15 August 2008

Manager Announcements

Company Announcements Office

Australian Securities Exchange

10th Floor, 20 Bond Street

SYDNEY NSW 2000

Drilling Update

Results from Extended Deeps Drilling

Pending completion of the new in-pit resource calculation, the focus has switched to drilling up potential underground resource in the Extended Deeps area.  There are now 4 rigs drilling the Extended Deeps.  The most recent results are reported below.

Composite results from the Extended Deeps

0.5% Ni cut off grade, 4m minimum mining width

These results are very encouraging.  The average of all 4 Extended Deeps holes announced to date is 92m at 0.89% Ni, demonstrating excellent potential for bulk underground mining at Santa Rita.  The mineralisation in this area appears to be getting higher grade and more consistent at depth.  The true widths of these results are about 90% of down-hole widths.

 As set out in the attached schematic long-section, the Extended Deeps program comprises 17 holes on approximate 120m x 105m spacing.  There will be 5 holes on each of sections 400N, 505N and 610N, collectively drilling up 600m of down-dip extension and 300m of strike.  In addition, there is one hole drilled on each section further north and south to test potential strike extensions.  Further strike extension holes are planned, particularly to the north.

The status of the program is 4 holes drilled and announced, 8 holes drilled with assays pending, 4 holes being drilled, and only one hole to be drilled.  The visual observations of the 8 holes with assays pending are encouraging - the mineralised zone remains thick, continuous and predictable.  Upon completion of this initial program (and receipt of assays) a JORC Inferred Resource calculation will be undertaken, expected to be announced in about 3 months time. 

In conjunction with the Extended Deeps drilling program, the Company has commenced a scoping study into potential underground mining at Santa Rita, including further expansion of the plant to accommodate additional underground throughput.  The aim is to develop an underground project that operates contemporaneous with the open-cut, using the early open-cut project cash flows to pay for underground development and an associated plant expansion.

Results from Southern Deeps pit extension drilling

Results of the last two pit extension holes are as follows:

Composite results from the Southern zone

0.4% Ni cut off grade, 4m minimum mining width

* MBS-437 was extended from a depth of 412m to 646m

MBS 437 was a surprisingly good result.  The hole was originally stopped short due to a lost drill bit.  The recent extension of this hole has recorded one of the best results to date at Santa Rita and will assist the current in-pit resource calculation.  The true widths of these results are about 90% of down-hole widths.

New In-pit Resource Estimate

The pit extension drilling program is complete and all assays returned.  An updated in-pit resource calculation is now well advanced and expected to be completed within 2 weeks.  The corresponding open-pit mining reserve is expected late next month.

      More details of the above results are set out in Attachments 1, 2 and 3.

Background

Mirabela Nickel Ltd is listed on the Australian and Toronto stock exchanges. With an open-cut mining reserve of 84mt grading 0.61% Ni, Santa Rita is the largest greenfields nickel sulphide discovery in the last 12 years and the third largest open-cut nickel sulphide mining reserve worldwide. 

Construction of a nickel sulphide concentrator commenced in November 2007 and is progressing well. The plant is expected to produce 18,500 tpa of nickel in a sulphide concentrate from one open-cut mine starting from mid 2009 increasing to 27,000 tpa by mid 2010.  At this rate of production the project will have a mine life of at least 14 years.

Contact details

Australia contact:                                                                                                    Toronto contact (media):

Nick Poll, Managing Director                                                                                 Eric Tang, Porter Novelli

Telephone: +61 8 9324 1177                                                                               Telephone: +1 (416) 422-7200

nickp@mirabela.com.au                                                                                        eric.tang@porternovelli.com

Australia contact (media):

Caroline de Mori, Purple Communications

Telephone: +61 8 9485 1254

cdemori@purplecom.com.au

The information in this report that relates to Mineral Resources and Exploration Results is based on information compiled by Lauritz Barnes who is a Member of The Australian Institute of Geoscientists.  Lauritz Barnes is consultant to Mirabela Nickel Limited.  Lauritz Barnes has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ?Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserve? and a Qualified Person in accordance with NI 43-101.  Lauritz Barnes consents to the inclusion in the report of the matters based on their information in the form and context in which it appears.

Caution Regarding Forward Looking Statements: There can be no assurance that an expanded mineral resource or reserve will be established at the Santa Rita Project.  The forward-looking statements made in this news release are based on assumptions and judgments of management regarding future events and results. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any anticipated future results, performance or achievements expressed or implied by such forward-looking statements.

Attachment 1: New intersections ? Extended Deeps drilling

(0.5% Ni cut off grade)

All chemical analyses were completed by ALS Chemex, Vancouver, Canada

Attachment 2: New intersections ? Southern Zone drilling

(0.4% Ni cut off grade)

All chemical analyses were completed by ALS Chemex, Vancouver, Canada

¹ MBS-437 ? extended from 412m to 646m.

Attachment 3:  Drill hole collar locations

¹ MBS-437 ? extended from 412m to 646m.

² TS ? Total Station Survey Tool.

Attachment 4:  Long Section

***

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Issued by

Purple Communications

Level 3, 28 Kings Park Road, WEST PERTH WA 6005

Ph: 08 9485 1254     Fax: 08 6263 0455

purple@purplecom.com.au