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Re:   News Releases - Thursday, July 03, 2008
      First Nickel Announces the Results of the NI 43-101 Reserve
      Estimate and Mine Plan Prefeasibility Study Completed on Lockerby
      Depth Zone
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News Release No. 2008-14
View News Release in PDF Format

-Probable Mineral Reserves of 1.84 million tonnes grading 1.69% Ni,
1.16% Cu and 0.06% Co
-Estimated Net Cash Flow of $78.20 million over project life
69.3% Internal Rate of Return ("IRR")
-Net Present Value ("NPV") of $47 million at a 10% discount rate

July 3, 2008 - Toronto, Ontario - First Nickel Inc. ("First Nickel" or
the "Company") (FNI-TSX) is pleased to announce that it has received
the final report of the Prefeasibility Study ("Study") on the
development and mining of the Lockerby Depth from Genivar Limited
Partnership ("Genivar"), a consulting engineering firm based in Quebec
City, Quebec.

First Nickel will hold an investor update conference call to discuss
the mine plan and pre-feasibility study on the Lockerby Depth Zone
today at 10:30 ET.

The Study indicates that the project has an IRR of 69.3% and would
generate an undiscounted pre-tax cash flow of $78.20 million after
capital recovery assuming average metal prices of US$10.23/lb Ni, US$
2.31/lb Cu, and US$ 14.26/lb Co. An exchange rate of $C/$US 1.05 was
used for this study. Based on a 10% discount rate the project has a
$47.03 million NPV as calculated by Genivar.

Capital expenditures and ongoing investments, including a 15%
contingency, are estimated to total $85.98 million of which $52.21
million is required during the preproduction phase.

Metal production would total 46 million pounds payable nickel, 37
million pounds payable copper, and 900 thousand pounds payable cobalt.
The primary mining methods proposed were descendant longhole mining to
the 65-1 Level (a continuation of the current plan) and ascendant
longhole stoping between the 69 and 65-1 levels.

Unit cash operating costs net of by-product credits are estimated at
US$6.08 per pound of nickel over the 5.2 year mine plan, attaining a
low of US$5.70/lb in peak production years of 420,000tpy. Mine
operating costs are estimated to average $130/tonne.

The Study derived the reserves from an estimated Indicated Mineral
Resource of 2.89 million tonnes grading 1.78 percent nickel, 1.23
percent copper and 0.06 percent cobalt at a 1.0 percent nickel
equivalent cut-off grade. Conversion of the upper part of the
resources, above the 69 Level, to reserves yielded a Probable Mineral
Reserve of 1.838 million tonnes grading 1.69 percent nickel, 1.16
percent copper and 0.06 percent cobalt. Reserves were estimated using a
1.5 percent nickel equivalent cut-off grade, 15 percent dilution, and
91 percent extraction.

Genivar believes that their Probable Mineral Reserve is conservative.
Opportunities exist to reintroduce some of the stopes located on the
margins of the deposit that were eliminated from the model, as a result
of the increased cut off grade, once a new resource block model has
been constructed using the higher cut off grade.

The Lockerby Depth Project Mine Plan schedule extracting the Probable
Mineral Reserves would last 5.2 years consisting of 1.5 years of
preproduction and 3.7 years of development and production at a full
production rate of 1,200 tonnes per day or 420,000 tonnes per year. It
also assumed launch of the program in 2008 with operations ongoing. The
critical components of the capital plan that will increase output and
reduce unit costs are the development program, replacing of the haulage
fleet with electric trucks and optimized use of high speed personnel
carriers. The plan now needs to be taken to feasibility level that will
optimize the flow of funds by detailing the scheduling, determining the
level of ongoing mining, and formalize the start dates.

"Our goal here, and the mandate we gave Genivar, was to build a plan
that would allow us to bring our production up to the levels we need
for economies of scale and generate strong cash flow with a capital
outlay that is manageable and flexible," states William Anderson,
President and CEO of First Nickel. "We now have the basis for a mine
plan and capital program for the next 5-6 years within which we already
see additional opportunities to increase cash flow, and maximize
return.

"Significant additional upside potential remains for Lockerby. The
production profile outlined in the Study does not incorporate any ore
sourced from resources in other zones at the mine, and in the years
ahead we also expect to continue to convert more of the resources in
the Depth to reserves," concluded Mr. Anderson.

The foregoing technical information in this release was prepared or
reviewed by Paul Davis, P.Geo., Vice President Exploration for First
Nickel Inc., a "qualified person" as defined by National Instrument
43-101.

Genivar has reviewed this release and has confirmed that the
information contained in this release is consistent with the Study.
Marc Lavigne, Eng., M.Sc., Senior Mining Engineer and Project Manager,
Luc Bourguignon, Eng., Senior Mining Engineer and Jacques Gauthier,
P.Eng., Eng., MGP, Director Mining - Eastern Canada, are qualified
persons as defined in NI43-101.

First Nickel will hold an investor update conference call to discuss
the mine plan and pre-feasibility study on the Lockerby Depth Zone on
Thursday July 3rd at 10:30 ET. The presentation by President and CEO
Bill Anderson will be followed by a question and answer session.

To join the call:    
Dial-in number(s): 416-641-6136 / 866-299-6655  
     
Instant replay:
    
Dial-in number(s): 416-695-5800 / 800-408-3053 Passcode: 3265703
End date: July 10, 2008  

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.

For further information contact:

First Nickel Inc.
William Anderson, President & CEO
Toll Free: (888)-362-7050
Telephone: (416) 362-7050 Fax: (416) 362-9050
Email: wanderson@firstnickel.com

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Copyright (c) 2008 FIRST NICKEL INC. (FNI)  All rights reserved.  For
more information visit our website at http://www.firstnickel.com/ or
send mailto:info@firstnickel.com
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