Stornoway Announces 2018 Exploration Programs

Drill Programs Aimed at New Discovery and Resource Expansion

LONGUEUIL, Québec, Jan. 18, 2018 — Stornoway Diamond Corporation(TSX:SWY) (the “Corporation” or “Stornoway”) is pleased to provide an overview of exploration programs planned for 2018. With the successful construction and ramp-up of the Renard Diamond Project completed, the board of directors of Stornoway has approved a program of both brownfield and grassroots exploration aimed at both new discoveries, and the development of the existing resource upside potential at Renard. A total budget of $4.6 million has been allocated to complete this work.

Highlights of the 2018 program include:

• A drill program of 100 targets on the Renard Property aimed at new kimberlite discovery;
• 5,000 meters of delineation drilling on Renard 3 aimed at the conversion of high grade mineral resources and their acceleration in the Renard mine plan; and
• Grassroots sampling and drilling on new claim acquisitions in both eastern and western Canada.

Matt Manson, President and CEO commented: “In 2018, Stornoway is turning with a renewed focus to exploration and new project development. Our objective is both brownfield discovery and resource expansion at our existing Renard Mine, and new exploration geared towards the creation of a viable project pipeline for the future. The bulk of the 2018 exploration budget will be allocated to drilling. Since the early 1990s, Stornoway’s exploration team has been involved, individually or collectively, in the discovery of more than 200 kimberlites in Canada. Our experiences include the discovery or furtherance of the Diavik, Snap Lake and Renard mines, as well as the Aviat, Churchill, Pikoo, Qilalugaq, Coronation Gulf, Wales Island, Temiscaming Attawapiskat, Buffalo Hills and, most recently, Adamantin kimberlite fields. We are particularly excited about the potential for additional brownfield discoveries at Renard, given the large number of targets that remain untested and the unusually small size of the current kimberlite cluster.”

Renard Property “100 Target” Drill Program

In 2018, Stornoway will test 100 geophysical anomalies on the Renard Property identified from the recent reprocessing, compilation and interpretation of numerous historical airborne and ground geophysical surveys. These data have been integrated with geochemical results from some 4,700 historical surficial till samples to generate a list of high priority targets. Known kimberlite pipes at Renard have prominent geophysical signatures in a locally quiet background, a situation not common elsewhere on the property. The focus of the late winter-early spring 2018 program is to look for pipe-like kimberlite bodies with the size and tonnage potential to provide meaningful new sources of ore-feed to the centrally located Renard mine process plant. A budget of $3 million has been allocated to complete this work.

The Renard Property comprises more than 600 mineral claims representing about 33,600 ha of ground, and extends 10-12 km in all directions around the producing Renard Diamond Mine. In addition to the nine known kimberlite pipes in the Renard core area (five of which are in the present mine plan), there are at least eleven additional kimberlite dykes on the property. No systematic exploration work has been conducted on the Renard Property since 2007-08 when mine development activities commenced. Excluding drill holes on the known kimberlite pipes and dykes, only about 40 targets have been previously tested throughout the entire property.

The 100 targets will be tested with light reverse circulation drill rigs that can be moved easily from site to site. A similar exploration approach was applied over the last two years at the Adamantin, Lustre and Eclat properties, located about 100km south of Renard which resulted in the discovery of eleven new kimberlite bodies.

The 100 target drill program is expected to commence in March, with micro-diamond assessment and additional delineation drilling to follow upon any discovery.

Renard Resource Development

A separate program comprising 5,000 meters of underground drilling is planned to test the depth potential of the Renard 3 kimberlite below the base of the currently defined Mineral Reserves. The objective of this drill program is the conversion of Inferred Mineral Resources and Targets for Further Exploration (“TFFE”) to Indicated Mineral Resource and, if warranted, new Mineral Reserves, with a view to the acceleration and expansion of underground mining of the high grade Renard 3 kimberlite in the Renard mine plan. A budget of $0.6 million has been allocated to complete this work.

