Stornoway Diamond Corporation

Published : June 27th, 2008

And Shear Report Additional High Interest Mineral Dispersions At Churchill Diamond Project: 2007 Wor

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June 26, 2008

Stornoway And Shear Report Additional High Interest Mineral Dispersions At Churchill Diamond Project
2007 Work Completed Including New Kahuna Grade of 1.04 cpt

Stornoway Diamond Corporation (SWY:TSX) and Shear Minerals Ltd. (SRM:TSXV) today announced final results from the 2007 exploration program at the Churchill Diamond project in Nunavut. 

Highlights Include:

  • Complete laboratory results received from 2007 till sampling with mineral abundance and chemistry defining 35 unsourced high interest indicator mineral dispersions.  Highest count sample returned 136 pyrope garnets from 44% of the sorted concentrate.
  • Kahuna tailings audit completed with the recovery of additional diamonds that increases Diamond grade to 1.04 carats per tonne (cpt).
  • Diamond fragments from the Kahuna bulk sample are confirmed to originally have been part of a larger single 13.42 carat Diamond.

2007 Mineral Chemistry Update

In 2007 a total of 479 till samples were collected on the property in order to further resolve existing high interest dispersions and to follow-up on high interest samples or prospecting targets previously identified.  Overall, 97% of the 2007 samples were positive for indicator minerals with a total of 10,089 kimberlite indicator mineral grains recovered.  Probe results have been received for 979 grains to date, representing the silicates and chromites recovered from the first 400 samples.  The highest count sample (07C488) returned 482 grains including 480 picroilmenites.  The highest pyrope count was from sample 07C441 with 245 grains recovered from 44% of the concentrate, including 136 pyrope garnets.  This sample is located 2km down ice (SE) of the PST kimberlite and may indicate a new distinct source in the vicinity of the sample. 

Since 2004 Shear has contracted Mineral Services Canada (?MSC?) to assist with the ongoing resolution of possible sources of the very high interest G10 garnet compositions present on the Churchill property. From the 2007 till sample data, MSC has identified a number of additional high interest indicator mineral trains on the property. Out of a total of 42 mineral dispersions identified to date, 35 have yet to be explained by known kimberlite sources. Of these, 17 are ranked high priority, 10 are ranked moderate priority, and 8 are ranked low priority for additional follow-up work. Seven high interest dispersions can be confidently associated with known kimberlite sources, however five of these have mineral dispersions that suggest possible input of grains from additional undiscovered kimberlite sources. The mineral dispersions are ranked on the basis of the indicator mineral abundance, mineral compositions and presence of primary surface features on the recovered garnets and ilmenites.

One of the goals for the 2008 field season is to find the kimberlite sources to as many of these high Diamond potential dispersion trains as possible.

Kahuna Breakage Study and Diamond Descriptions

MSC was contracted to undertake an evaluation of the value characteristics of the Kahuna macrodiamonds. MSC completed detailed characterization of a total of 1,757 stones out of the total population of 11,347 diamonds. These included all stones falling on the +7 DTC sieve class and larger (464 diamonds in total), plus representative sub-sets of the smaller DTC sieve classes (1,293 diamonds in total). The work was carried out at MSC?s secured Diamond recovery facility in North Vancouver, BC. It should be noted that this exercise was not aimed at establishing a market-based valuation of the Kahuna Diamond parcel. The primary goal of the study was to investigate the value characteristics of the macrodiamonds and how these vary with increasing Diamond size.

MSC describes the Kahuna Diamond population as having encouraging value characteristics. Most notably, the diamonds contain a high abundance of colourless and near colourless varieties and octahedral shapes are the dominant morphology. Diamond clarity in the smaller DTC size classes is described as being mostly very good, however, clarity does decrease in the larger DTC size classes due to an increase in the frequency of inclusions and internal fractures, and not due to the presence of coating on the diamonds. The larger stones also show increased fragmentation, which MSC believes to be due to the increase in occurrence of inclusions and fractures. In terms of cutability, the majority of the stones were classified as having elongated (B) forms that would most likely place them into the makeable category.  Pie charts of the Diamond population will be posted to www.shearminerals.com.

A breakage assessment was completed internally in order to firstly asses the Kahuna diamonds for physical evidence of breakage through mechanical means (i.e. man-made through crushing) and secondly to determine if the large Diamond fragments recovered could be fitted back together to represent a single stone or stones.  Diamonds shapes and populations were compared from samples #2 (no crushing) and #3 (crushed) and no significant difference was noted. In order to piece together the Diamond fragments all Diamond surfaces were examined for resorption, crystallographic orientation, catholuminesence and other mineralogical characteristics.  Based on this it was concluded that seven fragmented diamonds, totaling 13.42 carats, most likely originated from a single, larger stone. It also indicated that some of these diamonds exhibited physical evidence of breakage through mechanical means during processing.

