First Nickel Inc.
TSX : FNI

First Nickel Inc.

January 20, 2011 17:05 ET

First Nickel Announces US$1,828,940 Debt for Equity Exchange

TORONTO, ONTARIO--(Marketwire - Jan. 20, 2011) -

NOT FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES NEWSWIRE SERVICES

First Nickel Inc. ("First Nickel" or the "Company") (TSX:FNI) announces that Resource Capital Fund IV L.P. exchanged US$1,828,940 (C$1,947,090) of the amount remaining outstanding under its US$5,000,000 (C$5,323,000) bridge loan (the "Bridge Loan") for 16,225,753 units ("Units") of the Company based on an exchange rate of C$1.0646/US$1.00 and a price of C$0.12 per Unit. Each Unit is comprised of one common share in the capital of the Company (a "Common Share") and one-half of one Common Share purchase warrant (each whole warrant, a "Warrant"). Each Warrant entitles the holder thereof to acquire one Common Share at a price of C$0.17 until November 12, 2012. The issuance of 16,225,753 Units to RCF IV was approved by shareholders of the Company at a special meeting of shareholders held on January 6, 2011. The Bridge Loan has now been repaid in full.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities described herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or any state securities laws and may not be offered or sold in the United States or to "U.S. persons", as such term is defined in Regulation S promulgated under the 1933 Act, absent registration or an applicable exemption from the registration requirements of the 1933 Act and applicable state securities laws.

About First Nickel

First Nickel is a Canadian mining and exploration company that has recently commenced restart activities at its Lockerby nickel mine in the Sudbury Basin in northern Ontario. Once the Lockerby mine reaches full production (expected in 2012), it will produce approximately 10 million pounds of nickel and approximately 7 million pounds of copper annually. In addition to the Lockerby nickel mine, the Company owns exploration properties in the Sudbury Basin, the Timmins region of northern Ontario, and the Belmont region of Eastern Ontario. First Nickel's shares are traded on the TSX under the symbol FNI.

Some of the statements contained in this news release are forward-looking statements, such as statements that describe First Nickel's future plans, intentions, objectives or goals, and specifically include but are not limited to future production. Actual results and developments may differ materially from those contemplated by such forward-looking statements depending on, among others, fluctuating metal prices, completion of additional financing initiatives, maintaining operating and exploration teams, continued care and maintenance of the Lockerby Mine, and other factors described in the Company's most recently filed Annual Information Form under the heading "Risk Factors" which has been filed electronically by means of the System for Electronic Document Analysis and Retrieval ("SEDAR") located at www.sedar.com. The forward-looking statements included in this document represent First Nickel's views as of the date of this document and subsequent events and developments may cause First Nickel's views to change. Readers should not place undue reliance on any forward-looking statements.

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