======================================================================
Re: News Releases - Tuesday, August 14, 2007
First Nickel Reports Second Quarter 2007 Results
======================================================================

TORONTO, ONTARIO - First Nickel Inc. ("First Nickel" or the "Company")
(TSX:FNI) today reports financial and operating results for the quarter
ended June 30, 2007. Complete quarterly results will also be available
on SEDAR and on the Company's website at www.firstnickel.com. All
dollar amounts are expressed in Canadian currency unless otherwise
stated.

Highlights

- Ore delivered to the mill of 35,250 tonnes in the second quarter
highest in the Company's history. An increase of 63% over the first
quarter.

- The mining rate at Lockerby Mine during Q2 2007 reached a steady rate
of 400 tonnes per day, a 60% increase from the 250 tonnes per day in Q1
2007.

- Revenue of $17.0 million in Q2, 2007, up from $9.0 million in Q2 2006
and an increase of $6.5 million from the Q1 2007 revenues.

- Operating cash flow in Q2 2007 improved significantly to $6.5 million
compared to $2.1 million in Q2 2006. For the six months ended June 30,
2007, operating cash flow was $10.3 million, compared to cash usage of
$0.4 million in 2006

- Overall increase in cash balance of $9.2 million during Q2 2007.

- Completed private placement of 15,000,000 common shares of the
Company at a price of $1.15 per common share, for net proceeds to the
Company of $15.8 million.

- The 11% Series A Debentures totaling $14.5 million were redeemed on
June 1st.

- The Company is debt free and has a working capital of $19.8 million.

- Feasibility Study on the Premiere Ridge Property was completed and
submitted to Xstrata on July 1st.

- Discovery of massive and semi-massive sulphides intersected on the
Morgan-Lumsden Property.

Financial Results

The following table presents a summary of the results of operations for
the three and six month periods ended June 30, 2007 and 2006:


Three months ended Six months
ended
June 30, June 30, June 30, June
30,
2007 2006 2007
2006
----------------------------------------------------------------------
-----
---------Unaudited---------
----------Unaudited---------

Sales Revenue $16,951,012 $ 8,981,666 $27,410,422 $
8,981,666
---------------------------
----------------------------
Operating costs
excluding
amortization 10,068,378 7,477,354 17,855,400
7,477,354
Accretion of
asset retirement
obligations 45,000 --- 90,000
---
Amort. of mining
properties &
equipment 1,018,896 720,000 1,607,896
720,000
---------------------------
----------------------------
11,132,274 8,197,354 19,553,296
8,197,354
---------------------------
----------------------------

Operating profit 5,818,738 784,312 7,857,126
784,312
---------------------------
----------------------------

General and
administrative 678,355 862,308 1,205,843
1,384,549
Stock-based
compensation 2,061,286 95,321 2,075,765
131,519
Amortization 7,485 10,149 14,970
20,298
Debenture and
other interest 655,955 812,366 1,536,884
1,596,660
Interest and
other income (261,854) (84,581) (390,618)
(157,626)

--------------------------------------------------------
3,141,227 1,695,563 4,442,844
2,975,400

--------------------------------------------------------

Earnings (loss)
before the
following 2,677,511 (911,251) 3,414,282
(2,191,088)

Provision for
(recovery of)
future income
and mining taxes 1,953,607 (361,337) 2,160,109
(798,287)

--------------------------------------------------------

Earnings (loss)
for the period $ 723,904 $ (549,914) $ 1,254,173
$(1,392,801)

--------------------------------------------------------

Earnings (loss)
per share:
Basic $ 0.01 $ (0.01) $ 0.01 $
(0.02)
Fully diluted $ Nil $ (0.01) $ 0.01 $
(0.02)


For the three month period ended June 30, 2007, the Company recorded
net earnings of $723,904, or $0.01 per share, compared to a net loss of
$549,914, or $0.01 per share, for the three month period ended June 30,
2006. The change from a loss in 2006 to earnings in 2007 is mostly due
to higher revenues as a result of realizing a higher nickel price in
2007, offset by an increase in operating costs and the recording of the
non-cash stock based compensation expense.

For the six month period ended June 30, 2007, net earnings of
$1,254,173, or $0.01 per share were recorded, compared to a net loss of
$1,392,801, or $0.02 per share, for the comparable period of 2006. The
2006 results only reflect one quarter of revenues and operating costs
as the Company commenced recording revenue in the second quarter of
2006 as per the revenue recognition policy.

