Exploration Update

Exploration Update

Stornoway’s material mineral properties are (i) the Foxtrot Property in the Otish Mountains located in Québec,Canada; and (ii) the Aviat One Property on the Melville Peninsula located in Nunavut, Canada. The following discussion is an update to disclosure in documentation filed with regulatory agencies and available for viewing under Stornoway’s profile on the SEDAR website at www.sedar.com.

Foxtrot Property – Renard Kimberlitic Bodies, Quebec

The Foxtrot Property, containing the Renard cluster of kimberlite bodies, is a 50/50 joint venture between Stornoway’s wholly-owned subsidiary Ashton, and SOQUEM Inc.’s (“SOQUEM”) wholly-owned subsidiary, Diaquem. Ashton is the project operator. Since 1996, Ashton and SOQUEM have evaluated an area of more than 400,000 square kilometres of the eastern Archean Superior craton. Exploration conducted by the joint venture has resulted in the discovery of a new field of kimberlitic intrusions on the Foxtrot property, notably the Renard cluster of kimberlitic bodies, and a nearby system of kimberlitic dykes, the Lynx-Hibou dykes.

Renard Diamond Project – Positive Economic Study Announced

On October 28, 2008, Stornoway announced the receipt of a positive economic study for the Renard Diamond Project, located at the Foxtrot Property in North Central Québec, followed by the filing on SEDAR on December 12, 2008 of a National Instrument (”NI”) 43-101 technical report on the Renard Project located at the Foxtrot Property in North Central Québec.

The Foxtrot Property is a 50:50 joint venture with SOQUEM INC. (”SOQUEM”). The independent technical report has been prepared by Scott Wilson Roscoe Postle Associates Inc. (Scott Wilson RPA) and is the qualifying report relating to the Renard Preliminary Assessment. AMEC Americas Limited (AMEC) and SENES Consultants Limited (SENES) have prepared or contributed to sections of this technical report. The technical report includes improved estimates of project economics resulting from certain conceptual mine plan efficiencies identified since Stornoway disclosed the initial results of the preliminary assessment on October 28th, 2008. The improved economics are highlighted as follows:

Highlights:

• Pre-tax IRR on a “Base Case” economic assessment utilizing a 5.9 million carat mineral resource from Renard kimberlites 2, 3 and 4 has increased marginally to 14.2% (12.1% after tax) from 13.9% (11.8% after tax). Pre-Tax NPV (calculated before tax at an 8% discount rate) increases to C$56m from C$52m.
• Pre-tax IRR on an “R4-R9 Price Sensitivity” economic assessment has increased to 17.5% (14.9% after tax) from 16.4% (13.9% after tax), with pre-tax NPV increasing to C$93m from C$78m. This upside economic assessment utilizes an expanded 6.2 million carat mineral resource from Renard kimberlites 2, 3, 4 and 9 and is predicated upon the application of an alternate diamond price to both of the Renard 4 and Renard 9 kimberlites.

The Renard Preliminary Assessment comprises a National Instrument (”NI”) 43-101 compliant mineral resource estimate and a diamond processing plant design prepared by AMEC Americas Limited (”AMEC”). A conceptual mine plan, capital and operating cost estimate, and an economic assessment were prepared by Agnico-Eagle Mines Limited (”Agnico”) and reviewed and accepted by Scott Wilson RPA. The economic assessment is based, in part, on Inferred Mineral Resources, and is preliminary in nature. Inferred Mineral Resources are considered too geologically speculative to have mining and economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is no certainty that the Preliminary Assessment will be realized.

Since the results of the Preliminary Assessment were initially reported on October 28th, 2008, no changes have been made to the mineral resource statement or estimate of potential mineral deposits. However, additional inferred mineral resource from the Renard 2 kimberlite has been added to the conceptual mine plan resulting in a marginally increased IRR under the base case economic assessment. In addition, an additional 540,000 tonnes of inferred mineral resource in the Renard 9 kimberlite has been added to the conceptual mine plan in the economic assessment scenario that applies the Renard 2 and 3 diamond price to the Renard 4 and Renard 9 kimberlites. This additional Renard 9 mineral resource has had a more significant impact on the project economics under this upside scenario. Estimates of project capital cost, operating cost and mining method remain the same, as does the mineral resource statement and the assumptions used in the financial model.

Overview of the Mineral Resource Statement, Estimate of Potential Mineral Deposit, and Conceptual Mine Plan

The NI 43-101 compliant mineral resource at Renard comprises 7.0 million carats of Indicated Resources (11.6 million tonnes at an average grade of 60 carats per hundred tonnes, or “cpht”) and 4.5 million carats of Inferred Resources (7.2 million tonnes at an average grade of 63 cpht). Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. Extensive upside has been identified in the form of an additional 9 to 21 million carats classified as potential mineral deposit (14 to 32 million tonnes ranging from 31 to 164 carats per hundred tonnes). The potential quantity and grade of any potential mineral deposit is conceptual in nature, and it is uncertain if further exploration will result in the target being delineated as a mineral resource. Consequently, the economic assessment, in both “Base Case” and “R4-R9 Price Sensitivity” scenarios, does not incorporate any of this non-resource, conceptual material. The evaluation of the large quantity of potential mineral deposit at Renard will be the prime focus of the joint venture in the coming year. If confirmed as additional mineral resource, it offers the potential to significantly extend the preliminary mine life and enhance the project’s economics prior to a formal production decision.

The conceptual mine plan combines open pit mining and sublevel, open stope underground mining. The mining sequence and design were determined by optimizing the pit depth and underground stopes to achieve a production rate of 3,500 tonnes/day or 1.3 million tonnes per annum. The capital expense is estimated to be $308 million, including $73 million for a diamond processing plant and including a contingency of $50 million. Operating costs (op-ex) are anticipated to average C$50.35/tonne, including $14.06/tonne for open pit mining, $22.74/tonne for underground mining, C$14.92/tonne for processing and C$16.13/tonne for surface services and general administration. Capital and operating costs were estimated between April and July 2008 through contractor quotes or real-case unit costs derived from current Agnico operations. Site access is based on the assumed availability of an all-season road from the south.

Financial models have been prepared using a US dollar 3-year historical exchange rate of C$1.146 and assuming a 3% diamond marketing cost. Diamond prices are as of an open market valuation exercise undertaken by WWW International Diamond Consultants Ltd. (”WWW”) in March 2008 (Stornoway press release dated April 28th 2008) and an annual diamond price escalation factor of 2.5% has been applied. The diamond price escalation factor does not commence until 2011, and extends through the life of mine, consistent with a consensus of recent diamond industry price forecasts.

