First Nickel Announces Near Surface Intersection of 42.2 Feet '12.85 M' Of 1.53% Ni and 0.97% Cu at Foy Mouth.

TORONTO -- ALSO ANNOUNCES COMMENCEMENT OF TRUCKING OF ORE FROM LOCKERBY MINE TO STRATHCONA MILL

First Nickel Inc. (TSX:FNI) ("First Nickel") today announced that Falconbridge Limited ("Falconbridge"), the operator of First Nickel's exploration program at the Foy Mouth Property on the North Range of the Sudbury Basin, has reported intercepts of 12.85 metres (42.2 feet) of 1.53% Ni, 0.97% Cu and 24.65 metres (80.9 feet) of 1.07% Ni and 0.48% Cu in drill holes completed below a surface exposure of nickel-copper sulphide.

Three previously unreported zones of nickel sulphide mineralization, McGrindle Creek West, Sovereign Trend, and McGrindle Creek East zones, have been identified by Falconbridge Limited during their exploration campaign in 2005. The Foy Mouth property is located at the highly prospective junction of the basal contact of the Sudbury Igneous Complex (SIC) and the Foy Offset Dyke. This environment hosts significant deposits in the Sudbury Basin (e.g. Whistle) as do the offset dykes themselves (e.g. Copper Cliff, Worthington). Detailed descriptions of exploration results from each zone are summarized below.

McGrindle Creek West Zone:

Diamond drilling below known surface exposures of nickel sulphide mineralization situated near the hanging wall contact of the Foy Offset Dyke have intersected significant widths of near surface nickel sulphide mineralization. BO-189 intersected massive and semi-massive sulphides starting at 14.65 metres downhole that assayed 12.85 metres (42.2 feet) of 1.53% Ni and 0.97% Cu and includes a zone of 7.15 metres (23.5 feet) of 2.01% Ni and 1.00% Cu. BO-187, drilled on the same section, intersected the same zone at 9.50 metres downhole that assayed 12.15 metres (39.9 feet) of 1.54% Ni and 0.56% Cu and includes a zone of 4.15 meters (13.6 feet) of 2.18% Ni and 0.71% Cu. This zone had previously been sampled at surface by Falconbridge. A 7.0 metre (23.0 feet) channel sample returned 1.37% Ni and 0.79% Cu.

Hole BO-182, drilled 150 metres east and along strike of hole BO-187, intersected semi-massive and breccia hosted sulphides starting at 11.75 metres downhole that assayed 24.65 metres (80.9 feet) of 1.07% Ni and 0.48% Cu and includes 6.35 metres (20.8 feet) of 1.53% Ni and 0.47% Cu. The possible down plunge continuation of this mineralized trend has been identified in hole BO-152 which intersected 8.0 metres (26.2 feet) of 1.12% Ni and 0.60% Cu approximately 70 metres below hole BO-182.

The sulphide zone remains open along strike and at depth. Diamond drilling is currently ongoing to define the overall dimensions of the sulphide system. First Nickel believes there is considerable potential to expand this sulphide system which may represent a source of near term, open pit, nickel sulphide production for First Nickel.

Highlights McGrindle Creek West Surface Zone
Drill Hole   From       To   Drill Width    Ni %   Cu %  Pt+Pd+Au g/t
               (m)      (m)      m   (ft)
BO-152     105.00   113.00     8.0 (26.2)   1.12   0.60          0.33
BO-182      11.75    39.35   24.65 (80.9)   1.07   0.48       pending
Incl.       11.75    18.10    6.35 (20.8)   1.53   0.47       pending
BO-187       9.50    21.65   12.15 (39.9)   1.54   0.56       pending
Incl.       11.25    18.10    4.15 (13.6)   2.18   0.71       pending
BO-189      14.65    27.50   12.85 (42.2)   1.53   0.97       pending
Incl.       14.65    21.80    7.15 (23.5)   2.01   1.00       pending

Sovereign Trend Zone:

Drilling designed to test the junction of the Foy Offset Dyke and the Sudbury Igneous Complex has intersected 11.95 metres (39.2 feet) of 1.15% Ni and 0.69% Cu in hole BO-159 and 7.1 metres (23.3 feet) of 1.33% Ni and 0.54% Cu in hole BO-174. The sulphide zone is open up and down-plunge and responds well to borehole UTEM. The proximal association of the Sovereign Trend Zone to the McGrindle Creek West Zone could prove to be beneficial when considered any potential development plans.

Highlights Sovereign Trend Zone
Drill Hole   From       To   Drill Width    Ni %   Cu %  Pt+Pd+Au g/t
               (m)      (m)      m   (ft)
BO-159     463.85    475.8   11.95 (39.2)   1.15   0.69          0.74
BO-174     451.55   458.65    7.10 (23.3)   1.33   0.54          0.49
Incl.      453.35   458.65    5.30 (17.4)   1.52   0.66          0.58

Roland Lake Zone

The overall size and grade of the Roland Lake Zone was not improved by the 2005 diamond drill program. Falconbridge is currently reviewing drill results for the Roland Lake Zone to determine if further drilling is warranted.

First Nickel will have spent $3 million in exploration expenditures on Foy Mouth in 2005 and has committed to a $4 million program in 2006. (See Release March 22, 2005).

The exploration program is being carried out under the direction of Alger St. Jean P.Geo, a Falconbridge Senior Project Geologist, and a "qualified person" as defined in National Instrument 43-101.

COMMENCEMENT OF TRUCKING ORE TO STRATHCONA MILL

First Nickel also announced that on December 7, 2005 the trucking of crushed ore from the Lockerby Mine to Falconbridge' Strathcona Mill on the North Range of the Sudbury Basin has commenced. "This heralds the start of cash flow for First Nickel, six months after taking possession of the Lockerby Mine on June 1, 2005" said Elizabeth Kirkwood, the President and Chief Executive Officer of First Nickel. "We have now become the fourth currently producing nickel mining company in Canada."

First Nickel is a Canadian mining and exploration company. Its current activities are primarily focussed 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.

First Nickel Inc. (TSX:FNI)