First Nickel Incorporated Announces 475 Percent Increase For Lockerby Mine

TORONTO, ONTARIO -- First Nickel Inc. (TSX: FNI) is pleased to report an updated mineral resource estimate for its Lockerby Mine in Sudbury.

To December 31, 2006, First Nickel completed 168 holes totaling 28,375 metres and has estimated a NI 43-101 compliant mineral resource that contains Indicated Resources of 1.0 million tonnes grading 2.07% Ni, 1.45% Cu and 0.07% Co, from the 64 to 67 levels, and Inferred Resources of 1.83 million tonnes grading 1.98% Ni, 1.12% Cu and 0.07% Co, from the 67 to 72 levels, at a 1.2% nickel equivalent cut-off grade. Please refer to the attached diagram of the updated mineral resource for the Lockerby Depth Zone that depicts the horizontal widths as measured from the block model using a 1.2% nickel equivalent cut-off grade. This current model does not include any of the recently released drill results on the Lockerby Depth Zone on February 26, 2007. It is anticipated that these results and those of the present drilling will further increase the resource to the 72L when they are incorporated in the next resource estimate.

This upgraded resource estimate equates to the addition of 38 million pounds of contained nickel in the Indicated Resources category on the Lockerby Depth Zone as compared to those previously reported (to NI 43-101 report filed July 2005).

“The Lockerby Mine was acquired because FNI saw the potential to increase the resources. This potential has been realized with an increase of the Indicated Resources by 475% and the Inferred Resources by 105%.” states William Anderson, President and CEO. “The Lockerby Mine is currently estimated to contain in excess of 46 million pounds of contained nickel in Indicated Resources, and 80 million pounds contained nickel in Inferred Resources, an inventory level that will allow us to plan the changes to the mine infrastructure that will lead to increased output, better productivity, reduced costs and extend the mine life well into the future.”

Based upon this estimate, First Nickel will be undertaking a new life of mine study that will include engineering and economic comparisons of shaft extension options, and mine design. First Nickel anticipates that a majority of the Indicated Resources will be converted to Mineral Reserves resulting in a significant increase in the Mineral Reserves and greatly increasing the life of mine of First Nickel’s Lockerby Operations.

Significant potential exists to expand this resource estimate below the 67 Level and drilling is ongoing to define this potential to the 72 Level in the Lockerby Depth Zone. Additional opportunities exist in and around the historic mine workings above the 46 Level where a great deal of effort has been expended entering all of the old diamond drill hole data into a workable digital database to define the areas of opportunity.


The total Indicated Mineral Resource estimate is tabulated as follows:

Classification Tonnes Ni % Cu% Co%
(000’s)
Indicated

Depth Zone 1,000 2.07 1.45 0.07

Total Indicated 1,000 2.07 1.45 0.07


Inferred

Depth Zone 1,360 2.02 1.27 0.08

East Zone 470 1.86 0.67 0.04

Total Inferred 1,830 1.98 1.12 0.07

1. 1.2% nickel equivalent (NiEq) cut-off grade used for Lockerby Depth
Resource Estimate (NiEq = Ni grade + (0.32 X Cu grade) + (0.53 X Co
grade));
2. Mineral resources which are not mineral reserves do not have
demonstrated economic viability. The estimate of mineral resources
may be materially affected by environmental, permitting, legal,
taxation, sociopolitical, marketing, or other relevant issues;
3. The quantity and grade of reported inferred resources in this
estimation are conceptual in nature and there has been insufficient
exploration to define these inferred resources as an indicated or
measured mineral resource and it is uncertain if further exploration
will result in upgrading them to an indicated or measured mineral
resource category.

Mineral Resource Estimate
The Mineral Resource model was prepared by the FNI Technical Team. The model and modelling procedures have been reviewed by Scott Wilson Roscoe Postle Associates Inc. (SWRPA), an independent, geological and mining consulting firm. In SWRPA’s opinion the Mineral Resource Modeling and the Mineral Resource estimation, conform to NI 43-101 standards. In SWRPA’s opinion, the density of drilling and continuity of mineralization is sufficient to classify the estimated resources between the 64 and 67 levels on the Lockerby Depth Zone as Indicated Mineral Resources and between the 67 and 72 Levels on the Lockerby Depth Zone and the Lockerby East Zone as Inferred Mineral Resources. This resource estimate will form a portion of a more comprehensive Technical Report being prepared by SWRPA.

A total 129 drill holes representing 26,677 metres of diamond drill core has been completed within the Lockerby Depth Zone and 92 drill holes representing 14,118 metres of diamond drill core has been completed within the Lockerby East Zone a portion of which were historic drill holes completed by Xstrata Nickel (formerly Falconbridge Limited). A total of 1,758 assay samples were used in the resource estimate for the Lockerby Depth and a total of 709 assay samples for the Lockerby East. The Mineral Resource estimate for the Lockerby Mine was derived from block models created with Datamine(c) software, applying industry standard resource modelling procedures. Grade was interpolated into the blocks using Ordinary Kriging, and results were compared to that derived from Inverse Distance Squared weighting (ID2). Multiple iterations of the model were completed with varying input criteria and compared for accuracy and reproducibility. A cut-off value of 1.2% NiEq was selected as a base case for the Lockerby Mine model.

First Nickel’s diamond drill program was carried out under the supervision of First Nickel’s Chief Mine Geologist, Stephen Conquer, P.Geo. and First Nickel’s Sudbury Exploration Manager, Phil Vicker, P.Geo., “qualified persons” as defined by National Instrument 43-101. The Mineral Resource modelling was carried out under the supervision of First Nickel’s Sudbury Exploration Manager, Phil Vicker, PGeo, a “qualified person” as defined by National Instrument 43-101. The independent audit of the Mineral Resource estimate was completed by Richard Routledge, M.Sc. PGeo. Of Scott Wilson Roscoe Postle Associates, a “qualified person” as defined by National Instrument 43-101. The information in this release was prepared under the direction of Paul Davis, PGeo, Vice President of Exploration for First Nickel Inc., a “qualified person” as defined by National Instrument 43-101. First Nickel Inc. follows a rigorous QA/QC protocol on all of its exploration projects.

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.

To view Map please click the following link: http://www.ccnmatthews.com/docs/FNImap.pdf

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