On July 16, 2008, Stornoway Diamond Corporation (TSX-SWY) announced that, subject to negotiating the definitive subscription agreement and receiving all necessary approvals, it intends to effect a $22 million private placement (the "Private Placement") comprising 24,444,444 common shares at a price of $0.90 per common share split equally between Agnico-Eagle Mines Limited ("Agnico-Eagle") and Lorito Holdings Limited ("Lorito"). The proceeds of the Private Placement will be used to redeem the $10 million principal amount of convertible debentures held by each of Agnico-Eagle and Lorito.

The Issuer hopes to close the Transaction in fewer than 21 days from the date of the material change report filed with respect to this transaction. The Issuer believes that closing the Transaction in such period is necessary or reasonable in order to avoid continuing to incur interest charges under the Debentures.

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 Corporation 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 financings, the use of proceeds, stock exchange and regulatory approval and 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 Corporation's expectations are in Corporation 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 Corporation disclaims any intention or obligation to revise or update such statements.