Shear Announces Positive Water License NWB Decision for Jericho Diamond Mine

TORONTO, ONTARIO -- (Marketwire - Dec. 22, 2011) - Shear Diamonds Ltd. (TSX VENTURE: SRM) is pleased to announce that the Nunavut Water Board ("NWB") issued a positive decision on the water license application for the Jericho Diamond Mine. The NWB has recommended to the Minister of Aboriginal Affairs Northern Development Canada (AANDC) that an eight year Type A water license be issued to its wholly-owned subsidiary, Shear Diamonds (Nunavut) Corp., covering the re-commissioning, operation and ultimate reclamation of the Jericho Diamond project. The previous water license for the Jericho Diamond mine was for a total of six years.

"NWB's positive decision to renew the license represents a significant milestone for our company and for the communities of the Western Kitikmeot Region that will directly benefit from the Jericho Diamond project," said Julie Lassonde, CEO of Shear Diamonds Ltd. "The renewal of the Jericho Diamond mine water license is a key component to Shear's evolution into the re-start of the Jericho Diamond Mine."

The positive license decision is provided in conjunction with terms and conditions, which Shear will be working cooperatively with all stakeholders to fulfill. The NWB decision and recommendation has been sent to the AANDC Minister for approval. Shear would like to make a special acknowledgement of the hard work and efforts made by the Nunavut Water Board over the course of the renewal process.

"Shear could not have asked for a better note on which to end 2011. We look forward to processing the recovery reject pile during the course of the first nine months of 2012 and receiving the Minister's decision some time early in the new year," comments CEO Julie Lassonde.

Today Shear also announces the appointment of Richard Belfer as Chief Financial Officer. Previously Mr. Belfer was Shear's Acting CFO, and Shear is delighted to have Mr. Belfer join as a member of the senior management team.


On behalf of the Board of SHEAR DIAMONDS LTD.

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.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts 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