The two adjusted economic assessment scenarios are summarized as follows:

Table 1: Renard Preliminary Assessment1

	Base Case	R4-R9 Price Sensitivity Case
Carats Recovered (m)	5.89	6.19
Tonnes Processed (m)	7.50	8.04
Grade (cpht)	78	77
Mine Life (years)	7	7
Total Cap-ex (C$m)	$307.70	$308.21
Average Op-ex (C$/tonne)	$50.35	$50.00
Total Revenue (C$m)	$879	$974
Undiscounted Pre-Tax Cash Flow (C$m)	$194	$264
Pre-Tax IRR2	14.2% (with sensitivities of 6.8% to 21.1%)	17.5% (with sensitivities of 10.2% to 24.2%)
After-Tax IRR2	12.1% (with sensitivities of 6.1% to 18%)	14.9% (with sensitivities of 8.8% to 20.7%)
Pre-Tax NPV3	C$56m (with sensitivities of C$35m to C$96m)	C$93m (with sensitivities of C$66m to C$143m)
1 The preliminary assessment includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainity that the preliminary assessment will be realized. The cash flow considers the Project from the time of the construction decision and does not include costs for permitting, prefeasibility, and feasibility studies. The mine production, economic analysis and cash flows represent forward-looking information. Assumptions have been made for diamond prices, values and grades. Forecasts of diamond grades and valuation are based on limited sampling that may not be representative of actual diamond production. 2 Based on a 2.5% annual diamond price escalation starting in 2011. Sensitivities are shown at 0% and 5% for the purposes of this release, and are not contained within the independent technical report. 3 Based on an 8% discount rate with sensitivities of 10% and 5%.

Qualified Persons for the NI 43-101 Report

The authors of the NI 43-101 technical report are Mr. Normand Lecuyer (ing.) and Dr. William E. Roscoe (P.Eng.) of Scott Wilson Roscoe Postle Associates Inc., Mr. Randall Cullen (P.Geo.) and Ms. Alexandra Kozak (P.Eng.) of AMEC Americas Ltd. and Mr. Gerd Wiatzka (P.Eng) of SENES Consultants Limited. Mr. Cullen is the independent Qualified Person responsible for the preparation of the mineral resource estimate for the Renard Diamond Project. Mr. Normand Lecuyer (ing.) and Dr. William E. Roscoe (P.Eng.) of Scott Wilson Roscoe Postle Associates Inc. have reviewed and accepted the conceptual mine plan, capital and operating cost estimates, and the preliminary economic analyses developed by Agnico and are the independent Qualified Persons for these aspects of the study. Details regarding data verification, exploration information, and the mineral resource estimates for the Renard Project are included in the technical report, which is titled “Technical Report on the Preliminary Assessment of the Renard Project, Quebec, Canada” NI 43-101 Report dated December 12, 2008, as filed on SEDAR.

Results from Winter Drill Program at Renard

In March 2009, a winter drill program on the Renard 2 and Renard 3 kimberlite pipes was completed. The drilling confirmed a significantly expanded zone of kimberlite on the northern and eastern sides of Renard 2 at depths greater than 250 meters below surface. Three separate deep drill holes have now delineated the zone in the northsouth and east-west axes, prompting a re-evaluation of the geological model for the overall pipe. It now appears that Renard 2 is approximately twice as large as previously thought when modeled to a depth of 570 meters below surface, which represents the base of the geological model used in the recent National Instrument (”NI”) 43-101 compliant mineral resource statement (Stornoway Press Release dated December 15, 2008). The pipe is approximately three times larger than previously thought when modeled to a depth of 700 meters below surface.

The drilling resulted in the discovery of a substantial amount of new kimberlite at Renard 2, which has a dramatic impact on estimates of the overall size of the pipe. In the recently released Renard Preliminary Assessment, Renard 2 contributed the bulk of the mineral resource contained within the conceptual mine plan. Management expects that the discovery of such a large amount of new kimberlite, much of it within the scope of the existing underground mine design, will have a very positive impact on the project economics. As a result, additional work programs are planned to convert the new material identified in the winter drill program into a mineral resource.

In total, five deep delineation drill holes were completed at Renard 2 as part of the winter drill program. Drill hole R2-55 gave an intersection of kimberlite on the northern side of the pipe 178 meters longer than expected from the existing geological model. Drill holes R2-57 and R2-58 were designed to provide the east-west dimension of this new extension, and returned kimberlite intersections of 339 meters and 250 meters respectively. Drill hole R2-57 ended in kimberlite at 729 meters due to drilling difficulties, and did not determine the actual eastern contact of the pipe at depth. Drill hole R2-58 includes a 56m intersection of dilute kimberlite (country rock plus kimberlite). These drill intersections, taken together with the existing drill database, are consistent with Renard 2 measuring approximately 180 meters by 50 meters (north-south and east-west dimensions) at a depth of 400 meters below surface, and 195 meters by 45-60 meters at a depth of 570 meters below surface. In the previous geological modeling, the pipe dimensions at these depths were thought to be only 70 meters by 38 meters and 48 meters by 10 meters respectively. The pipe remains open below 700 meters.

Preliminary field logging indicates that the new kimberlite intersections are comprised predominantly of lithologies seen elsewhere within Renard 2, including Brown Transitional Kimberlite Breccia (”Kimb2b”), Blue Tuffisitic Kimberlite Breccia (”Kimb2a”), Hypabyssal Kimberlite Breccia and Hypabyssal Kimberlite, along with rafts of Country Rock and Country Rock Breccia with Kimberlite.

In the recent NI 43-101 compliant mineral resource statement for the project, Renard 2 was estimated to contain 3.36 million tonnes of Indicated Mineral Resource (at an average grade of 81 carats per hundred tonnes, or “cpht”) and 1.80 million tonnes of Inferred Mineral Resource (at an average grade of 86 cpht). At that time, upside identified at Renard 2 in the form of potential mineral deposit was an additional 2.5 to 7.1 million tonnes (calculated to a depth of 700 meters below surface) with grades estimated between 73 and 164 cpht. The potential mineral deposit was determined on the basis of known drill intersections of kimberlite for which insufficient diamond sampling existed to adequately estimate a diamond resource grade, or on the basis of the implied depth extent of the kimberlite pipes to 700 meters below surface, or on the basis of geological uncertainty in the definition of kimberlite geological models. The new drilling results support a better constrained geological model that is consistent with a revised potential mineral deposit estimated at between 10.5 and 12.3 million tonnes to 700 meters below surface, a substantial increase over the previous estimate.

