Preliminary 2003 Till Sampling Results Received 2004 Delineation Drilling at AV-1 Completed


Stornoway Diamond Corporation is pleased to provide the following exploration update on its 5.5 million acre Aviat Diamond Project located on the Melville Peninsula in eastern Nunavut. Aviat is being explored under a joint venture between Stornoway (70%), BHP Billiton Diamonds Inc. (20%) and Hunter Exploration Group (10%), and hosts the diamondiferous AV-1 and AV-2 kimberlites, discovered by prospecting during 2002 and 2003, respectively. AV-1 and AV-2 represent the first diamond discoveries on the Melville Peninsula and helped precipitate one of the largest land rushes in Canadian history, with over 90 million acres having been acquired for diamond exploration in the eastern arctic by early 2004.

Spring 2004 drilling helped to further delineate the AV-1 kimberlite, increasing its size, and has provided 2.5 tonnes of kimberlite from the unexposed Lake Zone for macrodiamond analysis. Preliminary till sampling results from 2003 have identified numerous kimberlitic indicator mineral anomalies throughout the landholdings and provide strong evidence for the presence of additional kimberlite bodies at Aviat. In particular, visual picking results have defined a prominent roughly east-west trending zone of highly anomalous samples, referred to as the "Tremblay Corridor", that extends for more than 75 km and varies between 3 and 8 km in width. As follow up to these encouraging results, the partners are proceeding with an aggressive $12.5 million exploration program comprised of ground and airborne geophysics (including BHP Billiton's proprietary FALCONTM airborne gravity system), prospecting, till sampling and drilling. The FALCONTM airborne gravity gradiometer system has been used successfully at BHP Billiton's Qilalugaq Project in the southern Melville Peninsula., where at least 9 diamondiferous kimberlitic bodies have been identified since 2003.

Eira Thomas, President and CEO commented "After almost two years of data-gathering, processing and interpretation, we are ready to begin our first comprehensive phase of target evaluation, which will include a large component of drilling. AV-1 and AV-2 alone cannot account for the widespread distribution of kimberlitic indicator minerals recovered from the property to date and we are confident that additional kimberlite bodies are present. The Tremblay Corridor has emerged as an obvious exploration focus and we are optimistic that detailed geophysics, including deployment of the FALCON TM system, will help us to prioritize targets for drilling in this highly prospective region".

A total of 2,024 m of delineation drilling was completed at AV-1 between late April and late June, 2004. This work has defined a multiphased body comprised of two principal rock types: hypabyssal kimberlite and transitional tuffisitic kimberlite. The Outcrop Zone at AV-1 consists of hypabyssal kimberlite, while the Lake Zone is dominated by tuffisitic kimberlite. Kimberlite was encountered over a horizontal distance of more than 225 m averaging approximately 50 m in width. Drilling to date has not fully constrained the body. The drilling also provided a further 2.5 tonnes of transitional tuffisitic kimberlite from the Lake Zone, which will be processed for macrodiamonds (diamonds >0.85 mm) in the coming weeks. Preliminary caustic fusion results from the transitional tuffisitic kimberlite breccia from the Lake Zone (reported previously) suggests that it may have a coarser diamond distribution than the Outcrop Zone, which returned a macrodiamond grade of 0.88 carats per tonne from 7.4 tonnes of kimberlite (see Company press release of April 20, 2004 for further details).

Three additional lake-based geophysical targets, selected on the basis of proximity to AV-1, were also tested as part of the spring drilling program. Two of the three holes did not intercept kimberlite, while the third hole intercepted several stringers of kimberlite up to 70 cm in width. The third anomaly, which is located approximately 250m west of AV-1, was not adequately tested due to technical difficulties and will undergo further drilling later in the season. Most of the priority geophysical and geochemical targets identified at Aviat so far have yet to be drill tested.

Final silicate picking results from some 2400 till samples collected in 2003 have now been received. A strong concentration of anomalous samples have been identified in association with the 70km long, 3-km wide, east-west trending Tremblay Corridor, which hosts AV-1 and AV-2, the first kimberlites discovered in the region. Anomalous kimberlitic indicator minerals (KIM's) have now been identified up-ice of AV-1 and AV-2 and there is also evidence of re-charge down ice of the known kimberlites providing further support for additional kimberlites along this trend. Outside of the Tremblay Corridor, at least ten discrete regions of anomalous KIM's have been identified for detailed follow-up. Electron microprobing has confirmed the presence of 4140 potential diamond indicator minerals from 215 till samples including both G9A and G10A garnets (indicating derivation from within the diamond stability field). Stornoway will be conducting a comprehensive summer prospecting and sampling program to follow up on all positive samples identified in 2003.

Thomas stated: "In 2004 we continue with an aggressive technically driven mandate that promises to deliver steady news flow and the potential for new discoveries".

Current plans for the 2004 summer program include 28,000 line km of detailed heli-borne mag-em, 6,000 line km of FALCONTM airborne gravity, 10,000 line km of detailed airborne magnetics and ground geophysical surveys. More than 3000 till samples will be collected and extensive prospecting will be undertaken throughout the landholdings and particularly within the prospective Tremblay Corridor. Drilling will test as series of priority targets. The total estimated budget for this work is $12.5 million, with Stornoway's contribution approaching $9 million. Airborne geophysical surveys commenced earlier this month, and will continue throughout the summer. Till sampling, prospecting and ground geophysics will be conducted starting mid-July, once the snow cover has melted, with drilling to follow in late July or early August, 2004.

The 2003 exploration program, including the collection of all till and Kimberlitic material, was conducted and managed by APEX Geoscience Ltd. under the direction of Dean Besserer, P. Geol., a qualified person under NI 43-101.

On behalf of the Board


/s/ "Eira Thomas"

Eira Thomas