Mr. Matt Manson reports

STORNOWAY ANNOUNCES FUNDING OF FIRST TRANCHE OF STREAM FINANCING

Stornoway Diamond Corp. has successfully completed the drawdown of the first $80-million (U.S.) tranche of diamond stream financing from Orion Mine Finance and the Caisse de depot et placement du Quebec (CDPQ). Under Stornoway's $946-million project financing transaction, which closed on July 8, 2014, a total of $250-million (U.S.) in upfront stream payments was committed by Orion and the CDPQ to finance in three tranches, scheduled for March, 2015, September, 2015, and March, 2016. Drawdown of each tranche is conditional upon the satisfaction of certain terms and conditions, including the independent certification of construction progress at the Renard diamond project and its cost to complete being within plan. With these conditions having been met, the first stream tranche has been financed on schedule.

As of Jan. 31, 2015, Stornoway's cash, cash equivalents and short-term investments stood at $322-million. Stornoway's current cash resources are sufficient to cover all planned mine development expenses, financing and corporate costs into calendar 2016. Following financing of the second and third tranches of stream payments, Stornoway expects to draw on a $100-million senior secured loan in late 2016 to complete mine development at Renard, which has a capital budget (including contingencies and escalation allowances) of $811-million. Given the recent devaluation of the Canadian dollar, Stornoway will realize a significant foreign exchange gain on the U.S.-dollar-denominated stream payments over and above the Canadian-dollar-denominated July, 2014, financing plan, should the U.S. dollar continue to trade above $1.10 for the next 12 months. This is expected to provide additional financing flexibility to the corporation. Construction progress at Renard continues on budget and schedule.

About the Renard diamond project

The Renard diamond project is located approximately 250 kilometres north of the Cree community of Mistissini and 350 km north of Chibougamau in the James Bay region of north-central Quebec. On July 8, 2014, Stornoway announced the completion of a $946-million project financing transaction to fully finance the project to production, and construction commenced on July 10, 2014. First ore is scheduled to be delivered to the plant in the second half of 2016, with commercial production scheduled for the second quarter of 2017.

In January, 2013, Stornoway released the results of an optimized feasibility study at Renard, which highlighted the potential of the project to become a significant producer of high-value rough diamonds over a long mine life. Probable mineral reserves, as defined in National Instrument 43-101, stand at 17.9 million carats. Total indicated mineral resources, inclusive of the mineral reserve, stand at 27.1 million carats, with a further 16.85 million carats classified as inferred mineral resources, and 25.7 million to 47.8 million carats classified as non-resource exploration upside. Average annual diamond production is forecast at 1.6 million carats/year over the first 11 years of mining, at an average valuation of $190 (U.S.)/carat, based on a March, 2014, assessment by WWW International Diamond Consultants Ltd.

Readers are cautioned that the potential quality and grade of any target for further exploration are conceptual in nature, there has been insufficient exploration to define a mineral resource, and it is uncertain if further exploration will result in the target being delineated as a mineral resource. All kimberlites remain open at depth. Readers are referred to the technical report dated Feb. 28, 2013, in respect of the January, 2013, optimization study, and the press release dated July 23, 2013, in respect of the July, 2013, mineral resource estimate, for further details and assumptions relating to the project. Disclosure of a scientific or technical nature in this press release was prepared under the supervision of Patrick Godin, PEng (Quebec), chief operating officer, and Robin Hopkins, PGeol (NT/NU), vice-president, exploration, both qualified persons under National Instrument 43-101.

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