The following table sets out selected sales information for the periods
indicated:


----------------------------------------------------------------------
-----
2nd Q 2007 2nd Q 2006 YTD 2007 YTD
2006
----------------------------------------------------------------------
-----
Sales by Payable Metal
----------------------------------------------------------------------
-----
Nickel - pounds 699,622 788,027 1,171,281
788,027
----------------------------------------------------------------------
-----
Copper - pounds 433,409 469,574 733,170
469,574
----------------------------------------------------------------------
-----
Cobalt - pounds 11,821 15,577 19,658
15,577
----------------------------------------------------------------------
-----
Average price
received - US$/lb
----------------------------------------------------------------------
-----
Nickel $19.41 $8.30 $18.31
$8.30
----------------------------------------------------------------------
-----
Copper $2.86 $2.56 $2.79
$2.56
----------------------------------------------------------------------
-----
Cobalt $27.82 $14.08 $27.00
$14.08
----------------------------------------------------------------------
-----


Sales revenue in the second quarter of 2007 amounted to $16,951,012
from the sale of 699,622 pounds of nickel and 433,409 pounds of copper.
These revenues were derived from the settlement of the first quarter
2007 production. Despite the lower metal sales in the second quarter of
2007 compared to 2006, the revenues in 2007 are substantially higher
then 2006, primarily to the higher nickel prices realized in 2007
compared to 2006. The average price realized during the quarter was
US$19.41. This is US$11.11 (134%) higher then the price realized in
2006. On a year-to-date basis, the 2007 revenues reflect six months of
sales compared to only three months in 2006, as there were no revenues
recorded in the first quarter of 2006 as per the Company's revenue
recognition policy.

General and administrative expenses totalled $678,355 in the second
quarter of 2007 and $1,205,843 for the first six months of 2007. This
compares to $862,308 and $1,384,549 for the same comparable periods in
2006. The lower 2007 expenditures are due to the fact that the 2006
expenditures included severance and termination costs of approximately
$213,000 as a result of the management changes in June, offset by an
exchange loss due to the strengthening of the Canadian dollar during
2007.

The stock-based compensation costs in the second quarter and in the
first six months of 2007 include the fair value of the options granted
and vested in June 2007. The fair value of all options granted in June
2007 was estimated to be $2,948,125, of which $1,751,141 has been
vested, with the remaining $1,196,984 to be vested over the next two
years.

Debenture and other interest expense totalled $655,955 and $1,536,884,
respectively, in the second quarter and for the first six months of
2007. This compares to $812,366 and $1,596,660, respectively, recorded
in the comparable periods of 2006. The lower interest expense reflects
the lower interest on the Series A Debentures as these were paid on
June 1, 2007, offset by higher interest paid on advances received from
Falconbridge on the ore delivered to their facilities, as the advances
were much higher in 2007 compared to 2006 due to the higher nickel
price. Going forward, the quarterly interest expense will be
substantially lower due to the debentures being paid off.

Interest and other income is mostly made up of interest earned on term
deposits. The higher interest income in 2007 compared to 2006 results
from the Company having substantially higher cash balances in 2007 to
invest.

Lockerby Mine Operations

Selected operating statistics for the six month period ended June 30,
2007 are as follows:


----------------------------------------------------------------------
-----
Item 1st Q 2007 2nd Q 2007 YTD
2007
----------------------------------------------------------------------
-----
Ore Delivered to Mill (tonnes) 21,564 35,250
56,814
----------------------------------------------------------------------
-----
Nickel Mill Head Grade (%) 1.90 1.45
1.62
----------------------------------------------------------------------
-----
Copper Mill Head Grade (%) 1.06 0.95
0.99
----------------------------------------------------------------------
-----
Payable Nickel (pounds) 699,622 857,546
1,557,168
----------------------------------------------------------------------
-----
Payable Copper (pounds) 433,409 637,402
1,070,811
----------------------------------------------------------------------
-----
Mine operating costs per tonne $354 $254
$294
----------------------------------------------------------------------
-----
Cash cost per pound of Nickel (i) US$10.04 US$9.43
US$9.70
----------------------------------------------------------------------
-----
(i) Cash cost per pound of Nickel is net of other metal credits, and
does
not include amortization of mining properties and equipment.


