Skye Resources Inc.
TSX VENTURE : SKR

Skye Resources Inc.

August 03, 2005 14:07 ET

Skye Reports Excellent Grades from Drilling at Fenix

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 3, 2005) - Skye Resources Inc. (TSX VENTURE:SKR) ("Skye") is pleased to report the initial results from an ongoing 45,000 metre drilling program at its Fenix nickel laterite project in Guatemala.

"These results, which include results to the end of June, are just the first in a series due out over the next several months. We expect they will form the foundation of the feasibility study we have underway aimed at potentially restarting the mine, which had been operated by Inco from 1977 to 1980," says Skye's President, Ian Austin.

Highlights from this drilling include:

Area 212:

- Hole 30008: 14.0 metres grading 3.15% Ni

- Hole 30012: 18.0 metres grading 2.94% Ni and a deeper zone of 12.0 metres grading 1.77% Ni

- Hole 30021: 21.8 metres grading 2.33% Ni

Area 213:

- Hole 32003: 11.7 metres grading 2.81% Ni

- Hole 32006: 19.2 metres grading 3.13% Ni

The first phase of the drilling program was designed to twin a statistically significant number of the historic drill holes in the 212, 213 and 217 (La Gloria) deposit areas. This phase began in late April and the drilling was essentially completed in early June with a total of 109 holes drilled comprising 3,728 metres.

The twinned holes were targeted within 1 metre of the original drill hole in order to allow an unbiased geological representation of the deposit, as well as the re-confirmation of the extensive historic resource database (which had been used for the former mine and smelter facility during its operation in the 1977-1980 period). This new data will also allow Skye to evaluate the multi-element chemistry of the laterite profile and to examine deeper sections of the profile in those areas where the original drilling stopped in above cut-off grade material.

Skye's technical team is particularly encouraged by the fact that in these first results, three of the holes, namely 30012, 30018 and 30020, cut deeper saprolite zones not sampled by the original drilling.

The in-fill drill program, which is designed to evaluate the less intensively drilled deposits on a 50 metre hole spacing, also got underway with 30 holes completed (421 metres) by the end of June in area 251. The first 3 holes in the 217 in-fill program (146 metres) were also completed.

Assay results have been received for nine holes drilled in area 213 and 47 holes drilled in area 212. With the exception of results from hole 30043 that require re-analysis to address a lab quality control failure, assays received to date are summarized in Table 2, and the distribution of the drill holes is summarized in Table 1. A location map showing deposit outlines is provided in Figure 1. (To view Figure 1, please click on the following link: http://www2.ccnmatthews.com/database/fax/2000/SkyeMap.pdf)

Until a revised resource estimate is prepared it is not possible to determine the impact these new drill results will have on the historical resource estimate which is based on the original drilling.

REVIEW BY QUALIFIED PERSON, QUALITY CONTROL AND REPORTS

Dr. Paul Golightly, P.Geo is the independent QP, as defined under NI43-101, responsible for the quality control and verification of the data contained in this release. The Fenix Project diamond drill core is logged and marked for sampling by company geologists. Sample lengths are 0.3 to 1.3 metres. All boreholes in the twin hole program (HQ size) are cut in half either by knife or diamond saw depending on sample hardness, with one half bagged and tagged for shipment to the sample preparation laboratory. The remaining half of the split core is returned to the core box for storage and future reference. Sample rejects are returned to the project after 15 days for long term storage; sample pulps are presently stored at the sample preparation lab.

Samples are shipped from the Fenix Project site to BSI Inspectorate in Guatemala City for sample preparation. Samples are dried at 105 degrees C for 12 hours, crushed to 90% less than 10 mesh, riffle split and pulverized to 95% less than 150 mesh. The prepared samples (150g to 200g of pulverized laterite) are air freighted to SGS Lakefield, Canada for assay by lithium borate fusion, XRF. SGS Lakefield has ISO/IEC 17025 accreditation for its mineral analytical services.

Twelve major element oxides, Loss on Ignition plus Ni and Co are analyzed. Detection limits are 0.05% for Ni and 0.01% for Co. Field duplicates (1:20) and standards or blanks (1:20) are inserted at the project site to monitor lab procedures and assay quality. All batches of analysis are subjected to statistical tests to ensure they meet established quality control criteria. Procedures for check assaying at a secondary lab are being put in place to further verify assay quality.

Mineralized intercepts are herein reported using a 1.5% Ni cut-off for the purposes of comparison with the original holes. The intercepts are averages weighted by sample length and a calculated density. New resource and reserve cut-off grades will be determined by Skye Resources during the course of its feasibility study of the Fenix Project (see February 28, 2005 news release: Feasibility Study to Commence Immediately; 45,000 Metre Drill Program Commences).

Cautionary Notices:

This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, capital and other costs and credits, timing for and results of feasibility study and other programs, receipt of property titles, potential mineral recovery processes, and other related matters. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The Fenix Project is at an early stage and all estimates and projections are based on limited, and possibly incomplete, data. More work is required before the mineralization and the Project's economic aspects can be confidently modeled. Actual results may differ materially from those currently anticipated in this presentation. No representation or prediction is intended as to the results of future work, nor can there be any promise that the estimates and projections herein will be sustained in future work or that the Project will otherwise prove to be economic.

Inco Limited, the former 70% owner of the facilities and mineral rights that comprise the Fenix project, takes no responsibility for nor makes any representation or warranty of any kind relating to any of the estimates or any other information contained in this news release.

