TORONTO, ONTARIO--(Marketwired - Aug 14, 2014) - Victory Nickel Inc. ("Victory Nickel" or the "Company") (NI.TO) (www.victorynickel.ca) has filed its financial results for the three and six months ended June 30, 2014. Construction and refurbishment of the Company's dry frac sand processing plant in Seven Persons Alberta, located approximately 18 km south of Medicine Hat (the "7P Plant"), was completed in March, 2014 and commissioning continued during the second quarter until recently. The cost incurred to complete the construction of the 7P Plant totalled $5,364,000 including leased equipment of $703,000.

• During the commissioning period and until June 30, 2014, 41,367 tons of washed concentrated sand was acquired from Wisconsin for shipment to the 7P Plant for finish processing into several grades of high quality frac sand.
• To the end of June 2014, 22,519 tons of various grades of finished frac sand were produced.
• Total sales for the six months ended June 30, 2014 were 11,310 tons, of which 1,840 tons were sold during the first quarter.
• Sales revenue totalled $1,702,000, of which $274,000 was credited to pre-operating costs during the first quarter.
• Cost of goods sold during the second quarter was $1,587,000. On a per-ton basis this is higher than is expected on a go-forward basis post-commissioning of the 7P Plant.
• Finished goods inventory at June 30, 2014 was 11,209 tons of various grades of frac sand.
• Finished goods inventory as at June 30, 2014 was valued $1,227,000. This represents the cost of production expected to be realized as production increases to more normal levels once out of the commissioning stage.
• As a result, the Company incurred a loss on sales of $159,000 for the three months to June 30, 2014.
• After general and administration, financing and amortization expenses and taxes, the Company incurred a net loss of $2,349,000, or $0.00 basic and diluted, for the six months ended June 30, 2014. Of this loss, $1,012,000 was net finance costs to fund the construction of the 7P Plant; many such costs are non-cash items.
• For the Quarter ended June 30, 2014 the Company incurred a net loss was $754,000, or $0.00 basic and diluted.
• The 7P plant is now operating well on a 12-hour-per-day, 7-day-per-week basis and producing at a rate of approximately 4,000 tons per week. As a result of a recent sales contract (see press release dated August 13, 2014), plans are underway to add a third production crew at the 7P Plant which will increase throughput to approximately 6,500 tons per week.
• The fourth and final production crew will be added as soon as sales justify the increased staffing. This is expected during the third quarter of 2014.

"We are pleased with the ramp up in frac sand production since commissioning began in March," said René Galipeau, Vice-Chairman and CEO of Victory Nickel. "We are seeing increasing customer demand for our premium-quality Jordan Formation frac sand from Wisconsin and expect to exit the third quarter at the projected production rate of 500,000 tons per annum ("tpa")."

"With the completion of commissioning, Phase 1 of Victory Nickel and Victory Silica Ltd.'s ("Victory Silica") three-phased plan to enter the frac sand market is essentially complete and we are proceeding with negotiations on Phase 2," added Mr. Galipeau. "At full production, the 500,000 tpa 7P Plant is expected to generate operating cash flow in excess of $12,000,000 per year. Phases 2 and 3 will bring the eventual production target to 1,500,000 tons of frac sand per annum and are expected to improve these margins. On completion of all three phases, cash flow is expected to exceed $40,000,000 per annum."

"The Company's focus over the past several quarters on establishing a presence in the frac sand market is in part to prove the value of the substantial NI 43-101-compliant frac sand resource at our Minago Project in Manitoba. The proposed open pit at Minago contains over 12 million tonnes of the highest quality Canadian frac sand available. This is in addition to the significant nickel resource, and we continue to work on optimizing Minago and our other nickel assets in preparation for a strengthening nickel market," Mr. Galipeau said.

• Please refer to the Company's Unaudited Condensed Consolidated Financial Statements for the three and six months ended June 30, 2014 for additional information. These are available at www.sedar.com.

About Victory Silica

Victory Silica is a wholly-owned subsidiary of the Company and is charged with a phased plan to establish the Company in the frac sand market. In Phase 1, the Company has begun sales of premium quality midwestern white frac sand from the 7P Plant by shipping partially-processed sand purchased in Wisconsin to the 7P Plant for final processing and distribution. The 7P Plant is well located in an area populated with fracking companies, its potential customers, and is within only a few hours' trucking distance of major oil or gas play well sites. Phase 2, which includes the construction of a frac sand wash plant in Wisconsin, is expected to reduce costs and assure security of sand supply through the control of a frac sand mine in Wisconsin. In Phase 3, Victory Silica has identified a site in Winnipeg, Manitoba, where it plans to build a larger frac sand dry plant to process and distribute both imported and domestic sands, including sand mined as a co-product of development of a nickel mine at the Company's 100%-owned Minago project in Manitoba.