Stornoway Diamond Corporation (TSX:SWY) announced today that it has entered into a Letter of Intent with Indicator Minerals Inc. whereby Stornoway has an option to earn a 41% interest in the Baumann Project located on Ellesmere Island, Nunavut.
The Baumann Project is comprised of 87 Prospecting Permits totaling more than 2.8 million acres. The property was acquired based on the recovery of kimberlite indicator minerals from regional heavy mineral samples including one high chrome G-10 pyrope garnet.
Under the terms of the option agreement, Stornoway can earn a 41% interest in the Baumann Project by spending $1.0 million before 31st December, 2009 and incurring 100% of the cost of staking mineral claims. Upon exercise of the option the Bauman Project will be held 41% by Stornoway, 39% by Indicator, and 20% by Hunter Exploration Group, with Stornoway acting as operator.
Stornoway has committed to collecting 100 heavy mineral samples from the project area in 2005 and results from this year's program will be used to determine a budget and work program for 2006.
Stornoway is a diamond exploration company with extensive landholdings (over 20 million acres) located in ten key project areas in northern Canada. Stornoway will directly spend more than $15 million to explore our properties and, together with its partners, will be exposed to more than $22 million in exploration expenditures in 2005.
Stornoway's diamond exploration programs are conducted under the direction of Robin Hopkins, P.Geol. (NT/NU), a qualified person under NI 43-101.
On behalf of the Board
STORNOWAY DIAMOND CORPORATION
/s/ "Eira Thomas"
Eira Thomas
President