (P.Eng.) of Scott Wilson Roscoe Postle Associates Inc. have reviewed the conceptual mine plan, capital and operating cost estimates, and the preliminary economic analyses authored by Agnico and are the independent Qualified Persons for these aspects of the study.

All of these Qualified Persons have reviewed and approved the contents of this release.

Stornoway Diamond Corporation

Stornoway Diamond Corporation is one of Canada's leading diamond exploration and development companies, involved in the discovery of over 200 kimberlites in seven Canadian diamond districts. The Company benefits from a diversified diamond property portfolio, a strong financial platform and management and technical teams with experience in each segment of the diamond "pipeline" from exploration to marketing.

SOQUEM INC.

SOQUEM is a wholly-owned subsidiary of Société générale de financement du Québec ("SGF"). The SGF, the Québec industrial and financial holding company, has as its mission to undertake economic development projects in the industrial sector in cooperation with partners and in compliance with the economic development policies of the Government of Québec.

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

Caution Regarding Forward-Looking Statements

This document may contain "forward-looking statements" within the meaning of Canadian securities legislation and the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements are made as of the date of this document and the Company does not intend, and does not assume any obligation, to update these forward-looking statements.

Forward-looking statements relate to future events or future performance and reflect management's expectations or beliefs regarding future events and include, but are not limited to, statements with respect to the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, success of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage.

These forward-looking statements include, among others, statements with respect to Stornoway's objectives for the ensuing year, our medium and long-term goals, and strategies to achieve those objectives and goals, as well as statements with respect to our beliefs, plans, objectives, expectations, anticipations, estimates and intentions. The words "may," "could," "should," "would," "suspect," "outlook," "believe," "plan," "anticipate," "estimate," "expect," "intend," and words and expressions of similar import are intended to identify forward-looking statements. In particular, statements regarding Stornoway's future operations, future exploration and development activities or other development plans contain forward-looking statements.

All forward-looking statements and information are based on Stornoway's current beliefs as well as assumptions made by and information currently available to Stornoway concerning anticipated financial performance, business prospects, strategies, regulatory developments, development plans, exploration, development and mining activities and commitments. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution readers not to place undue reliance on these statements as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates and intentions expressed in such forward-looking statements.

These factors include, but are not limited to, developments in world diamond markets, changes in diamond valuations, risks relating to fluctuations in the Canadian dollar and other currencies relative to the US dollar, changes in exploration, development or mining plans due to exploration results and changing budget priorities of Stornoway or its joint venture partners, changes in project parameters as plans continue to be refined; possible variations in ore reserves, grade or recovery rates; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities, the effects of competition in the markets in which Stornoway operates, the impact of changes in the laws and regulations regulating mining exploration and development, judicial or regulatory judgments and legal proceedings, operational and infrastructure risks and the additional risks described in Stornoway's most recently filed Annual Information Form, annual and interim MD&A, and Stornoway's anticipation of and success in managing the foregoing risks. Stornoway cautions that the foregoing list of factors that may affect future results is not exhaustive. When relying on our forward-looking statements to make decisions with respect to Stornoway, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Stornoway does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by Stornoway or on our behalf.