Stornoway Options Non-Core Exploration Projects

Stornoway Options Non-Core Exploration Projects 
MONTREAL, QUEBEC -- (Marketwire) -- 03/14/13 -- Stornoway Diamond
Corporation (TSX:SWY) is pleased to report that it has entered into
option agreements with 0954506 B.C. Ltd. (the "Optionee"), a private
company controlled by Ms. Eira Thomas, formerly a director of
Stornoway, relating to Stornoway's interest in each of the Qilalugaq,
Pikoo and Timiskaming exploration projects. Under the terms of the
option agreements, the Optionee will acquire an 80% interest in each
of the Qilalugaq, Pikoo and Timiskaming exploration projects upon
completion of a defined exploration program (the "option work
program") specific to each project. The option work programs will be
funded and operated by the Optionee. Stornoway retains a one-time
back-in right to re-acquire a 20% interest in each project, thereby
increasing its interest to 40%, by paying the Optionee an amount
equal to three times the cost incurred by the Optionee in connection
with the project-specific option work program. Stornoway has a 100%
interest in each of these projects; the Qilalugaq project is subject
to a 3% net smelter returns royalty on metals produced and a 3%
gross-overriding royalty on the sale of industrial minerals,
including diamonds.  
The Optionee has notified Stornoway 
of its intent to assign its
interest and obligations in the option agreements to North Arrow
Minerals Inc. (TSX VENTURE:NAR) ("North Arrow"), as permitted under
the terms of the option agreements. Upon closing of the assignment,
North Arrow, as optionee, will assume the rights and obligations of
0954506 B.C. Ltd. under these agreements.  
The option work program for the Qilalugaq, Nunavut project is
designed to evaluate the potential of the Q1-4 kimberlite by the
surface collection and subsequent processing of a 1,000 tonne bulk
sample. The option work programs for the Pikoo, Saskatchewan and
Timiskaming, Ontario projects are designed to evaluate the potential
for bedrock kimberlite occurrences at each project. The Pikoo option
work program will consist of a minimum of 2,000 meters of diamond
drilling within the project, with a minimum of two drill holes for
each of the North and South Target areas. The Timiskaming option work
program will consist of single core drill holes testing three
separate geophysical targets. The Timiskaming option agreement
excludes the previously identified 95-2 kimberlite. Stornoway expects
that exploration on these projects will commence in 2013, subject to
receipt of all required permits and authorizations.  
Matt Manson, Stornoway's President and CEO commented: "This option
agreement allows us to move these promising exploration projects
forward while allowing our management team to focus on the
development of the Renard Diamond Project, our core asset. The bulk
sample program at Qilalugaq, for which an Inferred Mineral Resource
of 26 million carats was declared by Stornoway in June 2012, is
designed to recover a large enough parcel of diamonds for a
preliminary valuation and economic assessment. The Pikoo and
Timiskaming work programs are designed to test for the presence of
kimberlite with economic potential. At the end of each program
Stornoway and the Optionee will be well placed to make a
determination on whether to advance each project further within a
joint venture, if results warrant." 
About the Qilalugaq, Pikoo, Timiskaming Exploration Projects  
The Qilalugaq Diamond Project, located on the Rae Isthmus of Nunavut
close to the hamlet of Repulse Bay, includes the Qilalugaq kimberlite
pipes and the Naujaat system of kimberlite dykes. The project was
originally optioned by Stornoway and subsequently acquired from BHP
Billiton Diamonds Inc. in July 2006 and July 2010, respectively. The
project includes the 12.5 hectare Q1-4 kimberlite, the largest
kimberlite pipe in the eastern Canadian Arctic. In June 2012
Stornoway announced an Inferred Mineral Resource at Q1-4 of 26.1
million carats from 48.8 million tonnes of kimberlite with an average
+1 DTC total diamond content of 53.6 carats per hundred tonnes (cpht)
extending from surface to a depth of 205m. Additional resource upside
in the form of a target for further exploration was estimated at
between 7.9 to 9.3 million carats from 14.1 to 16.6 million tonnes of
kimberlite with an average +1 DTC total diamond content of 56.1 cpht,
extending from 205m depth to 305m depth.  
The Pikoo Project comprises 33,374 hectares of contiguous claims
located in central Saskatchewan, approximately 140 km east of La
Ronge Saskatchewan and 100 km west of Flin Flon Manitoba and close to
the community of Deschambault Lake. Previous geochemical and
geophysical work by Stornoway has outlined the potential for several
kimberlites with diamond potential on the property. In 2012
kimberlite float was discovered that returned a single microdiamond
from 73.8 kilograms of material submitted for caustic dissolution.  
The Timiskaming Project comprises 3,865 hectares of claims located
close to the community of New Liskeard, Ontario. Stornoway and its
predecessor companies have discovered a total of 9 kimberlites out of
over 50 ki
mberlites that are believed to have been discovered in the
region. Stornoway's 95-2 kimberlite, the best delineated and most
promising Timiskaming kimberlite discovered to date, contains an
Inferred Mineral Resource of 2.3 million carats from 20.2 million
tonnes of kimberlite with an average +1 DTC total diamond content of
11.3 cpht extending from surface to a depth of 300m. The 95-2
kimberlite is excluded from the Timiskaming option agreement. 
