First Nickel Reports: Sudbury Mining And Exploration Properties: Corporate Update.

TORONTO -- First Nickel Inc. (TSX:FNI) is pleased to report the current status of their Sudbury Mining and Exploration projects.

LOCKERBY MINE:

First Nickel is proud of the accomplishments of its Lockerby team in re-activating the mine after being on care and maintenance since September 2004. The Lockerby Mine began commercial production last month with delivery of ore to Falconbridge's Strathcona Mill. First Nickel received its first revenue payment from Falconbridge in early January under the terms of the off-take agreement. The mine is currently producing ore from the Depth zone at a rate of about 500 tonnes per day. Production from the East zone is anticipated to commence in the second half of 2006 after completion of further diamond drilling and an internal feasibility study.

Lockerby ore is subjected to a thorough crushing, sampling and assaying process for precise grade determination The ore is stored and sampled on surface in a large building constructed adjacent to the No. 1 shaft head frame. Underground diamond drilling is proceeding to both increase mineral resources and convert resources to reserves.

PREMIERE RIDGE:

Diamond drilling with one rig has resumed on the Premiere Ridge property continuing the infill drilling of the main deposit. Upon completion of the infill drilling, testing will begin on the "greenfields" area associated with the 1,200 metres of untested Sudbury Igneous Complex contact to the east of the deposit with known surface exposures of nickel sulphide and gradient IP anomalies.

The results of the 2005 exploration drill program are being interpreted and incorporated into the existing ore model. Analytical results have been received for an additional seven holes completed on infill sections within the main deposit and significant assay results have been summarized on the following table:

Highlights Premiere Ridge Property (not true width)

Drill Hole  From (m)   To (m)  Drill Width   Ni %  Cu %  Pt+Pd+Au g/t
                                     m (ft)
FNI-06        149.9   159.85    9.95 (32.6)  1.40  0.22          0.09
FNI-07(a)     149.9   164.40   14.50 (47.6)  1.45  0.25           n/a
FNI-09        159.5    172.5   13.00 (42.7)  1.69  0.45          0.19
FNI-20(a)    169.85   182.00   12.15 (39.9)  2.15  0.94           n/a
FNI-23(a)    116.70   128.60   11.90 (39.0)  1.35  0.42           n/a

(a) - Partial Results: Pt, Pd and Au analytical results pending.

The verification of transitional style sulphide mineralization well into the footwall stratigraphy on western portion of the deposit is very encouraging and exploration will continue to test for other zones of footwall sulphide mineralization below the SIC contact.

First Nickel has initiated environmental studies to characterize the base line environmental conditions of the area and continue to add to the database of similar studies completed by Falconbridge prior to 2005. This information is required to advance the permitting process for any potential mining operations within the property boundaries.

Two diamond drill holes were completed on the property for the sole purpose of providing a fresh metallurgical sample for bench scale testing by SGS Lakefield Research Limited in Lakefield Ontario. A well defined protocol was followed for the metallurgical sampling to ensure the integrity of the samples for the proposed bench tests. The results of the metallurgical studies are anticipated by Spring 2006.

WEST GRAHAM:

A total of 2,654 metres of diamond drilling in 9 holes has been completed on First Nickel's "West Graham" property, currently under option from Landore Resources Limited. The drill program was focused on the down plunge potential from the known sulphide mineralization and the near surface potential of the higher grade central portion of the "Conwest" deposit.

Analytical results have been received for the first three holes of the diamond drill program. Both, FNI-2002 and FNI-2003 intersected a higher grade zone, 9.85 metres (32.3 feet) of 1.22% Ni and 0.54% Cu at a drill depth of 310.15 metres and 8.75 metres (28.7 feet) of 1.30% Ni and 0.39% Cu at a drill depth of 356.45 metres, respectively, within a broader zone of weaker mineralization. The nickel sulphide mineralization is located approximately 20 to 60 metres above the basal contact of the SIC and is generally disseminated in nature with lesser amounts of veined and blebby  sulphides The nickel sulphide mineralization is intriguing on the West Graham property given the high nickel tenors are similar to the Lockerby East zone. Analytical results are pending for the remaining 6 holes on the West Graham property.

An exploration program is being developed to drill untested gradient IP anomalies along the portion of the SIC contact to the northeast contained within the property boundary. The exploration program will also include testing the footwall potential into the underlying granites that cover approximately 75% of the West Graham property. An additional 5,000 metres of diamond drilling is scheduled for this property in 2006.