The reader is cautioned that the new kimberlite material reported from the winter drill program, as well as any “potential mineral deposit”, does not constitute a mineral resource, and it is uncertain if further exploration will result in it being delineated as a mineral resource. In addition, mineral resources are not mineral reserves and do not have demonstrated economic viability. Future work required to update the Renard mineral resource statement includes additional delineation drilling and the integration of the observed geological units within the new kimberlite zone into the overall resource model using detailed petrographic and microdiamond analysis.

Two drill holes were also successful in extending the dimension of the Renard 3 kimberlite pipe at depth on a more modest basis, while a third drill hole deviated from its planned location and did not intersect the pipe. Full drill results, including expected and actual drill intersections, are provided in the table below.

Hole ID	Azimuth (degree)	Dip (degree)	Length (Meters)	Kimberlite Contact (Meters down hole)     Lower
Renard 2
R2-543	175	-70	453	Expected 164 425 Actual 179 433 Difference1 -15 +8
R2-553	354	-63	660	Expected 120 395 Actual 122 573 Difference1 -2 +178
R2-563	156	-67	411	Expected 152 312 Actual 109 393 Difference1 +43 +81
R2-57	094	-70	739	Expected n/a n/a Actual 390 >7292 Difference1 Outside extent of previous model
R2-58	178	-66	441	Expected n/a n/a Actual 165 415 Difference1 Outside extent of previous model
Renard 3
R3-56	130	-62	321	Expected 220 246 Actual 199 279 Difference1 +21 +33
R3-57	208	-67	447	Expected 347 387 Actual Did not intersect kimberlite pipe. Difference1
R3-58	050	-76	325	Expected 240 267 Actual 232 291 Difference1 +8 +24
1A negative ("-") difference indicates a decrease in geological model size when compared to the model utilized in the Dec 15th NI 43-101 compliant mineral resource statement. A positive ("+") indicates an increase in model size. Differences between expected and actual contacts have a smaller influence on the shape of the geological model at the top of the pipe than at the bottom owing to the amount of geological control already existing. 2 Hole ended in kimberlite. Terminated due to drilling difficulties. 3Minor revisions from March 09, 2009 release incorporating final geological logging and positional survey data

Next steps at Renard

In June 2009, the next phase of an ongoing resource expansion and optimization program commenced at Renard. This program includes core drilling of some 9,500m on the Renard 2 kimberlite pipe which is expected to continue until late August. The objective of this program is to convert the 10.5 to 12.3 million tonnes of potential mineral deposit material identified at Renard 2 to a formal resource classification. Results from the winter drill program at Renard suggest that the Renard 2 kimberlite is approximately twice as large as previously thought when modeled to a depth of 570 meters below surface, and approximately three times larger when modeled to a depth of 712 meters below surface. The summer program will focus on detailed delineation drilling and sampling of the newly discovered material within Renard 2, and is expected to allow a restatement of the NI 43-101 mineral resource by year end, followed by a revision of the project’s economic assessment.

In the existing Renard Preliminary Assessment, Renard 2 contributed the bulk of the high grade resource contained within the conceptual mine plan. Management believes that the discovery of such a large amount of new kimberlite in Renard 2, much of it within the scope of the existing underground mine design, could have a very positive impact on project economics, and could potentially add approximately 8 to 10 years of mine life to the 7 year mine plan already established. The growing scale of the Renard Diamond Project, taken together with the Quebec government’s recent announcement of major capital funding for the regional Route 167 Extension project, are recent, positive developments.

The 2009 summer work at Renard conforms with Stornoway’s stated objective of conducting modest, value-driven,exploration programs focused on the Company’s key, advanced projects during the currently challenging resource equity environment. It compliments ongoing desktop work at Stornoway’s 90% owned Aviat Project designed to provide a qualified estimate of contained value and potential mining methods for Aviat’s large Eastern Sheet Complex (”ESC”; Stornoway Press Release dated May 05, 2009), and continuing readiness to exploit, on an opportunistic and inexpensive basis, new discovery prospects identified within Stornoway’s grassroots exploration portfolio.

During the year ended April 30, 2009, the Company used an undiscounted cash flow method to test for potential impairment on the Renard Diamond Project, which is carried at $131.2 million. A description of this testing can be found in the section “Critical Accounting Estimates – Impairment of Long-lived Assets” below. Management determined that the carrying value of the project did not exceed its estimated recoverable value as at April 30, 2009 and accordingly, no write-down of the carrying value was required.

Aviat Property, Nunavut

The Company’s interest in the 442,641 acre Aviat Property was previously governed by a joint venture agreement with BHP Billiton Diamonds Inc. (“BHPB”) and Hunter Exploration Group (“Hunter”). Initially, the Company held a 70% interest in the property, BHPB held a 20% interest and Hunter held a 10% carried interest. Stornoway is the Operator. BHPB chose not to participate for its share of the 2006 or 2007 Aviat Property exploration programs, and as a consequence of this election, its interest on the Aviat Property was reduced to approximately 14.4%. Under an assignment agreement between Stornoway and BHPB entered into in May 2008, BHPB assigned to Stornoway all of its interest in the Aviat Project and its rights to market all diamonds of Hunter produced from the Project in consideration for the assumption by Stornoway of BHPB’s obligations under the joint venture agreement, including their bulk sampling obligations and all future funding obligations. Acquisition of BHPB’s interest in the project brings Stornoway’s project interest to 90% (Hunter continues to hold a 10% interest, carried to production) and Stornoway’s diamond marketing rights for the Project to 100%.