Kahuna Bulk Sample Tailings Audit

Shear would also like to report on the recovery of additional macrodiamonds from an audit of the tailings material from the 2007 Kahuna bulk sample. The audit comprised reprocessing of between 15 and 22% of the tails from each sample, and an additional 351 diamonds representing 6.196 carats were recovered, including a 0.27 carat Diamond from the Kahuna 3 sample. It was carried out at Microlithics Dense Media Separation (DMS) facility in Thunder Bay, Ontario. The tailings underwent an initial pass through the DMS circuit to produce a heavy mineral concentrate which was then subjected to caustic fusion to recover diamonds.

Based on the results of the audit, the calculated Diamond grade for Kahuna (as reported on December 3, 2007) has the potential to increase from 0.96 carats per tonne (cpt) to 1.04 cpt.

The original samples were processed by dense media separation (DMS) followed by magnetic separation through an Eritz magnetic separator at Kennecott Canada Exploration Inc.?s independent processing plant in Thunder Bay, ON, using a 1mm square mesh bottom cut off.  Kahuna Samples 1 and 3 were crushed; Sample 2 required no crushing as the kimberlite was pervasively clay altered. A heavy mineral concentrate was generated and then passed through an x-ray sorter and picked for diamonds. A final stage caustic fusion was then undertaken on the concentrate to recover all remaining diamonds.

Kahuna Bulk Sample Valuation

Given the completion of the tailings audit and breakage studies on the Kahuna bulk sample, Shear is currently in the process of finalizing arrangements for an independent market valuation exercise for the Kahuna diamonds. The valuation will be conducted in Antwerp, Belgium, and is designed to give a preliminary estimate of average Diamond value for the parcel recovered to date.

Meeka Kimberlite Update

In 2007 a total of 31 new kimberlites were discovered on the Property including five highly diamondiferous dykes (see news release October 11, 2007) within the Sedna Corridor. This brings the total number of high interest diamondiferous kimberlites to nine. One of these is the Meeka kimberlite found during the field prospecting of an east-west linear trend located southeast of the Jigsaw kimberlite (see news release October 22, 2007). Initially, an area of green coloured till was sampled and nineteen microdiamonds were recovered from a 15kg sample using caustic fusion. Further sampling and caustic fusion of additional material, believed to represent a mixture of till and weathered kimberlite, returned 92 microdiamonds from a 102.8kg sample (see news release January 31, 2008). Based on the interpretation of a ground geophysical survey conducted over the linear feature, Meeka is believed to be an east-west trending kimberlite dyke approximately 500m in length and open in both directions. Trenching along the body was unable to establish true width due to the highly weathered nature of the kimberlite and surrounding country rock. Nonetheless, a 1.8-tonne mini bulk sample was collected of this material that once dried, resulted in a final sample weighing 860.5 kilograms. This sample was processed through the Microlithics DMS facility and only one >0.5mm Diamond was recovered from a concentrate containing abundant chromite and kyanite.  Due to the unconsolidated nature of the sample medium it is interpreted that the mini bulk sample was highly diluted by glacial material and weather country rock.  Prospecting of the entire Meeka trend will occur in 2008 to attempt to locate fresh bedrock kimberlite for follow up sampling.  

The Churchill Diamond Project is owned 58.14% by Shear and 41.86% by Stornoway and is comprised of the Diamond rights to more than two million acres located near the communities of Rankin Inlet and Chesterfield Inlet in the Kivalliq region of Nunavut. Work is presently focused on continued exploration of new promising indicator mineral trains and geophysical anomalies as well as the evaluation of a system of significantly Diamond-bearing, vertically-emplaced kimberlite dykes that have returned sample grades of up to 2.18 carats per tone. Pamela Strand (P.Geol.) is Shear?s qualified person reviewing the project and has reviewed the content of this news 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

For further information, please contact Nick Thomas , Investor Relations Manager at 604.331.2271 or 1.877.331.2232

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Stornoway Diamond Corporation

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CODE : SWY.TO
ISIN : CA86222Q8065
CUSIP : 86222Q806
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Stornoway Diamond is an exploration gold and copper company based in Canada.

Stornoway Diamond develops gold, copper, diamonds and nickel in Canada, and holds various exploration projects in Botswana and in Canada.

Its main asset in development is RENARD (FOXTROT) in Canada and its main exploration properties are RAVEN, CHURCHILL, KINGORA, LDG, DARING LAKE, JEWEL, STARFISH, WALES ISLAND, SCEPTRE AND TIARA, HAMMER, QILALUGAQ, PORTAGE MINE, MELVILLE PENIN. and MELVILLE PENINSULA (AVIAT PROJECT) in Canada.

Stornoway Diamond is listed in Canada. Its market capitalisation is CA$ 16.6 millions as of today (US$ 12.6 millions, € 11.4 millions).

Its stock quote reached its highest recent level on May 14, 2004 at CA$ 9.80, and its lowest recent point on September 06, 2019 at CA$ 0.01.

Stornoway Diamond has 828 659 968 shares outstanding.

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