First Nickel Inc.
TSX : FNI

First Nickel Inc.

August 30, 2010 17:00 ET

First Nickel Arranges US$5 Million Bridge Loan Facility

TORONTO, ONTARIO--(Marketwire - Aug. 30, 2010) - First Nickel Inc. ("First Nickel" or the "Company") (TSX:FNI) announces that it has entered into a commitment letter with Resource Capital Fund IV L.P. ("RCF") for a US$5 million bridge loan facility maturing on December 31, 2013 (the "Facility"). The proceeds of the Facility will be used to commence capital development activities at the Lockerby Mine that will expedite launch of the full capital development project when full financing for the project is arranged. The Facility will close on or about September 1, 2010 and is subject to certain closing conditions, including the approval of the Toronto Stock Exchange and entering into definitive documentation.

William Anderson, President and CEO stated: "This is another significant step forward in structuring the financing of our Lockerby Depth Project, and is also a vote of confidence from our biggest stakeholder in both the project and the management team. These funds allow us to immediately begin a number of critical pre-development activities at Lockerby, including detailed engineering and addressing a number of bottleneck items to ensure a smooth start-up of the main development program once full financing is arranged. Our goal is to launch the full capital program in the fourth quarter of 2010, and this latest funding will keep us on that track."

Description of the Bridge Loan Facility

The Facility will bear an interest rate of 15.0% per annum, paid quarterly in cash or, at RCF's option, in common shares of the Company valued at the market price which equals the 5-day weighted average trading price of the Company's shares. The Facility will be secured by the security granted to RCF according to the existing US$10 million convertible loan agreement.

Provided that the Company completes an equity financing in an amount of at least US$20 million from third parties prior to December 31, 2010, RCF has agreed to convert the Facility into equity at the subscription price and terms of said equity financing. This effective lead order subscription would close concurrent with the equity financing.

About RCF

RCF is one of several successive private equity funds with mandates to make investments in mining companies and projects across a diversified range of commodities and geographic regions. Since inception in 1998, RCF has invested in 80 companies with projects in 35 countries relating to in excess of 20 different commodities. RCF is a long term investor that invests throughout the commodity cycle and has facilitated the development of a number of junior and mid-tier companies and assets that are recognized in the market place.

About First Nickel

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 redevelopment stage property (the Lockerby Mine) and two of its exploration properties. First Nickel also has exploration properties in 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 press 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 completion of the proposed Facility, maintaining operating and exploration teams, continued care and maintenance of the Lockerby Mine; and the launch of the full development program on Lockerby Depth project. In certain cases, forward-looking statements can be identified by the use of words such as "expects", "will", "enable", "anticipates", "estimated" or words of similar effect. Since forward-looking statements are not statements of historical fact and address future events, conditions and expectations, forward-looking statements inherently involve unknown risks, uncertainties, assumptions and other factors well beyond the Company's ability to control or predict. Actual results and developments may differ materially from those contemplated by such forward-looking statements depending on, among others, such key factors as negotiating and entering into definitive agreements for the Facility, completion of the Facility, fluctuating metal prices, and other factors described in the Company's 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. These forward-looking statements should not be relied upon as representing First Nickel's views as of any date subsequent to the date of this document. Although First Nickel has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on any forward-looking statements.

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