Exploration Program Update and Status

Stornoway’s 2008 field program on the Aviat Project commenced in early May of that year. Exploration activities during 2008, and subsequently, concentrated on delineating the size and grade potential of the known kimberlite sheets within the Eastern Sheet Complex (”ESC”), in support of the first conceptual resource study at the project. Delineation drilling was also undertaken on the AV9 kimberlite pipe, discovered late in the 2007 program. Highlights of the 2008 exploration program at Aviat include the following:

• significantly expanded the lateral extent of the highly diamondiferous AV267 body from approximately 125 ha to more than 250 ha
• successfully collected 202 wet tonnes of kimberlite from AV267 at two surface exposures
• confirmed the pipe-like nature of AV9 and extended it to a minimum depth of 175m (longest continuous kimberlite intersection 195m)
• discovered a new kimberlite sheet within the ESC
• completed 23 diamond drill holes for a total of 3,225 m of drilling
• recovered 302.7 carats, including a 3.99 carat stone, from 190.9 dry tonnes collected at two localities within the ES1 kimberlite, representing an overall diamond recovery of 159 cpht (for diamonds retained on a +1 DTC screen)
• received results of an independent conceptual resource study at Aviat, highlights of which included:
  • 12.4 to 16.0 million tonnes total content of kimberlite material from a conceptual model of four kimberlite dykes of the ESC; one interpreted dyke, ES 1 (previously known as A267), spans an area of some 260 hectares and represents about 78% of the total kimberlite volume
  • 235 carats per hundred tonnes (cpht) +/- 30 cpht conceptual estimate of total diamond content, assuming 100% recovery of stones in all size fractions down to a +1.00 mm bottom cut-off and based on limited micro and macro diamond data collected during the 2003 to 2007 field campaigns
  • 24.1 to 40.3 million carats in the ground, using the conceptual range of total content of kimberlite material, conceptual estimate of total diamond content and an allowance for approximately 5% internal dilution within the conceptual model

SRK Consulting (Canada) Inc. (”SRK”) an independent, international consulting practice, was engaged to (i) develop a conceptual geological model for kimberlite dykes of the ESC, (ii) provide a range of potential kimberlite volume and tonnage, and (iii) estimate conceptual total diamond content within the extent of the bodies as known from current drilling (see Press Release of September 8, 2008). The conceptual study does not include Aviat’s pipelike kimberlite bodies (AV1, AV4 and AV9), kimberlite sheets outside of the ESC (such as AV1W and AV5) or drill intersections of as yet un-named kimberlite sheets that have not yet been integrated into the overall geologic model.

Kimberlite dykes of the ESC comprise a series of stacked, subparallel, shallowly dipping (8-20 degrees) sheets that cover an area of approximately 260 hectares and are composed of macrocrystic, hypabyssal kimberlite and kimberlite breccia assumed to represent a single phase of kimberlite magma. In order to simplify the historical naming convention of the outcropping sheet-like kimberlites at Aviat (AV267, AV38, etc.), the bodies in this conceptual geological model have been re-classified by SRK into four main sheets referred to as ES 1, ES 2, ES 3 and ES 4.

The conceptual geological model developed by SRK (see Press Release of October 7, 2008) consists of four distinct dyke horizons, the largest of which, ES 1, is interpreted to extend continuously from the original AV6 surface discovery southeast to the original AV8 discovery, average 1.7m true thickness and underlie the entire 260 hectare area. One of the three other distinct dykes modelled by this study, ES 2 (1.3m average thickness), is a hanging wall dyke situated 10-20m above the northwest part of ES 1, and the two other bodies, ES 3 (1.3m thick) and ES 4 (0.9m thick), are stacked footwall dykes situated 10-20m, respectively, below the southeastern extent of ES 1.

A total of 96 vertical and inclined drill holes spaced at roughly 150 to 300m intervals, of which 81 encountered kimberlite intersections from a few centimetres to 16.0m in thickness, have been incorporated into the conceptual geological model by SRK. Kimberlite intersections were classified into one of the four main ES dykes based on elevation. For horizons with multiple, close spaced kimberlite intersections separated by non-kimberlitic country rock, the kimberlite units were grouped into a single envelope so long as kimberlite units were greater than or equal to 0.25m in thickness and separated by less than 1.5m of country rock. This inclusion of internal waste provides approximately 5% internal dilution, therefore the overall proportion of kimberlite within the current geological interpretation is approximately 95%. At this stage it is impossible to estimate potential mining dilution. The volume of kimberlite dyke generated by the current conceptual model is estimated to be in the range of 4.7 to 6.1 million cubic meters, with the higher volume estimate including a down dip extension to the regional scale northwestsoutheast trending Centennial fault zone (used as the southwestern limit for the purposes of this conceptual geological model). Some 72 to 78% of the total kimberlite volume is attributed to ES 1. The average specific gravity determined from 18 samples collected to date is 2.63 g/cc, providing the tonnage ranges of 12.4 to 16.0 million tonnes reported above.

Total diamond content estimation of the ES dykes (235 +/- 30 cpht undiluted) was determined by SRK using both micro and macro diamond data provided by Stornoway. A total of 529 microdiamonds from 409 kg of drill core, and 33.40 carats of diamonds totalling 979 macrodiamonds obtained from 20.56 tonnes of bulk sample material, were used to produce the total diamond content estimate. The estimate is considered conceptual in nature, uses a 1.0mm (+2 DTC Sieve) bottom cut-off and assumes 100% recovery of stones of all size fractions. No corrections were applied for breakage and/or loss of smaller diamonds that would typically occur during recovery of diamonds in a commercial dense media separation (DMS) plant. The increase of the estimated total diamond content from the previously reported raw bulk sample grade of 162 cpht (see Press Release of January 29, 2008) can be attributed to both this small diamond recovery factor, and also to undersampling of the larger size distribution (+11 to +23 DTC Sieve Classes) of the diamond population. The relatively small bulk samples collected to date do not appear to have representatively sampled the entire size distribution. Larger tonnage samples are required to verify the estimate of diamond content. Quantification of commercial diamond recoveries is extremely difficult at this stage of the projectdue to numerous factors that need to be studied in greater detail (for example: economical bottom cut-off; efficiencies of the process plant; diamond breakage and/or loss; etc.). However, SRK has stated that in a commercial DMS plant it is not unreasonable to expect a 15-20% reduction in recovered diamonds from the total diamond content estimation assuming a similar bottom cut-off of +1.00 mm.

The above estimates are conceptual in nature and do not constitute the estimation of a mineral resource. To date there has been insufficient exploration to define a mineral resource in terms of NI 43-101 for the ES dyke complex and it is uncertain at this stage if further exploration will be able to delineate a mineral resource. The conceptual geological model incorporates kimberlite dykes previously referred to AV267, AV3 Upper, and AV8 Upper (ES 1), AV2 Upper (ES 2), AV3 Lower, AV8 Middle and AV8 Lower (ES 3 and ES 4). Some significant kimberlite intersections could not be incorporated into the current model due to uncertainties in lateral continuity as a result of the relatively coarse drill pattern. ES 1 remains open down-dip to the southwest (across the Centennial Fault) as well as to the southeast along strike. Additional drilling could potentially expand the outlines of ES 1, ES 2 and ES 3, as well as allowing the correlation and delineation of unincorporated kimberlite intersections. Revisions to the model are anticipated on an ongoing basis as new information becomes available.

