Skye Resources receives environmental permits for Fenix Project

    TSX Symbol: SKR

    VANCOUVER, June 7 - Skye Resources Inc. ("Skye") announces that its
Guatemalan subsidiary, Compania Guatemalteca de Niquel, S.A. (CGN), has
received formal written approvals from the Guatemalan Ministry of Environment
and Natural Resources (MARN) for the four component environmental impact
assessments (EIAs) relating to the processing plant and related activities at
its Fenix ferro-nickel project. Approval of the EIA for mining activities was
received from MARN in January 2006.
    "This represents an essential milestone for the project and keeps us on
track to initiate construction activities later this year, with the target of
being in production in the second half of 2009," said Ian Austin, President &
CEO of Skye.
    Basic engineering for the project is 50% complete, and site clean-up is
underway. Negotiation of the Engineering, Procurement and Construction
Management ("EPCM") contract is nearing completion. Skye expects to approach
the credit rating agencies shortly, consistent with completing its debt
financing in the third quarter.
    Skye is considering accelerating the commissioning of the second line at
the Fenix project, by sourcing additional power supply during ramp-up in order
to increase nickel production in the early years of operation. To achieve this
Skye is assessing the viability of acquiring reciprocating engine generators
to provide the needed power and is also in advanced negotiations for a power
purchase agreement (PPA) to obtain the power over the Guatemalan grid. Both of
these alternatives would require additional environmental approvals, and the
PPA alternative also would require confirmation of technical viability, and
the successful completion of a binding PPA with the supplier of power. Skye
will make a determination how to proceed once these issues are resolved.
    If Skye is able to arrange for power supply from generators or under a
PPA, the solid fuel power plant included in the October 2006 feasibility study
could be deferred and financed out of project cash flows. While the deferral
of the solid fuel power plant would increase operating costs it would reduce
the immediate financing requirement for the project (including working
capital, cost overrun facilities and interest during construction) from
approximately US$1.1 billion to approximately US$800 million if a PPA is
concluded. The use of generators would increase the financing requirement
above US$800 million but it would still be less than US$1.1 billion. In either
case Skye's financial advisors have indicated that over 60% of the financing
requirements can be funded through senior debt.

    About Skye

    Skye is an international mining company focused on becoming a new
mid-tier nickel producer, which acquired the rights to its Guatemalan
lateritic nickel project (the Fenix project) in December 2004 and in October
2006 completed 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