First Nickel Inc.

First Nickel Inc.

December 18, 2006 12:16 ET

First Nickel 2007 Outlook

TORONTO, ONTARIO--(CCNMatthews - Dec. 18, 2006) - First Nickel Inc. (TSX:FNI) is pleased to provide an update and outlook on its underground operations at the Lockerby Mine located in Sudbury, Ontario.

First Nickel is currently driving production drifts and producing development ore from the 64 level and the 35 level in the Depth and East zones, respectively. These two areas will provide much of the production in 2007, while at the same time an aggressive development program will be maintained over the course of the year in order to establish access and infrastructure well in advance of 2008 production.

Forecast production for 2007 is 152,042 tonnes of ore grading 1.85% Ni, 1.12% Cu, and 0.06% Co which will yield approximately 4.7 million lbs payable nickel, 3.2 million lbs payable copper, and 86,000 lbs payable cobalt.

The Company will release a resource estimate to the 67 level in the first quarter based upon the recently completed very successful drilling campaign. The next phase of activity will include a drill program designed to define the resources to a higher category from 67 to 72 levels. The latter project should be completed by June.

Compilation and interpretation, carried out in 2006, of historic drilling and mining activities have generated exploration and potential development opportunities in the vicinity of the upper mine workings as well as elsewhere on the mine property. These targets represent potential to add near term production, and a follow-up exploration program to advance those activities will be aggressively pursued.

" After a year of working through and correcting some difficult operating issues at Lockerby we can look forward in 2007 to steady production, solid cash flow, and most importantly we can begin to focus on the upside opportunities on the property, which was the original reason for purchasing the Mine " states William Anderson, President and CEO of First Nickel. " We have put together a good team at this operation, and have the complementary technical and exploration talent to achieve our longer term goals of growing the business and converting development opportunities into production areas."

Paul Davis, P.Geo., Vice President Exploration of First Nickel Inc., is the designated "qualified person" as defined by National Instrument 43.101 and responsible for the verification and quality assurance of First Nickel's exploration data and analytical results. Samuele Renelli, P.Eng., Lockerby's Chief Mine Engineer, oversees mine engineering activities on behalf of First Nickel Inc.

First Nickel Inc. follows a rigorous QA/QC protocol on all of its exploration projects. Whole drill core is sampled and sent to a commercial laboratory, SGS Laboratories in Garson for preparation and specific gravity measurements and shipped internally by SGS to Toronto for assay. A rigorous quality assurance/quality control program is employed which includes the insertion of standards and blanks for each batch of samples. Historic analytical work completed by Falconbridge was completed by a commercial laboratory, Lakefield Laboratories.

First Nickel is a Canadian mining and exploration company. Its current activities are primarily focused on the Sudbury Basin in northern Ontario, the location of the company's producing property (the Lockerby Mine) and four of its exploration properties. First Nickel also has two exploration properties in the Timmins region of northern Ontario. First Nickel's shares are traded on the TSX under the symbol FNI.

This news release may contain forward-looking statements, which are subject to certain risks, uncertainties and assumptions. A number of factors could cause actual results to differ materially from the results discussed in such statements, and there is no assurance that actual results will be consistent with them. Such forward-looking statements are made as at the date of this news release, and the company assumes no obligation to update or revise them, either publicly or otherwise, to reflect new events, information or circumstances, except as may be required under applicable securities law.

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