Subsequent to the SRK conceptual resource study, Stornoway reported final results from the processing of a total of 190.9 dry tonnes of kimberlite collected during 2008 from two exposures of the ES1 kimberlite (see press release of May 5, 2009). A combined total of 302.7 carats of diamonds have now been recovered, representing an overall diamond recovery of 159 cpht for stones retained on a +1 DTC screen. The three largest diamonds recovered from this sample are 3.99, 1.72 and 1.22 carats, described as an off white clivage, grey clivage and a white octahedron, respectively. The 3.99 carat stone represents the largest diamond recovered to date from the Aviat project.

The first tranche of sample, collected at the historical “AV6″ outcrop (see press release of February 19, 2008) returned 89.6 carats of diamonds from 42.7 dry tonnes of kimberlite, representing a diamond recovery of 210 cpht for stones retained on a +1 DTC screen. The second tranche of sample, collected at the historical “AV2″ outcrop, returned 213.2 carats of diamonds from 148.3 dry tonnes of kimberlite, representing a diamond recovery of 144 carats per hundred tonnes (cpht) for stones retained on a +1 DTC screen.

The two outcrop samples were processed separately, but represent exposures of the same “ES1″ kimberlite sheet. Diamond recovery data for the individual samples, following Dense Media Separation (”DMS”) processing and utilizing both x-ray sorter and grease table recovery circuits, are as follows:

Sample	Dry Weight (tonnes)	Stones (retained on +1 DTC screen)	Carats (retained on +1 DTC screen)	Diamond Content1 (cpht)2	Largest Diamonds (carats)
ES1 Part 2 (”AV2″-2008)	148.27	5,3993	213.15 3	144	3.99, 1.72, 1.22
ES1 Part 1 (”AV2″-2008)	42.67	2,4473	89.553	210	0.81, 0.77, 0.67
Total ES1	190.94	7,8463	302.70	159	-
1The estimated diamond content, expressed as carats per hundred tonnes, may not be representative of the overall diamond content of the body due to a number of factors, including location/size of the samples and processing parameters. 2Carats per hundred tonnes 3Represents only stones retained on a +1 or greater DTC screen, as discussed below

All previously reported DMS results from kimberlite outcrops considered to be part of the ES1 kimberlite sheet are provided in the table below. The weighted average diamond content for the three larger samples (211.5 tonnes) is 159 cpht. Individual differences in diamond content are interpreted as natural variations due to the relatively small sample size. The improvement evident in the three most recent samples is ascribed to the increased sample size, and the collection of fresher, more representative kimberlite. The weighted average diamond content for all six samples (218.3 tonnes) is 156 cpht, and the three largest stones are 3.99, 3.64 and 1.72 carats.

Disclosure Date	Sample Type	Dry Weight (tonnes)	Carats	Diamond	Largest Diamond (carats)
May 5, 2009	Outcrop ES1 Part 2 (”AV2″- 2008)	148.27	213.15	1443	3.99, 1.72, 1.22
February 19, 2009	Outcrop ES1 Part 1 (”AV6″- 2008)	42.67	89.55	2103	0.81, 0.77, 0.67
January 21, 2008	Outcrop “AV2″ (2007)	20.60	33.36	1624	3.64, 0.55, 0.53
January 11, 2007	Outcrop “AV2″ (2005)	2.19	1.58	724	0.19
July 11, 2006	Outcrop “AV7″ (2005)	2.32	1.78	774	0.19
June 21, 2006	Outcrop “AV6″ (2005)	2.15	2.08	974	0.10
1 The estimated diamond content, expressed as carats per hundred tonnes, may not be representative of the overall diamond content of the body due to a number of factors, including location and size of the samples or drill holes 2 Carats per hundred tonnes 3Represents only stones retained on a +1 or greater DTC screen 4Represents only stones retained on a +0.85mm square mesh screen

In March of 2008 Stornoway also reported diamond recovery results from the Aviat Project’s AV1 and AV2 Upper kimberlites, located on the Melville Peninsula in eastern Nunavut, Canada. A total of 48.9 dry tonnes of material from the AV1 kimberlite was collected in 2007 and processed by Dense Media Separation (DMS), recovering 43.41 carats of diamonds for an indicated diamond content of 89 carats per hundred tones (cpht) for stones retained on a 0.85mm square mesh screen. The three largest diamonds recovered from this work were a 0.53 carat colourless macle, a 0.50 carat grey clivage and a 0.49 carat colourless macle.

Previously reported results (Stornoway press release of October 21, 2004) from AV1 comprised 8.54 carats of diamonds recovered from 10.28 dry tonnes of processed material, for an indicated diamond content of 83 cpht (stones retained on a 0.85mm square mesh screen). The largest diamond recovered from this previously reported work was 0.40 carats. Combining this historical result with the new DMS data reported above provides a ‘global’ summary for the AV1 body of 88 cpht (51.95 carats from 59.19 dry tonnes).

Also during 2007, a total of 6.24 dry tonnes of the AV2 Upper kimberlite was collected and processed by DMS to yield 4.99 carats of diamonds for an indicated diamond content of 80 cpht for stones retained on a 0.85mm square mesh screen. The three largest diamonds recovered from this work were a 0.30 carat colourless broken octahedron, a 0.23 carat colourless octahedron and a 0.13 carat grey tetrahexahedroid.

