Shear Minerals Ltd.
TSX VENTURE : SRM

Shear Minerals Ltd.

May 23, 2006 17:52 ET

Shear Minerals Ltd. Closes $2.95 Million Private Placement

EDMONTON, ALBERTA--(CCNMatthews - May 23, 2006) - Shear Minerals Ltd. ("Shear") (TSX VENTURE:SRM) today announced that it closed a non-brokered private placement of units 1,228,500 ("Units") at a price of $0.65 per Unit and 3,073,500 flow-through common shares of Shear ("FT Shares") at a price of $0.70 per FT Share for aggregate gross proceeds of $2,949,975. Each Unit consisted of one common share of Shear ("Common Share") and one-half of a non-transferable share purchase warrant ("Warrant"). Each whole Warrant entitles the holder to acquire an additional Common Share at a price of $0.80 at any time within 18 months of issuance. Insiders of Shear purchased an aggregate of 62,500 FT Shares.

The FT Shares and Units were sold to qualified purchasers in reliance upon exemptions from the prospectus and registration requirements of applicable jurisdictions in reliance upon exemptions from the registration and prospectus requirements of applicable securities legislation. The proceeds from the sale of FT Shares will be used to incur expenditures which qualify as Canadian Exploration Expenses and will be spent primarily on Shear's Churchill Diamond Project in Nunavut.

In connection with the sale of the FT Shares and Units, Shear paid cash finder's fees to Integral Wealth Securities Limited, Blackmont Capital Inc., Emerging Equities Inc., Canaccord Capital Corporation and M. Kaufmann (collectively, the "Finders") in the aggregate amount of $195,210.93 and also issued to the Finders non-transferable warrants ("Finder's Warrants) entitling the holder to acquire an aggregate of 284,676 Common Shares at a price of $0.65 per Common Share at anytime within 18 months following closing of the Offering.

The FT Shares, Common Shares and Warrants comprising the Units, the Finder's Warrants and the Common Shares issuable upon exercise of the Warrants and Finder's Warrants are subject to a restricted period which expires on September 20, 2006.

Shear Minerals Ltd. is a Canadian-based exploration company focused on diamond exploration in the Canadian North where it explores in established diamond districts and has discovered new ones. Shear currently has a portfolio of nine diamond projects, six of which are drill-ready. The Company has advanced its 51%-owned Churchill Diamond property in Nunavut from a conceptual grassroots project to a new kimberlite district.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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