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$8.4 Million Private Placement Financing Closed
Underwriter’s Option Exercised

Stornoway Diamond Corporation ("Stornoway") is pleased to announce it has closed an $8.4 million financing with a syndicate of underwriters led by Raymond James Ltd. and Canaccord Capital Corporation, and including Haywood Securities Inc. (the "Underwriters"), under which the Underwriters have bought, on a private placement basis 7,000,000 Flow Through Shares at a price of $1.20 per share.

On October 3, 2005, Stornoway announced a $6 million dollar private placement of 5,000,000 Flow Through Shares at $1.20 per share with an underwriters option for an additional 2,000,000 Flow Through Shares.  Prior to closing, the Underwriters exercised their option and increased the private placement to 7,000,000 Flow Through Shares for gross proceeds of $8.4 million.

The underwriters received a 6% cash commission.  All securities issued at closing are subject to a four month hold period, expiring February 21, 2006. 

The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.  This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

On behalf of the Board
STORNOWAY DIAMOND CORPORATION
/s/ "Eira Thomas"
Eira Thomas
President