First Nickel Inc.: High Platinum-Palladium Values At Dundonald South.

TORONTO -- First Nickel Inc. (FNI-TSX) today announced that high gold-platinum-palladium values have been received for diamond hole D04-16 recently completed on the north sector of the Dundonald South Nickel Zone as follows:

From      To     Length     Ni     Cu     Co     Au       Pt     Pd
 (m)      (m)     (m)      (%)    (%)    (%)    (g/t)    (g/t)  (g/t)
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201.8   203.5     1.7     11.84  0.28    0.11   0.89     6.97    8.69
incl
202.4   203.5     1.1     14.74  0.36    0.12   1.36    10.62   13.21
incl
203     203.5     0.5     16.91  0.34    0.06   2.80    21.46   25.36

The above Ni and Co values were previously released on September 15, 2004. Results for the previous 15 holes on the north sector were released on August 13 and September 15, 2004. The above Au, Pt and Pd values represent the average of two assays on each sample. Additional check assays are being carried out on this material.

These values are reminiscent of those encountered by Falconbridge (1989/90) and Hucamp Mines Ltd (2000) in surface trenches on the Dundonald Beach zone. This particular massive sulphide occurrence is very small (10-20 cm wide by approx.10 m long) but very high grade, and occurs at the base of a komatiitic peridotite flow within the north sector. Sampling of the massive material by Falconbridge yielded some extremely high grades (26.3% Ni, 22.4 g/t Pt, 22.7 g/t Pd, 3.30 g/t Rh and 3.06 g/t Ir. Hucamp Mines reported assay results of 34.82% Ni, 0.30% Co, 5.75 g/t Pt, 3.7 g/t Pd, 0.44 g/t Os, 0.47 g/t Ir, 0.84 g/t Rh, 2.4 g/t Ru on similar material. The difference between the Hucamp and Falconbridge Pt-Pd grades in samples from virtually the same location attests to an irregular distribution of these elements.

Analytical and microprobe work carried out at the University of Western Ontario in 1989 on a Dundonald Beach sample donated by Falconbridge showed the sulphides to consist predominantly of the variably altered nickel sulphide pentlandite with minor chalcopyrite, sphalerite and chromite. Three PGE species along with gold-silver electrum were identified. The PGE species were identified as froodite, along with an un-named Pb-Sb-Bi phase and an Os-Ni-Fe alloy. This is the first recorded occurrence of froodite, first identified from mineralization from the Frood-Stobie Mine Sudbury, Ontario, in komatiite-associated nickel mineralization.

"We are extremely encouraged by these very high values in hole D04-16" said Elizabeth Kirkwood, President & CEO of First Nickel "and we are now entertaining the possibility that the intersection in hole D04-16 represents a more robust re-appearance of the Dundonald Beach zone to depth". Assays for the remaining platinum group elements are being carried out on this material and will be reported when received. First Nickel will be carrying out considerable additional drilling around hole D04-16.

First Nickel has also initiated line-cutting and ground geophysical surveys over the approx. 200 metre west extension onto the Dundonald Property of the Kelex Nickel Zone currently being extensively explored by Canadian Arrow Mines Ltd on their adjoining property to the east.

First Nickel has now received a comprehensive re-interpretation of previous Falconbridge down-hole geophysical data for the Terminus base metals zone (copper, zinc, gold, silver) and adjoining Dundeal nickel zone located in the north-central portion of the Dundonald Property from Quantec Geoscience Inc. Three high priority off-hole geophysical targets have been identified, two of which correlate with Terminus stratigraphy and a deeper target in Dundeal stratigraphy. The current plan is to drill test at least the two Terminus zone targets in the near future. The Terminus base metals system is also completely open down-plunge and at least one hole will be drilled to test the zone at approximately 550 metres vertical depth beneath previous Falconbridge hole DUN25-20 which returned a 10.13 metre core length which averaged 1.37% Cu, 7.53% Zn, 0.13% Co, 1.1 g/t Au, 2.9 g/t Ag. Included within this was a 4.22 metre core length which assayed 1.67% Cu, 13.66% Zn, 0.14% Co, 1.42 g/t Au and 35.2 g/t Ag.

The surface drilling program is being supervised by Kevin Montgomery, PGeo, of MPH Consulting Limited, a qualified person under National Instrument 43-101 guidelines. Drill core of interest (NQ size) is sawed in half, with one-half sent to a commercial laboratory, Expert Laboratory of Rouyn-Noranda, Que., and the other half retained for future reference. A rigorous quality assurance/quality control program is employed which includes the insertion of standards, blanks and duplicates for each batch of samples.

Core samples are routinely analyzed for nickel, copper and cobalt by aqua regia digestion, atomic absorption techniques. Those samples returning greater than 5,000 parts per million (0.5 per cent) nickel are re-assayed by total digestion atomic absorption and their value reported as a percent. Selective assays for gold and platinum group elements on the higher-grade nickel samples are carried out by standard fire assay techniques.

The Dundonald property is located east of Timmins in Northeastern Ontario, approximately 25 kilometres by road from the Falconbridge Limited's Kidd Creek metallurgical facility. The Dundonald property was acquired from Falconbridge as part of First Nickel's formative transaction whereby Falconbridge now owns 18.4 per cent of the issued and outstanding shares of First Nickel.

First Nickel is a junior mining exploration and development company engaged in the acquisition, exploration and development of mineral prospects in Canada. Pursuant to an agreement with Falconbridge Limited dated January 9, 2004, as amended, First Nickel has acquired 100% of the Dundonald Property located 60 kilometers east of Timmins, Ontario, the right to earn up to a 50% interest in 12 unpatented mining claims located in the Kamiskotia area, northwest of Timmins, Ontario, and has formed a strategic alliance with Falconbridge Limited in the western Abitibi Belt for the exploration and development of nickel properties. On June 28, 2004 First Nickel completed an IPO and raised $11,500,000 for the drilling and underground exploration of the Dundonald Property, for the first round of drilling of the Kamiskotia prospects and for the strategic alliance with Falconbridge.

At July 31, 2004 First Nickel had a working capital of approximately $11,485,000 with 39,229,713 common shares outstanding.

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Ni - Nickel  Cu - Copper    Co - Cobalt     Au - Gold     Ag - Silver
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Zn - Zinc    Pt - Platinum  Pd - Palladium  Rh - Rhodium
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Ir - Iridium OS - Osmium    Ru - Ruthenium
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First Nickel Inc. (TSX:FNI)