Skye Resources Inc.

Skye Resources Inc.

March 06, 2007 16:34 ET

Skye Resources Exercises Fenix Option

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 6, 2007) - Skye Resources Inc. ("Skye") (TSX:SKR) today reported that it has exercised its option to make unconditional its 2004 acquisition of the CVRD Inco Limited ("Inco") interest in the Fenix nickel laterite project in Guatemala. As consideration, Skye has delivered to Inco 1,746,463 Skye shares and US$3.5 million.

"The formal exercise of the option is an important step in the development of the world class Fenix project," said Ian Austin, President & CEO, Skye Resources Inc. "Our project development team is advancing the engineering while simultaneously we are moving forward with our financing plan so that we can act quickly once we receive the environmental approvals from the Guatemalan government."

Inco has advised Skye that it has also exercised 250,000 Skye share purchase warrants at a price of C$5.75. Following Skye's exercise of the option and Inco's warrant exercise, Inco holds 5,615,714 Skye shares representing approximately 13% of the outstanding shares in Skye.

Inco has advised Skye that it will exercise its right to nominate a director to the Skye Board at Skye's Annual Meeting.

In 2004 Skye acquired Inco's shares in the Guatemalan company (CGN) that owns the Fenix project, with the acquisition being conditional upon Skye satisfying a number of conditions, culminating in the completion of the feasibility study, which was announced late in 2006. Skye now owns 92.4% of CGN.

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 in September 2006 received the results of a feasibility study for a ferro-nickel project at Fenix using proven conventional smelting technology.

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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