Skye Resources Inc.

Skye Resources Inc.

June 22, 2006 20:45 ET

Skye Board Approves Shareholder Rights Plan

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - June 22, 2006) - Skye Resources Inc. ("Skye") (TSX:SKR) has reviewed the press release issued earlier today by BHP Billiton PLC in which it announced that the BHP Billiton group of companies owns 16.5% of the issued and outstanding common shares of Skye. Although Skye is not aware of any pending or threatened take-over initiatives directed at the company, its Board of Directors today approved the adoption of a Shareholder Rights Plan ("Rights Plan"). The Rights Plan is subject to the approval of the Toronto Stock Exchange.

The purpose of the Rights Plan is to provide shareholders and the Skye Board of Directors with adequate time to consider and evaluate any unsolicited bid made for Skye, to provide the Board with adequate time to identify, develop and negotiate value-enhancing alternatives, if considered appropriate, to any such unsolicited bid, to encourage the fair treatment of shareholders in connection with any takeover bid for Skye and to ensure that any proposed transaction is in the best interests of Skye's shareholders.

Ian Austin, President & Chief Executive Officer of Skye, said "The Rights Plan is designed to ensure that all shareholders receive equitable treatment in the event of a transaction that could lead to the change of control of the company and is not intended to deter take-over proposals. We believe it is similar to plans adopted by other Canadian companies and is consistent with guidelines set out for such plans by institutional investors. We welcome the endorsement of the FENIX project and Guatemala that BHP Billiton's investment in Skye represents and note that BHP Billiton is one of two major nickel companies with a substantial investment in Skye. Skye remains focused on completing the feasibility study for a 50 million pound per year ferro-nickel operation at FENIX".

Effective June 22, 2006, rights were issued and attached to all Skye common shares. A separate rights certificate will not be issued until such time as the rights become exercisable (which is referred to as the "separation time"). The rights will become exercisable only if a person, together with its affiliates, associates and joint actors, acquires or announces its intention to acquire beneficial ownership of shares, which when aggregated with its current holdings total 20% or more of the outstanding Skye common shares (determined in the manner set out in the Rights Plan), other than by a Permitted Bid (as defined in the Rights Plan). Following an acquisition of shares otherwise prohibited by the Rights Plan, each right held by a person other than the acquiring person and its affiliates, associates and joint actors would, upon exercise, entitle the holder to purchase that number of Skye common shares which have a current market value equal to twice the exercise price payable for such common shares.

A copy of the Rights Plan is available by contacting the company by telephone (604) 602-9500, by facsimile (604) 602-9510, or by mail to Skye Resources Inc., Suite 1203, 700 West Pender Street, Vancouver, British Columbia, V6C 1G8, Attention: Mr. Brooke Macdonald. A copy will be available on SEDAR 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 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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