Shear Diamonds Ltd. announced that it has begun processing its high grade concentrate stockpiles at its 100%-owned Jericho Diamond Mine in Nunavut. A total of approximately 3,500 carats have been recovered from 358 tonnes after the first 10 full days of processing. For approximately the next 10 months, operations will be focused on the processing of these stockpiles. Following the required diamond valuation process by a Canadian government valuator, which is next scheduled for late May 2012, these and all future diamonds produced from Jericho, other than diamonds subject to a royalty if the holder has elected to take the royalty in kind, are to be delivered to Tache Company N.V., Shear's diamond marketing partner, for sale into end markets. Shear's goals for the processing of the Recovery Reject stockpiles are to: demonstrate that a significant number of diamonds went un-recovered during Jericho's previous operation and that these diamonds are recoverable; generate cash flow to support operations in 2012 while sources of funding for achieving full commercial production at Jericho are sought; and acquire key processing knowledge which can be applied to future production at Jericho. As with many mining operations, Shear has had to overcome some significant challenges in its efforts to restart diamond recoveries at Jericho, some of which likely result from the facility having been shut and abandoned for three years. These include, among others, the balancing of processes and general flowsheet fine tuning, basic maintenance and legacy repair issues that had to be resolved, recruitment and training of operational personnel, as well as significant stoppages in power generation and software malfunctions. As well, Shear had to commence arranging for delivery of fuel for Jericho earlier than originally expected. Live commissioning of the recently-modified Jericho diamond recovery plant is underway on a day-shift basis only while Shear ramps up production. Shear has so far achieved a maximum processing rate of 50 tonnes over a 12-hour shift and hopes to hit approximately 80 tonnes/day with an average recovery rate of approximately 10 cpt. as it moves to 24-hour operations in the coming weeks.