Skye Resources Inc.
TSX VENTURE : SKR
TSX : SKR

Skye Resources Inc.

February 21, 2006 10:28 ET

Skye Closes Financing

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Feb. 21, 2006) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Skye Resources Inc. ("Skye") (TSX VENTURE:SKR) today announces that it has closed the private placement previously announced on February 2, 2006 of 5,885,000 common shares at a price of $4.25 per share for aggregate gross proceeds of approximately $25 million.

A syndicate of underwriters led by Paradigm Capital Inc. and including BMO Nesbitt Burns Inc., Desjardins Securities Inc. and Orion Securities Inc., underwrote the private placement. As part of the private placement, Inco Limited ("Inco") exercised its pre-emptive right to maintain its ownership interest in Skye at approximately 12.4%. A commission of 5.5% of the gross proceeds raised by this issue, excluding the shares purchased by Inco, has been paid to the underwriters. All of the shares issuable in the private placement are subject to restrictions on resale until June 22, 2006.

The net proceeds of the offering will be used for exploration drilling at Skye's Fenix nickel laterite project in Guatemala, environmental and community relations expenditures, basic engineering, land purchases, early establishment of the owner's project management team and other expenses to permit implementation of the Fenix Project following completion of the feasibility study, a preliminary assessment for hydrometallurgical expansion and general working capital including project financing costs.

About Skye

Skye is an international mining company focused on becoming a new mid- tier nickel producer. The Company acquired the rights to 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.

Cautionary Notice

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities being offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to, or for the benefit of, U.S. persons unless registered under the U.S. Securities Act or an exemption from such registration is available.

This News Release contains certain forward-looking statements regarding Skye's equity offering and its use of proceeds of the offering, including statements of the Company's plans, objectives, strategies, expectations and intentions, that involve risks and uncertainties. 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. Actual results, performance, achievements and developments may differ materially from those contemplated by these statements depending on, among others, the risks that Skye may be unable to deploy the proceeds in the manner currently planned, the proceeds may not be sufficient to carry out Skye's plans, and other risk factors listed from time to time in Skye's reports filed with applicable Canadian securities regulatory authorities. 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.

Inco, the former 70% owner of the facilities and mineral rights that comprise the Fenix Project, takes no responsibility for nor makes any representation or warranty of any kind relating to the information contained in this news release.

Contact Information

  • Skye Resources Inc.
    Ian G. Austin
    Chief Executive Officer
    (604) 602-9500
    Website: www.skyeresources.com

    or

    Skye Resources Inc.
    Keith Service
    Chief Financial Officer
    (604) 602-9500