RAPAPORT...  Stornoway Diamond Corporation  closed a $22 million private placement comprising 24,444,444 common shares at a price of 90-cents per common share split equally between Agnico-Eagle Mines Limited and Lorito Holdings Limited. As a result of the private placement, Stornoway is now debt-free.

Agnico-Eagle and Lorito held, equally between them, convertible debentures in the aggregate principal amount of $20 million, which were due in March 2009.  Agnico-Eagle and Lorito agreed to amend the debentures to permit Stornoway to redeem them prior to the maturity date in consideration for an additional $2 million payment to be split equally between Agnico-Eagle and Lorito. 

The proceeds of the private placement were required to redeem the $10 million principal amount of convertible debentures held by each of Agnico-Eagle and Lorito and to make the $2 million  payment in respect of the amendment of the debentures. 

On July 31, 2008, Stornoway issued a further 1,055,894 common shares in payment of interest payable on the convertible debentures to the redemption date in the amount of $289,315. 

As a result of the private placement, Agnico-Eagle's holdings have  increased to 40,270,978 common shares, representing approximately 17.7 percent of Stornoway's common shares issued and outstanding.