First Nickel Inc.

First Nickel Inc.

January 10, 2005 08:30 ET

First Nickel Annnounces More High Grade Nickel Intersections From Dundonald South


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: FIRST NICKEL INC.

TSX SYMBOL: FNI

JANUARY 10, 2005 - 08:30 ET

First Nickel Annnounces More High Grade Nickel
Intersections From Dundonald South

TORONTO, ONTARIO--(CCNMatthews - Jan. 10, 2005) - First Nickel Inc.
(TSX:FNI) today announced it has now completed approximately 13,500
metres of drilling on the Dundonald nickel property near Timmins in
northeastern Ontario and is pleased to release results for the next 8
diamond drill holes on the Dundonald South zone as follows:



---------------------------------------------------------------------
Hole From To Core Ni % Pt+Pd+Au Zone
No. (m) (m) Length (gpt)
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D04-33 249.65 250.9 1.25 3.30(a) 1.27 A
--------------------------------------------------------------------
D04-35 55.8 57.8 2.0 1.89 D
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111 112.5 1.5 1.14 B
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D04-36 114 114.55 0.55 8.06 B
--------------------------------------------------------------------
D04-38 112.6 115.1 2.5 1.25 E
--------------------------------------------------------------------
250.7 251.7 1.0 1.91 B?
--------------------------------------------------------------------
274.05 275.45 1.4 3.62 (b) A
--------------------------------------------------------------------
S04-17 155.8 157.9 2.1 5.22(a) 1.25 F
--------------------------------------------------------------------
Incl. 155.8 156.1 0.3 13.81 3.01 F
--------------------------------------------------------------------
Incl. 157.35 157.9 0.55 10.79 2.73 F
--------------------------------------------------------------------
S04-18 136.4 139.7 3.3 1.36 G
--------------------------------------------------------------------
S04-19 142.2 143.8 1.6 1.64 G
--------------------------------------------------------------------
S04-20 111 112.3 1.3 1.43 G
--------------------------------------------------------------------
S04-21 128 133 5.0 1.43 G
--------------------------------------------------------------------
Incl. 128 129.5 1.5 2.00 G
--------------------------------------------------------------------
170.5 172.6 2.1 3.74 (b) F
--------------------------------------------------------------------
Incl. 171.4 172.6 1.2 5.82 F
--------------------------------------------------------------------
Incl. 171.9 172.1 0.2 25.55 F
--------------------------------------------------------------------

(a) previously reported
(b) PGE values pending for holes D04-38 and S04-21


The above nickel intersections in holes D04-33 and D04-38 are
approximately 35 and 65 metres respectively down-plunge of the
previously reported high grade intersection in hole D04-29 (5.26% Ni
over 15.2 m). Further drilling is planned on this portion of the A zone
in light of the ongoing high grade nickel intercepts from this immediate
area.

Hole S04-21 returned an intersection of 5.82% Ni over 1.2 m which
correlates with the previously reported intersection of 5.22% Ni over
2.1 m in hole S04-17 and with the historic intersection of 4.89% Ni over
2.14 m in Falconbridge hole 74-12. These latter two holes are located
approximately 30 m to the east and are in turn approximately 25 m apart
in section. Diamond drilling is continuing on this relatively unexplored
portion of the Dundonald South nickel zone. The S04-21 portion of the F
zone is 300 m east-southeast of the D04-29 portion of the A zone
attesting to the large size of the overall nickel system.

First Nickel would also note that virtually every one of the 63 holes
totaling approximately 11,000 m drilled in the Dundonald South zone to
date has intersected nickel mineralization of potential economic
significance.

The surface drilling program is being supervised by Kevin Montgomery,
PGeo, of MPH Consulting Limited, a qualified person under National
Instrument 43-101 guidelines. Drill core of interest (NQ size) is sawed
in half, with one-half sent to a commercial laboratory, Expert
Laboratory of Rouyn-Noranda, Que., and the other half retained for
future reference. A rigorous quality assurance/quality control program
is employed which includes the insertion of standards, blanks and
duplicates for each batch of samples.

Core samples are routinely analyzed for nickel, copper and cobalt by
aqua regia digestion, atomic absorption techniques. Those samples
returning greater than 5,000 parts per million (0.5 per cent) nickel are
re-assayed by total digestion atomic absorption and their value reported
as a per cent. Selective assays for gold and platinum group elements on
the higher-grade nickel samples are carried out by standard fire assay
techniques.

The Dundonald property is located east of Timmins in Northeastern
Ontario, approximately 25 kilometres by road from the Falconbridge
Limited's Kidd Creek metallurgical facility. The Dundonald property was
acquired from Falconbridge as part of First Nickel's formative
transaction whereby Falconbridge now owns 18.4 per cent of the issued
and outstanding shares of First Nickel.

At October 31, 2004 First Nickel had a working capital of approximately
$11,300,000 with 41,852,713 common shares outstanding.

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