First Nickel Inc.
TSX : FNI

First Nickel Inc.

March 22, 2006 17:15 ET

First Nickel Reports on Annual Financial Statements for Fourteen Months Ended December 31, 2005

TORONTO, ONTARIO--(CCNMatthews - March 22, 2006) - First Nickel Inc. (TSX:FNI) announces that it has filed with the Canadian securities regulatory authorities its audited financial statements, management's discussion and analysis of financial results for the fourteen months ended December 31, 2005.

The Company recorded a loss of $4,001,494, or $0.09 per share in the fourteen month period ended December 31, 2005. This compares to a net loss of $109,802, or $0.01 per share for the previous year's truncated period ended October 31, 2004. The significant increase in the net loss is mostly attributable to higher general and administrative expenses of $1,518,543, as the company shifted its focus from being primarily an exploration company to an operating company, the inclusion of stock-based compensation expense, as a non-cash item, in the amount of $1,491,330, interest expense of $1,925,190, including amortization of the premium (being the difference between the face value and the assigned value) on the debentures of $845,833 on the 11% Series A Debentures issued in conjunction with the completion of the Lockerby Mine acquisition, as well as a write-down of $488,500 on the Kamiskotia property as exploration results to date do not support any further work on this property. The expenditures in the year earlier period were nominal, as the Company was a private company until it went public in June 2004.

It is expected that in 2006, being the first full year of operations at the Lockerby Mine, the Company will achieve operating profits.

Ore tonnage milled in December 2005 from the Lockerby Mine was 5,715 tonnes grading 2.58% nickel and 1.32% copper. Payable metal production was 248,500 pounds of nickel and 143,000 pounds of copper. Estimated revenue derived from metal production of $2,234,175 was credited against pre-production capital costs as the Lockerby Mine was in the pre-production phase until January 1, 2006.



Selected Annual Information

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14 months ended Period from
December 31, 2005 Incorporation To
October 31, 2004
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Interest and other income $390,054 $88,424
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Net loss $4,001,494 $109,802
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Net Loss per share $0.09 $0.01
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Total Assets $51,422,363 $16,571,430
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Working capital $4,510,222 $11,372,713
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Long term debt $18,345,833 -
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Share Capital $24,827,425 $13,261,499
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Shareholders' Equity $22,065,657 $13,151,697
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Number of Common Shares issued 61,985,764 41,852,713
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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, except as may be required under applicable securities law.

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