Stornoway Diamond Corporation (TSX-SWY) is pleased to provide the following update for the 1.04 million acre Qilalugaq Project, situated north of Repulse Bay in Nunavut. The property hosts 17 kimberlites, including the 14 ha coalescing 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 Diamonds Inc. ("BHP Billiton"). Under the terms of an option agreement signed between BHP Billiton and Stornoway on July 10, 2006 and revised June 5, 2008, Stornoway can earn 50% in the project from BHP Billiton by spending $9 million before December 31, 2012.

Dense Media Separation (DMS) processing of 20.28 tonnes (dry) of kimberlite collected during 2007 as a single surface sample from the outcropping Q1 (also known as A28) kimberlite returned a total of 6.081 carats of diamonds, indicating a diamond content of 30 cpht for stones retained on a 0.85mm square mesh screen. The largest intact diamond recovered from this sample was a 0.37 carat light brown irregular stone. Some 25 pieces of a larger but mechanically broken colourless stone were recovered, representing an original crystal weight of at least 0.7925 carats. Other unrecognized fragments of this diamond may be present in the stone counts below. The Q1 (A28) diamonds are described as a mix of mostly octahedral and tetrahexahedroid forms. Stone colours range from colourless to light brown, with a small component of yellows.

Stornoway CEO, Eira Thomas commented: "The Q1-4 kimberlite complex remains a compelling target for the Company. Minibulk sampling to date has established a modest grade, but it is a large, outcropping ore body, located 10 km from tidewater with the potential to yield a 10 million carat plus resource. Early indications of diamond quality have also been encouraging and Stornoway is now considering a larger bulk sample to properly characterize the diamond population and provide a preliminary estimate of diamond value".

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 (see press release dated August 23, 2006), and identified four new kimberlite dykes, Naujaat 3 through Naujaat 6, inclusive (see press release dated September 11, 2007). Collectively, the Naujaat 1 to Naujaat 6 bodies and the known diamondiferous kimberlite pipes suggest the presence of a 26 km long, structurally favourable, belt that has been exploited by kimberlite magmas rising from the mantle. No drilling or mechanized trenching has been undertaken on the Naujaat 1 to Naujaat 6 bodies.

Surface expressions of kimberlite subcrop from Naujaat 1 to 4 and Naujaat 6 were sampled to determine microdiamond content by caustic fusion analysis. As noted previously, (see press release dated September 11, 2007) the Naujaat 5 kimberlite occurs only as disaggregated frost heaved ‘green tills' for which no fresh representative sample could be collected. All of the 2007 caustic fusion samples retuned diamonds, with results summarized in the table below. Recovery of +0.60 and +0.85mm stones from Naujaat 4 during caustic fusion is considered to be a positive development.

Small DMS samples were collected in 2007 from kimberlites Naujaat 1, 2, 3 and 6 to gain greater information on potential macrodiamond content. Although the sample sizes are too small to accurately reflect total diamond content (see discussion in Historical and Comparative section below), only the Naujaat 1 body recovered any diamonds on the 0.85mm or greater square mesh screen, as reported below.

The 2008 program is anticipated to commence in July, depending on weather and logistical considerations, and will focus on unsourced mineral indicator mineral trains with promising chemistry. Stornoway will also conduct additional prospecting along the Naujaat 4 and 5 bodies to determine if sufficient unweathered material exists at surface to facilitate the collection of larger samples.

 Stornoway also announces that terms of the original option agreement signed between Stornoway and BHP Billiton on July 10, 2006 (see press release dated July 12, 2006) have been revised, such that Stornoway may earn up to a 50% interest in the Qilalugaq Diamond Property by spending a total of $9 million before December 31, 2012 (changed from December 31, 2011). Thereafter, a joint venture will be formed whereby the partners agree to jointly fund the next $6 million in property expenditures over two years. After $6 million in expenditures have been incurred, BHP Billiton shall have a one time election to earn a further 15% interest in the project (bringing its total interest to 65%) by incurring the next $15 million in expenditures.

