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Stornoway provides Renard drilling update

April 14, 2010

Expansion of Three Kimberlite Pipes at depth

TSX: SWY

VANCOUVER, April 14 /PRNewswire-FirstCall/ – Stornoway Diamond Corporation (TSX-SWY) is pleased to report the completion of a winter drill program at the Renard Diamond Project in North Central Quebec. The Renard Diamond Project, which includes the Renard kimberlite pipes and the Lynx-Hibou system of kimberlite dykes, is a 50:50 joint venture with SOQUEM INC. (“SOQUEM”). The drill program comprised geological, geotechnical and hydro-geological aspects, and has resulted in substantial new intersections of kimberlite at depth in three separate kimberlites. Highlights are as follows:

    -  Intersection of significant thickness of kimberlite in a previously
       untested location on the eastern side of Renard 3 at 373 meters
       vertical depth. Hole terminated in kimberlite prior to reaching the
       expected projection of the pipe based on previous geological modeling.

    -  Significant expansion of Renard 65 at its eastern extent at 383 meters
       vertical depth.

    -  Significant expansion of Renard 4 at its southeastern extent. Hole
       terminated in kimberlite at 759 meters vertical depth.

    -  2,436 meters of geotechnical and hydro-geological drilling completed
       successfully.

President and CEO Matt Manson commented “In this winter’s geological drill program, we set out to test the depth extents of three kimberlite pipes with single, carefully planned holes in each body. As with last year’s Renard 2 drill program, the results show that each pipe is larger at depth than previously modeled. We are encouraged that a substantial amount of exploration upside remains to be delineated at Renard on top of an existing mineral resource that can support a 25 year mine life in current conceptual mine planning. Each discovery reported today now merits aggressive follow-up.”

Geological Drilling

The geological component of the winter drill program comprised three holes totaling 1,711 meters, targeted at the interpreted deep extensions of the Renard 3, Renard 4 and Renard 65 kimberlite pipes. In each case, the objective of the drilling was to test the scope of the kimberlites below the level of previous drilling, at depths where each has been previously classified as a potential mineral deposit (“PMD”) with “high range” and “low range” interpretations of tonnage and diamond content. The results of this drilling in the context of the expected “High Range PMD” are outlined in Table 1 below. The reader is cautioned that the potential quantity and grade of any potential mineral deposit is conceptual in nature, and it is uncertain if further exploration will result in the target being delineated as a mineral resource. Micro-diamond data from each drill hole, which will allow an assessment of potential diamond content of the intersected kimberlite, are still pending. Illustrations showing the location of each drill hole with respect to the existing geological models for each pipe can be downloaded at: Renard 3 (http://www.stornowaydiamonds.com/_resources/news/R3-59_looking_SW_with_geotech.jpg), Renard 4 (http://www.stornowaydiamonds.com/_resources/news/R4-53_GR4-10_looking_N_with_geotech.jpg), Renard 65 (http://www.stornowaydiamonds.com/_resources/news/R65-35_looking_NW_all_PMD.jpg).

