First Nickel Inc.
TSX : FNI

First Nickel Inc.

July 25, 2011 08:58 ET

First Nickel Establishes Hedge Facility

TORONTO, ONTARIO--(Marketwire - July 25, 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) is pleased to announce that it has completed forward sales arrangements for 15 million pounds of nickel, at an average contract price of US$10.37, and 12 million pounds of copper, at an average contract price of US$4.11, each of which are apportioned equally between Société Générale and Commonwealth Bank of Australia. The sales are pro-rated over the four year life of the project debt facility previously announced with the lenders. The quantities represent approximately 28% of the payable nickel, and 34% of the payable copper to be produced from the current reserve. While management believes the medium and long term fundamentals for nickel and copper are very good, the level of forward selling provides a reasonable level of risk management for the financing, while preserving the upside for the majority of its future sales.

The hedging programs are required to be in place to allow the Company to draw from the $30 million debt facility. Combined with the funds received from the recently closed private placement, the Company has now satisfied all the conditions precedent for drawdown, with the exception of a CAD$/US$ exchange rate hedge which is in the process of being implemented.

Since the launch of the capital program this past winter the Company has made good progress, such that all the critical refurbishing activities have been completed. The development contractor that will extend the ramp to the next production levels began work in May, and activities are on track for initial ore production later in this quarter. With the subsequent ramp up, the Company will be at full production in mid-2012 at an annualized rate of 10 million pounds payable nickel, and 7 million pounds payable copper.

William Anderson, President and Chief Executive Officer of the Company commented: "I am very pleased to confirm that all of the key components of our financing are in place, and we remain on track to be in production again soon. We have a great group of dedicated people at our Lockerby Mine who have worked very hard to bring us back to operating status. I look forward to later this year when, once in production we will be one of the very few publicly-listed producing nickel companies in North America."

This press 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 / copper mine in the Sudbury Basin in northern Ontario. Once the Lockerby mine reaches full production (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 concerning the anticipated use of net proceeds of the Brokered Offering and other statements that describe First Nickel's future plans, intentions, objectives or goals, and specifically include but are not limited to 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 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. 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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