Skye Resources Inc.

Skye Resources Inc.

December 18, 2006 17:37 ET

Skye Adopts Shareholder Rights Plan

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Dec. 18, 2006) - Skye Resources Inc. (TSX:SKR) ("Skye" or the "Company") today announced that the board of directors of the Company has approved the adoption of a new shareholder rights plan (the "Rights Plan"), effective December 21, 2006.

"The Rights Plan is intended to ensure that all shareholders receive equal treatment in the event of a transaction that could lead to a change in control of the Company," said Ian Austin, Chief Executive Officer of Skye. "The Rights Plan also gives the board of directors of the Company adequate time to assess an unsolicited bid made for Skye and to explore and develop alternatives for maximizing shareholder value."

The purpose of the Rights Plan is to encourage a potential bidder to make a "Permitted Bid", having terms and conditions designed to meet the objectives of the Rights Plan, or to negotiate the terms of an offer with the board of directors of the Company. A Permitted Bid must be made by way of a take-over bid circular prepared in compliance with applicable securities laws, remain open for acceptance by shareholders of Skye for 60 days, and satisfy certain other conditions.

The Company believes that the Rights Plan preserves the fair treatment of shareholders, is consistent with current best Canadian corporate practice and addresses guidelines for such plans set out by institutional investors. The Company is not aware of any specific take-over bid for the Company that has been made or is contemplated. The Rights Plan is not intended to and will not prevent a take-over of the Corporation.

The issuance of common shares upon exercise of the rights is subject to receipt of certain regulatory approvals.

The Rights Plan must be confirmed by shareholders within six months of its effective date. The Company currently plans to seek shareholder approval of the Rights Plan at the next annual general meeting of shareholders.

A copy of the Rights Plan is available by contacting the Company by telephone (604) 602-9500, by facsimile (604) 602-9510, or by mail to Skye Resources Inc., Suite 1203, 700 West Pender Street, Vancouver, British Columbia, V6C 1G8, Attention: Mr. Brooke Macdonald. A copy may also be found on SEDAR at

About Skye

Skye is an international mining company focused on becoming a new mid-tier nickel producer. The Company acquired the rights to its Guatemalan lateritic nickel project (the Fenix project) in December 2004 and in September 2006 received the results of a feasibility study for a ferro-nickel project at Fenix using proven conventional smelting technology.

Cautionary Notice:

Some of the statements contained in this release are forward-looking statements, such as estimates and statements that describe the Company's future plans, intentions, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Since forward-looking statements are not statements of historical fact and address future events, conditions and expectations, forward-looking statements by their nature involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements. The Company does not expect to update forward-looking statements continually as conditions change and you are referred to the full discussion of the Company's business contained in its reports filed with the securities regulatory authorities.

Contact Information

  • Skye Resources Inc.
    Brooke Macdonald
    Vice-President, Legal Affairs & Secretary
    (604) 602-9500
    Fax: (604) 602-9510