Stornoway Diamond Corporation: Renard Drilling Expands Three Kimberlite Pipes

Stornoway Diamond Corporation (TSX:SWY) is pleased to report the completion of
the fall exploration drilling program at the Renard Diamond Project in North
Central Quebec. The Renard Diamond Project is a 50:50 joint venture with
DIAQUEM, a wholly-owned subsidiary of SOQUEM INC., itself a wholly-owned
subsidiary of Societe generale de financement du Quebec ("SGF"), the Quebec
government's main industrial and financial holding company.


The fall program reported today was a continuation of a step-out program of deep
drilling first initiated last winter (Stornoway Press Release dated April 14,
2010:
http://www.stornowaydiamonds.com/investor_relations/news_releases/2010/index.php?&content_id=499),
and designed to assess the size and composition of several kimberlite pipes
outside the project's established National Instrument ("NI") 43-101 compliant
Mineral Resources. Highlights of the drilling, and its implications, are as
follows:


- New intersections of kimberlite outside of the current geological models in
two new drill holes at Renard 3, one hole at Renard 4 and two holes at Renard
65;

 
- Anticipated increase in the quantity of Inferred Mineral Resources estimated
at Renard 3 and Renard 4, and in the amount of Potential Mineral Deposit
estimated at Renard 3, Renard 4 and Renard 65; 


- Confirmation of kimberlite to a depth of 513 meters at Renard 65, and an
anticipated conversion of Potential Mineral Deposit over the uppermost
elevations of Renard 65 to Inferred Mineral Resources; 


- Successful completion of a new drill hole at Renard 1, confirming considerable
size potential and enabling sampling of Renard 1 kimberlite units for
microdiamond analysis. 


Mineral resources that are not mineral reserves do not have demonstrated
economic viability. Further, the potential quantity and grade of any Potential
Mineral Deposit ("PMD") is conceptual in nature, and it is uncertain if further
exploration will result in the target being delineated as a mineral resource.


President and CEO, Matt Manson, commented, "The results of the fall drill
program have confirmed that the Renard kimberlite pipes are larger at depth than
previously assumed. As well as the expected boost to the project's Inferred
Mineral Resources, the drilling serves to bring out the extensive resource
upside below the level of the existing conceptual mine plan at Renard, and
confirms the potential for a considerable mine life at the project."


Geological Drilling

The fall drill program comprised six holes totaling 3,020 meters, including two
existing holes that were re-entered and deepened. Detailed geological modeling
and micro-diamond sampling from each drill hole are ongoing. However, kimberlite
lithologies identified from previous drilling were intersected in each hole,
including Coherent Kimberlite ("Brown" kimberlite), Tuffisitic Kimberlite
Breccia ("Blue" kimberlite), Hypabyssal Kimberlite and Kimberlite Breccia, and
Country Rock Breccias. Results from both winter and fall phases of the 2010
drill program are shown in Table 1 below. Illustrations showing the location of
drill holes from both programs, and with respect to the existing geological
models for each pipe, can be viewed here:


Renard 3: http://stornowaydiamonds.com/_resources/R3_lookingSW_2010DDH_final.JPG

Renard 4: http://stornowaydiamonds.com/_resources/R4_lookingnorth_2010DDH_final.jpg

Renard 65: http://stornowaydiamonds.com/_resources/R65_lookingNW_2010DDH_final.jpg