    Table 1: Geological Drill Results.
    ------------------------------------------------------------------------
                                                          Kimberlite
                                                         Intersection
                                                       (meters down hole)
    Hole      Azimuth       Dip      Length         ------------------------
    ID        (degree)   (degree)   (meters)                   From    To
    ------------------------------------------------------------------------
    Renard 3
    -------------------------------------------------------------------------
                                               Expected(1)      419    455
                                               ------------------------------
    R3-59       310        -75        391      Actual           295    391
                                               ------------------------------
                                               Difference(2)   +124  n/a(3)
    -------------------------------------------------------------------------
    Renard 4
    -------------------------------------------------------------------------
                                               Expected(1)      275    637
                                               ------------------------------
    R4-53       068        -76        789      Actual           212    789
                                               ------------------------------
                                               Difference(2)    +63 (greater
                                                                       than)
                                                                       +152
    -------------------------------------------------------------------------
                                               Expected         131    398
                                               ------------------------------
    GR4-10      157        -66        513      Actual           180    412
                                               ------------------------------
                                               Difference(2)    -49    +14
    -------------------------------------------------------------------------
    Renard 65
    -------------------------------------------------------------------------
                                               Expected(1)      194    320
                                               ------------------------------
    R65-35      133        -53        531      Actual           211    486
                                               ------------------------------
                                               Difference(2)    -17   +166
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                      Horizontal Impact                       Vertical Depth
                         on Size of          Maximum Vertical   of Existing
                       Kimberlite Body           Depth of        NI 43-101
                    Compared to Previous        Kimberlite       Compliant
                        Estimates(1)           Intersected       Resource
                  -----------------------
                    Upper        Lower
    Hole           Contact      Contact
    ID             (meters)     (meters)         (meters)        (meters)
    -------------------------------------------------------------------------
    Renard 3
    -------------------------------------------------------------------------
    R3-59            +23            n/a             373             395
    -------------------------------------------------------------------------
    Renard 4
    -------------------------------------------------------------------------
                              (greater
    R4-53             +7      than) +35             759             380
    ----------------------------------------------------------
    GR4-10            -8             +7             366
    -------------------------------------------------------------------------
    Renard 65
    -------------------------------------------------------------------------
    R65-35            -9            +75             383         No Resource
                                                                Established
    -------------------------------------------------------------------------
    (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 statement.
    (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.

Renard 3

At Renard 3, drill hole R3-9 was designed to test the east-west dimension of the pipe at approximately 400 meters vertical depth, and then to continue downwards to the west to test for a possible convergence of the Renard 3 and Renard 2 pipes at between 750 and 800 meters vertical depth. Based on previous geological modeling, it was expected that the hole would intersect the deep extension of Renard 3′s “south lobe” at 419 meters down hole. Instead, the hole entered kimberlite at 295 meters down hole, 124 meters earlier than expected, and had to be terminated due to drilling difficulties after intersecting 96 meters of Coherent Kimberlite, a geological unit typically associated with a high diamond content. An illustration showing the location of each drill hole with respect to the existing geological model can be downloaded at: Renard 3 (http://www.stornowaydiamonds.com/_resources/news/R3-59_looking_SW_with_geotech.jpg).

In the existing geological model for Renard 3, as utilized in the recent National Instrument (“NI”) 43-101 compliant mineral resource statement (Stornoway Press Release dated December 08, 2009 (http://www.stornowaydiamonds.com/investor_relations/news_releases/2009/index.php?&content_id=486)), the south lobe of Renard 3 is interpreted to have a horizontal dimension of approximately 15 x 45 meters at this depth, based on the projection of drill controlled contacts downwards. On the same basis, the new drill hole R3-59 suggests that the south lobe is larger, increasing to a minimum dimension of 35 x 45 meters, although additional drilling would be required to confirm this estimate.

The early termination of drill hole R3-59 means that the potential convergence of the Renard 2 and Renard 3 kimberlite pipes remains untested. However, the new drill data reported today suggests that, at the very least, Renard 3 has more size potential at depth than has been indicated by previous geological modeling.

Renard 4

At Renard 4, drill hole R4-53 was designed to test the size of the deep extension of the pipe at its southern and southeastern extents. The hole was terminated in kimberlite at 789 meters down hole, 152 meters beyond the previously modeled pipe contact, at a vertical depth of 759 meters below surface. This is the deepest intersection of kimberlite to date at the project. Subsequent to this drilling, a geotechnical drill hole, GR4-10, was extended to provide additional control on the Renard 4 geological model on its northern and southern sides, and was terminated at 513 meters down hole after successfully locating both contacts. An illustration showing the location of each drill hole with respect to the existing geological model can be downloaded at: Renard 4 (http://www.stornowaydiamonds.com/_resources/news/R4-53_GR4-10_looking_N_with_geotech.jpg). The full range of expected kimberlite lithologies were intersected in both drill holes including Coherent Kimberlite (“Brown” kimberlite), Tuffisitic Kimberlite Breccia (“Blue” kimberlite), Hypabyssal Kimberlite and Kimberlite Breccia, and Country Rock Breccias.

