Shear Minerals Ltd.

Shear Minerals Ltd.

August 30, 2005 12:02 ET

Shear to Proceed with Spin-out Transaction

EDMONTON, ALBERTA--(CCNMatthews - Aug. 30, 2005) - Shear Minerals Ltd. (TSX VENTURE:SRM) ("Shear") today announced that the acquisition of the non-diamond rights in six properties from Hunter Exploration Group, including the non-diamond rights to the Churchill Diamond Project, the transfer of these properties together with Shear's gold properties to Kaminak Gold Corporation ("Kaminak"), a wholly-owned subsidiary of Shear, and the distribution of the Kaminak common shares to Shear's shareholders (the "Spin-out Transaction"), is expected to close on or about October 15, 2005. The Spin-out Transaction will be done on the basis of one Kaminak common share for each five (5) common shares of Shear. The properties cover over 15 million acres in British Columbia and Nunavut.

The shareholders of Shear approved the Spin-out Transaction and ratified the Shareholders' Rights Plan adopted by the Board of Directors of Shear on April 28, 2005 at Shear's annual general and special meeting held on August 17, 2005. The Spin-out Transaction is subject to a number of conditions including regulatory approval and the closing of a private placement resulting in sufficient proceeds to meet Minimum Listing Requirements of the TSX Venture Exchange (the "Exchange") Tier 2 Mining Issuer. The Exchange conditionally approved the Spin-out Transaction and the listing of the Kaminak shares by letter dated July 14, 2005.

Once Shear determines that all of the conditions to the Spin-out Transaction have been or will be satisfied, it will announce the Effective Date of the Spin-out Transaction. Holders of Shear common shares of record at the close of business on the business day immediately prior to the Effective Date will be entitled to participate in the distribution of the Kaminak common shares.

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 eight diamond projects, seven 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.

This news release contains forward-looking statements regarding ongoing and upcoming exploration work and expected geology, geological formations and structures. Actual results may differ materially from those anticipated in these statements.

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

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