SKYE
PROVIDES UPDATE ON FENIX PROJECT AND ANNOUNCES FIRST QUARTER RESULTS
VANCOUVER, BC,
May 13, 2008 -- Skye Resources Inc. (“Skye” or the
“Company”) (TSX:SKR) today released an update on its Fenix Project
and its unaudited consolidated interim financial statements for the three
months ended March 31, 2008.
First
Quarter Activities and Project Update
Skye continues to explore
alternatives to finance the development of the Fenix Ferro-Nickel Project in Guatemala,
following the January announcement that it was temporarily deferring a proposed
high yield debt financing.
“We are committed
and determined to see this project developed as it is without a doubt the most
advanced brownfield ferro-nickel project in the world. The Fenix Project
is fully permitted, it has the support of the government and the people of Guatemala,
it contains excellent geological resources and it is based on time proven
technology,” said Colin K. Benner, Skye’s Chief Executive Officer.
During the first quarter,
management focused on rescheduling construction activities and reviewing
project alternatives. The Company is in discussion with vendors to hold the existing
equipment orders open until late in the summer of 2008. Vendor
engineering is continuing on all long lead time items and some fabrication has
been completed. The Engineering Procurement and Construction Management
contractor is maintaining a core team of key engineering personnel on the
project and is continuing with detailed engineering, albeit at a reduced
level. Skye intends to continue this level of engineering until the end
of the summer.
While the original Fenix
Project plan envisioned producing ferro-nickel in late 2009, it is possible
that the project could be delayed by up to a year assuming the financing for
the project is in place by the end of this summer.
2008
First Quarter Financial Results
(all
amounts are in U.S. dollars unless otherwise indicated)
The Company is reporting
a loss of $10,916,000 for the first quarter of 2008 (basic and diluted loss per
share of $0.21) compared with a loss of $5,731,000 (basic and diluted loss per
share of $0.14) for the three months ended March 31, 2007. The loss for
the quarter is principally related to exploration and indirect development
costs for Skye’s Fenix Ferro-Nickel Project, general and administrative
costs and non-cash stock-based compensation expense. In the quarter, the
Company capitalized $25,820,000 of Fenix Project direct development costs
(engineering, project management and procurement costs) bringing the total
capitalized expenditures to date to $72,341,000.
Skye’s unaudited
consolidated interim financial statements and Management’s Discussion and
Analysis (MD&A) for the quarter ended March 31, 2008 will be filed on SEDAR
and available for download at www.sedar.com.
About Skye
Skye is an international
mining company focused on becoming a mid-tier nickel producer. Skye 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. In 2007 Skye received its
environmental permits for the project, completed basic engineering and filed a
Technical Report. Skye is preparing to initiate construction once
financing is in place. www.skyeresources.com
Cautionary
Notice: This document 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. Forward-looking statements may include mineral reserve and
resource estimates, commodity prices, estimates of future production, unit
costs, construction schedules and construction cost estimates, costs of capital
projects and timing of commencement of operations, and are based on current expectations
and beliefs concerning future developments and their potential effects on
Skye. Factors that could cause actual results to differ materially from
any forward-looking statement include, but are not limited to failure to
construct the mine facilities in the time frame and within estimated costs as
planned; variations in capital and operating costs from estimated costs;
unavailability of key personnel, skilled labor, supplies, equipment, machinery,
parts, contractors and necessary components of Skye’s project; variations
in the grade and recovery of ore from estimated amounts; fluctuations in global
demand, supply of and price for nickel; inability to obtain financing on
commercially suitable terms; delays in obtaining or failures to obtain required
governmental, environmental or other project permits, licenses or approvals; changes
in tax or mining laws; failure to build and maintain good relationships with
the local community; illegal land occupations; civil disturbances; changes in
the regulatory environment; unforeseen geological, physical or meteorological
conditions; natural disasters or industrial accidents; labor shortages or
stoppages; industrial disputes; inflation; changes in exchange rates; political
factors; fluctuations in power, fuel and other commodity prices; and other
factors including those described under the heading “Risk Factors”
in Skye’s most recent Annual Information Form filed on Sedar. The
forward-looking statements included in this document represent Skye’s
views as of the date of this document. 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
document. 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 PLEASE
CONTACT:
Cindy Burnett
Vice President, Investor
Relations
Tel: (604)
648-4133
cburnett@skyeresources.com