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. In November 2011,
Stornoway released the results of a Feasibility Study at Renard,
followed by an Optimization Study in January 2013, which highlighted
the potential of the project to become a significant producer of high
value rough diamonds over a long mine life. Probable Mineral Reserves
as defined under NI 43-101 stand at 17.9 million carats, with a
further 17.5 million carats classified as Inferred Mineral Resources,
and 23.5 to 48.5 million carats classified as non-resource
exploration upside. All kimberlites remain open at depth.
Pre-production capital cost stands at an estimated C$752 million,
with a life of mine operating cost of C$57.63/tonne giving a 67%
operating margin over an initial 11 year mine life. Readers are
referred to the technical report dated December 29, 2011 in respect
of the November 2011 Feasibility Study for the Renard Diamond
Project, and the press release dated January 28, 2013 in respect of
the January 2013 Optimization Study, 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 
Matt Manson, President and Chief Executive Officer 
This press release 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 press release 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 exploration
targets; (ii) the amount of future production over any period; (iii)
net present value and internal rates of return of the mining
operation; (iv) assumptions relating to recovered grade, average ore
recovery, internal dilution, mining dilution and other mining
parameters set out in the Feasibility Study or the Optimization
Study; (v) assumptions relating to gross revenues, operating cash
flow and other revenue metrics set out in the Feasibility Study or
the Optimization Study; (vi) mine expansion potential and expected
mine life; (vii) expected time frames for completion of permitting
and regulatory approvals and making a production decision; (viii) the
expected time frames for the construction of a mining grade road by
Stornoway and completion generally of the Route 167 extension and the
financial obligations or costs incurred by Stornoway in connection
with such road extension; (ix) future exploration plans; (x) future
market prices for rough diamonds; and (xi) sources of and anticipated
financing requirements. 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
Forward-looking statements are made based upon certain ass
umptions by
Stornoway or its consultants and other important factors that, if
untrue, could cause the actual results, performances or achievements
of Stornoway to be materially different from future results,
performances or achievements expressed or implied by such statements.
Such statements and information are based on numerous assumptions
regarding present and future business strategies and the environment
in which Stornoway will operate in the future, including the price of
diamonds, anticipated costs and Stornoway's ability to achieve its
goals. Certain important factors that could cause actual results,
performances or achievements to differ materially from those in the
forward-looking statements include, but are not limited to: (i)
estimated approval date of the Environmental and Social Impact
Assessment; (ii) required capital investment and estimated workforce
requirements; (iii) estimates of net present value and internal rates
of return; (iv) receipt of regulatory approvals on acceptable terms
within commonly experienced time frames; (v) the assumption that a
production decision will be made, and that decision will be positive;
(vi) anticipated timelines for the commencement of mine production;
(vii) anticipated timelines related to the construction of a mining
grade road by Stornoway and completion generally of the Route 167
extension and the impact on the development schedule at Renard;
(viii) anticipated timelines for community consultations and the
impact of those consultations on the regulatory approval process;
(ix) market prices for rough diamonds and the potential impact on the
Renard Project's value; and (x) future exploration plans and
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 risk
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, (i) risks relating to variations in the
grade, kimberlite lithologies and country rock content within the
material identified as mineral resources from that predicted; (ii)
variations in rates of recovery and breakage; (iii) the greater
uncertainty of exploration targets; (iv) developments in world
diamond markets; (v) slower increases in diamond valuations than
assumed; (vi) risks relating to fluctuations in the Canadian dollar
and other currencies relative to the US dollar; (vii) increases in
the costs of proposed capital and operating expenditures; (viii)
increases in financing costs or adverse changes to the terms of
available financing if any; (ix) tax rates or royalties being greater
than assumed; (x) results of exploration in areas of potential
expansion of resources; (xi) changes in development or mining plans
due to changes in other factors or exploration results of Stornoway;
(xii) changes in project parameters as plans continue to be refined;
(xiii) risks relating to receipt of regulatory approvals or the
implementation of the existing Impact and Benefits Agreement with
aboriginal communities; (xiv) the effects of competition in the
markets in which Stornoway operates; (xv) operational and
infrastructure risks; (xvi) technical, environmental, permitting and
execution risk relating to the construction by Stornoway of a mining
grade road forming part of the Route 167 extension, (xvii) the
additional risks described in Stornoway's most recently filed Annual
Information Form, annual and interim MD&A, 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.
Stornoway Diamond Corporation
Matt Manson
President and CEO
Stornoway Diamond Corporation
Nick Thomas
Manager Investor Relations
604-983-7754 or toll free at 1-877-331-2232 
Stornoway Diamond Corporation
M. Ghislain Poirier
Vice-president Affaires publiques de Stornoway
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