DIAMOND DEVELOPMENT: Shear updates Jericho operation

NUNAVUT – Shear Diamonds of Toronto delivered the first parcel of diamonds from its Jericho diamond project to its marketing partner, Tache Company NV, on May 29, 2012. The parcel contained 11,317.98 ct. Tache has made an interim payment of US$500,000 to Shear in expectation that the total value of the parcel will be more than that.

Shear said it has had considerable success in starting the kimberlite processing plant, it temporarily suspended processing for two days to reduce output and another two days for clean up. Processing has resumed but at a slightly lower rate to improve recoveries.

The company notes, however, that world diamond prices are now below the values used in preparing the operating plans and budgets for the Jericho mine. At this time sufficient cash flow cannot be generated to support commercial operation. In the meantime, Shear is concentrating on improving the carat recovery rate.

An overview of the Jericho mine and information are posted at ShearDiamonds.com.