October 22, 2007

STORNOWAY ANNOUNCES POSITIVE VALUATION RESULTS
FROM RENARD BULK SAMPLE
US$109 per Carat Model Price for Renard 2 and Renard 3

Stornoway Diamond Corporation (TSX-SWY) is pleased to provide complete diamond valuation results on its recently completed 6,500 carat bulk sample from the Renard project in north-central Québec, a 50:50 joint venture with SOQUEM INC. (“SOQUEM”).  Three separate valuation parcels from the Renard 2, 3 and 4 kimberlite pipes were recently presented for valuation in Antwerp, Belgium under the supervision of WWW International Diamond Consultants Ltd. (“WWW”), an internationally recognized diamond valuation and consulting company. In addition to performing their own valuation, WWW showed the diamond samples to three other Antwerp based experienced rough diamond valuators in order to obtain additional market based valuations.

Diamond Valuation Results

WWW have recommended a modeled “Base Case” diamond price estimate of US$109 per carat be adopted for both of the Renard 2 and Renard 3 samples, with a “High” modeled price estimate of US$122 per carat and a “Low” modeled price estimate of US$105 per carat. WWW have further recommended a modeled base case diamond price estimate of US$69 per carat be adopted for the Renard 4 sample, with a high modeled price estimate of US$73 per carat and a low modeled price estimate of US$63 per carat.  

The complete diamond valuation results are summarized as follows:

* Sample weights represent the total carat weight of diamonds presented for valuation following the combination of individual sub-samples and after acid cleaning.
** Taken as the average from WWW plus three other diamond valuators.
*** As determined by WWW International Diamond Consultants Ltd.

Eira Thomas stated, “These are exceptional valuation results that confirm the potential for Renard to be a producer of large, high value gems. This marks a successful culmination for the Renard bulk sample program.  We are particularly encouraged by the results from Renard 2 and 3, as these bodies currently comprise the majority of the geological resource.  With the expected approval of Phase 2 of the pre-feasibility study by the project partners, we are confident that the project is on track to become Québec’s first diamond mine.”

Diamond Price Modeling

The modeled price estimates for Renard 2, 3 and 4 represent an average diamond price in the current rough diamond market that might reasonably be expected for each kimberlite based on standard production-scale recoveries of all commercial sized diamonds.  Diamond price models correct, principally, for an absence of large diamonds which are typically under-represented at this scale of sampling.  WWW assessed the Renard 2 and Renard 3 samples to be representative of the same population of diamonds in terms of diamond qualities and size distribution, and recommended one diamond price model should be adopted for both pipes.  Both the Renard 2 and Renard 3 samples are characterized by the presence of large, high value gems which have a strong influence on the resultant diamond price.  For Renard 2 and 3, WWW believe that it is unlikely that a diamond price of lower than US$109 per carat will be achieved in a production setting.  Conversely, WWW consider the “High” modeled price of US$122 per carat to be a reasonable expectation given the continued recovery of these larger Renard gems.

The Renard 4 sample differs from the other samples in that it has an apparent relative absence of larger diamonds.  Its lower modeled price estimate is principally a function of this finer diamond size distribution.  Unlike the Renard 2 and 3 samples, which were collected by underground decline across the breadth of each pipe, the Renard 4 sample was collected from a single surface trench excavated within the “northern complex zone”, a distinct unit of complex geology outcropping at the northern limit of the Renard 4 kimberlite.  This zone carries a high diamond content and is accessible at surface, but it is not representative geologically of the bulk of Renard 4, which is comprised of a tuffisitic kimberlite breccia with affinities to the “kimb2a” tuffisitic kimberlite breccia observed in Renard 2.  Hence the diamond price model obtained on the Renard 4 sample may not be representative of the majority of this kimberlite.  The joint venture is currently processing an additional 400 tonne sample of Renard 4 northern complex zone material that was stockpiled during the 2006 bulk sample program.  The additional diamonds recovered will assist in determining the exact nature of the Renard 4 northern complex zone diamond size distribution, and may warrant an update to the Renard 4 diamond price model.  

In support of this ongoing analysis, WWW have calculated two additional model price scenarios of US$118 per carat, for Renard 4 with a diamond size distribution equal to that shown by Renard 2 and 3, and US$94 per carat, for all three kimberlites taken collectively as per their recovered samples.

* Taken as the average from WWW plus three other diamond valuators.
** As determined by WWW International Diamond Consultants Ltd.

Comparative Historical Data

In April 2005, a total 459 carat sample of diamonds collected by reverse circulation drilling from four separate Renard kimberlites (Renard 2, 3, 4 and 65) was valued by WWW with an observed price of US$70 per carat (Ashton Mining of Canada Inc. press release of April 26th, 2005).  At this time, WWW concluded, based on the available data, that the four separate kimberlite sub-samples represented were consistent with a single population of diamonds.  WWW recommended a single modeled price estimate of US$88/carat, with a high modeled price estimate of $104 per carat and a low modeled price estimate of US$74 per carat.  The individual diamond valuation results for the Renard 2 and 3 bulk samples reported today, as well as result for the combined Renard 2, 3 and 4 samples, all exceed this previous valuation.     

Pre-Feasibility Study

Following the receipt of the Renard bulk sample valuation results, Stornoway and SOQUEM will now review the commencement of Phase 2 of the Renard Pre-Feasibility Study.  Approval to proceed is expected pending execution of the appropriate management committee resolutions.  The study is being authored by Agnico-Eagle Mines Limited (TSX: AEM, “Agnico-Eagle”) and AMEC Americas Ltd. (“AMEC”).  Phase 1 commenced in July (Stornoway press release of July 23rd, 2007) and has comprised preliminary geological, geotechnical, environmental and hydro-geological assessment.  Phase 2 will comprise an independent NI 43-101 compliant resource calculation, a mining model, mine design, diamond plant design, capital and operating cost estimation, and financial modeling.  AMEC is an international project management and services company with broad experience in the Canadian diamond mining sector.  Agnico-Eagle is a leading mine developer in the province of Québec and Stornoway’s largest shareholder.

Scientific and Technical Data

The diamond valuation results reported in this release were obtained during a valuation exercise undertaken in Antwerp between the 24th and 28th of September 2007.  Four independent diamond valuators were employed under the supervision of WWW.  The three separate Renard diamond parcels valued were recovered after the processing of kimberlite bulk samples with a 10 tph dense media separation plant owned by Stornoway (through its wholly owned subsidiary Ashton Mining of Canada Inc.) and SOQUEM in joint venture, and operated by Stornoway.  Diamonds were recovered from concentrate at Stornoway’s wholly owned and operated mineralogical laboratory in North Vancouver, British Columbia.  Quality assurance protocols and actual operating procedures for the processing, transport and recovery of diamonds under the Renard bulk sample program, including arms-length security provisions, conform to industry standard Chain of Custody provisions and are subject to the review of AMEC, who have been contracted to provide third party accreditation for program data.  The Renard bulk sample program is managed by Dave Skelton, P.Geol., Senior Project Manager.  Stornoway’s diamond exploration programs are conducted under the direction of Robin Hopkins P.Geol, Vice President, Exploration, a Qualified Person under NI 43-101.

Stornoway Diamond Corporation

Stornoway Diamond Corporation is one of Canada's leading diamond exploration and development companies, involved in the discovery of over 155 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.

SOQUEM INC.

SOQUEM is a wholly-owned subsidiary of Société générale de financement du Québec (“SGF”). The SGF, the Quebec industrial and financial holding company, has as its mission to undertake economic development projects in the industrial sector in cooperation with partners and in compliance with the economic development policies of the Government of Quebec.

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