Skye Resources Inc.

Skye Resources Inc.

August 11, 2006 15:36 ET

Skye Announces Second Quarter Financial Results

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 11, 2006) - Skye Resources Inc. (TSX:SKR) ("Skye") today released its unaudited consolidated interim financial statements for the six months ended June 30, 2006, reporting a loss of $14,651,000 (basic and diluted loss per share of $0.53) compared to a loss of $11,052,000 (basic and diluted loss per share of $0.56) for the six months ended June 30, 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 continued work on the feasibility study of a ferro-nickel plant using conventional technology on saprolite material and having an annual production capacity of 50 million pounds of nickel. A preliminary assessment of doubling the nickel output from the project by utilizing hydrometallurgy to process the limonite is also in progress. Both studies are on schedule for completion in late September. The environmental impact assessment for the refurbishment and expansion of the ferro-nickel processing plant was filed in June with the Ministry of Environment and Natural Resources of the Government of Guatemala.

Skye's unaudited consolidated interim financial statements and Management's Discussion and Analysis (MD&A) for the period ended June 30, 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. 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 the Company or persons acting on its behalf are expressly qualified in their entirety by this notice.

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