Skye Resources Inc.

Skye Resources Inc.

May 12, 2006 15:22 ET

Skye Announces 1st Quarter Results

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 12, 2006) - Skye Resources Inc. ("Skye") (TSX:SKR) today released its unaudited consolidated interim financial statements for the first quarter ended March 31, 2006, reporting a loss of $8,156,000 (basic and diluted loss per share of $0.31) compared to a loss of $3,851,000 (basic and diluted loss per share of $0.24) for the three months ended March 31, 2005. The loss for the period is principally related to exploration and development costs for Skye's Fenix nickel laterite project in Guatemala and general and administrative costs and non-cash stock-based compensation expense.

During the quarter Skye reached several important milestones towards its goal of becoming a new mid-tier nickel producer. The Company completed a private placement for net proceeds of $23,600,000 to provide financing to complete the feasibility study and certain project implementation costs; the pilot plant testing of Skye's proprietary atmospheric sulphuric acid leaching process was successfully completed; the feasibility study drilling program was completed; and a project finance advisor was appointed to assist Skye in arranging project financing for the Fenix Project. In April, a mining exploitation license was received from the Government of Guatemala and, in May, Skye's common shares were listed on the TSX.

Skye's unaudited consolidated interim financial statements and Management's Discussion and Analysis (MD&A) for the period ended March 31, 2006 will be filed on SEDAR and available for download 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 is currently undertaking a feasibility study for a 50 million pound per year ferro-nickel operation using proven conventional smelting technology.

This News Release contains certain forward-looking statements that involve risks and uncertainties, such as statements of the Company's plans, objectives, strategies, expectations and intentions. The words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions, as they relate to the Company, or its management, are intended to identify such forward-looking statements. Many factors could cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. All subsequent written and oral forward looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by this notice.

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