All subsequent written and oral forward looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by this notice.



Table 1.

----------------------------------------------------------
AREA No. of HOLES METERS HOLES w/ RESULTS
----------------------------------------------------------
Twin 212 62 2231 48
------------------------------------------------
holes 213 11 250 9
------------------------------------------------
217 36 1247 0
----------------------------------------------------------
In-fill 217 3 146 0
------------------------------------------------
holes 251 30 421 0
----------------------------------------------------------


Table 2.

----------------------------------------------------------
Area Hole From To Length % Ni
----------------------------------------------------------
212 30001 13.2 27.5 14.3 2.40
----------------------------------------------------------
212 30002 10.0 23.3 13.3 2.90
----------------------------------------------------------
212 30003 6.5 21.1 14.5 2.88
----------------------------------------------------------
212 30004 2.0 19.4 17.5 2.49
----------------------------------------------------------
212 30005 10.6 32.0 21.5 2.62
----------------------------------------------------------
212 30006 22.6 40.6 18.0 2.05
----------------------------------------------------------
212 30007 2.0 19.0 17.0 1.60
----------------------------------------------------------
212 30008 13.0 27.0 14.0 3.15
----------------------------------------------------------
212 30009 6.3 35.5 29.2 2.76
----------------------------------------------------------
212 30010 0.0 9.7 9.7 1.85
----------------------------------------------------------
212 30011 6.0 26.0 20.0 2.72
----------------------------------------------------------
212 30012 4.0 22.0 18.0 2.94
----------------------------------------------------------
212 30012 33.0 45.0 12.0 1.77
----------------------------------------------------------
212 30013 0.3 20.0 19.7 2.39
----------------------------------------------------------
212 30014 0.0 15.0 15.0 2.61
----------------------------------------------------------
212 30015 1.0 15.1 14.1 2.70
----------------------------------------------------------
212 30016 15.0 27.0 12.0 2.58
----------------------------------------------------------
212 30017 14.6 33.9 19.3 1.98
----------------------------------------------------------
212 30018 21.0 26.4 5.4 2.21
----------------------------------------------------------
212 30018 35.1 38.0 2.9 1.74
----------------------------------------------------------
212 30019 11.5 32.0 20.6 2.15
----------------------------------------------------------
212 30020 22.6 25.3 2.7 2.33
----------------------------------------------------------
212 30020 35.4 37.3 1.9 1.70
----------------------------------------------------------
212 30021 1.2 23.0 21.8 2.33
----------------------------------------------------------
212 30022 3.0 18.4 15.4 2.19
----------------------------------------------------------
212 30023 12.0 21.0 9.0 2.24
----------------------------------------------------------
212 30024 16.3 18.4 2.2 1.58
----------------------------------------------------------
212 30025 1.0 16.1 15.1 2.59
----------------------------------------------------------
212 30026 3.9 18.3 14.4 1.81
----------------------------------------------------------
212 30027 11.2 24.0 12.8 2.23
----------------------------------------------------------
212 30028 14.4 21.8 7.4 2.73
----------------------------------------------------------
212 30029 not rec'd
from lab
----------------------------------------------------------
212 30030 7.8 19.0 11.2 2.31
----------------------------------------------------------
212 30031 21.8 33.2 11.4 2.23
----------------------------------------------------------
212 30032 23.3 39.9 16.7 2.52
----------------------------------------------------------
212 30033 17.2 27.0 9.8 2.13
----------------------------------------------------------
212 30034 32.0 44.0 12.0 1.97
----------------------------------------------------------
212 30035 15.5 24.0 8.5 2.15
----------------------------------------------------------
212 30036 9.6 25.2 15.6 2.17
----------------------------------------------------------
212 30037 15.5 24.0 8.5 2.15
----------------------------------------------------------
212 30038 10.3 21.8 11.5 1.77
----------------------------------------------------------
212 30039 35.8 49.6 13.9 2.33
----------------------------------------------------------
212 30040 21.6 31.8 10.2 2.07
----------------------------------------------------------
212 30041 17.1 38.4 21.3 1.72
----------------------------------------------------------
212 30042 26.6 30.7 4.1 1.83
----------------------------------------------------------
212 30043 QA/QC
failure
----------------------------------------------------------
212 30044 12.0 27.0 15.0 2.33
----------------------------------------------------------
212 30045 9.3 28.7 19.5 2.43
----------------------------------------------------------
212 30046 14.0 36.0 22.0 1.72
----------------------------------------------------------
212 30047 23.5 31.4 7.9 1.65
----------------------------------------------------------
212 30048 7.1 27.0 20.0 2.06
----------------------------------------------------------
213 32000 0.4 11.9 11.5 1.98
----------------------------------------------------------
213 32001 0.3 17.5 17.2 2.34
----------------------------------------------------------
213 32002 0.2 15.7 15.5 2.25
----------------------------------------------------------
213 32003 0.3 12.0 11.7 2.81
----------------------------------------------------------
213 32004 no signif.
intercept
----------------------------------------------------------
213 32005 6.7 15.0 8.3 2.71
----------------------------------------------------------
213 32005 25.7 29.2 3.5 1.87
----------------------------------------------------------
213 32006 0.0 19.3 19.3 3.13
----------------------------------------------------------
213 32007 0.0 9.9 9.9 1.82
----------------------------------------------------------
213 32008 0.0 16.5 16.5 2.63
----------------------------------------------------------



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