POSITIVE RESULTS FROM SMELTER SCOPING STUDY

PERTH, AUSTRALIA  Mirabela Nickel Limited (TSX: MNB, ASX: MBN) is pleased to announce that a scoping study for a nickel sulphide smelter at its Santa Rita project has returned positive results with preliminary cost estimates as follows:

Capital expenditure – US$254m

Operating cost –  US$111/t of concentrate

As a result of these encouraging results, the Company is proceeding with a full feasibility study to build a smelter at Santa Rita.  A smelter would provide the following major benefits:

-          Substantial increase in nickel payability

-          Increase in payability for credits for Cu, Co, Au and PGEs.

-          Savings on transport costs

-          Optimization of mine, concentrator and smelter circuit

“The scoping study indicates that a smelter at Santa Rita could be an important value proposition for the Company,” said Managing Director Nick Poll.  “It’s all about making the most of the economies of scale that are available to us and Santa Rita now has the third largest open-cut, nickel sulphide mining reserve in the world.  A smelter would allow the Company to capture the revenue and operating benefits of downstream processing, whilst reducing transport costs.  We believe that the demand for nickel matte, the smelter product, is even stronger than the demand for nickel concentrate, so a smelter would also strengthen the Company’s strategic position in the nickel market,” he said.

“At this stage, we are working through the options and implications of a smelter in detail.  We remain focused on producing nickel concentrate, starting in 2009, from the currently planned operation for at least the first few years,” said Mr Poll.

The results of the smelter study coincide with today’s announcement of new drilling results that extend mineralization about 120m down dip of the recently announced open-cut mining reserve, with composite intersections up to 135m grading 0.83% nickel located in the Southern high grade zone of the Santa Rita deposit.  The occurrence of such thick mineralization is very encouraging and is expected to increase the open-pit mining reserve.

The positive smelter study has come on the back of several announcements in the past month, including the first mining reserve at Santa Rita, an updated CAPEX for the planned increase in capacity of the concentrator to 4.6mtpa and the mandating of debt financing.

Study details

WorleyParsens, a leading specialist in pyrometallurgical processing, completed the scoping study using the following Mirabela assumptions:

·         230ktpa concentrate throughput rate

·         12% nickel concentrate grade

·         25,000t of nickel a year output

The above assumptions are consistent with an expected 6.0mtpa production rate from the Santa Rita mine. 

Whilst the current planned capacity of Santa Rita is 4.6mtpa for 18,500t of nickel output, it is expected that this will be increased to 6mtpa for 25,000t of nickel within the first few years of operation due to continued growth of the resource.

The scoping study costs are estimated to within +/- 50% and used a Brazilian Real exchange rate of R$2.05 to the US dollar.

WorleyParsons has been commissioned to proceed with the feasibility study, a team has been appointed and work is underway.  The project will be split into two stages.  Stage one is expected to cover preliminary test work, thermodynamic modelling, conceptual engineering and estimation of capital cost to within +/- 30% for a cost of about A$2m.  Stage two will cover more detailed engineering and estimation of capital cost to within +/- 15%.  It is expected Stage one will be completed in Q3 2008 and Stage two in Q3 2009.  It is expected that a smelter would take about 2 years to construct.

Background

Mirabela Nickel is listed on the Australian and Toronto stock exchanges.  With a proven and probable mining reserve of 84mt at 0.61% Ni and growing, Santa Rita is the world’s largest greenfields nickel sulphide discovery in the last 12 years and the third largest open-cut nickel sulphide mining reserve.  Exploration is continuing to increase the in-pit reserves and determine underground mining potential below 500m deep, as mineralization appears to continue well below current drilling.

Construction of a nickel sulphide concentrator commenced in November 2007 and is progressing well. The plant is expected to produce 18,500t a year of nickel in a sulphide concentrate from one open-cut mine starting from mid 2009.  At this rate of production the project is expected to have a mine life of at least 18 years.  Studies are underway to increase nickel production to 25,000t a year.

Nick Poll

Managing Director

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

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, including but not limited to those with respect to the construction and development of a 18,500 tonnes per year and subsequently a 25,000 tonnes per year nickel sulphide concentrator and a nickel smelter at the Santa Rita Project and the required capital expenditures and estimated future production and operating cash costs 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. Such factors include, among others, the actual market prices of nickel, the actual results of current exploration, the actual results of future mining, processing and development activities, changes in project parameters as plans continue to be evaluated, as well as those other factors disclosed in the Company's filed documents.

www.mirabela.com.au

 ***

The new Spam Act commenced on 10 April 2004. This Act is aimed at reducing the amount of unauthorised emails you receive.  You have been receiving e-mails containing information and news releases from us on behalf of our clients because you are an important contact of Purple Communications, a boutique stakeholder communications consultancy.   If you do not wish to receive such emails from Purple, please click mailto: purple@purplecom.com.au subject=UNSUBSCRIBE or reply to this email and put UNSUBSCRIBE in the subject line and we will not email you again.

 If you do not reply, we will continue sending you relevant news and information via email. However, all future emails will allow you to unsubscribe.

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