"In the first part of the quarter, we took advantage of the strong
metals prices to mine lower grade ore from a mining panel on the east
end of the 64 Level," says William Anderson, President and CEO First
Nickel Inc. "Nickel head grades in the second quarter ranged from 1.05%
nickel in April to 2.11% nickel in June, and the mine rate has reached
a steady rate of 400 tonnes per day resulting in lower unit operating
costs. However, unit costs are still above plan due to the stronger
Canadian dollar and lower nickel output. Further increases in
production are planned for the second half of the year and as a result
we anticipate meeting our production target of 152,000 tonnes for the
full year."

Studies have begun to evaluate which shaft should be deepened to
improve efficiencies and exploit the increased resource in the Depth
Zone.

Exploration Activity

The majority of the exploration effort in the second quarter was
devoted to continued development of the Lockerby Mine 3-D model, the
Morgan-Lumsden Project and the completion of the Premiere Ridge
Feasibility Study.

A Diamond drill has been dedicated in the Depth Zone at Lockerby since
the beginning of the year to convert the Inferred Resources into an
Indicated Resource Category. This program will continue through the
summer and will include several holes targeting the down-plunge
potential between the 72 and 80 levels to confirm continuity below at
depth.

A Feasibility Study (the "Study") on Premiere Ridge was prepared by
Scott Wilson RPA, an international consulting engineering firm based in
Toronto, Ontario and submitted to Xstrata Nickel on July 1 in
fulfillment of one of the conditions of the Option Agreement.

The Study indicates that the Premiere Ridge project has an IRR of 37.1%
and would generate an undiscounted pre-tax cash flow of $27.8 million
after capital recovery assuming average metal prices of US$7.62 per
pound nickel, US$2.19 per pound copper and US$9.00 per pound cobalt
over a five year mine life. Based on a 10% discount rate the project
has a $14.3 million NPV as calculated by Scott Wilson RPA. The
pre-production and sustaining capital requirements have been estimated
at $42.8 million and $4.2 million respectively. Unit cash operating
costs net of by-product credits are estimated at US$5.49 per pound of
nickel.

The capital and operating estimates are in line with and confirm
figures worked up earlier by or for First Nickel. In order to minimize
project risk the Company is now engaged in further investigations to
constrain or reduce the capital costs and optimize the mining plans
prior to making a production decision. The Company's agreement with
Xstrata Nickel calls for production to commence by July 1, 2008 and
make a one time payment of $2,000,000. Yearly output will average
230,000 tonnes of ore (approximately 4 million pounds of payable
nickel), attaining a maximum of 291,000 tonnes of ore in 2009. If a
production decision to go ahead is made, the Company is considering
financing the capital requirement with existing cash resources along
with structuring some type of debt instrument.

Exploration highlights on the Morgan-Lumsden Property in the second
quarter of 2007 include the discovery of massive and semi-massive
sulphides including one intersection of 5.20 metres grading 2.03% Ni
and 0.26% Cu in hole M-066. Footwall potential has been identified on
the Morgan-Lumsden Property with the presence of significant intercepts
of Sudbury Breccia and localized disseminated, blebby and fracture
controlled chalcopyrite below the Sudbury Igneous Contact in M-066.

The Next Six Months

In the second half of 2007, the Company expects to:

- Continue ramping up production at Lockerby Mine

- Refine and complete the capital and operating estimates on Premiere
Ridge and make a production decision

- Advance the engineering studies on the expansion of Lockerby Mine

- Finish the definition drilling campaign on the Depth Zone

Non-GAAP Performance Measures

This press release contains non-GAAP measures like operating cost per
tonne of ore, net cash cost per pound of nickel, etc. Please see the
Company's MD&A on SEDAR for discussion on non-GAAP performance
measures.

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.


-30-

FOR FURTHER INFORMATION PLEASE CONTACT:

First Nickel Inc.
William Anderson
President & CEO
(416) 362-7050
(416) 362-9050 (FAX)
Email: wanderson@firstnickel.com
Website: www.firstnickel.com

======================================================================
Copyright (c) 2007 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 Tue Aug 14, 2007 at 7:52:39 AM Pacific Time
======================================================================
.