Victory Nickel Inc.
TSX : NI

Victory Nickel Inc.

June 26, 2012 11:10 ET

Victory Nickel's Ken Murdock Discusses Plans for Victory Silica's Entry Into Frac Sand Market

TORONTO, ONTARIO--(Marketwire - June 26, 2012) - Further to the announcement of June 19, 2012, Victory Nickel Inc. ("Victory Nickel" or the "Company") (TSX:NI) (www.victorynickel.ca) today provided additional discussion on the proposed activities of its newly-created subsidiary Victory Silica Ltd. ("VSL") by VSL's CEO Ken Murdock.

Victory Nickel's objective is to establish its presence in the frac sand market through VSL prior to commencing frac sand production and sales from its 100%-owned Minago mine in Manitoba. The Minago feasibility study envisions production of up to 1.14 million tonnes per year of premium-quality frac sand from Winnipeg Formation sandstone.

"The goal is to become the preferred supplier of a full suite of import and domestic frac sand products to the Canadian market," said VSL CEO Ken Murdock. "As a first step we intend to produce premium-quality Midwest frac sand in Canada by shipping raw or partially processed sand from Wisconsin to an existing facility in Alberta. We see this as an opportunity to establish Victory Nickel as a premier frac sand supplier prior to beginning production from the 100%-owned Minago nickel project in northern Manitoba. Minago is destined to be a significant source of frac sand for many years. In addition to a large nickel deposit, the Minago open pit footprint alone contains approximately 11 million tonnes of API spec frac sand of various grades."

With the proliferation of shale oil and gas drilling and the adoption of horizontal drilling technology, demand for premium-quality frac sand imported from the Midwest United States has outpaced supply in northern markets. Combined with infrastructure constraints (rail capacity and a shortage of covered hopper rail cars which are necessary to ship fully-processed sand) it has become extremely difficult for frac service companies to access premium frac sand.

"In the frac sand business, it is important to build strong relationships with customers by proving you can deliver quality product in the quantities they want, when and where they want it," said Mr. Murdock. "We see the opportunity to add value by not only providing the products but by also streamlining frac sand logistics to meet the needs of our customers and provide the returns for our investors."

Initially, VSL intends to target opportunities in the Manitoba, Saskatchewan, Alberta and North Dakota Bakken formation and the Montney in British Columbia. Additional opportunities exist in the Eagle Ford shale in Texas, and the Marcellus and Ithaca formations in the northeastern US.

"To tap these opportunities, VSL brings several advantages," Mr. Murdock added. "Our first advantage is that I am bringing a seasoned operational team that is familiar with the Alberta facility and is excited to bring it back into production. Another advantage is that VSL will be the first producer of Midwestern frac sand in Canada. Ultimately, our suite of products will include both import and domestic sands. We will also add value for customers and investors through strategic relationships in transportation and distribution; this will minimize or eliminate costs for end users in the movement, transloading and storage of frac sand products. Locating our primary finishing facilities close to our markets in areas with a skilled labour force is also an advantage. Down the road, Minago is positioned to be a long-term source of cost-effective sand supply with excellent access to road, rail and power, and is positioned to be the frac sand producer closest to the developing Manitoba portion of the Bakken oil shale."

Annual and Special Meeting

As a reminder, the Company's Annual and Special Meeting for Shareholders ("ASM") will take place today, Tuesday June 26, 2012, at 4:00 p.m. Toronto Time at the Toronto Board of Trade, 1 First Canadian Place, Toronto, Ontario. The ASM will be webcast and can be accessed at http://www.gowebcasting.com/3407 and through Victory Nickel's website at www.victorynickel.ca.

About Victory Nickel

Victory Nickel Inc. is a Canadian company with four sulphide nickel deposits containing significant NI 43-101- compliant nickel resources. Victory Nickel is focused on becoming a mid-tier nickel producer by developing its existing properties, Minago, Mel and Lynn Lake in Manitoba, and Lac Rocher in northwestern Québec, and by evaluating opportunities to expand its nickel asset base. Through a wholly-owned subsidiary, Victory Silica Ltd., Victory Nickel is establishing a presence in the frac sand market prior to commencing frac sand production and sales from Minago.

Please visit the Company's website at www.victorynickel.ca. Should you wish to receive Company news via email, please email juliet@chfir.com and specify "Victory Nickel" in the subject line.

Forward-Looking Information: This news release contains forward-looking information. All statements, other than statements of historic fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future constitute forward-looking information. This forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company. Forward-looking information is subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: uncertainty of estimates of capital and operating costs, production estimates and estimated economic return; the possibility that actual circumstances will differ from estimates and assumptions; uncertainties relating to the availability and costs of financing needed in the future; failure to establish estimated mineral resources; fluctuations in commodity prices and currency exchange rates; inflation; recoveries being less than those indicated by the testwork carried out to date (there can be no assurance that recoveries in small scale laboratory tests will be duplicated in large tests under on-site conditions or during production); changes in equity markets; operating performance of facilities; environmental and safety risks; delays in obtaining or failure to obtain necessary permits and approvals from government authorities; unavailability of plant, equipment or labour; inability to retain key management and personnel; changes to regulations or policies affecting the Company's activities; the uncertainties involved in interpreting geological data; and the other risks disclosed under the heading "Risk Factors" and elsewhere in the Company's annual information form dated March 30, 2012 filed on SEDAR at www.sedar.com. Forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.

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