First Nickel Inc.

First Nickel Inc.

March 22, 2005 10:08 ET

First Nickel Inc. Options Three Exploration Properties From Falconbridge In The Sudbury Basin


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: FIRST NICKEL INC.

TSX SYMBOL: FNI

MARCH 22, 2005 - 10:08 ET

First Nickel Inc. Options Three Exploration Properties
From Falconbridge In The Sudbury Basin

TORONTO, ONTARIO--(CCNMatthews - March 22, 2005) - First Nickel Inc.
(TSX:FNI) ("First Nickel") is pleased to announce that it has entered
into a non-binding letter of intent with Falconbridge Limited to earn
interests in three exploration properties located on the north range of
the Sudbury Basin. Strategically located along a 10 kilometre section of
the east portion of the North Range, the Bowell, Foy Mouth and
Morgan-Lumsden properties represent a very attractive exploration
package for First Nickel. A known deposit on the Bowell property has
near-term open pit production potential.

Option Terms

Bowell

First Nickel will commit to spend $1.5 million in exploration and
various studies including: metallurgical, engineering and environment
and complete a feasibility study on the Bowell Property within 12
months. First Nickel will vest for 100% interest in the Bowell Property
by paying Falconbridge $2 million in cash and meeting commercial
production within 24 months of signing the definitive agreement. First
Nickel will be the operator of the Bowell Property.

Foy Mouth

First Nickel will have the right to earn a 50% interest in the Foy Mouth
Property by committing to exploration funding of $3 million in 2005 and
$4 million in 2006, with option to spend an additional $6 million over
the following three years. First Nickel will vest its 50% interest by
completing a bankable feasibility study on a deposit of not less than
50,000,000 pounds of nickel equivalent and payment of $2 million to
Falconbridge. A 15,000+/- m metre drill program under Falconbridge's
direction is slated to commence shortly on the Foy Mouth property.
Falconbridge will be the operator of the Foy Mouth Property.

Morgan-Lumsden Property

First Nickel will have the right to earn a 50% interest in the
Morgan-Lumsden Property by committing to exploration funding of $1
million in 2005, with option to spend an additional $2 million over four
years. First Nickel will vest its 50% interest by completing a bankable
feasibility study on a deposit of not less than 50,000,000 pounds of
nickel equivalent and payment of $2 million to Falconbridge.
Falconbridge will be the operator of the Morgan-Lumsden Property.
The transaction is subject to the execution of definitive agreements.

Elizabeth Kirkwood, President & CEO of First Nickel stated "The
opportunity to acquire interests in these very prospective properties on
the north range of the Sudbury Basin is in keeping with our strategic
plan to be a near-term nickel producer and to secure a solid foothold in
the Sudbury mining area."

Geological Merits

Bowell

The Bowell property hosts a contact deposit with measured resource of
601,800 tonnes averaging 1.18% Ni, 0.71% Cu, and 0.04% Co, an indicated
resource of 645,900 tonnes averaging 1.17% Ni, 0.35% Cu, and 0.043% Co
and an inferred resource of 400,000 tonnes at 1.1% Ni, 0.2% Cu, and
0.04% Co. (Falconbridge 2003) FNI is of the opinion that these resources
conform to NI 43-101 standards. The northwest portion of the Bowell
deposit extends to surface and presents potential for an open pit mine
scenario. This deposit is open to expansion by further drilling down-dip
and along strike as well as within the immediate footwall below the
contact. Of particular interest to First Nickel is that the deposit has
above average Ni:Cu ratios suggesting that there may be considerable
potential for high grade footwall-type deposits in the Sudbury Breccia
units which are known to exist on the property. In addition, there is
1.5 kilometres of completely undrilled North Range SIC contact present
to the northeast of the known deposit on the property. First Nickel
plans to mount an aggressive drilling program to explore for footwall
type deposits, expand the known deposit and test the SIC contact to the
northeast. Metallurgical, engineering and permitting work commenced by
Falconbridge on the known deposit will be advanced with a view to
completing a feasibility study and, if positive, putting this deposit
into commercial production as soon as possible.

Foy Mouth

Foy Mouth covers an area of 323 hectares at the junction of the Sudbury
Igneous Complex ("SIC") and the Foy Offset Dike along the North Range.
Significant exploration potential exists on this property. One area of
immediate interest in terms of a near surface nickel deposit is that
along the SIC contact in the area of Roland Lake in the west portion of
the property. Drilling by Falconbridge has established the presence of a
mineralized sub layer embayment structure with nickel values in the 0.7
to 1.5% range over core lengths of 2 to 20 metres. A small
electromagnetic anomaly immediately beneath Roland Lake remains
untested. A second high priority area is located on the northeast side
of the Foy offset dike, immediately north of the junction with the SIC.
Recent mechanical stripping and surface sampling of sulphide zones by
Falconbridge yielded values of up to 3 metres of 1.52% Ni and 0.54% Cu.
This and other surface sulphide zones in this immediate area remain to
be tested by a series of shallow drill holes.

Morgan-Lumsden

There have only been 3 widely spaced holes drilled to date along the
favourable basal contact of the SIC on the 249 hectare Morgan-Lumsden
property. These were limited to the contact above 500 metres depth. The
property remains completely unexplored below 500 metres depth and up to
2 kilometres of untested contact strike-length is present between 500
and 1500 metres depth. At least 3 holes will be drilled by Falconbridge
as operator into this large area to explore for contact style nickel
sulphide deposits. There are also indicated to be abundant dikes of
Sudbury Breccia in the footwall gneisses.

William E. Brereton, P.Eng., a director of First Nickel, is First
Nickel's qualified person under National Instrument 43-101 guidelines.

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    First Nickel Inc.
    Elizabeth Kirkwood
    President & CEO
    (416) 364-6928
    (416) 364-0618 (FAX)
    ekirkwood@firstnickel.com
    or
    Falconbridge Limited
    Denis Couture
    Vice President - Investor Relations
    (416) 982-7020
    (416) 982-7242 (FAX)
    denis.couture@toronto.norfalc.com