Details of the new AV1 and AV2 Upper results are provided below:

Kimberlite	Dry wt. (tonnes)	+0.850 mm	+1.18 mm	+1.70 mm	+2.36 mm	+3.35 mm	No. Stones >0.85mm	No. Stones >1.18mm	Carats Recovered1	Diamond Content2 (cpht)3
AV1	48.91	1035	485	137	36	5	1698	663	43.41	89
AV2 Upper	6.24	139	73	12	2	0	226	87	4.99	80
1 Represents stones retained on a +0.85mm square mesh screen 2 The estimated diamond content, expressed as carats per hundred tonnes, may not be representative of the overall diamond content of the body due to a number of factors, including location and size of the samples 3 Carats per hundred tonnes

The AV9 pipe, discovered at the end of the 2007 field season, is described as a transitional kimberlite pipe, containing both macrocrystic hypabyssal and transitional hypabyssal breccia phases. The initial 2007 drilling intersected kimberlite within a horizontal area measuring approximately 60 x 60 meters, and to a vertical depth greater than 100 meters, but neither the lateral nor vertical extent of AV9 could be determined at that time. Caustic fusion of 307.26kg (dry) of kimberlite core from AV9 returned 236 diamonds (stones retained on a 0.106mm square mesh sieve), conclusively demonstrating that the body was diamondiferous and comparable to other kimberlite bodies at the Aviat Project (see press release of December 12, 2007). Drilling at AV9 in 2008 consisted of nine holes (two incomplete) totalling 1,144m. Of the holes that cut the AV9 body, kimberlite intersections ranged from 19.1m to 195.4m, suggesting a lenticular shaped body. The latter hole collared in kimberlite and remained in kimberlite until the end of the hole at 215m, suggesting a minimum vertical depth of 175m below current surface for the AV9 body. Kimberlite core has been submitted for caustic fusion analysis, and results will be reported when available.

Diamond results reported above are based on work completed by Microlithics Laboratories, Thunder Bay, Ontario, an independent mineral process laboratory currently providing services exclusively to Stornoway and its affiliates. The samples were processed through a 1.5 tonne per hour (tph) DMS plant designed to recover stones retained on a 0.85mm square mesh sieve. Kimberlite was prepared through a primary jaw crusher, with -10 mm material fed directly into the DMS. All +10 mm material was subsequently reduced through secondary cone crushing. DMS concentrates were submitted for caustic fusion and the residues hand sorted to extract diamonds. As part of Stornoway’s ongoing QA/QC programs, DMS tails, concentrate residues and other materials are subject to audit. Stornoway’s diamond exploration programs are conducted under the direction of Robin Hopkins P.Geol. (NT/NU), Vice President, Exploration, a Qualified Person under NI 43-101.

Planned Exploration Activities for 2009

Stornoway expects to conduct a market valuation exercise on the full parcel of diamonds recovered from the ES1 kimberlite sheet, once the world rough diamond market, which is currently experiencing internal financial volatility, has stabilized such that pricing information suitable for long term, advanced level, exploration planning can be obtained. Although this valuation work, being based on a small parcel of diamonds, will provide only a preliminary sense of the average diamond price at Aviat, it will be sufficient, in conjunction with the October 2008 conceptual study, to provide a qualified estimate of value contained within the ESC. This estimate will in turn support subsequent desktop studies aimed at determining optimum mining scenarios for the ESC. The conclusions of these studies will dictate the nature and type of future sampling required to obtain a National Instrument (”NI”) 43-101 compliant mineral resource statement at Aviat.

During the year ended April 30, 2009, the Company wrote-off capitalized acquisition and exploration costs totaling $5.1 million, which can be attributed to parts of the land package no longer retained by the Company, including all of the Aviat Two property interest. The carrying value of Aviat One as at April 30, 2009 is $20.7 million. Please see the section “Critical Accounting Estimates – Impairment of Long-lived Assets” below for a description of the impairment testing completed for the Aviat One Property during the year ended April 30, 2009.

Churchill Property, Nunavut

The Company acquired an initial 35% interest in the diamond rights to the Churchill Property pursuant to a letter agreement dated June 13, 2002. A joint venture agreement was executed as of August 1, 2004, among the Company, BHPB and Shear Minerals Ltd. (“Shear”). In July 2007, Stornoway increased its interest in the Churchill property to 41.86% by acquiring a portion of BHPB’s interest in the Churchill Project in consideration of a cash payment of $1,250,000 and by issuing 2,200,000 common shares with a fair value at the time of issuance of $2,134,000. Shear acquired the remainder of BHPB’s interest concurrently. As a result, Shear and Stornoway now own a 58.14% and 41.86% interest, respectively, in the project. The Churchill Property is subject to a 2% GOR/NSR in favour of Hunter. Hunter retained the non-diamond mineral rights to the property and has since transferred those rights to a third party. Stornoway elected not to participate for its share of the 2008 exploration budget. As a consequence of this election, its ownership in the Churchill Project could potentially dilute from 41.86% to approximately 38%. As of the report date, the Company does not know the full cost of the 2008 exploration program, and has not been informed by Shear of any dilution calculations.

The Churchill Diamond Project currently encompasses approximately 742,000 acres situated on the mainland tundra (barren lands), near the community of Rankin Inlet in the Kivalliq Region of Nunavut, Canada. Shear is operator of the Churchill Diamond Project.

Exploration on the property commenced in 2002 with an airborne magnetic survey and progressed in subsequent years with sampling, prospecting, drilling and analysis. In 2007, a bulk sample was completed from three pits on the Kahuna kimberlite and a further 16 kimberlite occurrences were identified in outcrop and subcrop. In June 2008, the Company announced that additional macrodiamonds had been recovered from an audit of tails from each of the three 2007 Kahuna bulk samples. Based on the results of the audit, the calculated diamond grade for Kahuna has the potential to increase from 96 cpht to 104 cpht. Shear was reportedly in the process of finalizing arrangements for an independent market valuation exercise for the Kahuna diamonds, to be conducted in Antwerp, Belgium.

In July 2008, Stornoway and Shear announced that the joint venture approved up to a $3.8 million exploration program for 2008 including: mini-bulk sampling of the Notch kimberlite, 400 infill till samples, testing of ground gravity and ground penetrating radar surveys over known diamondiferous kimberlite dyke structures, intensive prospecting and structural interpretation over high priority geochemical areas, testing of 25-50 targets with a lightweight drill, late summer core drilling to test up to 20 targets, selected ground magnetic surveys over new areas and ongoing environmental baseline data collection and reclamation. Stornoway elected not to participate for its share of the 2008 exploration budget.

In September 2008, Shear informed Stornoway that a total of nine new kimberlites had been discovered from prospecting and drilling in 2008, bringing the total to 88 known kimberlite occurrences on the property to date. Shear also collected 26.1 wet tonnes of kimberlite from surface exposures of the Notch kimberlite, tested 40 targets with a reverse circulation drill resulting in the discovery of two kimberlites, completed 14 core drillholes testing 10 targets resulting in the discovery of one new high-interest kimberlite system, discovered 24 new kimberlite float occurrences plus seven new outcrop/subcrop occurrences, collected 455 till samples to infill known priority areas and undertook limited ground geophysical surveys. Outstanding exploration results expected from the 2008 Churchill work program include macrodiamond results from DMS processing of the 26 tonne Notch kimberlite, additional microdiamond analyses from drilling and prospecting discoveries, and indicator mineral results from till samples. A total of 11 drillholes from seven setups have been drilled into the vertical, 1.5m wide, Notch kimberlite dyke, which trends for more than 3 km based on geophysical interpretation. As at the report date, Shear had not yet proposed a program for 2009.

