First Nickel Inc.

First Nickel Inc.

August 03, 2005 08:30 ET

First Nickel Options Strategic Footwall Property Adjoining East Zone Of Lockerby Mine In Sudbury From Landore Resources Canada

TORONTO, ONTARIO--(CCNMatthews - Aug. 3, 2005) - First Nickel Inc. (TSX:FNI) today announced it has entered into an option/joint venture agreement with Landore Resources Canada Inc. to acquire a 70% interest in the Landore Property adjoining the East Zone of the Lockerby Mine near Sudbury, Ontario.

The agreement provides for First Nickel to make cash payments of $150,000 and carry out exploration and development expenditures of $6 million over a four-year period. Should First Nickel fully exercise the option, Landore shall decide whether it wishes to participate to the extent of its 30% working interest in the development of any deposits delineated by First Nickel, failing which, First Nickel shall have the right to increase its interest to 85% by completing a bankable feasibility study within two years thereafter. The completion of the transaction is subject to the execution of a definitive agreement and regulatory approvals, if required.

The 130-hectare Landore property extends for approximately 1.3 kilometres into the footwall south of the Lockerby East portion of First Nickel's Lockerby Mine property. Given the copper-depleted nature of the known contact-style ores and the presence of extensive Sudbury breccia in the footwall, there is significant potential for high grade copper-PGE deposits in the footwall to the Lockerby East ore system.

The Landore property also contains the historic Conwest deposit. This contact-related deposit was estimated in the 1960's to have a mineral inventory of 4.3 million tons at 0.52% nickel and 0.33% copper. This resource should be considered non-compliant with National Instrument 43-101. The centre of the deposit lies at approximately 250 metres vertical depth. Of particular interest to First Nickel are indicated areas of much higher grade within the Conwest deposit - for example, 2.35% nickel, 0.35% copper over 15.5 feet in hole WG-27 and 2.32% nickel, 0.77% copper over 7.7 feet in hole WG-9, etc. Platinum-palladium-cobalt values are unknown. This deposit is approximately 500 metres above First Nickel's Lockerby East deposit, along the same ore system, suggesting that there is considerable potential to find additional contact-related mineralization along this trend.

First Nickel plans to mount an aggressive exploration campaign on the Landore property commencing immediately. This will include deep-penetration induced polarization surveys from surface, detailed mapping of the distribution of Sudbury breccia on the property and a thorough review of past drilling on the Conwest deposit to attempt to delineate areas of higher grade which may be accessible by a ramp from surface. First Nickel is also currently laying out plans for a major underground drilling program at Lockerby East to increase confidence levels in the existing resource base and to explore for more resources in the vicinity. In view of the Landore acquisition, a number of these underground holes will be continued south to explore for footwall deposits.

"We are thrilled to have made this agreement with Landore, which will greatly add to the exploration potential in and around the Lockerby Mine," said Elizabeth Kirkwood, President & CEO of First Nickel. "We are still on track to be in full commercial production at the Lockerby Mine in the fall of 2005."

At June 30, 2005, First Nickel had working capital of approximately $20.2 milllion and 53.4 million common shares issued and outstanding.

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