TORONTO, ONTARIO--(Marketwire - July 6, 2011) - Shear Diamonds Ltd. (News - Market indicators) today announced the acquisition of 34 newly staked claims totaling 77,250 acres contiguous with the Carat Property surrounding the Jericho Diamond Mine. This new land package provides Shear with blanket mineral rights covering existing and newly interpreted priority indicator dispersion trains. Shear's ongoing review of historical datasets has confirmed compelling evidence of undiscovered kimberlites in certain areas outside the immediate mine area with recommended ground follow up.

"In addition to our main goal for 2011 to support and augment the existing geological model for the Jericho Kimberlite Complex, Shear continues to evaluate the exploration potential of Shear's entire land package at Jericho," said Pamela Strand, President. "We have added these additional mineral rights based on priority area based on geophysics and favorable G10 pyrope indicator mineral chemistry."

Shear's in-house geology team have been working in partnership with Mineral Services Canada ("MSC") of North Vancouver, BC in a comprehensive review of historic indicator mineral dispersion data from tills and historic kimberlites at the Jericho Project and surrounding lands. Using a comprehensive database the primary goal of the study by MSC has been to assess the areas of interest for indications of potential undiscovered kimberlites and to evaluate associated Diamond potential, as indicated by mineral compositions in the tills. The MSC 2011 study has resulted in the following interpretations and conclusions:

• Definition of 20 indicator mineral dispersion trains in and around Jericho that are not explained by known kimberlites.
• Confirmation that the Diamond potential in kimberlites in the Jericho area is driven primarily by the presence of Diamond-associated low-chrome eclogitic and websteritic paragenesis in the garnet population. The presence of high-Cr G10 garnets in some of the dispersions suggests that there may be undiscovered kimberlites in close proximity to Jericho that are likely diamondiferous.
• The mineral train derived from the Jericho Kimberlite Complex (JD-01 and JD-02 kimberlites) shows evidence of input from either a kimberlite phase not yet tested or not yet discovered that has peridotitic Diamond potential (high-Cr G10 garnets). 
• Confirmation that the Babylon Float dispersion, located 500 m west of the Jericho kimberlite, has high Diamond potential based on low-Cr garnet mineral compositions and the presence of high-Cr G10 garnets from the float and corresponding till data. The mineral composition signature in this dispersion is similar to that of the Jericho dispersion train. 

Exploration Update

A total of five holes were completed into the Jericho Kimberlite Complex ("JKC"), to help resolve the kimberlite contacts as well as aid in understanding the geological domains as Shear revises the geological model for Jericho. Four of the five drill holes intersected kimberlite outside the current geological model, suggestive of upside tonnage potential.

Work is currently underway by Mineral Services Canada and Geostrat Consulting Ltd. to refine the existing geological model using detailed petrographic analysis, historical core logging and the incorporation of this most recent drilling.

The following table provides details of the recently completed delineation holes.

*Note all intercepts that are not kimberlite are granitic country rock

An attempt was made to drill additional delineation holes into JD-02, the satellite kimberlite immediately north of the Jericho pit, however difficult overburden conditions and troubles containing the resultant drill cuttings forced the abandonment of these holes until the ground is thawed.

In preparation for an on-ice exploration program this spring, an extensive program of ground geophysics was conducted, collecting 455.7 line kilometers of magnetic data and 55.7 line kilometers of HLEM data over 35 targets. A total of eleven high priority drill targets were selected for drilling, however only three holes over three targets were completed due to permitting and weather conditions. No kimberlite was intersected in the three holes; and the anomalies were sufficiently explained by magnetic or faulted country rock.

The following table details the recently completed exploration holes:

Shear is considering a brief summer exploration program which will include prospecting, the collection of additional till samples, ground geophysical surveying, and data compilation with interpretation. Once full results have been interpreted drill targets will be prioritized for future drilling.

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

Qualified Persons

Pamela Strand, P. Geol., Shear's President and Chief Executive Officer, and Jennifer Burgess, P. Geol. Shear's VP Exploration, are qualified persons 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.

Pamela Strand, P. Geol., President

Julie Lassonde, CEO & 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.