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Message: Stornoway Announces Funding of Third Tranche of Stream Financing and New

Management Appointments

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2016-03-31 07:30:00 AM ET (GlobeNewswire)

Stornoway Diamond Corporation (TSX:SWY) (the "Corporation" or "Stornoway") is pleased to announce that it has successfully completed the drawdown of the third and final US$90m tranche of diamond stream funding from Orion Mine Finance ("Orion"), the Caisse de depot et placement du Quebec ("CDPQ") and Blackstone Tactical Opportunities ("Blackstone").

Under Stornoway's C$946 million project financing transaction, which closed on July 8, 2014, a total of US$250 million in upfront stream payments were committed by Orion and the CDPQ to fund in three tranches, scheduled for March 2015, September 2015 and March 2016. On April 28, 2015, Blackstone announced that it had acquired a minority position in the Renard Diamond Stream from Orion by way of a secondary market transaction. Drawdown of each tranche is conditional upon the satisfaction of certain terms and conditions, including the independent certification of construction progress at the Renard Diamond Project and its cost to complete being within plan. With these conditions having been met, the third and final stream tranche has been funded on schedule.

The US$90 million of funds received from the third tranche of stream payments were converted to Canadian dollars upon deposit at an exchange rate of $1.2951, representing a cash gain to the Corporation of C$17.6 million compared to the July 2014 funding plan, which assumed a C$:US$ exchange rate of $1.10.

Following utilization of 75% of the proceeds from the third stream tranche and the satisfaction of certain other terms and conditions, Stornoway will be entitled to draw upon its $100 million senior secured loan from DIAQUEM Inc. to complete mine development. Stornoway's current cash resources and committed funds are sufficient to cover planned mine development expenses, financing and corporate costs during calendar 2016.

New Management Appointments

Stornoway is pleased to announce the appointment, effective April 1, 2016, of Mr. Robert Chausse to the position of Chief Financial Officer. Between 2012 and 2015 Mr. Chausse, a Chartered Accountant, was Executive Vice President and CFO of Aurico Gold Inc. until its acquisition by Alamos Gold Inc. and, subsequently, the Chief Financial Officer of Aurico Metals Inc. Prior to Aurico, Mr. Chausse held progressively senior finance roles at Barrick Gold Corporation, Baffinland Iron Mines Corporation and Kinross Gold Corporation. Mr. Chausse will be based at our head office in Montreal, Quebec and joins the company as we commence the transition from project development to mine operations and first diamond sales.

Stornoway is also pleased to announce the appointment of Mr. Orin Baranowsky to the new role of Vice President, Investor Relations and Corporate Development. Mr. Baranowsky joined Stornoway in June 2013 as Director, Investor Relations after serving as Vice President, Investor Relations for CB Gold and as Vice President, Equity Research at BMO Capital Markets. Mr. Baranowsky will remain based in Toronto, Ontario.

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 Quebec. On July 8, 2014, Stornoway announced the completion of a $946 million project financing transaction to fully fund the project to production, and construction commenced on July 10, 2014. First ore is scheduled to be delivered to the plant at the end of September 2016, with commercial production scheduled for December 31, 2016.

In January 2013, Stornoway released the results of an Optimized Feasibility Study at Renard, with an Updated Mine Plan and Mineral Reserve Estimate in March 2016. These studies highlight the potential of the project to become a significant producer of high value rough diamonds over an initial 14 year mine life. Probable Mineral Reserves, as defined in National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"), stand at 22.3 million carats. In accordance with the Corporation's September 2015 Mineral Resource estimate, total Indicated Mineral Resources, inclusive of the Mineral Reserve, stand at 30.2 million carats, with a further 13.35 million carats classified as Inferred Mineral Resources, and 33.0 to 71.1 million carats classified as non-resource exploration upside. Average annual diamond production is forecast at 1.8 million carats per annum over the first 10 years of mining, at an average valuation of US$155/carat based on March 2016 terms.

Readers are cautioned that the potential quality and grade of any target for further exploration is conceptual in nature, there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the target being delineated as a Mineral Resource. All kimberlites remain open at depth. Readers are referred to the technical report dated February 28, 2013, in respect of the January 2013 Optimization Study, the technical report dated January 11, 2016, in respect of the September 2015 Mineral Resource estimate, and the technical report dated March 30, 2016, in respect of the March 2016 Updated Mine Plan and Mineral Reserve Estimate for further details and assumptions relating to the project.

About Stornoway Diamond Corporation

Stornoway is a leading Canadian diamond exploration and development company listed on the Toronto Stock Exchange under the symbol SWY and headquartered in Montreal. Our flagship asset is the 100% owned Renard Diamond Project, on track to becoming Quebec's first diamond mine. 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.

On behalf of the Board

STORNOWAY DIAMOND CORPORATION

/s/ "Matt Manson"

Matt Manson

President and Chief Executive

For more information, please contact Matt Manson (President and CEO) at 416-304-1026 x2101

or Orin Baranowsky (Vice President, Investor Relations and Corporate Development) at 416-304-1026 x2103

or toll free at 1-877-331-2232

Pour plus d'information, veuillez contacter M. Ghislain Poirier, Vice-president Affaires publiques de Stornoway au 418-254-6550, [email protected]

** Website: www.stornowaydiamonds.com Email: [email protected] **

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