Shear Announces the Partial Closing of $1.05 Million Private Placement, Officer Appointments and Grant of Incentive Stock Options

TORONTO, ONTARIO -- (Marketwire - Aug. 22, 2011) - Shear Diamonds Ltd. (TSX VENTURE: SRM) today announced the successful partial closing of its $1,050,220 private placement financing, three new corporate officer appointments and the grant of incentive stock options.


Private Placement

Subject to final TSX Venture Exchange acceptance, Shear has partially closed a non-brokered private placement on August 19, 2011 for hard dollar gross proceeds of $1,050,220 with the sale of 3,750,786 common shares at a price of $0.28 per share. The maximum size of the proposed offering is $1,500,000 at $0.28 per share of hard dollars. The common shares of Shear ("Common Shares") were sold to qualified purchasers in reliance upon exemptions from the prospectus and registration requirements of applicable securities legislation. The proceeds from the sale of the Common Shares will be utilized for working capital and operations at Shear's Jericho Diamond Mine, Nunavut. No finders fees were payable in connection with this private placement and insiders participated in the financing.


Corporate Appointments

Shear is pleased to announce that it has appointed the following corporate officers, Ms. Stephanie Autut to the position of Vice President, Environment and Community Affairs; Mr. Richard Belfer as Acting CFO and Mr. Chris Morton as Vice President, Operations.

Ms. Autut has worked in senior positions for the Nunavut Impact Review Board, Nunavut Tunngavik Incorporated and the Kitikmeot Inuit Association. Notable is her 11 years as Executive Director for the Nunavut Impact Review Board, the agency responsible for impact assessment in Nunavut. In her current role, Stephanie will lead the Shear team and Shear's consulting firms to develop, execute and manage the implementation of a strategic environmental and community affairs plan and permitting strategy. Stephanie gained her diploma in Environmental Protection from the School of Civil Engineering at Centennial College in Toronto, Ontario and her bachelor's degree in English and Geography at Wilfrid Laurier University in Waterloo, Ontario.

Mr. Belfer is a finance professional with significant experience in the mining and consumer / industrial product industries. He joined Shear as Controller in May 2011. Prior to joining Shear Mr. Belfer spent four years with PricewaterhouseCoopers in assurance, tax and corporate restructuring roles in both Canada and Australia. Mr. Belfer is a Chartered Accountant and obtained a Bachelor of Commerce from Dalhousie University and a Masters in Business Administration from McMaster University.

Mr. Morton is a specialist in diamond recovery and diamond processing optimization. He has been involved in the mining industry for fifteen years and has had many years involvement specifically in the diamond mining sector including past employment with Rio Tinto. His passions are team building and the collaborative development of successful projects. Mr. Morton has been a part of the Shear team as Site & Process Manager for Shear's Jericho Mine and he recognizes the unlimited potential of Jericho as a viable diamond production facility and he is excited to be part of Shear Diamonds team.


Incentive Stock Options

In addition and subject to regulatory approval, Shear announced that the Board of Directors has granted options pursuant to Shear's incentive stock option plan to certain directors, officers, employees and consultants to acquire an aggregate of 3,525,000 Common Shares. The stock options are exercisable at a price of $0.30 per Common Share, equal to the market value on August 19, 2011, the date of their grant. The options have expiry dates of between two and five years from the option grant date.


About Shear Diamonds Ltd.

Shear is a Canadian-based company focused on diamond exploration in Canada's north, where it explores established diamond districts and has discovered new ones. Shear currently has a portfolio of eight diamond projects and 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

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.

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.
Pamela Strand, P. Geol.
President
416-479-8728 or 1-866-298-9695

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

Shear Diamonds Ltd.
Suite 220, 6 Adelaide Street East
Toronto, Ontario, Canada M5C 1H6
416-479-8728 or 1-866-298-9695
416-703-9014 (FAX)
www.sheardiamonds.com