Stornoway Diamond Corporation (TSX-SWY) is pleased to provide an update on the 2007 diamond exploration program at the Qilalugaq Project, situated north of Repulse Bay in Nunavut.

Eira Thomas, CEO commented: "We made great progress during the summer, discovering four new kimberlites from prospecting and further confirming the high exploration potential of the property. Several priority targets have now been identified for drill testing in 2008."

During the recently completed 2007 field program Stornoway successfully:

• discovered four new kimberlites by prospecting (Naujaat 3 through Naujaat 6, inclusive)
• collected 26.9 tonnes from five kimberlites for macrodiamond recovery through a Dense Media Separation (DMS) plant, including:
  • 22.3 tonnes from the A28 pipe, part of the diamondiferous Q1-4 kimberlite cluster
  • 0.7 tonnes from Naujaat 1(discovered in 2006)
  • 1.0 tonnes from Naujaat 2 (discovered in 2006)
  • 1.8 tonnes from Naujaat 3 (discovered in 2007)
  • 1.1 tonnes from Naujaat 6 (discovered in 2007)
• submitted a further 600 kg of kimberlite from 13 different sites along the Naujaat 1-6 kimberlite bodies for caustic fusion analysis
• acquired more than 300 kg of other rock samples for additional work
• completed ground geophysics over 19 grids to define targets for future drilling
• collected over 800 till samples for indicator mineral processing

Prospecting activities undertaken during the summer 2007 program extended the strike length of the Naujaat 1 and Naujaat 2 kimberlite dykes, originally discovered during 2006, and identified four new kimberlite dykes, Naujaat 3 through Naujaat 6, inclusive. The Naujaat 1 and 2 dykes occur in the immediate vicinity of 5 of the 10 known kimberlite pipes, extending over strike lengths of 3.2 and 1.4km, respectively. At the west end, Naujaat 2 appears to merge with Naujaat 1, and may be a splay off the host structure.

The four newly discovered kimberlite bodies are also thought to be dyke-like in character and occur to the west of the Naujaat 1 and 2 dykes. Collectively, the Naujaat 1 to Naujaat 6 bodies and the 10 known kimberlite pipes, suggest the presence of a 26 km long, structurally favourable belt that has been exploited by kimberlite magmas rising from the mantle. The 10 diamondiferous kimberlite pipes identified by BHP Billiton and the Naujaat 1 and 2 dykes occur in the eastern half of this favourable belt. Stornoway believes that there is the potential for unrecognized kimberlite pipes in the western part of this structure, based on the recently recognized association of kimberlite dykes with some of the eastern pipes, the discovery of four new dykes to the west, confirmed ground geophysical targets and unsourced indicator mineral distribution trains with mineral chemistry suggesting derivation from the diamond stability field. (Click here for map showing kimberlite distribution).

The following table summarizes the characteristics of the six Naujaat kimberlite bodies discovered by Stornoway, as currently understood. No drilling or mechanized trenching has been undertaken on these features. Surface expressions of kimberlite subcrop, float boulders and disaggregated frost heaved ‘green tills' are exposed intermittently along the host structures and lateral continuity is not assured. Similarly, reported widths are based on widths of the host structure, where constrained by outcropping country rock, and may not reflect true width of the kimberlite body. Many of the structures are open along strike and have not been completely prospected.

¹ see SWY Press Release May 14, 2007
² Company AIF July 25, 2007
³ no sample for DMS due to time constraints
⁴ represented only by disaggregated material- no fresh rock available for DMS sampling

Stornoway collected a 4.2 tonne sample by hand pitting of the subcropping A28 kimberlite body in 2006. This sample was submitted for Dense Media Separation (DMS) and a diamond content of 0.328 carats per tonne (cpt), including a 0.587 carat stone, has been previously reported (SWY press release dated May 14, 2007). BHP Billiton previously collected a 9.6 tonne sample from the same body by drilling and derived a grade of 0.26 cpt (greater than 0.85mm square mesh). The reason for the apparent difference in grade is not known at the present time. During 2007, Stornoway excavated approximately 22.3 tonnes of kimberlite from the A28 kimberlite pipe by hand pitting. This material will be submitted for DMS processing to establish diamond content, with results reported as available.

The 1.04 million acre Qilalugaq Project is located in eastern Nunavut immediately north of the community of Repulse Bay and is covered by terms of an option agreement between Stornoway and BHP Billiton. Stornoway can earn 50% in the project from BHP Billiton by spending $9 million before December 31, 2011. The property hosts 16 kimberlites, including the 14 ha Q1-4 bodies, currently the largest known kimberlite in the eastern Arctic and the subject of a previous large scale sampling program by BHP Billiton.

Stornoway Diamond Corporation is one of Canada's leading diamond exploration and development companies, involved in the discovery of over 150 kimberlites in six 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. Stornoway's diamond exploration programs are conducted under the direction of Robin Hopkins P.Geol. (NT/NU), Vice President, Exploration, a Qualified Person under NI 43-101.

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