In the current statement of Renard Mineral Reserves and Resources, effective December 31, 2016, Renard 3 comprised a Proven and Probable Mineral Reserve of 1.85 million carats (comprising 2.08 million tonnes at an average grade of 79 carats per hundred tonnes; “cpht”) to a depth of 255 meters. The current Renard mine plan, referred to as the March 2016Updated Mine Plan, contemplates open pit mining at Renard 3, which is now nearing completion, and a single stope of underground mining between the years 2026 and 2027.

However, the company believes significant opportunity exists to accelerate the underground mining of Renard 3, giving the benefit of higher grade mine feed earlier than planned, and to expand it to greater depths, giving the benefit of mine life extension.

The initial focus of the 2018 delineation drill program will be the area of currently defined Inferred Mineral Resources at Renard 3 of 0.61 million carats (comprising 0.54 million tonnes at 112 cpht) between 255 meters and 405 meters depth. The drilling will take advantage of the Renard underground mine ramp which has now been developed to a depth of 310 meters.

In addition, Stornoway will seek to target the extensive resource potential below the current Inferred Mineral Resources. No targeted drilling at Renard 3 currently exists below a depth of 405 meters. However, in a 2015 deep directional drill program undertaken on the Renard 2 kimberlite, Renard 3 was interpreted to have been intersected fortuitously over 126.6 meters at a vertical depth of approximately 1,000m. The implied true width of this intersection was a minimum 47 meters, larger than in the area of the current Inferred Mineral Resources. This represents over 500 meters of untested exploration potential in the intervening undrilled levels, and a Target for Further Exploration of between 3.5 and 6.4 million carats (comprising 3.4 to 3.8 million tonnes between 105 and 168 cpht). Any Renard 3 Mineral Resource delineated above 700 meters depth is potentially mineable with the existing and currently planned underground mine infrastructure.

At a depth of 1,000 meters, Renard 3 appears to have a modest westerly plunge, implying a potential deep convergence of the Renard 2 and Renard 3 kimberlites. Exploration of both ore bodies below the depth of the currently planned ramp will be a future exploration priority at the Renard Mine.

Canadian Grassroots Exploration

Stornoway maintains an active portfolio of grassroots diamond exploration projects within Canada. In 2018, Stornoway expects to actively pursue programs of sampling, geological and geophysical surveys, land acquisition and drilling, where warranted, on multiple properties in eastern and western Canada. A budget of $1 million has been allocated for this work.

Of note, Stornoway recently acquired claims near the town of Témiscaming in western Québec, where a review of historical till sampling records suggests the presence of diamond bearing kimberlite. Follow up till sampling was completed in 2017, and a targeted airborne geophysical survey was completed in December. This work has confirmed geophysical targets consistent with multiple kimberlite occurrences, supported by kimberlitic indicator mineral anomalies. This project, referred to as the “MET” project, merits drill testing, subject to permitting and local consultation.

About the Renard Diamond Mine

The Renard Diamond Mine is Québec’s first producing diamond mine and Canada’s sixth. It 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. Construction on the project commenced on July 10, 2014, and commercial production was declared on January 1, 2017. Average annual diamond production is forecast at 1.8 million carats per annum over the first 10 years of mining. Readers are referred to 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.

Qualified Persons

Disclosure of a scientific or technical nature in this press release was prepared under the supervision of M. Patrick Godin, P.Eng. (Québec), Chief Operating Officer and Mr. Robin Hopkins, P.Geol. (NT/NU), Vice President, Exploration, both “qualified persons” under National Instrument (“NI”) 43-101. Mr. Hopkins is responsible for the planning and execution of Stornoway’s exploration programs.

About Stornoway Diamond Corporation

Stornoway is a leading Canadian diamond exploration and production company listed on the Toronto Stock Exchange under the symbol SWY and headquartered in Montreal. A growth oriented company, Stornoway owns a 100% interest in the world-class Renard Mine, Québec’s first diamond mine.

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 x2101
or Orin Baranowsky (CFO) at 416-304-1026 x2103 or Jodi Hackett (Manager, Communications) at 416-304-1026 x2104
or toll free at 1-877-331-2232

Pour plus d’information, veuillez contacter M. Ghislain Poirier, Vice-président Affaires publiques de Stornoway au 418-254-6550, gpoirier@stornowaydiamonds.com

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

NT4