Skye Resources announces first quarter results

    TSX Symbol: SKR

    VANCOUVER, May 14 - Skye Resources Inc. ("Skye" or "the Company")
(TSX:SKR) today released its unaudited consolidated interim financial
statements for the three months ended March 31, 2007 reporting a loss of
US$5,731,000 (basic and diluted loss per share of US$0.14) compared with a
loss of US$7,061,000 (basic and diluted loss per share of US$0.27) for the
three months ended March 31, 2006. The loss for the period is principally
related to exploration and development costs for Skye's Fenix nickel laterite
project in Guatemala and general and administrative costs and non-cash
stock-based compensation expense. During the quarter the Company commenced
capitalizing certain project development costs resulting in US$4,191,000 of
expenditures being added to property, plant and equipment.
    The Company changed its functional and reporting currency to the United
States dollar effective January 1, 2007 so the results for the three months
ended March 31, 2007 are now expressed in United States dollars. The
comparative figures for the quarter ended March 31, 2006 and in the balance
sheet as at December 31, 2006 are similarly expressed in United States dollars
to conform with the presentation in the current period.
    All of the Company's 2007-Warrants were exercised on or before the expiry
date of March 24, 2007 and, as a consequence, the Company received
US$16,279,000 (C$19,052,000) in the three months ended March 31, 2007. Shares
outstanding on March 31, 2007 were 44,110,068.
    Skye is now undertaking the basic engineering for the Fenix ferro-nickel
project while it is negotiating the Engineering, Procurement and Construction
Management ("EPCM") contract and obtaining environmental approvals and
construction permits. It is also advancing its project financing arrangements
and is aiming to place orders for critical path items and begin major
construction activities on site in the third quarter with the objective of
initiating production from the first line in late 2009.
    In the feasibility study case, the second line will not start operation
until a new solid fuel power plant is constructed. Skye is investigating the
economic viability of accelerating this commissioning by bringing forward the
completion of the second kiln and acquiring reciprocating engine generators to
supply the power for the expanded plant. Reciprocating engines would be in
operation before the solid fuel power plant could be completed but would
require additional environmental approval.
    The potential advantages of the accelerated start of commissioning of the
second line is an increase in nickel production in the first three years of
approximately 20 million pounds in aggregate from the feasibility study case
and mitigation of the risk of delay in the availability of electricity from
the solid fuel power plant as a result of lengthening delivery dates for key
components of the power plant. The initial capital cost of the reciprocating
engines would be significantly less than the cost of the solid fuel power
plant which could reduce the financial requirements of the project and
introduce the possibility of financing the solid fuel power plant out of
project revenues.
    The Company has continued to implement new initiatives designed to
strengthen and extend community relations efforts and social development
activities. Several key personnel were added to the Company's local team to
ensure the transparency and reach of our communications program. Our focus, in
partnership with government and non-government organizations, is to support
the local community and move the region closer to solving lingering land
issues.
    Skye's unaudited consolidated interim financial statements and
Management's Discussion and Analysis (MD&A) for the period ended March 31,
2007 will be filed on SEDAR and available for download at www.sedar.com.
    Skye's Annual Meeting of its shareholders is scheduled for May 17, 2007.

    About Skye

    Skye is an international mining company focused on becoming a new
mid-tier nickel producer. The Company acquired the rights to its Guatemalan
lateritic nickel project (the Fenix project) in December 2004 and in October
2006 received the results of a feasibility study for a ferro-nickel project at
Fenix using proven conventional smelting technology. www.skyeresources.com

    Cautionary Notices:

    This news release contains certain forward-looking statements that
involve risks and uncertainties, such as statements of Skye's plans,
objectives, strategies, expectations and intentions. The words "may", "would",
"could", "will", "intend", "plan", "anticipate", "believe", "estimate",
"expect" and similar expressions, as they relate to Skye, or its management,
are intended to identify such forward-looking statements. Many factors could
cause Skye's actual results, performance or achievements to be materially
different from any future results, performance or achievements that may be
expressed or implied by such forward-looking statements. The forward-looking
statements included in this news release represent Skye's views as of the date
of this news release. While Skye anticipates that subsequent events and
developments may cause its views to change, it specifically disclaims any
obligation to update these forward-looking statements. These forward-looking
statements should not be relied upon as representing its views as of any date
subsequent to the date of this news release. All subsequent written and oral
forward-looking statements attributable to Skye or persons acting on its
behalf are expressly qualified in their entirety by this notice.

For further information: Ian G. Austin, President & Chief Executive
Officer, Tel.: (604) 602-9500; Martti Kangas, Investor Relations, The Equicom
Group, Tel: (416) 815-0700 x 243, mkangas@equicomgroup.com; David Feick,
Investor Relations, The Equicom Group, Tel: (403) 538-4787,
dfeick@equicomgroup.com

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