Skye Resources Inc.

Skye Resources Inc.

November 14, 2006 08:00 ET

Skye Announces Intention to Proceed With Project Development at Fenix

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Nov. 14, 2006) - Skye Resources Inc. ("Skye Resources" or the "Company") (TSX:SKR) announced today that its Board of Directors, after exploring strategic alternatives, including the potential sale or merger of the Company, has decided to initiate the financing and development of the Company's Fenix nickel project on an independent basis. On August 30, 2006, Skye Resources announced its intention to review strategic alternatives prior to considering a financing decision in respect of the construction and financing of the 50 million pound per year ferro-nickel operation at the Fenix project located in Guatemala.

"After receiving the advice and analysis of its project financing and financial advisers, Cutfield Freeman & Co. and TD Securities Inc., respectively, the Board of Directors carefully reviewed strategic alternatives in order to determine, on behalf of our shareholders, the most effective manner to realize the value of the Fenix project at this time," said Gordon Bacon, Chairman of the Board of Directors. "We fully explored the option of selling the Company and did not receive a proposal to acquire the Company. The discussions we had with potential purchasers confirmed our belief that the Fenix project represents a world class asset and one of the most attractive undeveloped nickel projects in the world. However, the ongoing integration of recent nickel industry acquisitions and the fact that we have two large nickel industry shareholders were factors impacting the sale process. We look forward to continuing to create value for our shareholders by initiating the next stage of development at the Fenix project."

"Development of the Fenix project will continue at full pace with the goal of commencing ferro-nickel production in 2009," said Ian Austin, President and Chief Executive Officer. "With the completion of the feasibility study last month we are now in a position to secure the required financing."

Cutfield Freeman & Co. has assessed the availability of debt financing for the development of Fenix through detailed discussions with potential project lenders and investment banks and, based on that review, they believe that over 60% of the total funding requirements of about US $1 billion (including working capital, cost overrun facilities and interest during construction) can be funded through debt.

Cautionary Notices:

This news release contains certain forward-looking statements that involve risks and uncertainties, such as statements of Skye'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 Skye, or its management, are intended to identify such forward-looking statements. Many factors could cause Skye'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. The forward-looking statements included in this news release represent Skye's views as of the date of this news release. While Skye anticipates that subsequent events and developments may cause its views to change, it specifically disclaims any obligation to update these forward-looking statements. These forward-looking statements should not be relied upon as representing its views as of any date subsequent to the date of this news release. All subsequent written and oral forward-looking statements attributable to Skye or persons acting on its behalf are expressly qualified in their entirety by this notice.

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