First Nickel Inc.

First Nickel Inc.

May 29, 2006 08:30 ET

First Nickel Reports: 21.66 Metres '71.1 Feet' of 3.2% Ni and 1.07% Cu from Lockerby Depth Zone

TORONTO, ONTARIO--(CCNMatthews - May 29, 2006) - First Nickel Inc. (TSX:FNI) is pleased to report assay results which verify lateral and down-plunge continuation of the Lockerby Depth Zone.

First Nickel is currently completing the first phase of an underground diamond drill program on the Depth Zone, designed to define and expand the mineral resources.

Drilling thus far, has intersected significant core lengths of nickel-copper sulphide mineralization along strike and down-plunge of the current deposit model including (please refer to table for drill intervals):

FNI6304 12.26 metres (40.2 feet) grading 3.2% Ni and 1.97% Cu,

FNI6306 66.18 metres (217.1 feet) grading 1.4% Ni and 1.16% Cu,

FNI6309 39.20 metres (128.6 feet) grading 1.41% Ni and 0.58% Cu, and

FNI6310 21.70 metres (71.1 feet) grading 3.2% Ni and 1.03% Cu.

Note: The core lengths reported do not represent true widths that are
defined as being measured at right angles to the direction of
extension of the sulphide body.

These results indicate that the Depth Zone nickel-copper sulphide mineralization extends a minimum of 75 metres beyond the boundaries of the previous deposit model. The Depth Zone remains open to the west and down-plunge and will require additional diamond drilling to define the ore boundaries. Based on these results, there is good exploration potential above the 63 Level along strike of the mined-out portions of the deposit. The following table summarizes the significant drill intersections completed since October 2005 below the 63 Level. Several holes were completed above the 63 Level for production purposes as part of this drill program and have not been summarized in the following table.

First Nickel believes these intercepts represent a significant increase in the resource potential of the Lockerby Depth Zone and will provide an updated resource estimate late in the fourth quarter as part of the annual process of updating ore reserves and mineral resources.

The diamond drill program was carried out under the supervision of First Nickel's Sudbury Exploration Manager, Phil Vicker, P.Geo., a "qualified person" as defined by National Instrument 43-101. The information in this press release was prepared under the direction of Paul Davis, P.Geo., Vice President of Exploration for First Nickel Inc., and also a "qualified person" as defined by National Instrument 43.101. First Nickel Inc. follows a rigorous QA/QC protocol on all of its exploration projects. Whole drill core is sampled and sent to a commercial laboratory, SGS Laboratories in Garson, Ontario, for preparation and specific gravity measurements and shipped internally by SGS to Toronto for assay. A rigorous quality assurance/quality control program is employed which includes the insertion of standards and blanks for each batch of samples.

Hole ID From To Core Length Ni % Cu %
m m m (ft)
FNI6303 154.50 188.60 34.10 (111.9) 1.4 1.71
Incl 178.70 186.20 7.50 (24.6) 3.4 1.10
FNI6304 236.40 248.66 12.26 (40.2) 3.2 1.97
FNI6306 304.10 370.28 66.18 (217.1) 1.4 1.16
Incl 357.87 362.33 4.46 (14.6) 3.0 0.43
FNI6308 169.15 171.42 2.27 (7.4) 2.4 0.95
FNI6309 195.8 235.0 39.2 (128.6) 1.4 0.58
Incl 195.8 202.42 6.62 (21.7) 2.9 0.47
Incl 215.65 218.60 2.95 (9.7) 4.2 0.18
FNI6310 247.22 268.88 21.66 (71.1) 3.2 1.03
FNI6316 128.10 132.20 4.10 (13.5) 3.0 1.19
FNI6317 128.08 129.68 1.60 (5.2) 3.4 0.68
FNI6318 124.15 129.29 5.14 (16.9) 2.3 1.03
FNI6319 136.70 141.45 4.75 (15.6) 1.1 0.94
FNI6320 179.80 187.34 7.54 (24.7) 2.0 1.12
Incl 182.31 184.50 2.19 (7.2) 4.1 0.21
FNI6322 187.66 190.24 2.58 (8.5) 2.0 1.23
FNI6323 218.33 225.10 6.77 (22.2) 2.2 1.40

Table: Summary of significant drill intercepts from Lockerby Depth

Business Combination with Jaguar Nickel Inc.

The due diligence investigations by both companies is continuing. Completion of the transaction remains subject to certain conditions, including among other things, due diligence by each company, the negotiation of a definitive agreement, receipt of all necessary regulatory approvals and the holding of a special meeting of Jaguar Nickel shareholders to approve the proposed combination.

First Nickel is a Canadian mining and exploration company. Its current activities are primarily focused on the Sudbury Basin in northern Ontario, the location of the company's producing property (the Lockerby Mine) and four of its exploration properties. First Nickel also has two exploration properties in the Timmins region of northern Ontario. First Nickel's shares are traded on the TSX under the symbol FNI.

This news release may contain forward-looking statements, which are subject to certain risks, uncertainties and assumptions. A number of factors could cause actual results to differ materially from the results discussed in such statements, and there is no assurance that actual results will be consistent with them. Such forward-looking statements are made as at the date of this news release, and the company assumes no obligation to update or revise them, either publicly or otherwise, to reflect new events, information or circumstances, except as may be required under applicable securities law.

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