NEWS RELEASE: Stornoway Signs Impacts And Benefits Agreement For The Renard Diamond Project

March 27, 2012

Stornoway Diamond Corporation (TSX-SWY) is pleased to announce that it has entered into an Impacts and Benefits Agreement for the Renard Diamond Project with the Cree Nation of Mistissini (“CNM”) and the Grand Council of the Crees (Eeyou Istchee) / Cree Regional Authority (“GCC(EI)/CRA”).

The new agreement, designated the “Mecheshoo Agreement”, was signed by representatives of Stornoway and the Cree parties at a ceremony held in Mistissini, Quebec earlier today in the presence of community members, members of the local “Tallymen” family, regional dignitaries and media. 

The Mecheshoo Agreement is a binding agreement that will govern the long-term working relationship between Stornoway and the Cree parties during all phases of the Renard Diamond Project. It provides for training, employment and business opportunities for the Crees during project construction, operation and closure, and sets out the principles of social, cultural and environmental respect under which the project will be managed. The Mecheshoo Agreement includes a mechanism by which the Cree parties will benefit financially from the success of the project on a long term basis, consistent with the Mining Industry’s best practices for engagement with First Nations communities.Matt Manson, Stornoway’s President and CEO, stated: “Today’s signing of the Mecheshoo Agreement builds upon a long record of good faith dialogue and mutual respect between Stornoway and the Crees of Eeyou Istchee. This agreement demonstrates our commitment to establishing strong social acceptability for the Renard Diamond Project and confirms the Crees’ support for responsible mine development. As we move forward with our permitting and project financing activities, we can look forward to developing an important, long-lived diamond mine at Renard that will deliver meaningful benefits to both Stornoway’s shareholders and our local community partners.”

“The Mecheshoo Agreement is again an example where, with the cooperation and participation of the Crees, mining development can take place and prosper in Eeyou Istchee,” said Dr. Matthew Coon Come, Grand Chief of the Grand Council of the Crees (Eeyou Istchee). “This agreement marks the beginning of a cooperative and fruitful relationship between the Crees and Stornoway, a relationship based on respect for Cree rights and environmental and economic sustainability. In accordance with the principles of our Cree Nation Mining Policy, the Crees and Stornoway have ensured that our traditional rapport to the land remains intact.”

“Stornoway has demonstrated an immense openness and has been willing to adapt the project in a manner that respects the Crees of Mistissini, our interests, our values, our culture and our way of life. This is the way we want to be dealt with.” said Chief Richard Shecapio of the Cree Nation of Mistissini.

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 November 2011, Stornoway released the results of a Feasibility Study for Renard that highlighted the potential of the project to become a significant producer of high value rough diamonds over a long mine life. NI 43-101 compliant Probable Mineral Reserves stand at 18.0 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 C$802 million, with a life of mine operating cost of C$54.71/tonne giving a 68% operating margin over an initial 11 year mine life. Production start-up is scheduled for 2015. Readers are referred to the technical report dated December 29, 2011 in respect of the Renard Diamond Project 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. 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.

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

For more information, please contact Matt Manson (President and CEO) at 416-304-1026
or Nick Thomas (Manager Investor Relations) at 604-983-7754, toll free at 1-877-331-2232

Pour plus d’information, veuillez contacter M. Ghislain Poirier, Vice-président Affaires publiques de Stornoway au 418-780-3938, gpoirier@stornowaydiamonds.com

**  Website: www.stornowaydiamonds.com  Email: info@stornowaydiamonds.com **

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