Table 1: Geological Drill Results.
----------------------------------------------------------------------------
                                                   Horizontal          Vert-
                                                    Impact on           ical
                                                      Size of   Maxi-  Depth
                                                   Kimberlite     mum     of
                                                         Body   Vert- Exist-
                                      Kimberlite  Compared to    ical    ing
                                    Intersection     Previous   Depth     NI
                              (meters down hole) Estimates(1)      of 43-101
                           ---------------------------------- Kimber- Compl-
                                                 Upper  Lower    lite   iant
        Azi-          Len-                        Con-   Con-  Inter-    Re-
        muth    Dip    gth                        tact   tact  sected source
Hole   (deg-  (deg-  (met-                       (met-  (met-   (met-  (met-
ID      ree)   ree)   ers)           From     To  ers)   ers)    ers)   ers)
----------------------------------------------------------------------------
Renard 3
----------------------------------------------------------------------------
R3-53    260    -70    383 Expected   376    n/a    +2    n/a    357     395
                           (1)
                           ---------------------
                           Actual     327
                           ---------------------
                           Differ-    +49
                           ence(2)
--------------------------------------------------------------------
R3-59    310    -75    391 Expected   419    455   +23    n/a    373
                           (1)
                           ---------------------
                           Actual     295    391
                           ---------------------
                           Differ-   +124    n/a
                           ence(2)           (3)
--------------------------------------------------------------------
R3-60     48    -65    508 Expected   388    439   +23    +24    439
                           (1)
                           ---------------------
                           Actual     357    484
                           ---------------------
                           Differ-    +31    +45
                           ence(2)
----------------------------------------------------------------------------
Renard 4
----------------------------------------------------------------------------
R4-53     68    -76    789 Expected   275    637    +7  grea-   759      380
                           (1)                            ter
                           ---------------------         than
                           Actual     212    789          +35
                           ---------------------
                           Differ-    +63  grea-
                           ence(2)           ter
                                            than
                                            +152
--------------------------------------------------------------------
R4-54    277    -66    718 Expected   376    705   +16 -21 to    532
                           (1)                            -40
                           ---------------------
                           Actual     341    595
                           ---------------------
                           Differ-    +35   -110
                           ence(2)
---------------------------------------------------------------------
GR4-10   157    -66    513 Expected   131    398    -8     +7     366
                           ---------------------
                           Actual     180    412
                           ---------------------
                           Differ-    -49    +14
                           ence(2)
----------------------------------------------------------------------------
Renard 65
----------------------------------------------------------------------------
R65-34   n/a    -90    596 Expected   n/a    591   n/a     +6     513     No
                           (1)                                           Re-
                           --------       ------                      source
                           Actual            513                      Estab-
                           --------       ------                      lished
                           Differ-           -78
                           ence(2)
---------------------------------------------------------------------
R65-35   133    -53    531 Expected   194    320    -9    +75     383
                           (1)
                           ---------------------
                           Actual     211    486
                           ---------------------
                           Differ-    -17   +166
                           ence(2)
---------------------------------------------------------------------
R65-36   347    -51    508 Expected   219    645   +26    -38     459
                           (1)
                           ---------------------
                           Actual     183    593
                           ---------------------
                           Differ-    +36    -52
                           ence(2)
----------------------------------------------------------------------------
Renard 1
----------------------------------------------------------------------------
R1-12     15    -58    537 Expected    n/a    n/a  n/a    n/a     370     No
                           (1)                                           Re-
                           ----------------------                     source
                           Actual(4)   195    508                     Estab-
                           ----------------------                     lished
                           Differ-     n/a    n/a
                           ence(2)
----------------------------------------------------------------------------
(1) Based on the "High Range Potential Mineral Deposit" component of the
    geological model utilized in the December 8th 2009 NI 43-101 compliant
    mineral resource
(2) A positive ("+") difference indicates an increase in geological model
    size when compared to the High Range PMD geological model. A negative
    ("-") indicates a decrease in model size. Differences between expected
    and actual contacts have a smaller influence on the shape of the
    geological model at the top of the pipe than at the bottom owing to
    the amount of geological control already existing.
(3) Hole terminated in kimberlite before the expected location of the first
    pierce point in the pre-existing geological model.
(4) Intersection includes kimberlite, country rock breccia and blocks of
    cracked country rock; detailed geological logging has not been
    completed; material changes reported as available.



Renard 3

All three of the most recent drill holes at Renard 3 demonstrate that additional
kimberlite is present between approximately 295 and 434m below surface. Two
holes (R3-53 and R3-59) were terminated early while still in kimberlite due to
technical challenges encountered during drilling. The base of the currently
established Inferred Mineral Resources at Renard 3 occurs at 395m, and the new
drilling is consistent with an expansion of the geological model in this area,
both in width and to depth.


Renard 4

The four most recent drill holes at Renard 4, in conjunction with recent
geotechnical drilling in the area of a potential open pit, may imply that Renard
4 has a plunge to the east and south. Additional kimberlite has been intersected
in both of these areas at depth, including hole R4-53 which terminated in
kimberlite at a vertical depth of 759 meters. Drill hole R4-54 in turn
intersected less kimberlite than expected on the northwest boundary of the
kimberlite at a vertical depth of 532 meters. It is expected that the net impact
of this drilling will be an increase in the amount of Inferred Mineral Resource,
an increase to the estimated quantity of PMD, and a smaller scale adjustment to
the estimated quantity of Indicated Mineral Resources.


