Shear Diamonds Ltd.
TSX VENTURE : SRM

Shear Diamonds Ltd.

October 06, 2011 15:11 ET

Shear Announces the Recovery of 200.85 Carats of Diamonds and Completion of New Geological Model, Jericho Diamond Mine, Nunavut

TORONTO, ONTARIO--(Marketwire - Oct. 6, 2011) - Shear Diamonds Ltd. (TSX VENTURE:SRM) today announces the recovery of the first 200 carats of diamonds from trial tests performed in the recently restarted recovery portion of Shear's 100% owned Jericho Diamond Mine, Nunavut. In addition Shear has completed a new geological interpretation and 3- D Model for the Jericho Kimberlite Complex.

"The recoveries are an important part of proving Jericho's real potential, and speaks to the lost grade from past operations. We are excited to see that the diamond recoveries from the recovery rejects tailings pile are in line with audits done by both Tahera and Shear (refer to press release dated Februrary 8, 2011)" says Julie Lassonde, CEO and Chair of Shear. "Diamond recoveries continue during our plant trial, which has seen periodic stoppages to address the inevitable issues which arise in recommissioning a circuit that has been dormant for the past three years. Shear's ultimate goal is to generate cash flow from diamond sales in the coming months and continuing through all of 2012."

The diamond recoveries total 200.85 carats from 22.1 wet tonnes of recovery reject and coarse processed kimberlite. 14 stones greater than 0.5 cts have been recovered and the four largest stones are 1.907, 0.978, 0.974, and 0.775 cts respectively.

The diamond recovery process includes on site processing of material through a crusher, sorted and fed through the WHIMS, then an X-ray flow sort and grease table followed by on site manual diamond recovery and sorting. Shear is reporting total diamond recoveries since the material being processed has already been run through the plant during past operations is not representative of the overall diamond count of the Jericho Kimberlite Complex as stated in the resource.

Geology Update

Mineral Services Canada ("MSC") was contracted to undertake a detailed geological analysis of all available historical drill core (49 drill holes in total) complemented by systematically collected thin sections and polished slabs (851 in total) for petrographic analysis. Twelve kimberlite types and 13 domains were defined. Shear believes this model better reflects the kimberlite emplacement processes at work within the Jericho Kimberlite Complex. The purpose of this exercise is to provide a basis for increased confidence in geological continuity for future mine planning.

The Jericho Kimberlite Complex is interpreted to represent a series of pyroclastic kimberlite eruptions that were emplaced in a general south to north direction from two vents known as the South/Central and North Lobes. Geologic complexity arises from the mixing of these events as well as the presence of remnants of interpreted earlier phases found in areas not previously identified by Tahera‟s previous geological model.

Geostrat Consulting Services ("Geostrat") was retained to develop the 3-D Geological Model of the Jericho Kimberlite Complex using Gemcom modeling software. This process involved working closely with MSC to help develop robust geological domains that represent a volcanologically permissive model with manageable mining parcels that can be evaluated for grade modeling and/or reconciliation.

Geostrat is also working to best, back‟-reconcile grades from mining production to the newly interpreted 3- D Model geology, but given that insufficient data was recorded over the mine life to link recovered carats back to the mining blocks from which they came, Shear will use this information to complement the new model, with plans to complete its own due diligence in the next 12-18 months. Recommended follow up work includes collection of geologically defined bulk samples from within the pit for the purpose of grade estimation and diamond valuation plus additional drilling.

Shear also announces the departure of Jennifer Burgess, VP Exploration. The Board of Directors would like to thank Jennifer for her many years of service. Pamela Strand., P. Geol., Shear's President and a qualified person for purposes of National Instrument 43-101 will be assuming Jennifer's duties.

About Shear Diamonds Ltd.

Shear is a Canadian-based company focused on diamond exploration and development in Canada's North, where it explores established diamond districts and has discovered new ones. Shear currently has a portfolio of eight diamond projects, including three advanced projects with development potential. Shear holds a 100% interest in Jericho Diamond Mine and surrounding exploration assets, located in the Kitikmeot region of Nunavut.

Qualified Person

Pamela Strand, P. Geol., Shear's President is a qualified person for purposes of National Instrument 43- 101 who supervised the preparation of the information forming the basis for this press release.

On behalf of the Board of SHEAR DIAMONDS LTD.

Julie Lassonde, CEO & Executive Chairman

Pamela Strand, P. Geol., President

This news release may contain forward looking statements, being statements which are not historical facts, including, without limitation, statements regarding potential mineralization, exploration results, resource or reserve estimates, anticipated production or results, sales, revenues, costs, "best-efforts" financings or discussions of future plans and objectives. There can be no assurance that such statements will prove accurate. Such statements are necessarily based upon a number of estimates and assumptions that are subject to numerous risks and uncertainties that could cause actual results and future events to differ materially from those anticipated or projected. Important factors that could cause actual results to differ materially from Shear's expectations are in its documents filed from time to time with the TSX or the TSX Venture Exchange and provincial securities regulators, most of which are available at www.sedar.com. Shear disclaims any intention or obligation to revise or update such statements.

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

Contact Information

  • Shear Diamonds Ltd.
    Julie Lassonde
    CEO & Executive Chairman
    416-479-8728 or 1-866-298-9695

    Shear Diamonds Ltd.
    Pamela Strand
    P. Geol., President
    416-479-8728 or 1-866-298-9695
    www.sheardiamonds.com