Agnico-Eagle Agrees to Assign Debt to Stornoway for Shares


Stornoway Diamond Corporation (the "Company") announces that it and Agnico-Eagle Mines Limited ("Agnico") have entered into an agreement (the "Agreement") under which the Company has agreed to issue shares to Agnico in exchange for the assignment of a promissory note evidencing funds owed to Agnico by the Company's wholly-owned subsidiary, Contact Diamond Corporation ("Contact"). The Company completed its acquisition of Contact on January 17, 2007.

The Agreement, which is subject to the approval of the Toronto Stock Exchange, requires Agnico to assign the promissory note and all indebtedness evidenced thereby to the Company in exchange for 3,207,861 common shares of the Company. As at the effective date of the Agreement, principal and interest totaling $4,009,825.87 were due under the promissory note. The shares to be issued to Agnico will be issued at a deemed value of $1.25 per Stornoway share, and are to be distributed pursuant to an exemption from applicable securities laws; accordingly, the shares will be subject to a 4-month hold period. Upon this transaction, Agnico-Eagle will hold 25,805,692 shares of Stornoway, or 14.8% of the issued and outstanding equity. Given the simplicity of the transaction, that the shares are being issued at a premium to market and the transaction size relative to the Company, the Company considers it reasonable to close the transaction promptly after receipt of conditional acceptance from the Toronto Stock Exchange.

Eira Thomas, President and CEO of Stornoway, commented "We are very pleased that Agnico-Eagle has agreed to increase their investment in Stornoway by way of the exchange of the promissory note, and view this development as a strong endorsement of the growth strategy of the company".

On January 16th 2007 Stornoway announced the completion of the amalgamation of a wholly owned subsidiary with Ashton Mining of Canada, following a special general meeting of Ashton shareholders held on January 15th, 2007. On January 19th 2007 Stornoway further announced the completion of a compulsory acquisition of the outstanding shares of Contact Diamond Corporation. The successful completion of these transactions now allows Stornoway the opportunity to advance Canada's leading portfolio of diamond exploration and development assets.

About Stornoway

Stornoway Diamond Corporation is one of Canada's leading diamond exploration and development companies. The Company and its affiliates have been responsible for discovering over 150 kimberlites and six new Canadian diamond districts. Stornoway's management and technical team has a proven track record in wealth creation for shareholders and direct operating experience in each segment of the diamond "pipeline" from exploration to marketing.

In Quebec, Stornoway has a 50% interest in the Renard Diamond Project through its 100% owned subsidiary Ashton Mining of Canada Ltd. Renard is currently undergoing a 10,000 tonne bulk sample ahead on an expected pre-feasibility study in 2007-2008. Elsewhere, Stornoway has advanced stage diamond exploration projects in Nunavut, Alberta and Ontario and exposure to over 20 million acres of prospective diamond properties across Canada and in Botswana.

On behalf of the Board
/s/ "Eira Thomas"
Eira Thomas

For further information, please contact Nick Thomas at 604-331-2259 or (888) 338-2200
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This news release may contain forward looking statements, being statements which are not historical facts, including, without limitation, statements regarding potential mineralization, exploration results, resource or reserve estimates, anticipated production or results, sales, revenues, costs, "best-efforts" financings or discussions of future plans and objectives. There can be no assurance that such statements will prove accurate. Such statements are necessarily based upon a number of estimates and assumptions that are subject to numerous risks and uncertainties that could cause actual results and future events to differ materially from those anticipated or projected. Important factors that could cause actual results to differ materially from the Company's expectations are in Company documents filed from time to time with the Toronto Stock Exchange and provincial securities regulators, most of which are available at The Company disclaims any intention or obligation to revise or update such statements.