Date Closed

August 27, 2010

Lead Office

Toronto

Value

19.00 Million CAD

On August 27, 2010, Shear Minerals completed its acquisition of the Jericho diamond mine and related assets in Nunavut from Tahera Diamond and Benachee Resources in the context of a CCAA proceeding for consideration of 80 million common shares of Shear, C$1.5 million in cash and C$500,000 in the form of a promissory note. The Acquisition is a transformational transaction that will strengthen Shear’s position as a leading diamond exploration company.

Jericho is Nunavut’s first and only diamond mine. It is located 420 km northeast of the City of Yellowknife and is accessible by air all year and by winter road from Yellowknife. The project was mined from 2006 to 2008, and produced 780,000 carats of diamonds from 1.2 million tonnes of kimberlite mined from the open pit operation. Over C$200 million was invested in the development of the Jericho operations including the construction of a 2,000 tonne per day
diamond recovery plant, maintenance facility, fuel farm, and offices and accommodation for 225 personnel.

Concurrently with its acquisition of the Jericho diamond mine, Shear completed a private placement offering of flow-through units (each comprised of one flow-through common share and one half of one common share purchase warrant) and conventional units (each comprised of one common share and one common share purchase warrant) for gross proceeds of approximately C$13 million.

The agents for the offering included RBC Capital Markets, who acted as lead agent, and Macquarie Capital Markets Canada.

Shear, based in Toronto, Ontario, is a Canadian-based exploration company focused on diamond exploration in the Canadian North, where it explores established diamond districts and has discovered new ones.

McCarthy Tétrault LLP represented Shear Minerals in the acquisition and concurrent private placement, with a team led by Gary Litwack.