Renard 65

In the recent NI 43-101 compliant Mineral Resource Estimate, the Renard 65 body
was represented only as PMD, with a low range estimate based on its projection
to 280 meters below surface, and a high range estimate based on its projection
to 700 meters below surface. The new drilling suggests that previous estimates
on the dimensions of the Renard 65 kimberlite have been conservative, and an
increase in tonnage estimates can now reasonably be expected, in particular on
the eastern and southern sides. In addition, drill hole R65-34 now confirms the
presence of kimberlite to a minimum depth of 513m below surface. For Renard 65,
microdiamond analyses of drill core will be particularly important given the
more limited historical diamond dataset available, the consistent recovery of
larger stones, and the recognition of multiple kimberlite facies with variable
diamond contents (Stornoway Press Release dated July 13, 2010:
http://www.stornowaydiamonds.com/investor_relations/news_releases/2010/index.php?&content_id=516).


Renard 1

The Renard 1 kimberlite does not form part of the project's current mineral
resources but, following a review of historical sampling data, has been
identified as having the potential for high diamond content. Renard 1 lies less
than 500 meters north of Renard 65, and was originally discovered in 2001.
Preliminary geological modeling of historical drill data suggests that the body
is similar in dimension to the Renard 4 kimberlite when modeled to a depth of
280 meters below surface, and is composed of three primary kimberlite
lithologies similar to those recognized in the other Renard bodies: tuffisitic
kimberlite, competent (transitional) kimberlite and hypabyssal kimberlite. Like
the other bodies, Renard 1 exhibits a halo of non-kimberlitic country rock
breccia ("CRB") and cracked country rock ("CCR") related to the pipe emplacement
event. During the summer program a single 537m drill hole inclined at -58
degrees crossed the body from south to north, intersecting kimberlite, CRB and
CCR from 195 to 508m down hole. Detailed geological logging, including dilution
estimates, has not yet been completed and any material changes to will be
reported when available. Renard 1's three principal kimberlite lithologies will
be tested by industry standard microdiamond analysis to permit a correlation
with other bodies currently in the mine plan.


Next Steps

Detailed geological logging, microdiamond analysis, and dilution estimation on
the new drill core will now be completed, and integrated into revised geological
models for each pipe. The new drill core intersections on Renard 3 and 4 lie
within the scope of the current conceptual mine plan (Stornoway press release
dated March 22, 2010:
http://www.stornowaydiamonds.com/_resources/news/SWY_10-10_Renard_Revised_Economic_Assessment_March_2010.pdf)
and the revised models will be incorporated into ongoing feasibility level mine
design work. An updated NI 43-101 compliant mineral resource estimate is
expected following the completion of all necessary analytical work. Currently,
Renard's NI 43-101 compliant mineral resource stands at 23.0 million carats of
Indicated Mineral Resource (26.5 million tonnes at 87 carats per hundred tonnes,
"cpht") and 13.3 million carats of Inferred Mineral Resource (17.8 million
tonnes at 75 cpht). An additional 26.8 to 45.7 million tonnes, containing
between 12.2 and 26.5 million carats, is currently characterized as a PMD.


About Stornoway Diamond Corporation

Stornoway Diamond Corporation is one of Canada's leading diamond exploration and
development companies, involved in the discovery of over 200 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. 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.


About SGF

Societe generale de financement du Quebec (sgfqc.com), an industrial and
financial holding company, has a mission to carry out economic development
projects, particularly in the industrial sector, in cooperation with partners
and in compliance with accepted profitability requirements and with the economic
development policy of the Quebec government. As part of its new mandate, SGF is
authorized by the Quebec government to go beyond its traditional role as an
equity investor by offering complementary solutions, such as loans, debentures
or preferred shares.


SOQUEM, a wholly-owned subsidiary of Societe generale de financement du Quebec,
is to under take exploration, development and mining activities throughout the
province of Quebec.


