Nevada Star Resource Corp.
OTC Bulletin Board : NVSRF

Nevada Star Resource Corp.

October 16, 2006 10:54 ET

Nevada Star Resource Corp. Announces the Acquisition of Pure Nickel Inc.

SEATTLE, WASHINGTON--(CCNMatthews - Oct. 16, 2006) - Nevada Star Resource Corp. (TSX VENTURE:NEV)(OTCBB:NVSRF) - Robert Angrisano, President and CEO of Nevada Star Resource Corp. ("Nevada Star") announced today that it has entered into an agreement dated October 13, 2006 to acquire 100% of the shares of Pure Nickel Inc. ("Pure Nickel"). This transaction, which has been negotiated at arm's length, will constitute a reverse takeover ("RTO") of Nevada Star by Pure Nickel pursuant to TSX Venture Exchange policies.

Pure Nickel, a private Canadian exploration company based in Toronto, Canada, has two high quality nickel sulphide exploration projects located in Saskatchewan and Manitoba, Canada.

Nevada Star and Pure Nickel are creating a nickel focused exploration company to fill a void created by recent consolidation in the nickel industry. When the transaction is complete, the combined company will have in its portfolio, three high quality nickel exploration properties. With a nickel only focus, the combined company intends to advance its existing properties and acquire new nickel exploration projects.

"We are excited to join forces with Pure Nickel. This transaction will create a new company with prospective nickel properties and experienced management with proven financing skills. This new company will allow us to create shareholder value in an order of magnitude greater than that which either company previously enjoyed and a structure to seek out and discover world-class nickel deposits," stated Mr. Robert Angrisano, President and CEO of Nevada Star.

"We are pleased to find a business partner in Nevada Star that shares the same vision as Pure Nickel in the creation of a nickel focused exploration company. Pure Nickel's management team, properties, institutional shareholder base and capital raising capabilities augment Nevada Star's strong and loyal shareholder base and property portfolio and significantly add to the critical mass necessary to explore and find new discoveries," stated Mr. Jay Jaski, Chairman and CEO of Pure Nickel.

The combined company will have interests in the following properties:

MAN Alaska Property, Alaska - Nevada Star's 100% owned MAN Alaska project consists of a 300,000 acre (300 square mile) nickel-copper-cobalt-PGE "drill ready" project. Exploration to-date indicates that the MAN Alaska property has the potential for the discovery of high-quality deposits of nickel, copper, gold, cobalt, and PGMs, occurring in a geologic environment similar to that which hosts the Noril'sk deposits in Russia. Grab samples from the MAN Alaska property contain up to 15.4% nickel, 16% copper, and 0.21 oz/ton gold, 2.6 oz/ton silver and high levels of PGMs.

The Axis Lake Project, Saskatchewan - Pure Nickel can acquire up to an undivided 80% working interest in the Axis Lake Nickel-Copper project ("Axis Project") from Red Dragon Resources Corp. (TSX VENUTRE:DRA). The Axis Project lies directly north of the Athabascan Basin in the Fond-du-Lac region of Northern Saskatchewan, Canada. The Axis Project consists of permits totaling approximately 95,000 acres of highly prospective ground. This area is characterized by a large number of nickel-copper sulphide occurrences and confirmed by ground geochemical work and airborne geophysical survey. The phase one 2006 drilling program intersected mineralization in 7 of the 7 drill holes completed including one intersection of a half meter length grading 1.86% nickel. Further drilling is planned for 2006. Pure Nickel has commissioned a National Instrument 43-101 technical report on a previously reported 4 million tons inferred mineral resource at Axis Lake grading 0.66% nickel and 0.35% copper. Readers are cautioned that while this historical resource estimate is considered to be reliable and relevant, it does not comply with the guidelines of National Instrument 43-101, it has not been verified by Nevada Star's Qualified Person and should not be relied upon.

Fox River Project, Manitoba - Pure Nickel also has an agreement with Xstrata Plc. to earn a 50% interest in the Manitoba Fox River Project. Fox River occurs in the Circum Superior Belt and is one of the largest ultramafic complexes in Canada. The Fox River project area is over 100 kilometers in length and is flanked to the west by the Thompson Nickel Belt and to the east by the Raglan Nickel Belt. The geological attributes at Fox River are identical but on a larger scale than found at Raglan. Since acquiring the operation from Xstrata, Pure Nickel has conducted ground geochemical sampling and is awaiting surface assays to add a level of precision to a planned winter drill program at Fox River.

The Transaction:

Nevada Star will issue approximately 88 million shares of its capital stock to the shareholders of Pure Nickel to acquire 100% of Pure Nickel. Upon completion of the transaction, the combined company will have approximately 176 million shares outstanding and the basic ownership split will be approximately 50% Nevada Star and 50% Pure Nickel.

The transaction is to be approved at a special meeting of Nevada Star shareholders expected to be held in December 2006 and the formal information circular containing the details and conditions of the transaction is expected to be mailed to Nevada Star's shareholders in November 2006. At the board meeting of Nevada Star held on October 13, 2006, the directors present unanimously recommended that shareholders vote in favor of the transaction at the Nevada Star special meeting.

Upon completion of the transaction, which is anticipated to take place in December 2006, the name of the combined company will be changed to Pure Nickel Inc. and the board of directors will consist of a majority of Pure Nickel directors to include Jay Jaski, founder of Pure Nickel and CEO of Regent Mercantile Bancorp Inc.; a successful international resource merchant bank, and preeminent lawyer and geologist, Steve Vaughan. Mr. Vaughan is Senior Partner of the prestigious Canadian law firm, MacMillan Binch Mendelson, he is chair of its Natural Resources Group and is widely acknowledged as the dean of Canadian mining lawyers. Pure Nickel shall propose two other board nominees to be named. Robert Angrisano and Monty Moore will remain on the board and Nevada Star will have an additional nominee of the combined company. Management of the combined company will be appointed at a later date by the representatives of Pure Nickel; however, management of Nevada Star will remain in place for at least six months to assist in the transition.

The transaction is subject to completion of due diligence, approval from a minimum of 66 2/3% of disinterested votes cast at the Nevada Star special meeting, and on the receipt of all regulatory and court approvals.

Nevada Star Resource Corp. is a mineral exploration company that uses advanced technology to search for metals that are in high demand world-wide. In addition to the MAN Alaska property, Nevada Star currently has projects in Nevada and Utah. The Nevada and Utah properties, which are scheduled to go into production, are in joint partnership with Round Mountain Gold Corporation and Western Utah Copper Company, respectively. For more information, including maps, photos and project descriptions, visit

Completion of the transaction is subject to a number of conditions, including Exchange acceptance and disinterested Shareholder approval. The transaction cannot close until the required Shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the Management Information Circular to be prepared in connection with the transaction, any information released or received with respect to the RTO may not be accurate or complete and should not be relied upon. Trading in the security of Nevada Star should be considered highly speculative. The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

This release was prepared by management of Nevada Star Resource Corp. who take full responsibility for its contents.

Neither the TSX Venture Exchange nor the NASD OTC Bulletin Board have reviewed or accept responsibility for the adequacy of this news release.

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