SRM Shear Diamonds Ltd.

Shear Diamonds Ltd. (TSX VENTURE:SRM) has today signed agreements with Tache
Company N.V. ("Tache") securing debt financing and forming a strategic alliance
under which Tache will purchase the diamond production from Shear's Jericho
diamond project in Nunavut. The alliance establishes a mutually beneficial
relationship encompassing sales of both rough and polished diamonds from the
Jericho mine. Shear will participate in final net profits from Tache's sales of
the Jericho diamonds either as rough or polished stones.


The debt financing to be provided by Tache includes a US$2 million term loan
repayable in 12 equal monthly installments once Shear begins to receive proceeds
of sales of diamonds from the existing recovery concentrate stockpiles at
Jericho, and a US$3 million revolving credit facility which can be drawn against
once Shear has begun shipping diamonds from the existing recovery stockpiles.


"This alliance is significant for Shear in both the short and long term. The
debt provides us with the capital required to begin processing our recovery
stockpiles in the near term, as well as long term support in the form of a
marketing agreement that has Shear participating in profits on the sales of both
the rough and, more importantly, the polished stones. We are delighted to have
built this relationship with Tache. Tache's reputation as a family run
organization and industry leader has created strong pillars for this strategic
alliance and Shear looks forward to working closely with Tache," commented CEO,
Julie Lassonde.


"The companies believe that this is a new paradigm for diamond miners and
diamontaires which substantially benefits both groups," says Lassonde.


"We at Tache are always looking for long term relationships with our suppliers
and customers alike. This agreement provides an exciting new strategic alliance
for Tache whilst respecting our need to partner with a group that share our
vision and our values" commented Jacky Tache, CEO of Tache.


On behalf of the Board of SHEAR DIAMONDS LTD.

Julie Lassonde, CEO & Executive Chairman

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.


About Tache Company N.V.

Tache is the Belgian sales division of the Tache Group, a family business active
in the diamond industry for over 50 years. The Tache Group deals in rough,
prepared and polished diamonds as well as in diamond jewellery.


The orderly supply of rough is fundamental to the Group's activities and
therefore the Group principally sources its rough from Primary Rough Producers,
in addition to being a DTC Sightholder and an Alrosa long term contract holder.


The Group has a longstanding leading position in fine make polished diamonds,
from Exceptional stones down to 0.01 carats, based on its longstanding
commitment to modern high quality manufacturing capacity. This polished is
distributed world-wide through 12 sales offices to premium retailers and
jewellery manufacturers.


www.tachediamonds.com

The information above related to Tache has been provided by Tache.

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.

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