During the year ended April 30, 2009, the Company wrote-off capitalized acquisition and exploration costs totaling $6.8 million for the Churchill property interest, after determining that an impairment existed. The carrying value of Churchill, subsequent to this write-down, is $7.9 million as at April 30, 2009. Please see the section “Critical Accounting Estimates – Impairment of Long-lived Assets” below for a description of the impairment testing completed for the Churchill Property during the year ended April 30, 2009.

Qilalugaq Property, Nunavut

The Qilalugaq Property is 1.04 million acres and lies on the Melville Peninsula in Nunavut. The Qilalugaq property was acquired by BHPB in 2001 and has undergone several phases of exploration using airborne geophysics (magnetics, electromagnetics and gravity surveying), together with property wide till sampling, drilling and limited mini-bulk sampling. Eleven kimberlites were discovered by BHPB as a result of this work, ten of these were analysed and proven diamondiferous. The Qilalugaq bodies share geological similarities with the Aviat bodies and appear to be the same age. The largest kimberlite identified by BHPB is a complex made up of the Qilalugaq 1, 2, 3, and 4 pipes which coalesce to form a body with an approximate area of 14 ha. Other drill confirmed bodies range in size from 0.8 to 11.0 ha based on interpretation of geophysical data. A mini-bulk sample of 229.7 dry tonnes extracted from the Qilalugaq 1-4 (Q1-4) complex by RC and core drilling returned a total of 61.37 carats (for stones greater than 1.1 mm), indicating a calculated diamond content of 27 cpht. The Q1 body, approximately 5.4 ha in size, was not tested with RC drilling and is therefore under represented in this mini-bulk sample. Stornoway has subsequently discovered seven additional dyke-like kimberlite bodies by prospecting, bringing the total of kimberlites known on the property to 18. Under the terms of an option agreement signed between BHPB and Stornoway on July 10, 2006 and as revised June 5, 2008, Stornoway can earn 50% in the project from BHPB by spending $9 million before December 31, 2012.

During the 2007 diamond exploration program at the Qilalugaq project, Stornoway discovered four new kimberlite dykes by prospecting (Naujaat 3 through Naujaat 6, inclusive) and collected almost 27 wet tonnes of kimberlite from five bodies for macrodiamond recovery through a DMS plant, including an estimated 22.3 tonnes from the Q1 (aka A28) pipe, 0.7 tonnes from Naujaat 1, 1.0 tonne from Naujaat 2, 1.8 tonnes from Naujaat 3 and 1.1 tonnes from Naujaat 6.

In June 2008, Stornoway reported results from DMS processing of the single 20.28 dry tonne sample collected during 2007 from the outcropping Q1 (aka A28) kimberlite. This sample returned a total of 6.081 carats of diamonds, indicating a diamond content of 30 cpht for stones retained on a 0.85mm square mesh screen. The largest intact diamond recovered from this sample was a 0.37 carat light brown irregular stone. Some 25 pieces of a larger but mechanically broken colourless stone were recovered, representing an original crystal weight of at least 0.7925 carats. Other unrecognized fragments of this diamond may impact the stone counts. The Q1 (A28) diamonds are described as a mix of mostly octahedral and tetrahexahedroid forms. Stone colours range from colourless to light brown, with a small component of yellows.

Sample	Dry Weight (tonnes)	No. Stones >0.85mm	Carats1	Diamond Content2 (cpht)3	Largest Diamonds (carats)
2007 Q1 (A28)	20.28	193	6.081	30.0	0.793, 0.37, 0.36, 0.29
1 Represents stones retained on a +0.85mm square mesh screen 2 The estimated diamond content, expressed as carats per hundred tonnes, may not be representative of the overall diamond content of the body due to a number of factors, including location and size of the sample 3 Broken stone (minimum weight as measured from 25 recovered pieces)

Small 2007 DMS samples collected from Naujaat 1, 2, 3 and 6 were processed to gain greater information on potential macrodiamond content. The reader is cautioned about drawing conclusions from the processing of small samples especially when dealing with lower grade kimberlite bodies. Apparent variations or discrepancies in diamond content may be attributable to natural factors, surficial weathering, collection issues, processing and recovery parameters, etc. Although the sample sizes are too small to accurately reflect total diamond content, only the Naujaat 1 body returned any diamonds on the 0.85mm or greater square mesh screen, as reported below.

Sample	Dry Weight (tonnes)	No. Stones >0.85mm	Carats1	Diamond Content2 (cpht)3	Largest Diamonds (carats)
Naujaat 1	0.588	4	0.0305	5.2	0.0080
Naujaat 2	0.913	0	n/a	n/a	n/a
Naujaat 3	1.703	0	n/a	n/a	n/a
Naujaat 6	0.998	0	n/a	n/a	n/a
1 Represents stones retained on a +0.85mm square mesh screen 2 The estimated diamond content, expressed as carats per hundred tonnes, may not be representative of the overall diamond content of the body due to a number of factors, including location and size of the sample

The 2008 exploration program focused on un-sourced indicator mineral trains with promising chemistry, and on September 04, 2008, Stornoway announced discovery of a new kimberlite body, Naujaat 7, bringing the total to 18 kimberlites on the property. Naujaat 7 was identified from a linear series of discontinuous occurrences of frost heaved kimberlite fragments and boulders extending over a 700m strike length. The host structure is as narrow as 1-2m in places and, based on the presence of associated alteration, can be traced for a minimum additional strike length of 1.3km and possibly for as much as 6km total. Naujaat 7 has been confidently traced over only 700m of that 6km, and a small sample has been collected for diamond recovery by caustic fusion.

No drilling or mechanized trenching has been undertaken on any of the Naujaat 1 to Naujaat 7 kimberlite dykes and they have been identified from surface expressions only. Surface expressions of kimberlite subcrop, float boulders and disaggregated frost heaved ‘green tills’ are exposed intermittently along the host structures and lateral continuity is not assured. Similarly, reported widths are based on widths of the host structure, where constrained by outcropping country rock, and may not reflect true width. Many of the structures are open along strike and have not been completely prospected (see summary table below). All of these bodies lie within a 26 km long, structurally favourable belt that appears to have been exploited by kimberlite magmas rising from the mantle, including the 11 kimberlite pipes discovered previously (0.8 to 11.0 ha based on drilling and interpretation of geophysical data).Prospecting in the vicinity of other unsourced mineral trains on the property did not discover any other kimberlite,and as a consequence these anomalous areas remain unexplained. Additional till samples were collected in 2008 to help identify the source bodies.