Historical and Comparative Data

The Qilalugaq Property was acquired by BHP Billiton in 2001 and has undergone several phases of exploration using airborne geophysics (magnetics, electromagnetics and gravity surveying) together with property wide till sampling, drilling and limited minibulk sampling. Eleven kimberlites were discovered by BHP Billiton as a result of this work, ten of these were analysed and proven diamondiferous. The Qilalugaq bodies share geological similarities with the Aviat bodies and appear to be the same age. The largest kimberlite identified by BHP Billiton is a complex made up of the Qilalugaq 1, 2, 3, and 4 pipes which coalesce to form a body with an approximate area of 14 ha. Other drill confirmed bodies range in size from 0.8 to 11.0 ha based on interpretation of geophysical data. A mini-bulk sample of 229.7 dry tonnes extracted from the Qilalugaq 1-4 (Q1-4) complex by RC and core drilling returned a total of 61.37 carats (for stones greater than 1.1 mm), indicating a calculated sample grade of 27 cpht. The Q1 body, approximately 5.4 ha in size, was not tested with RC drilling and is therefore under represented in this mini-bulk sample.

Stornoway collected a 4.2 tonne sample by hand pitting of the Q1 (A28) kimberlite body in 2006., A diamond content of 32.8 cpht, including a 0.587 carat stone, was reported following DMS processing (see press release dated May 14, 2007). BHP Billiton previously collected a 9.6 tonne sample from the same body by drilling and derived a diamond content of 26 cpht. During 2007, Stornoway excavated an additional 20.3 tonnes of kimberlite from the A28 kimberlite pipe by hand pitting of surface exposures as reported above. Historical results and a cumulative total are provided in the table below.

During 2006, Stornoway also discovered two kimberlite dykes by prospecting - the Naujaat 1 and Naujaat 2 bodies (see press release dated August 23, 2006). Caustic fusion results from Naujaat 1 collected at three locations along strike confirmed that the body was diamondiferous, and suggested a possible variation in diamond content may occur over the 3.1 km strike length. The small DMS sample collected in 2007, and reported above, indicates a potentially higher diamond content than the 2006 work, although the two samples were separated by a distance of 2.5 km. It is possible that what was thought to be a single body (Naujaat 1) is actually two separate features, but limitations to field exposures and unresolved geophysical variations preclude a definitive conclusion. The reader is also cautioned about drawing conclusions from the processing of small samples especially when dealing with lower grade kimberlite bodies. Apparent variations or discrepancies in diamond content may be attributable to natural factors, surficial weathering, collection issues, processing and recovery parameters, etc. 

Scientific and Technical Data

Diamond results reported above are based on work completed by Microlithics Laboratories, Thunder Bay, Ontario, an independent mineral process laboratory currently providing services exclusively to Stornoway and its affiliates. The DMS samples were processed through a 1.5 tonne per hour (tph) DMS plant designed to recover stones retained on a 0.85mm square mesh sieve. Kimberlite was prepared through a primary jaw crusher, with -10 mm material fed directly into the DMS. All +10 mm material was subsequently reduced through secondary cone crushing. DMS concentrates were submitted for caustic fusion and the residues hand sorted to extract diamonds. Caustic fusion analysis of individual rock samples was also undertaken at Microlithics. As part of Stornoway's ongoing QA/QC programs, DMS tails, concentrate residues and other materials are subject to audit. Any significant changes to recovered diamond contents will be reported when available. 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. Mr. Hopkins has reviewed the contents of this press release.

Stornoway Diamond Corporation

Stornoway Diamond Corporation is one of Canada's leading diamond exploration and development companies, involved in the discovery of over 150 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.

On behalf of the Board

STORNOWAY DIAMOND CORPORATION
/s/ "Eira Thomas"
Eira Thomas
Chief Executive Officer

This news release may contain forward looking statements, being statements which are not historical facts, including, without limitation, statements regarding potential mineralization, exploration results, resource or reserve estimates, anticipated production or results, sales, revenues, costs, "best-efforts" financings or discussions of future plans and objectives. There can be no assurance that such statements will prove accurate. Such statements are necessarily based upon a number of estimates and assumptions that are subject to numerous risks and uncertainties that could cause actual results and future events to differ materially from those anticipated or projected. Important factors that could cause actual results to differ materially from the Company's expectations are in Company documents filed from time to time with the Toronto Stock Exchange and provincial securities regulators, most of which are available at www.sedar.com. The Company disclaims any intention or obligation to revise or update such statements.