First Nickel Inc.

First Nickel Inc.

September 06, 2007 14:32 ET

First Nickel 2007 Update

TORONTO, ONTARIO--(Marketwire - Sept. 6, 2007) - First Nickel Inc. (TSX:FNI) is pleased to provide an update and revised outlook on its operations.

Production at the Lockerby Mine is currently from stopes on the 64 level and the 35-1 level in the Depth and East zones, respectively. The main ramp on the Depth is 50m from the 65 Level where most of 2008 production has been scheduled. Production has continued to ramp up, with an estimate of 12,857 tonnes shipped to Strathcona Mill at an estimated grade of 1.86% Ni for August. The mine is now targeting 13,500 tonnes per month for the balance of the year, a rate which is in excess of the original plan. This will lead to full year output of 136,100 tonnes, or 90% of the original forecast of 152,000 tonnes. Payable nickel is estimated at 3.9 million pounds compared to the original forecast of 4.7 million. The difference is largely attributable to the decision taken earlier in the year to mine lower grade ore at the start of production on the 64 Level which was ore that would have otherwise been abandoned, and also allowed for the development of the western portion of the 64 Level and the continuation of the main ramp toward the 65 Level without interruptions to production.

Drilling continues to define and extend the resources in the Depth orebody, as well as investigating opportunities for short term production and development in areas adjacent to existing infrastructure. Exploration targets identified in the upper portion of the Lockerby orebody will be tested later in the year from underground and surface drill platforms. Updates on these activities are expected later in the Fall as program results are received.

Engineering studies that will lead to a new life of mine plan along with the economic evaluation of the proposal to extend one of the surface shafts were launched in the summer. A prefeasibility level report should be available by the end of Q4.

Work is continuing on the Premiere Ridge project to tighten up the capital and operating estimates and optimize the off-take agreement with Xstrata Nickel in order for the Company to make a production decision later this Fall.

"I am very pleased to see the progress and continued improvement in our operating performance at Lockerby," states William Anderson, President and CEO of First Nickel. "Our people have been working hard to increase production levels and lower costs. With the mine now providing a steady cash flow, coupled with excellent drill results, the mine is starting to match our expectations, and with more hard work and dedication, is set to become the operation we knew it could be."

Joseph Del Campo, the Company's Chief Financial Officer, adds, "the Company has a healthy balance sheet and treasury, and combined with current cash flow can easily meet all of its short term funding requirements for capital and exploration. Therefore, there is no immediate need to access the capital markets in the current volatile environment. In addition, I wish to emphasize that we have zero exposure to any form of commercial paper instruments."

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 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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