Grizzly Diamonds Ltd. TSX VENTURE: GZD

EDMONTON, ALBERTA--(CCNMatthews - Jan. 9, 2006) - Grizzly Diamonds Ltd. (TSX VENTURE:GZD) ("Grizzly") today announces that a budget of $1.5 Million has been approved for the winter 2005-2006 diamond exploration programs in Northern Alberta.

As part of this aggressive exploration program, Grizzly has mobilized a field crew to Northern Alberta to initiate ground geophysical surveys on the Grand Cub Aiden Property in the Buffalo Head Hills region, and to prepare for drilling on the Legend Property in the Birch Mountains.

The approved exploration programs will focus on three main properties and includes more than 15,000 line-km in airborne surveys, an extensive two-month ground geophysical survey program, followed by the drill testing of 6 to 8 kimberlite targets.

A high resolution 3,800 line-km GEOTEM magnetic and electromagnetic survey has now been completed over a portion of Grizzly's Preston Upon Wolverine Property in the highly prospective Buffalo Head Hills area. The survey area, which is situated along the western edge of the Buffalo Head Hills, was selected on the basis of a new diamond indicator anomaly announced during April 2005 by the Alberta Geological Survey (AGS). An AGS stream sediment sample yielded more than 30 high interest diamond indicator minerals including 8 pyrope garnets and 23 chromites, a number of which were recovered from the 0.5 to 1 mm size fraction. In addition, at least two of the pyrope garnets are reported to have kelyphite rims.

The nearest known kimberlite to the Preston Upon Wolverine Property is 30 km due east at Sawn Lake on Ashton Mining of Canada's main Buffalo Head Hills Block. Ashton has discovered 38 kimberlite pipes in the Buffalo Head Hills area, 26 of which are diamondiferous. This new diamond indicator mineral result may indicate the presence of undiscovered kimberlites along the west side of the Buffalo Head Hills where Grizzly's Preston Upon Wolverine Property is located. No kimberlites are known either in the vicinity of the anomalous sample or up ice of the sample.

Recent results reported by Ashton indicate that the Buffalo Head Hills kimberlite field does contain kimberlites that have excellent potential to host a population of commercial-sized diamonds at grades approaching the threshold of being economic. As an example, Ashton has recently reported that a 22.8 tonne mini-bulk sample collected from the K252 Kimberlite (which is located approximately 21 km or 13 miles north of Grizzly's Smoky The Bear property) has yielded a grade of 55 carats per hundred tonnes (cpht).

Grizzly reports that it has entered into negotiation with Blue Diamond Mining Corporation (TSXV:BDM) ("Blue"), an Alberta based company at 'arms length' to Grizzly, to increase its interest in the Legend Property ("the Property") located in the Birch Mountains of Northeast Alberta. The Property consists of approximately 270,000 acres (110,000 hectares).

Grizzly Diamonds is an aggressive Canadian exploration company focused on exploring for diamonds in Alberta and precious metals in North America. It currently holds diamond properties in the Buffalo Head Hills, Birch Mountains and Calling Lake areas of Alberta totaling over four million acres which host prospective geophysical targets and associated diamond indicator minerals. In British Columbia, the Corporation has four precious metal properties totaling over 23,000 acres.

All 2005 field programs are being conducted under the supervision of Mike Dufresne, P. Geol., a principal of APEX Geoscience Ltd. and a Qualified Person under NI 43-101.

On behalf of the Board
Grizzly Diamonds Ltd.
/s/ "Brian Testo"
Brian Testo
President

This news release contains forward-looking statements regarding ongoing and upcoming exploration work and expected geology, geological formations and structures. Actual results may differ materially from those anticipated in these statements.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.