Kimberlite	Discovery Date	Prospected Length (subcrop, float, etc.)	Width of Host Structure
Naujaat 1	2006	3160 m	4.5 m west end1.5 m east end	West-Northwest
Naujaat 2	2006	1400 m	2.3 m	West-Northwest
Naujaat 3	2007	3000 m	5 m	West-Northwest
Naujaat 4	2007	100 m	Unknown	West-Northwest
Naujaat 5	2007	2000 m	4 m	East to West
Naujaat 6	2007	500 m	3 m	East to West
Naujaat 7	2008	700 m	1-2 m	East to West

Surface expressions of kimberlite subcrop from Naujaat 1 to 4, Naajaat 6 and Naujaat 7 were sampled to determine microdiamond content by caustic fusion analysis. The Naujaat 5 kimberlite occurs only as disaggregated frost heaved ‘green tills’ for which no fresh representative sample could be collected. Naujaat 7 has not yet been processed due to current financial constraints. Available caustic fusion results are summarized in the table below. Recovery of +0.60 and +0.85mm stones from Naujaat 1 and Naujaat 4 during caustic fusion is considered to be a positive development.

Body	Sample Weight (kg)	NUMBER OF DIAMONDS PER SIEVE SIZE (MM SQUARE MESH SIEVE)							Total Stone Count
		+0.106 mm	+0.150 mm	+0.212 mm	+0.300 mm	+0.425 mm	+0.600 mm	+0.850 mm
Naujaat 1	320.89	76	40	33	27	12	3	0	191
Naujaat 2	71.80	9	4	4	2	0	0	0	19
Naujaat 3	243.30	0	8	4	2	2	0	0	16
Naujaat 4	94.75	13	12	13	2	1	1	1	43
Naujaat 5	0.00	insufficient fresh material for meaningful caustic fusion sample
Naujaat 6	158.40	14	14	5	1	1	0	0	35
Naujaat 7	~44.00	results pending

An expectedly long drill program associated with the ongoing development of a conceptual kimberlite resource at Stornoway’s Aviat Project, coupled with other logistical considerations, prevented the drilling of promising geophysical targets on the Qilalugaq Property during the 2008 season. Additional work for 2009 may occur, pending financial and logistical concerns.

Timiskaming Diamond Project, Ontario/Quebec

The Timiskaming Diamond Project is located in northeastern Ontario/northwestern Quebec. The Company, through its wholly-owned subsidiary Contact Diamond Corporation (“Contact”) currently maintains a 100% interest in over 280,000 acres of exploration licenses and has to date discovered nine kimberlite bodies in the region. The 95-2 pipe on the property yielded a population of highly commercial diamonds at marginally sub-economic grades in a minibulk sample program conducted between 2003 and 2004. Between 2005 and 2006, Contact identified several new kimberlitic indicator mineral trains in the area suggesting the existence of multiple, to date undiscovered kimberlites in the area. Stornoway commenced exploration on landholdings in the Timiskaming area in mid-May 2007, after acquiring Contact, and to date has completed a detailed airborne survey over the head of un-sourced mineral distribution trains on the Elk Lake Property; undertaken anomaly checking and ground geophysical surveys of potential targets; collected detailed till sampling over specific areas of interest; and continued regional exploration activities. No targets were drill tested during 2008, and plans for 2009 remain on hold due to current market conditions.

Nunavut, NWT and Alberta Properties (Various Interests)

The Company maintains interests in a number of properties in Nunavut and the Northwest Territories, including the Itza, IC/TIM, Mackenzie, Blackstone, RAM/SHU and Calling Lake properties. Please see the Company’s AIF, available on SEDAR at www.sedar.com, for information on these properties.

Hammer Property

Stornoway acquired large land packages in the Coronation Gulf (North Slave) Diamond District during 2001 and 2002. A joint venture was subsequently signed with Navigator Exploration Corporation (now Strongbow Exploration Inc.) governing exploration on a group of mineral claims known as the Bear Property. North Arrow Minerals Inc. acquired Strongbow Exploration Inc.’s interest in the Bear Project as part of a May 2007 plan of arrangement. Historical till sampling identified an indicator mineral train with chemistry indicative of a potentially diamond bearing kimberlitic intrusive, and suggested the source was outside the original Bear Property. The Bear Property joint venture was revised to include an area of interest (AOI) outside of the original Bear Property claims, known as the “Hammer AOI”. A claim was staked in October of 2008 to cover the potential source area and adjoins one of the claims remaining from the original Bear Property. A joint venture covering the area of interest (the two claim 2,533 acre Hammer Property) was signed between Stornoway (75%) and North Arrow Minerals Inc. (25%). Stornoway is the operator. Till sampling was carried out on the Hammer Property in 2008 and results available to date suggest the source of anomalous indicator minerals lies within the current claims. Work plans for 2009 are still under consideration.

Other Properties (Various Interests)

Stornoway and its wholly owned subsidiaries hold varying interests in a number of other minor diamond properties and prospects, as well as significant regional geological, geochemical and geophysical databases. Stornoway reviews these properties and databases as time allows, in addition to other properties or information that may become available, in order to ensure that the Company continues to maintain a portfolio of promising diamond projects that fill the ‘pipeline’ from grassroots to development stage. Exploration activities, including drilling, will be undertaken where warranted and where permitted by logistical and budgetary considerations. Results will be reported as appropriate.

Stornoway undertook generative exploration programs throughout Canada during 2007 and 2008. This work investigated geologically prospective terrains, un-sourced indicator mineral anomalies derived from public, quasipublic and proprietary databases and unexplained geophysical targets from both ground and airborne surveys. Till and heavy mineral sampling, airborne and ground geophysical surveys and prospecting programs were completed in 2008. Rock samples were collected for both caustic fusion and DMS processing. Partial results available to date from this 2008 generative exploration program have been, and will continue to be, used to identify and acquire targeted landholdings thought to have the potential to host diamondiferous kimberlites. Results for additional work are pending and Stornoway anticipates continued property acquisitions and exploration work, subject to funds being available for grass-roots exploration and the Company’s ability to fund its other exploration priorities.