First Nickel Discloses Production Targets, Financial Forecast For 2006.

TORONTO -- First Nickel Inc. (TSX:FNI) today disclosed metal production targets and released a financial forecast for 2006.

The Company forecasts cash flow from operations of CDN$9.6 million in 2006 on projected revenues of CDN$52.7 million, Chief Operating Officer John Haflidson told a mining conference in Toronto sponsored by MGI Securities Inc.

"Increasing metal production is a powerful driver of the First Nickel growth story," Mr. Haflidson said, addressing the conference theme of Drivers For Growth.

Mr. Haflidson said First Nickel's payable metal production in 2006 is expected to total 5.7 million pounds of nickel, 3.9 million pounds of copper and 106,000 pounds of cobalt (see Table 1).

Mr. Haflidson said the financial calculations were based on current metal prices of US$6.65 per pound for nickel, US$2.16 for copper and US$15.00 for cobalt. He noted the industry consensus anticipates metal prices to remain relatively strong for the next few years.

All of First Nickel's 2006 production will come from its Lockerby Mine in the Sudbury basin of Ontario. The Company purchased the mine in June 2005 from Falconbridge Limited, which had placed it on care and maintenance in September 2004. First Nickel re-started production, and, in December, 2005, began delivering crushed ore to Falconbridge's Strathcona Mill for processing.

"Underground diamond drilling at Lockerby, which has been in progress since October 2005, indicates strong potential for further reserve and resource expansion," said Elizabeth Kirkwood, First Nickel's President and CEO . "We are also very encouraged about the possibility of Premiere Ridge becoming our second mine. Pre-feasibility work is proceeding on schedule and will lead to a production decision in July 2006."

Exploration drilling is scheduled for 2006 at the Lockerby Mine and at First Nickel's properties on the north range of the Sudbury basin - Premiere Ridge, Foy Mouth and Morgan-Lumsden, and its Dundonald property in the Timmins region of Ontario.

Paul Davis, First Nickel's Vice President of Exploration, noted the company's aggressive exploration program, for which $6 million has been budgeted in 2006. "We are confident with our property position and ongoing exploration activities, both surface and underground, that First Nickel will continue to replace and expand our current resource base."

Table 1
             Lockerby Mine 2006 Forecast

    Payable Metal Production    Nickel 5,708
            (000 lbs)           Copper 3,878
                                 Cobalt  106


                                           ($000)
Gross Revenue                             52,711
Milling/Treatment Costs                   16,439
Mine Operating Costs                      22,595
                                        --------
Operating Profit                          13,677
Capital/Deferred Costs                     4,066
                                        --------
Net Cash Flow                              9,611
Cost/lb of payable Ni net of
 non-Ni revenues (US$/lb)                  $4.22

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