Grizzly Diamonds Ltd.
TSX VENTURE : GZD
FRANKFURT : G6H

Grizzly Diamonds Ltd.

December 30, 2009 14:45 ET

Grizzly Diamonds Closes Private Placement

EDMONTON, ALBERTA--(Marketwire - Dec. 30, 2009) - Grizzly Diamonds Ltd. ("Grizzly" or the "Corporation") (TSX VENTURE:GZD) (FRANKFURT:G6H) today announced that it has closed a non-brokered private placement of an aggregate of 1,033,000 units ("Units") at a price of $0.40 per Unit and an aggregate of 912,499 flow-through units ("FT Units") at a price of $0.45 per FT Unit for gross proceeds of $823,825.

Each Unit consisted of one common share of the Corporation ("Common Share") and one non-transferable share purchase warrant ("Warrant") entitling the holder to acquire one additional Common Share at a price of $0.50 prior to December 30, 2010 and $0.60 on or after December 30, 2010, provided that the Warrants will expire on the earlier of: (a) 30 days following the issuance of a press release by the Corporation that the trading price of the Common Shares on the TSX Venture Exchange is at or greater than $0.80 per Common Share for ten consecutive days; and (b) December 30, 2011.

Each FT Unit consisted of one Common Share issued as a "flow-through share" ("FT Share") pursuant to the Income Tax Act (Canada) and one non-transferable share purchase warrant ("FT Unit Warrant"). Each FT Unit Warrant entitles the holder to acquire one additional Common Share at a price of $0.55 prior to December 30, 2010 and $0.65 on or after December 30, 2010, provided that the FT Unit Warrants will expire on the earlier of: (a) 30 days following the issuance of a press release by the Corporation that the trading price of the Common Shares on the TSX Venture Exchange is at or greater than $0.80 per Common Share for ten consecutive days; and (b) December 30, 2011.

In connection with the sale of 121,944 FT Units, the Corporation paid CIBC World Markets the sum of $4,390 (representing 8% of the gross proceeds from the sale of such FT Units) issued non-transferable share purchase warrants ("Finder's Warrants") to acquire an aggregate 12,194 Common Shares (representing 10% of such FT Units) on the same terms as the Warrants.

The Units and FT Units were sold to qualified purchasers in reliance upon exemptions from the prospectus and registration requirements of applicable securities legislation. The Common Shares and Warrants comprising the Units, the FT Shares and FT Unit Warrants comprising the FT Units, the Finder's Warrants, together with any Common Shares issued pursuant to the exercise of the Warrants, FT Units Warrants, and Finder's Warrants, will be subject to a restricted period expiring on May 1, 2010.

The proceeds from the sale of the FT Shares will be used to incur expenditures which qualify as Canadian Exploration Expenses on the Corporation's precious metals properties in British Columbia.

About Grizzly

Grizzly is an aggressive Canadian exploration company focused on exploring for world class gold and base metal deposits in British Columbia and diamonds and industrial minerals in Alberta. In British Columbia, Grizzly currently has five precious-base metal properties totaling over 210,000 acres. It currently holds more than 1 million acres in diamond properties which host diamondiferous kimberlites in the Buffalo Head Hills and Birch Mountains of Alberta. Grizzly also holds metallic and industrial mineral permits for potash totaling more than 1.4 million acres along the Saskatchewan-Alberta border.

Grizzly trades on the TSX Venture Exchange under the symbol GZD, with 25,831,969 Common Shares issued and outstanding.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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