Stornoway Diamond Corp. Closes its $15 Million Bought Deal Equity Financing

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

VANCOUVER, BRITISH COLUMBIA -- (Marketwire - March 28, 2012) - Stornoway Diamond Corporation (TSX: SWY) (Stornoway" or the "Company") is pleased to announce that it has completed its bought deal equity financing previously announced on March 8, 2012 for aggregate gross proceeds to Stornoway of $15 million (the "Offering"). Scotia Capital Inc. (the "Underwriter"), as sole underwriter, purchased 15 million units (the "Units"), each consisting of one common share of Stornoway and one-half of one common share purchase warrant of Stornoway (a "Warrant"). The Units were sold at a price of $1.00 per Unit. Each Warrant entitles its holder to purchase one common share in the capital of Stornoway at a price of $1.20 per share at any time prior to 5:00 p.m. (Vancouver time) on March 31, 2014. Stornoway granted to the Underwriter an over-allotment option, exercisable in whole or in part, up to 30 days after the completion of the Offering, to purchase up to an additional 2,250,000 Units at a price of $1.00 per Unit. This over-allotment option has not been exercised at the time of this press release.

Stornoway intends to apply the net proceeds of the Offering, after deducting the underwriter's fees and the expenses related to the Offering, to fund pre-development expenditures at the Renard Diamond Project, located in north-central Québec, for the 2012 calendar year and for general corporate purposes.

The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or under any securities or "blue sky" laws of any state of the United States, and may not be offered or sold, directly or indirectly, or delivered within the United States absent registration or an applicable exemption from the registration requirements. This news release does not constitute an offer to sell or a solicitation to buy such securities in the United States.


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 TSX 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

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 capital costs, operating costs and other cost metrics; (v) assumptions relating to gross revenues, operating cash flow and other revenue metrics; (vi) assumptions relating to recovered grade, average ore recovery and other mining parameters; (vii) mine expansion potential and expected mine life; (viii) expected time frames for completion of permitting and regulatory approvals and making a production decision; (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 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 ability to achieve goals. As a consequence, actual results could differ materially from results forecast or suggested in these forward-looking statements.

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. These risk factors include the inherent risks involved in the exploration and development of mineral properties, and specifically the Renard Diamond Project, developments in world diamond markets; slower increases in diamond valuations than assumed; increases in the costs of proposed capital and operating expenditures; and 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.

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this press release.



Contact Information

Stornoway Diamond Corporation
Matt Manson, President and CEO
416-304-1026

Stornoway Diamond Corporation
Nick Thomas, Manager Investor Relations
604-983-7754 or Toll free at 1-877-331-2232
info@stornowaydiamonds.com

Stornoway Diamond Corporation
M. Ghislain Poirier, Vice-president Affaires publiques
418-780-3938
gpoirier@stornowaydiamonds.com
www.stornowaydiamonds.com