Skye Resources Inc.

Skye Resources Inc.

October 29, 2007 18:25 ET

Skye Announces Power Purchase Agreement with Duke Energy International

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 29) - Skye Resources Inc. ("Skye") (TSX:SKR) today announced that its 98.2%-owned subsidiary, Compania Guatemalteca de Niquel (CGN), has entered into agreements with Guatemalan subsidiaries of Duke Energy International LLC (Duke) for the supply of electrical power and construction of a new power transmission line for the Fenix ferro-nickel project in Guatemala.

Under the power purchase agreement (PPA), Duke will supply committed capacity and energy to the Fenix project for five years and three months, commencing July 1, 2009. CGN has an option to extend the term of the PPA for an additional five years. The PPA is based on the capacity of existing generation facilities owned by Duke in Guatemala.

Under a transmission toll agreement (TTA), Duke will construct a new 230 kV transmission line to connect the Fenix project to the Guatemalan primary transmission grid. CGN will have the right to utilize the transmission line for 20 years, with an option to extend the agreement for a further 20 years.

The cost of power, transmission tolls and other terms and conditions associated with the PPA and TTA are consistent with the arrangements contemplated by the technical report filed by Skye under National Instrument 43-101 on September 18, 2007.

Environmental approvals for the new transmission line have been received by Duke. The interconnection of the Fenix project with the Guatemalan transmission grid remains subject to the final approval of Guatemalan regulatory authorities, which Skye expects to receive by the end of 2007. Skye expects to file executed copies of the PPA and TTA on SEDAR shortly.

About Skye

Skye is an international mining company focused on becoming a new mid-tier nickel producer. Skye acquired the rights to its Guatemalan lateritic nickel project (the Fenix project) in December 2004 and in October 2006 completed a feasibility study for a ferro-nickel project at Fenix using proven conventional smelting technology. In June 2007 Skye received its environmental permits for the project, and expects to initiate construction during the first quarter of 2008 with initial production in late 2009.

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 the 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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