First Nickel Inc.

First Nickel Inc.

July 09, 2007 11:58 ET

First Nickel Inc.: Premiere Ridge Feasibility Study Delivered to Xstrata Nickel

- Estimated Cash Flow of $27.8 million over life of mine representing a 37.1% Internal Rate of Return ("IRR") - Five year mine life - Net Present Value ("NPV") of $14.3 million at a 10% discount rate

TORONTO, ONTARIO--(Marketwire - July 9, 2007) - First Nickel Inc. ("First Nickel" or the "Company") (TSX:FNI) is pleased to announce that it has received the final report of the Feasibility Study ("Study") on the Premiere Ridge Project from Scott Wilson RPA an international consulting engineering firm based in Toronto, Ontario.

A copy of the Study was delivered to Xstrata Nickel on July 1, 2007, fulfilling a condition of the Amended Option Agreement signed on May 1, 2007.

The Study indicates that the project has an IRR of 37.1% and would generate an undiscounted pre-tax cash flow of $27.8 million after capital recovery assuming average metal prices of US$7.62 per pound nickel, US$2.19 per pound copper and US$9.00 per pound cobalt over a five year mine life. Based on a 10% discount rate the project has a $14.3 million NPV as calculated by Scott Wilson RPA. The pre-production and sustaining capital requirements have been estimated at $42.8 million and $4.2 million respectively. Unit cash operating costs net of by-product credits are estimated at US$5.49 per pound of nickel.

The Study was based upon an estimated Indicated Mineral Resource of 1.44 million tonnes grading 1.42 percent nickel and 0.54 percent copper at a 1.0 percent nickel equivalent cut-off grade. Due to the flat-lying nature of the deposit, the primary mining methods employed were room and pillar, blasthole (longhole), and ramp pillar recovery. Conversion of the resources to reserves yielded a Probable Mineral Reserve of 1.15 million tonnes grading 1.33 percent nickel and 0.53 percent copper. Reserves were estimated at a 1.0 percent nickel equivalent cut-off grade, 12 percent dilution, and 78 percent extraction. First development ore is scheduled for March of 2008, and yearly output will average 230,000 tonnes, attaining a maximum of 291,000 tonnes in 2009.

The Company is actively pursuing permit applications for the project to meet the aggressive development schedule proposed for this project. All of the baseline studies have been completed and environmental monitoring is continuing on the property.

"The positive Feasibility Study completed by Scott Wilson RPA is another indication of the viability of the Premiere Ridge Project," states William Anderson, President and CEO of First Nickel. "The capital and operating estimates in the study are in line with previous estimates made by or for FNI. With a short mine life and relatively high capital cost, the project will require strong project controls and good metal markets. The Company in the weeks ahead will continue to review ways to reduce the capital and operating costs and mitigate risks prior to a final production decision on the project."

The foregoing technical information in this release was prepared or reviewed by Paul Davis, P.Geo., Vice President Exploration for First Nickel Inc., a "qualified person" as defined by National Instrument 43-101.

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.

Contact Information

  • First Nickel Inc.
    William Anderson
    President & CEO
    (416) 362-7050 or Toll Free: 1-888-362-7050
    (416) 362-9050 (FAX)