SANTA RITA MINERALIZATION CONTINUES 120 METERS BELOW OPEN-PIT RESERVE

PERTH, AUSTRALIA  Mirabela Nickel Limited (TSX: MNB, ASX: MBN) is pleased to announce new drilling results that extend mineralization about 120m down dip of the recently announced open-cut mining reserve, with composite intersections up to 135m width grading 0.83% nickel located in the Southern High Grade zone of its Santa Rita project.  This mineralization appears to be at a flatter dip, and is expected to substantially increase the current mining reserve of 84 mt grading 0.61% nickel.

The occurrence of such thick mineralization is very encouraging and is expected to contribute to the open-pit mining reserve.  Work is continuing to fully evaluate the resource potential of the Southern High Grade zone and its amenability to open pit and underground mining.

 “We have always believed that mineralization continues at depth and the latest results 120m below the current open-pit mining reserve confirm it,” said Managing Director Nick Poll.  “These widths and grades are expected to add significant tonnage to the open-pit reserve.  And any further down dip extensions at similar widths and grades will provide a strong basis for underground mining evaluations.” he said.

Drilling is continuing with 6 rigs on site. Another 2 holes have been drilled in the Southern high grade zone below the open pit reserve and results are expected in March.

The new drilling results coincide with today’s announcement of positive results from a smelter scoping study.

A summary of the results is provided below.  Schematic long and cross section diagrams with results can be downloaded from http://www.mirabela.com.au/projects_galleries.asp.

Southern High Grade Zone

The Southern High Grade zone continues to return excellent intersections.  The results are as follows:

Composite results from the Southern High Grade zone

0.4% Ni cut off grade, 4m minimum mining width

These holes confirm the Southern High Grade zone continues 120m down dip of the open pit mining reserve and remains open at depth.  Drill holes MBS 474 (129m at 0.76% Ni) and MBS 477 (135m at 0.83% Ni) are on the same section (8430400mN) as Santa Rita’s previous best composite intersection to date - MBS 427 (156m at 0.88% Ni).  A schematic cross section of this area can be downloaded at http://www.mirabela.com.au/projects_galleries.asp.

The high grade section is located at the centre of the Southern High Grade zone.  This zone is now about 200m in strike length and 300m down dip from about 250m below surface.   The average true width of mineralization for these Southern High Grade zone results is about 92% of the down-hole width.

Similar mineralization with encouraging initial visual estimates was intersected in the other two holes, one 70m to the north and the other 90m to the south of MBS 477. The drilling of these holes was completed mid-January and results are expected in March.

Remaining Southern Zone

Drilling has also continued along strike of the Southern High Grade zone, where mineralization continues to meet expectations and appears to be thickening.  New significant results are as follows:

Composite drilling results from the remaining Southern zone

0.4% Ni cut off grade, 4m minimum mining width

These new results demonstrate that the width of mineralization in the Southern zone is improving at depth.  Whilst they have a lower than average resource grade, this tends to be offset by a higher recovery rate, as the Southern zone contains mostly pyroxenite hosted mineralization that has less non-sulfide (unrecoverable) nickel.   For example, a 0.50% nickel grade in pyroxenite is similar to a 0.63% nickel grade in harzburghite – the dominant host of mineralization in Northern zone.  Accordingly, these results are expected to make a significant contribution to the open-pit mining reserve.

The average true width of mineralization for these remaining Southern zone results is about 80% of the down-hole width.

South East Extension Area

New results from the South East Extension area drilling have confirmed a substantial zone of mineralization starting about 200m southeast of the current Santa Rita open-pit mining reserve and extending over a strike length of about 240m. The results are as follows:

Composite results from the Southeast Extension area

0.4% Ni cut off grade, 4m minimum mining width

Drill hole MBS 461 (55m at 0.65% Ni) intersected the mineralized zone 160m down dip of previously announced MBS 439 (89m at 0.69% Ni), so confirms thickness and continuity of the mineralization at depth.  The mineralization in the South East Extension area is dominantly hosted by the pyroxenite unit. A schematic plan of this area can be downloaded at http://www.mirabela.com.au/projects_galleries.asp.

Being near surface, this zone is expected to make a significant contribution to the open-pit mining reserve.  The average true width of mineralization  for these Southeast Extension results is about 85% of the down-hole width.

Santa Rita drilling program

Resource drilling recommenced at Santa Rita early this month after a three week Christmas break.  Three drill rigs are allocated to more deep drilling in the Southern zones and a further two rigs are continuing with infill drilling converting the first 3.5 years of mine life from Indicated to Measured Resource status. 

Palestina drilling program

Drilling has commenced at Palestina.  A total of 270m of the 2700m program has now been drilled in two holes.  First results from this program are expected in a few months.

Nick Poll

Managing Director

Background

Mirabela Nickel is listed on the Australian and Toronto stock exchanges. With an open-cut mining reserve of 84mt grading 0.61% Ni, Santa Rita is the largest greenfields nickel sulphide discovery in the last 12 years and the third largest open-cut nickel sulphide mining reserve worldwide. 

Construction of a nickel sulphide concentrator commenced in November 2007 and is progressing well. The plant is expected to produce 18,500t a year of nickel in a sulphide concentrate from one open-cut mine starting from mid 2009. At this rate of production the project is expected to have a mine life of at least 18 years. Studies are underway to increase nickel production to 25,000t a year.

Contact details

Australia contact:                                                                       Toronto contact (media):

Nick Poll, Managing Director                                                        Eric Tang, Porter Novelli

Telephone: +61 8 9324 1177                                                       Telephone: +1 (416) 422-7200

nickp@mirabela.com.au                                                              eric.tang@porternovelli.com

Australia contact (media):

Caroline de Mori, Purple Communications

Telephone: +61 8 9485 1254

cdemori@purplecom.com.au

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Lauritz Barnes, who is a Member of the Australian Institute of Geoscientists.  Lauritz Barnes is a consultant employed by Mirabela Nickel Ltd.

Lauritz Barnes has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserve’.   Lauritz Barnes consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Caution Regarding Forward Looking Statements: There can be no assurance that an expanded mineral resource or reserve will be established at the Santa Rita Project.  The forward-looking statements made in this news release are based on assumptions and judgments of management regarding future events and results. Such forward-looking statements, including but not limited to those with respect to the construction and development of a 18,500 tonnes per year and subsequently a 25,000 tonnes per year nickel sulphide concentrator and a nickel smelter at the Santa Rita Project and the required capital expenditures and estimated future production and operating cash costs involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the actual market prices of nickel, the actual results of current exploration, the actual results of future mining, processing and development activities, changes in project parameters as plans continue to be evaluated, as well as those other factors disclosed in the Company's filed documents.

www.mirabela.com.au

Attachment 1: New significant intersections – Southern zone drilling

(0.4% Ni cut off grade)

All chemical analyses were completed by ALS Chemex, Vancouver, Canada

Attachment 2: New significant intersections – Southern Extension area drilling

(0.4% Ni cut off grade)

All chemical analyses were completed by ALS Chemex, Vancouver, Canada

Attachment 3:  Drill hole collar locations

¹ TS – Total Station Survey Tool

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