On behalf of the Board

STORNOWAY DIAMOND CORPORATION

Matt Manson, President and Chief Executive Officer

This document contains "forward-looking information" within the meaning of
Canadian securities legislation and "forward-looking statements" within the
meaning of the United States Private Securities Litigation Reform Act of 1995.
This information and these statements, referred to herein as "forward-looking
statements" are made as of the date of this document and the Company does not
intend, and does not assume any obligation, to update these forward-looking
statements, except as required by law.


Forward-looking statements relate to future events or future performance and
reflect current expectations or beliefs regarding future events and include, but
are not limited to, statements with respect to: (i) the amount and
classification of indicated and inferred mineral resources and potential mineral
deposits; (ii) the amount of future production over any period; (iii) diamond
values and increases in diamond values; (iv) mine expansion potential and
expected mine life; (v) exploration potential at the Project; and (vi) expected
time frames for completion of permitting and regulatory approvals, completion of
a Feasibility Study and making a production decision. Any statements that
express or involve discussions with respect to predictions, expectations,
beliefs, plans, projections, objectives, assumptions or future events or
performance (often, but not always, using words or phrases such as "expects",
"anticipates", "plans", "projects", "estimates", "assumes", "intends",
"strategy", "goals", "objectives" or variations thereof or stating that certain
actions, events or results "may", "could", "would", "might" or "will" be taken,
occur or be achieved, or the negative of any of these terms and similar
expressions) are not statements of historical fact and may be forward-looking
statements.


All forward-looking statements are based on Stornoway's or its consultants'
current beliefs as well as various assumptions made by and information currently
available to them. Many of these assumptions are set forth in the news release
and include: (i) the presence of and continuity of diamonds in its host rocks at
the Project at modeled grades; (ii) the geological interpretation of drilling
results and the expected impact on project resources, conceptual mine plans and
mine life; and (iii) the anticipated incorporation of new information into
existing geological models, feasibility study work and an updated NI 43-101
compliant mineral resource estimate. Although management considers these
assumptions to be reasonable based on information currently available to it,
they may prove to be incorrect. Many forward-looking statements are made
assuming the correctness of other forward looking statements, such as statements
of net present value and internal rate of return, which are based on most of the
other forward- looking statements and assumptions herein. The cost information
is also prepared using current values, but the time for incurring the costs will
be in the future and it is assumed costs will remain stable over the relevant
period.


By their very nature, forward-looking statements involve inherent risks and
uncertainties, both general and specific, and risks exist that estimates,
forecasts, projections and other forward-looking statements will not be achieved
or that assumptions do not reflect future experience. We caution readers not to
place undue reliance on these forward-looking statements as a number of
important factors could cause the actual outcomes to differ materially from the
beliefs, plans, objectives, expectations, anticipations, estimates assumptions
and intentions expressed in such forward-looking statements. These risk factors
may be generally stated as the risk that the assumptions and estimates expressed
above do not occur, including the assumption in many forward-looking statements
that other forward-looking statements will be correct, but specifically include,
without limitation, risks relating to variations in the grade, kimberlite
lithologies and country rock content within the material identified as mineral
resources from that predicted, variations in rates of recovery and breakage; the
greater uncertainty of potential mineral deposits, developments in world diamond
markets, slower increases in diamond valuations than assumed, risks relating to
fluctuations in the Canadian dollar and other currencies relative to the US
dollar, increases in the costs of proposed capital and operating expenditures,
increases in financing costs or adverse changes to the terms of available
financing, if any, tax rates or royalties being greater than assumed, results of
exploration in areas of potential expansion of resources, changes in development
or mining plans due to changes in other factors or exploration results of
Stornoway or its joint venture partners, changes in project parameters as plans
continue to be refined, risks relating to receipt of regulatory approvals or
settlement of an Impact and Benefits Agreement, the effects of competition in
the markets in which Stornoway operates, operational and infrastructure risks
and the additional risks described in Stornoway's most recently filed Annual
Information Form, annual and interim MD&As, and Stornoway's anticipation of and
success in managing the foregoing risks. Stornoway cautions that the foregoing
list of factors that may affect future results is not exhaustive. When relying
on our forward-looking statements to make decisions with respect to Stornoway,
investors and others should carefully consider the foregoing factors and other
uncertainties and potential events. Stornoway does not undertake to update any
forward-looking statement, whether written or oral, that may be made from time
to time by Stornoway or on our behalf, except as required by law.