Stornoway Provides Construction Update on the Renard Mine Road

Wed Mar 27, 2013 3:51pm EDT

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Stornoway Diamond Corporation

March 27, 2013 - 03:50:49 PM

Stornoway Provides Construction Update on the Renard Mine Road

MONTREAL, QUEBEC--(Marketwire - March 27, 2013) - Stornoway Diamond
Corporation (TSX:SWY) is pleased to provide an update on progress made in the
construction of the Renard Mine Road that will provide year-round vehicle
access to the Renard Diamond Project by way of the communities of Mistissini
and Chibougamau. Due to favourable weather conditions, construction of the
Renard Mine Road has commenced earlier than anticipated, with overall progress
already standing at 12% of expected work. First all-season vehicle access to
Renard is currently scheduled for the fourth quarter of this year, as
previously anticipated.

Under the terms of an agreement executed on November 15th, 2012 by Stornoway,
the Quebec Ministere des Transports ("MTQ"), the Ministere des Ressources
Naturelles, and the Ministere des Finances et de l'Economie ("MFE"), a 240km
long all-season road linking Renard to the Quebec highway network is currently
being constructed in four segments, A to D. Progress is well established on
segments A and B, which are being completed by the MTQ as a 70km/hr two-lane
gravel highway. Stornoway will complete the remaining 97km covered by segments
C and D as a 50km/hr single lane mining road under the terms of a Financing
Agreement executed on December 6th, 2012 between Stornoway and the MFE.

As previously reported, first vehicle access to the Renard project site was
achieved on February 15th by way of a winter road constructed by the MTQ. The
winter road, which opened early and remains in use currently, has been used to
ship construction equipment and fuel to the project site and has allowed
construction of the all-season Renard Mine Road to commence well ahead of the
planned schedule. Consequently, Stornoway can report the following
construction milestones achieved:

--  Construction camps for the accommodation of 100 people have been
--  Building materials for 9 of 16 permanent bridges have been delivered to
    watercourse sites and the abutments of 3 bridges have been completed;
--  Dry-fill foundations have been completed and culverts delivered on 85%
    of all wetland sites;

Several road construction contracts have been entered into by Stornoway with
businesses located in the James Bay Region of Quebec or associated with the
Crees of Eeyou Itschee. These include:

--  A consortium of the Eskan Company, the Development Corporation of the
    Cree Nation of Mistissini, and Swallow-Fournier inc., for road
--  Nordic Structures Bois, a wholly-owned subsidiary of Chantiers
    Chibougamau Ltee, for bridge construction; 
--  Jos Ste-Croix & Fils Ltee of Chibougamau for construction management; 
--  The Eenatuk Forestry Corporation for tree clearing; and 
--  The Kiskinchiish Corporation for camp services and catering; 
--  Petronor, a wholly owned Cree enterprise, for fuel supply.

On December 17th, 2012, Stornoway announced that it had received the transfer
of the Certificate of Authorization for the construction of the Renard Mine
Road from the Quebec Ministere du Developpement durable, de l'Environnement,
de la Faune et des Parcs ("MDDEFP"). Consistent with this transfer, and the
reduced scope of the Renard Mine Road compared to the two-lane public highway
that was previously contemplated, Stornoway filed an amendment to the road
project's Environmental and Social Impact Assessment on February 15th, 2013
with the Evaluation Committee ("COMEX") of the James Bay and Northern Quebec
Agreement, the environmental protection regime for the James Bay Region of

About the Renard Mine Road

Construction of the road that will provide all-season vehicle access to the
Renard Project began in February 2012 as the "Route 167 Extension". Under the
terms of the November 2012 Framework Agreement between Stornoway and the
Government of Quebec, Quebec will complete the first 143km of road as a
70km/hr two-lane gravel highway and Stornoway will undertake the construction
of a 50km/hr single lane mining road over the remaining 97km as the "Renard
Mine Road". The cost of the Renard Mine Road is estimated at $77 million,
including a 15% contingency. Under the terms of the December 2012 Financing
Agreement between Stornoway and Quebec, this cost will be funded through a
credit facility provided to Stornoway bearing interest at the rate of 3.35%
and amortized over a period of 15 years. In order to provide additional
contingency, Stornoway will be entitled to draw an additional $7.7 million
bearing interest at the rate of 6.3%, for a total facility of up to $84.7
million . The schedule of repayment of these loans will be based on the
financing and construction schedule of the Renard Diamond Project. To-date,
Stornoway has drawn $26.2 million from the credit facility.

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 National Instrument ("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 29th, 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 statements.

Forward-looking statements are made based upon certain assumptions 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 objectives.

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: 1-877-331-2232

Stornoway Diamond Corporation
M. Ghislain Poirier
Vice-president Affaires publiques de Stornoway