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Re: News Release - Wednesday, January 16, 2008
First Nickel Reports 289% Increase in Indicated Resources at the
Lockerby Mine
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Investor Update Conference call at 2:00 pm ET today

News Release No. 2008-01

January 16, 2008 - Toronto, Ontario - First Nickel Inc. (FNI-TSX) is
pleased to report an updated mineral resource estimate for its Lockerby
Mine in Sudbury.

First Nickel has estimated a NI 43-101 compliant Mineral Resource that
contains Indicated Resources of 2.89 million tonnes grading 1.78% Ni,
1.23% Cu and 0.07% Co, from the 65 to 72 levels, and Inferred Resources
of 0.38 million tonnes grading 1.37% Ni, 1.05% Cu and 0.05% Co, below
the 72 Level. A 1.0% nickel equivalent cut-off grade was used for this
resource estimate. The resource estimate does not include the 64
Level, which was part of the March 2007 resource estimate and is
currently being mined.

This upgraded resource estimate equates to a total of 113 million
pounds of contained nickel in the Indicated Resource Category for the
Lockerby Depth Zone and represents a net increase of 68 million pounds
as compared to those previously reported in March 2007.

"The potential of the Lockerby Depth Zone has expanded significantly
with an increase of the Indicated Resources by 289% above the March
2007 Resource Estimate. We are gratified that, when compared to the
Indicated Resources at the time of purchase of the Lockerby Mine in
2005, we have increased the Indicated Resources more than ten-fold in
less than 3 years." stated William Anderson, President and CEO. "Based
on this new Resource Estimate, the Lockerby Mine currently has in
excess of 100 million pounds of contained nickel in the Indicated
Resource category which should allow First Nickel to plan for mine
expansion and increased production."

Using this estimate, First Nickel expects to complete a new life of
mine study this quarter that will include engineering and economic
comparisons of shaft extension options and mine design. It is
anticipated that such infrastructure improvements, based on the new
resource model, will yield increased output, better productivity,
reduced costs and will extend the mine life by 8 years or more.

Mineral Resource Estimate

The Mineral Resource model was prepared by the FNI Technical Team. The
model and modelling procedures have been reviewed by Scott Wilson
Roscoe Postle Associates Inc. (Scott Wilson RPA), an independent,
geological and mining consulting firm. In Scott Wilson RPA's opinion
the mineral resource modeling and the Mineral Resource estimation,
conform to NI 43-101 standards. In Scott Wilson RPA's opinion, the
density of drilling and continuity of mineralization is sufficient to
classify the estimated resources between the 65 and 72 levels on the
Lockerby Depth Zone as Indicated Mineral Resources and below the 72
Levels on the Lockerby Depth Zone and the previously reported Lockerby
East Zone as Inferred Mineral Resources. This resource estimate will
form a portion of a more comprehensive Technical Report being prepared
by Scott Wilson RPA.

The total Indicated Mineral Resource estimate is tabulated as follows:

Classification Tonnes Ni% Cu% Co%
(000's)
Indicated
Depth Zone 2,890 1.78 1.23 0.07
Total Indicated 2,890 1.78 1.23 0.07

Inferred
Depth Zone (1) 380 1.37 1.05 0.05
East Zone (2) 470 1.86 0.67 0.04
Total Inferred 850 1.64 0.84 0.04

1. 1.0% nickel equivalent (NiEq) cut-off grade used for Lockerby Depth
Resource Estimate (NiEq equals Ni grade + (0.32 X Cu grade) +
(0.53 X Co grade));

2. A 1.2% nickel equivalent (NiEq) cut-off grade was used for Lockerby
East Resource Estimate where 16,254 tonnes have been produced from
the Lockerby East Zone since the publication of the Resource
Estimate in March 2007 (NiEq equals Ni grade + (0.32 X Cu grade) +
(0.53 X Co grade));

3. Mineral resources which are not mineral reserves do not have
demonstrated economic viability. The estimate of mineral resources
may be materially affected by environmental, permitting, legal,
taxation, sociopolitical, marketing, or other relevant issues;

4. The quantity and grade of reported inferred resources in this
estimation are conceptual in nature and there has been insufficient
exploration to define these inferred resources as an indicated or
measured mineral resource and it is uncertain if further exploration
will result in upgrading them to an indicated or measured mineral
resource category.

View Chart: http://www.firstnickel.com/i/misc/2008-01-16_NRC.gif

A total of 164 First Nickel drill holes comprising 32,453 metres of
Diamond drill core and 5,096 assay samples have been used for the
Lockerby Depth Resource Estimate. The Mineral Resource estimate for
the Lockerby Mine was derived from block models created with
Datamine(c) software, applying industry standard resource modelling
procedures. Grade was interpolated into the blocks using Ordinary
Kriging, and results were compared to that derived from Inverse
Distance Squared weighting (ID2). Multiple iterations of the model
were completed with varying input criteria and compared for accuracy
and reproducibility. A cut-off value of 1.0% NiEq was selected as a
base case for the Lockerby Depth model.
First Nickel's Diamond drill program was carried out under the
supervision of First Nickel's Chief Mine Geologist, Stephen Conquer,
P.Geo. and First Nickel's Sudbury Exploration Manager, Phil Vicker,
P.Geo., "qualified persons" as defined by National Instrument 43-101.
The Mineral Resource modelling was carried out under the supervision of
First Nickel's Sudbury Exploration Manager, Phil Vicker, PGeo, a
"qualified person" as defined by National Instrument 43-101. The
independent audit of the Mineral Resource estimate was completed by
Richard Routledge, M.Sc. PGeo. of Scott Wilson Roscoe Postle
Associates, a "qualified person" as defined by National Instrument
43-101. The information in this release was prepared under the
direction of Paul Davis, PGeo, Vice President of Exploration for First
Nickel Inc., a "qualified person" as defined by National Instrument
43-101. First Nickel Inc. follows a rigorous QA/QC protocol on all of
its exploration projects.

First Quarter Events

"We anticipate that, during the first quarter of 2008, First Nickel
will make a number of other announcements on our projects," said Bill
Anderson. These include:

.. West Graham exploration results
.. Lockerby Main Zone exploration results
.. Lockerby Life of Mine and Shaft Extension Study
.. Decision on Premier Ridge development
.. Raglan Hills property exploration results
.. Guidance on 2008 anticipated Lockerby production

Conference Call

Investors and analysts are invited to participate in a conference call
at 2:00 pm (ET) January 16th at which management will discuss the
Lockerby Resource Update, followed by a question and answer session.

To join the call, please dial in at approximately 1:50pm

Local 416-695-6272 / toll free 866-852-2121

A replay will be available until January 23, 2007, and may be accessed
by dialing:
416-695-5800 / 800-408-3053 pass code: 3248587

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,
except as may be required under applicable securities law.

For further information contact:
First Nickel Inc.
W.J. Anderson, President & CEO
Telephone: (416) 362-7050
Fax: (416) 362-9050
Email: wanderson@firstnickel.com
www.firstnickel.com
Or
Forbes West, Investor Relations Advisor
416-203-2200 / 1-888-655-5532 / forbes@sherbournegroup.ca

View News Release in PDF Format:
http://www.firstnickel.com/i/pdf/2008-01-16_NR.pdf
54 KB in size, approx. 11 seconds to download at 56.6Kbps

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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
Message sent on Wed Jan 16, 2008 at 7:09:46 AM Pacific Time
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