Skye announces power purchase agreement with Duke Energy International

    TSX Symbol: SKR

    VANCOUVER, Oct. 29 - Skye Resources Inc. ("Skye") (TSX:SKR), today
announced that its 98.2%-owned subsidiary, Compania Guatemalteca de Niquel
(CGN), has entered into agreements with Guatemalan subsidiaries of Duke Energy
International LLC (Duke) for the supply of electrical power and construction
of a new power transmission line for the Fenix ferro-nickel project in
Guatemala.
    Under the power purchase agreement (PPA), Duke will supply committed
capacity and energy to the Fenix project for five years and three months,
commencing July 1, 2009. CGN has an option to extend the term of the PPA for
an additional five years. The PPA is based on the capacity of existing
generation facilities owned by Duke in Guatemala.
    Under a transmission toll agreement (TTA), Duke will construct a new
230 kV transmission line to connect the Fenix project to the Guatemalan
primary transmission grid. CGN will have the right to utilize the transmission
line for 20 years, with an option to extend the agreement for a further 20
years.
    The cost of power, transmission tolls and other terms and conditions
associated with the PPA and TTA are consistent with the arrangements
contemplated by the technical report filed by Skye under National Instrument
43-101 on September 18, 2007.
    Environmental approvals for the new transmission line have been received
by Duke. The interconnection of the Fenix project with the Guatemalan
transmission grid remains subject to the final approval of Guatemalan
regulatory authorities, which Skye expects to receive by the end of 2007. Skye
expects to file executed copies of the PPA and TTA on SEDAR shortly.

    About Skye

    Skye is an international mining company focused on becoming a new
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 June 2007 Skye received its environmental
permits for the project, and expects to initiate construction during the first
quarter of 2008 with initial production in late 2009. 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 the 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: Media Inquiries: Andrew Grant, Vice President,
Public Relations, Tel: (604) 602-9500, agrant@skyeresources.com; Investor
Inquiries: David Bryson, Vice President, Finance & Treasurer, Tel: (604)
602-9500, dbryson@skyeresources.com; 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