The exploration programs are being carried out under the supervision of First Nickel's Sudbury Exploration Manager, Phil Vicker, P.Geo., a "qualified person" as defined by National Instrument 43-101. The information in this release was prepared under the direction of Paul Davis, P.Geo., Vice President of Exploration for First Nickel Inc., a "qualified person" as defined by National Instrument 43.101. First Nickel Inc. follows a rigorous QA/QC  protocol on all of its exploration projects. Drill core of interest (NQ size) is sawn in half, with one half retained for future reference and one half sent to a commercial laboratory, SGS Laboratories in Garson for preparation and specific gravity  measurements and shipped internally by SGS to Toronto for assay. A rigorous quality assurance/quality control program is employed which includes the insertion of standards and blanks for each batch of samples. Historic analytical work completed by Falconbridge was completed by a commercial laboratory, Lakefield Laboratories.

FALCONBRIDGE OPERATED PROPERTIES

FOY MOUTH:

Several drill sections have been completed on the McGrindle Creek West Zone on the near surface sulphide mineralization associated with hanging wall contact of the Foy Offset dyke in 2005 and 2006. Drilling was focused on the strike potential of three surface gossans that outcrop along 400 metres of strike on the Foy Offset. Preliminary results indicate that the sulphide mineralization is laterally restricted to steeply plunging zones of sulphide mineralization that are further cut-off at approximately 100 metres depth by the Falconbridge-INCO property boundary. The current proposed drill program on the near surface McGrindle Creek West Zone is being reviewed in light of the recent results.

Analytical results received for the 2005 drill program indicate the potential for higher grade nickel sulphides below the 3 surface gossan zones. BO-188 intersected 5.20 metres (17.1 ft) of 1.92% Ni and 1.06% Cu within a broader zone of 12.20 meters (40.0 ft) of 1.27% Ni and 0.83% Cu. BO-194, located 250 metres northeast of BO-188, intersected 6.60 metres (21.7 ft) of 1.10% Ni and 0.47% Cu and included a higher grade section of 2.90 metres (9.5 ft) of 1.43% Ni and 0.41% Cu. Previous results from the McGrindle Creek West zone were reported in a press release dated, December 15, 2005.

Highlights McGrindle Creek West Zone (not true width)

Drill Hole   From (m)  To (m)  Drill Width   Ni %  Cu %  Pt+Pd+Au g/t
                                     m (ft)
BO-188          9.80   22.00   12.20 (40.0)  1.27  0.83          0.61
Incl.           9.80   15.00    5.20 (17.1)  1.92  1.06          0.87
BO-194          8.40   15.00    6.60 (21.7)  1.10  0.47          0.43
Incl.           8.40   11.30    2.90  (9.5)  1.43  0.41          0.47
BO-195         11.00   17.00    6.00 (19.7)  1.02  0.58          0.50

Drilling is continuing on the Foy Mouth property, targeting the intersection of the SIC and the Foy Offset dyke. The intercept of offset dykes with the main SIC has been a favourable environment for hosting significant accumulations of Ni-Cu sulphide mineralization on other parts of the Sudbury complex.

MORGAN-LUMSDEN:

Falconbridge Limited completed drilling hole M-058, designed to test the UTEM conductors interpreted from M-055 that intersected 35 cm of 1.72% Ni and 25 cm of 2.14% Ni at the basal contact of the SIC (previously reported in a press release dated November 21, 2005). Hole M-058 intersected the basal SIC contact approximately 150 metres to the south of M-054 at a drill depth of 955.25 metres. The hole has been logged and analytical samples are pending.

Borehole UTEM was completed on this hole and identified a broad region of elevated conductance back towards M-055. The orthogonal component of the survey also suggests an off-hole footwall target below the hole.

First Nickel is currently reviewing the results of the 2005 exploration program and will decide upon the continuation of the option agreement based upon the interpretation of the exploration results.

The exploration program is being carried out under the direction of Falconbridge Limited's Senior Project Geologist, Alger St. Jean P.Geo,, a "qualified person" as defined in National Instrument 43-101. The information in this release was prepared under the direction of Paul Davis, P.Geo., Vice President of Exploration for First Nickel Inc., a "qualified person" as defined by National Instrument 43.101. Falconbridge Limited follows a rigorous QA/QC protocol for the Foy Mouth Project which includes the regular insertion of standards and blanks in the sample batches.. Drill core of interest (NQ size) is sawn in half, with one half retained for future reference and one half sent to a commercial laboratory, SGS Laboratories in Garson for preparation and specific gravity measurements and shipped internally by SGS to Toronto for assay.

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)