Skye Resources Inc.
TSX VENTURE : SKR
TSX : SKR

Skye Resources Inc.

March 06, 2006 20:33 ET

Skye Announces Financial Results

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 6, 2006) - Skye Resources Inc. (TSX VENTURE:SKR) ("Skye") today released its audited consolidated financial statements for the year ended December 31, 2005. Skye reported a loss of $28,468,000 compared with a loss of $1,559,000 for the four month transition period ended December 31, 2004 and a loss of $3,845,000 for the year ended August 31, 2004. Skye changed its year end to December, 31 on November 30, 2004.

Skye initiated a feasibility study for a 50 million pound ferro-nickel project on its Fenix nickel laterite property in Guatemala in the second quarter of 2005. This study is expected to be completed during the third quarter of 2006. Accordingly, in 2005 Skye incurred significant expenses on the feasibility study, as well as on the related drilling, and environmental and social impact assessments. Corporate and administration costs in Canada and Guatemala, non-cash stock-based compensation costs and expenditures associated with the continuing development of Skye's proprietary atmospheric leaching process also contributed to the loss in 2005.

On February 21, 2006 Skye closed a private placement for gross proceeds of approximately $25,000,000. Skye now has three drills working at Fenix to continue upgrading the mineral resources. It has also initiated a preliminary assessment for a project to produce 100 million pounds of nickel which would involve adding a 50 million pound hydrometallurgical plant to the ferro-nickel smelter being evaluated in the feasibility study. This preliminary assessment should also be complete in the third quarter of 2006.

Skye's audited consolidated financial statements and Management's Discussion and Analysis for 2005 will be filed with SEDAR and available for download at www.sedar.com.

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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