Shear Diamonds Ltd.
TSX VENTURE : SRM

February 14, 2011 09:30 ET

Shear Diamonds Ltd. Signs Agreement with Nunavut Resources Corp.

EDMONTON, ALBERTA--(Marketwire - Feb. 14, 2011) - Shear Diamonds Ltd. ("Shear") (TSX VENTURE:SRM) is pleased to announce the signing of a Mutual Co-Operation Agreement with the Nunavut Resources Corporation ("NRC"). The agreement was signed by Pamela Strand, President of Shear and Charlie Evalik, NRC Chairman, and is the first of its kind to be signed with the NRC. It sets out as its initial priority, specific provisions for mutual cooperation in the examination of infrastructure and other development opportunities associated with the potential re-development of the Jericho Diamond Mine which was acquired by Shear on August 27, 2010.

"We are delighted to formalize our growing cooperation with the NRC, through a document that defines Shear's partnership with the Nunavut Resources Corporation.", says Pamela Strand, Shear President, "In signing this document, we at Shear are excited to demonstrate our commitment to being an active corporate citizen within the Nunavut community. This alliance has the potential to maximize mutual benefits at the Jericho Diamond Mine or wherever Shear operates in Nunavut."

The NRC is an Inuit-owned corporation dedicated to achieving participation and ownership in Nunavut's major resource developments. The NRC will enhance Nunavut's economic outlook through the development and deployment of a capital investment base that strategically invests in prospective regional projects. NRC investments may take the form of direct equity participation in resource companies operating in Nunavut, or through the development of key infrastructure that supports existing and prospective projects while generating revenues. The NRC is also intended to enhance business, employment and training opportunities for Nunavummiut, provide a basis for senior Canadian financial and investment managers to work together with Inuit, secure an Inuit voice at the senior corporate level, and influence the pace and nature of development in Nunavut.

The Jericho Diamond Mine is Nunavut's first and only diamond mine. It is located 420 km northeast of the City of Yellowknife and is accessible by air all year and by winter road from Yellowknife. The project was mined from 2006 to 2008, and produced 780,000 carats of diamonds from 1.2 million tonnes of kimberlite mined from the open pit operation. Over $200 million was invested in the development of the Jericho operations including the construction of a 2,000 tonne per day diamond recovery plant, maintenance facility, fuel farm, and offices and accommodation for 225 personnel.

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 its recently acquired Jericho Diamond Mine and surrounding exploration assets, located in the Kitikmeot region of Nunavut. 

On behalf of the Board of SHEAR DIAMONDS LTD.

Pamela Strand, P. Geol., President & CEO

Julie Lassonde, Executive Chairman

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.

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