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RAPAPORT... Shear Diamonds suspended the production of its stockpiles at the Jericho diamond mine, citing weak rough diamond prices. Until prices improve, Shear Diamonds stated that it would instead examine assets proximal to the Jericho site, such as its Carat and Muskox properties, coupled with further definition of its in situ diamond resource at Jericho that will include diamond results from in-pit drilling. Diamond market prices have dropped well below Shear Diamonds' break even prices, according to the company, and this has resulted in significant financial challenges this year. In June, Shear and its diamond marketing partner and lender, Taché Company N.V. , continued funding production from the high grade stockpiles. Shear and Tache jointly have deferred end user sales of the parcels that had been shipped to Taché in the hopes that diamond prices would recover relatively quickly. ''While we are gratified that we achieved our 2012 goals, we are subject to many factors that are outside our control, such as current low diamond prices. Prices have dropped significantly just as we were hitting our stride,'' said Shear's president, Julie Lassonde. ''Shear had assembled an outstanding team that has enabled us to overcome many challenges and in achieving our goals, including recently repairing a damaged thickener core well ahead of schedule and on budget. We will now turn to obtaining further financing for exploration.'' Since commencing production in April, Shear delivered three rough parcels to Taché, with an aggregate of 47,516.32 carats. Shear expects another shipment to Taché will be delivered in mid-September. In addition to its $2 million term loan, Shear has drawn $1.6 million against its $3 million revolving line of credit with Taché. Shear and Taché have jointly agreed that this suspension is in Shear's long-term interest and continue to collaboratively consider project value maximization, according to the company.
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