Shear Provides Processing Update and Announces New CFO

Shear Diamonds Ltd. (TSX VENTURE:SRM) ("Shear") is providing a processing and
operations update and also announces the appointment of a new Chief Financial
Officer. 


Processing Update

Shear is providing a processing and operations update with respect to the high
grade concentrate stockpiles at its Jericho diamond mine:




--  On July 6, 2012 Shear delivered its second parcel of diamonds to Tache
    Company N.V. ("Tache"), Shear's diamond marketing partner, for sale into
    end markets. The second parcel amounted to 13,908.31 carats. 
    
--  Since commencing 24 hour operations on June 15, 2012, Shear's average
    production rate has been approximately 80 tonnes per day. 
    
--  Shear's average recovery grade for the second parcel is approximately
    10.6 carats per tonne. 
    
--  Tache had advanced $US550,000 to Shear for the shipment of the parcel
    received on July 6, 2012. In addition, Shear has drawn an additional
    $550,000 from its revolving line of credit with Tache in July in
    relation to the production and delivery of this shipment. Tache will
    reconcile a final payment to Shear once prices per carat can be
    ascertained based on the formula provided in the marketing agreement. 
    
--  To date Shear has produced 34,007 carats from the high grade concentrate
    stockpiles. 25,226 carats have been delivered to Tache within the first
    and second parcels and 8,781 carats have been produced within the first
    twelve days of production since the valuation of second parcel. 
    
--  Shear's next parcel of diamonds is due to be delivered to Tache in early
    August.



Appointment of New CFO

Shear also announces the appointment of Greg Powell as its new Chief Financial
Officer effective as of August 7, 2012. Mr. Powell will replace Richard Belfer,
who is leaving Shear to accept the challenge of a senior financial role for a
company in a different industry. Mr. Belfer will be working with Mr. Powell in
the coming weeks to ensure a smooth transition.


Greg Powell brings to Shear significant experience in the mining industry. Mr.
Powell is a CGA, CFE and ACCA, and has many years of financial experience
working for both private and public companies primarily in the resource sector.
Mr. Powell has held senior finance positions with Silver Bear Resources and for
Olympus Pacific Minerals.


"Over the past year, Richard has played an important role in the transformation
of Shear from a purely diamond exploration company into a development, and now,
a diamond producing company," said President and CEO Julie Lassonde. "Richard is
a first-class professional and we are grateful for his significant
contributions" said Ms. Lassonde. "I am delighted that Greg will be joining our
senior management team at Shear, where I am confident he will make a valuable
contribution to the next phase of our company's growth and development," Ms.
Lassonde added. "Greg brings to Shear experience and a dynamic approach that I
am sure will prove invaluable." 


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. 




                         On behalf of the Board of                          
                            SHEAR DIAMONDS LTD.                             
                                                                            
                      Julie Lassonde, President & CEO