In the current geological model, Renard 4 is classified as PMD between 380 meters vertical depth, which is the base of the inferred mineral resource, and 700 meters vertical depth. The new drilling would suggest that the body extends to greater depths, and is significantly larger, than previously modeled, specifically on its southeastern side. Additional drilling will be required to further delineate this expansion. The relationship of Renard 4 to the nearby Renard 9 kimberlite is not known but, as with Renard 2 and Renard 3, current geological data are consistent with the two bodies converging at depth.

Renard 65

In the geological modeling utilized in the recent NI 43-101 compliant mineral resource statement, 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 drill hole, R65-35, was designed to test the vertical extent of the body and its dimension on the east-west axis. The eastern margin of the pipe was successfully delineated at 486 meters down hole, 166 meters beyond its previously modeled location, at a vertical depth of 383 meters. An illustration showing the location of each drill hole with respect to the existing geological model can be downloaded at: Renard 65 (http://www.stornowaydiamonds.com/_resources/news/R65-35_looking_NW_all_PMD.jpg). Both Coherent Kimberlite and Tuffisitic Kimberlite Breccia were intersected in the hole. At this depth, the cross-sectional dimension of Renard 65 has been previously estimated at approximately 25 x 300 meters, based on the projection of drill controlled contacts downwards. Again, the new drilling suggests this estimate is understated, and could potentially be increased to approximately 100 x 300 meters when using the same modeling methodology. Additional drilling will be required to confirm this estimate.

Geotechnical and Hydro-geological Drilling

In addition to the geological drilling discussed above, the winter drill program at Renard also comprised geotechnical and hydro-geological drilling designed to collect additional data pertaining to feasibility level open pit and underground mine design on the Renard 2, Renard 3 and Renard 4 bodies. A total of 26 new holes were completed for 2,436 meters of drilling. Eight holes were completed at Renard 2 (540 meters), eight holes at Renard 3 (573 meters) and ten holes at Renard 4 (1,323 meters). Most of the holes were short, averaging 77 meters in length, although Renard 4 hole GR4-10 was extended to collect additional geological information and is summarized in Table 1. Select historical drill holes were also re-entered to collect hydro-geological data. Shallow geotechnical drilling that intersected kimberlite generally confirmed the outline of geological models used in the December 08, 2009 NI 43-101 compliant mineral resource statement, but may ultimately result in a slight tonnage increase for Renard 4 between surface and 75 meters below ground level.

Next Steps

Each of the three geological drill holes discussed above has identified additional tonnage potential in each of the three kimberlites tested. All of this material is within the scope of the currently designed 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)). Additional geological drilling is planned for the summer drilling season, and Stornoway expects to recommend to the joint venture an increase in the scope of this program.

In addition to providing valuable geological modeling information, core from each kimberlite lithology intersected by drilling has been sampled for micro-diamond analysis. These data are expected to be available within two to three months. The purpose of this sampling is to estimate the potential diamond content of the deeper portions of each kimberlite based on comprehensive diamond grade models that have already been established for each pipe. For Renard 65, these analyses will be particularly important given the pipe’s currently limited diamond dataset, consistent recovery of larger stones and the recognition of multiple kimberlite facies with variable diamond contents.

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. The Renard Diamond Project is managed by Dave Skelton, P. Geol. (AB/QC), Vice President, Project Development. Mr Skelton is a Qualified Person under NI 43-101 and has reviewed the contents of this press release.

SOQUEM INC.

SOQUEM is a wholly-owned subsidiary of Societe generale de financement du Quebec (“SGF”). SGF is the Quebec government’s main industrial and financial development corporation. Its mission is 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/ "Matt Manson"
    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 of mineral resources and potential mineral deposits; (ii) mine expansion potential; (iii) exploration potential at the Project; and (iv) expected time frames for completion of permitting and regulatory approvals, proceeding to 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) diamond recovery and breakage,and (iii) receipt of regulatory approvals on acceptable terms within commonly experienced time frames. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. 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, results of exploration in areas of potential expansion of resources, changes in project parameters as plans continue to be refined, risks relating to receipt of regulatory approvals, the effects of competition in the markets in which Stornoway operates, 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.

SOURCE Stornoway Diamond Corporation


Source: newswire



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