Stornoway Diamond Corporation (TSX-SWY) is pleased to provide an update on activities at the company's diamond exploration pipeline projects. Stornoway’s flagship asset is its 100% owned Renard Diamond Project in north-central Québec, currently the focus of a Feasibility Study and an associated Environmental and Social Impact Assessment. In conjunction with work at Renard, Stornoway has been pursuing vigorous programs of exploration on additional projects with the aim of discovering new kimberlite fields in under-explored regions of Canada. Stornoway’s budget for its 2011 exploration programs is $5.6m, of which approximately $3.5m has been expended to date.

Matt Manson, President and CEO commented “As we work to develop Renard into Québec’s first diamond mine, Stornoway has maintained a strong program of primary diamond exploration in jurisdictions of Canada which remain prospective for important new diamond discoveries. We are particularly excited about progress at our new Pikoo and Aeon projects in Saskatchewan and Québec respectively where, following this summer’s work, we have now established multiple kimberlite indicator mineral anomalies, geochemical confirmation of potentially diamondiferous sources and credible geophysical targets, all under 100% claim ownership. Our goal is to drill both of these projects in 2012.”

Aeon Project, Québec

The 100% owned Aeon claims were acquired in July 2011 on the basis of regional indicator mineral sampling that indicated the potential for multiple kimberlites or kimberlite clusters within two 10 km by 10 km source areas. Kimberlite indicator mineral grain counts in anomalous samples are comparable to those associated with the discovery of the Renard Diamond Project to the south, and the chemistry of the indicator minerals is suggestive of a diamondiferous source. During the summer field program, Stornoway completed a 100m spaced airborne magnetic survey at Aeon, and identified 61 targets compatible with kimberlite pipes. Only nine of these targets were explained during subsequent ground prospecting, leaving 52 prospective for kimberlite. 198 till samples have been collected adjacent to these geophysical targets to allow target discrimination ahead of potential drilling.

The 49,350 hectare Aeon Project is situated 100 kilometers north of the network of Hydro-Québec power stations located along the all-season Trans-Taiga Highway and 300 kilometers north of the Renard Diamond Project, within the region of northern Québec governed by the James Bay and Northern Québec Agreement.

Pikoo Project, Saskatchewan

The 100% owned Pikoo claims were acquired in April 2011 on the basis of indicator mineral sampling in the Sask craton in north-central Saskatchewan that indicated the potential for multiple kimberlites or kimberlite clusters within a 15km by 20km source area. As with the Aeon Project, no kimberlites in this area have been discovered previously. During the summer field program, Stornoway completed a 75m spaced helicopter magnetic and electromagnetic survey at Pikoo, and identified 102 prominent geophysical targets. Ground verification of these targets is ongoing at time of writing, and 220 additional till samples have been collected to date to allow target discrimination ahead of potential drilling.

The 33,374 hectare Pikoo Project is located 140 km east of La Ronge Saskatchewan and 100 km west of Flin Flon Manitoba. An all-season road to the community of Deschambault Lake comes to within 6km of the property’s southern boundary.

Hammer Project, Nunavut

In October 2009 Stornoway announced the discovery by surface pitting of the Hammer kimberlite at the Hammer Property, Nunavut. Hammer is a joint venture between Stornoway (75% and operator) and North Arrow Minerals Inc. (TSXV-NAR; 25% participating), and was first identified as a topographic anomaly at the head of a kimberlitic indicator mineral train with strong diamond inclusion chemistry. Upon discovery, a single micro-diamond was recovered from a 6 kilogram hand sample recovered from the surface pits. During the summer 2011 field season, Stornoway and North Arrow completed 21 short delineation holes at Hammer for a total of 1,800 meters of core drilling and 930 meters of kimberlite for logging and diamond recovery. The Hammer kimberlite appears to have an elongated surface expression of approximately 0.4 hectares, a confirmed depth extent of at least 200 meters, and to be composed of olivine-rich variably bedded volcaniclastic kimberlite. 200 kilograms of core sample has been submitted for microdiamond recovery, and an additional 3.4 tonnes of core will be processed through a dense media separation facility for macro-diamond recovery. At time of writing, diamond results are pending.

The 1,014 hectare Hammer Project is located approximately 500km north of Yellowknife, Northwest Territories within the Coronation Gulf/North Slave Diamond District. Adjacent to the Hammer Property, past surficial sampling work has suggested the presence of other kimberlite bodies that have yet to be discovered. During the 2011 field season Stornoway collected additional till samples in these areas and discovered kimberlite float boulders during ground prospecting. However, two short holes drilled to discover the source of the “Eokuk” indicator mineral train failed to intersect kimberlite. Within the Coronation Gulf/North Slave Diamond District, Stornoway holds variable interests in ten known kimberlites. As part of a review of this historical database, additional samples have been submitted for microdiamond recovery from several kimberlites with a view to testing for hitherto overlooked economic potential.

About Stornoway Diamond Corporation

Stornoway is a leading Canadian diamond exploration and development company listed on the Toronto Stock Exchange under the symbol SWY. Our flagship asset is the 100% owned Renard Diamond Project, on track to becoming Québec’s first diamond mine. Stornoway also maintains an active diamond exploration program with both advanced and grassroots programs in the most prospective regions of Canada. Stornoway is a growth oriented company with a world class asset, in one of the world’s best mining jurisdictions, in one of the world’s great mining businesses.

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 approved the contents of this release.

About the Renard Diamond Project

The Renard Diamond Project is located approximately 250 km north of the Cree community of Mistissini and 350 km north of Chibougamau in the James Bay region of North-Central Québec. In May 2010, Stornoway filed a National Instrument 43-101 compliant technical report for the Preliminary Assessment at Renard that highlighted the potential of the project to become a significant producer of high value rough diamonds over a long mine life. Current NI 43-101 compliant Indicated and Inferred Mineral Resources stand at 23.8 and 17.5 million carats respectively, with a further 23.5 to 48.5 million carats classified as a non-resource, “Potential Mineral Deposit”. All kimberlites remain open at depth. Readers are referred to the technical report in respect of the Renard Diamond Project for further details and assumptions relating to the project.

On behalf of the Board
STORNOWAY DIAMOND CORPORATION
/s/ “Matt Manson”
Matt Manson
President and Chief Executive Officer