Jaguar Nickel Inc. Announces Second Quarter Results.

TORONTO -- Jaguar Nickel Inc. (TSX:JNI)

Mr. John Yates, President and CEO is pleased to report the Company's second quarter results, which have been filed on SEDAR, demonstrate that Jaguar's exploration and project development activities are advancing as planned.

Results of Operations

The Company's current activities are centred around development of the Sechol Project, Regional Exploration Program, Process Technology and its initiative to establish a strategic relationship with an established producing company.

Progress at Sechol Project

Development of the Sechol Project was the primary focus of the Company's business activities during the second quarter and the program is proceeding as planned. These activities include an updated resource estimate, definition drilling, land access negotiations, government and community relations, environmental baseline studies and process research.

The results of the mineral resource estimates for its Sechol Phase One Drilling Program completed by Snowden Mining Industry Consultants in compliance with National Instrument 43-101, demonstrate to the Company sufficient indicated mineral resources to move to the next stage of its project development. Specifically, the resource estimate shows that there is enough indicated resource tonnage from El Inicio alone to move to a pre-feasibility study and that most of the tonnage is saprolite, which is a type of laterite  that easily lends itself to a ferronickel product.

The following excerpt of the nickel and cobalt mineral resource estimates on the Sechol property have been taken from the Snowden Technical Report:

El Inicio Indicated Mineral Resources from the transition and
saprolite material at a greater than 0.8% nickel cut-off:

                        Tonnage (MT)   Nickel   Cobalt
                        ------------   ------   ------
                           22.1         1.58%   0.029%

El Sequndo and Rio Negro Inferred Mineral Resources from the
transition and saprolite material at a 1% nickel cut-off:

                        Tonnage (MT)   Nickel   Cobalt
                        ------------   ------   ------
                           13.1         1.65%   0.036%

The limonite material at the Sechol property amounted to:

                        Tonnage (MT)   Nickel   Cobalt
                        ------------   ------   ------
El Inicio                   8.0         1.17%   0.114%
El Sequndo/Rio Negro        1.7         1.32%   0.120%

The full text of the Snowden Technical Report has been filed on SEDAR.

To the end of July, 2005, the Company has drilled on the Sechol Project 836 holes, totaling 11,130 metres. The latest definition drill results continue to show well mineralized nickel laterite consistent with its previous drill program on the El Inicio deposit of its Sechol Project. The assay data received was from 133 holes in the 50m tightly spaced 'definition' drill program and supports the results from the previous 100m spaced drilling over the same area. Of the 133 holes reported, 123 have intercepts of nickel bearing laterite exceeding a 1% nickel cut-off including 25 holes with average grades exceeding 2% nickel and one example showing 26.7 metres grading 2.14% nickel.

The Sechol Phase Two Drilling Program is underway on a 100m by 100m grid of the undrilled portions of the Rio Negro and El Segundo deposits and is scheduled for completion in the fourth quarter of 2005. Revised mineral resource estimates incorporating the data from this additional drilling are expected to be completed in the first quarter of 2006.

Jaguar's exploration and development activities are supported by the Company's approach to a successful government and community relations program that meets the necessary requirements to acquire, maintain, extend and/or renew exploration licenses.

The term of the Company's Sechol license will expire December 16, 2005 and the current term of the Sechol II license will expire on April 29, 2007. The Company has made an application for an extension of the area covered by the Sechol II license to incorporate the area currently held under the Sechol license together with an additional area. The application has been accepted for filing and is being processed by the Ministry of Energy and Mines. The Company expects confirmation of this license extension in due course.

Upon issuance of the new license, the land areas covered by the Sechol and Sechol II licenses will be consolidated. The initial term of this license will expire in April 2007, subject to the right to extend the term for up to two additional periods of two years each, effectively granting the Company the right to explore the area until 2011.

Regional Exploration Initiative Launched

Concurrent with its Sechol Project development program, the Company is carrying out a regional exploration program on its other properties, to enable it to identify and prove up additional areas on its licensed properties that may contain sufficient nickel laterite grade and tonnage for potential project development. An area to the south of Lake Izabal comprising the La Ruidosa, Virginia and La Coincidencia properties has been identified by the Company as a potential project area and has been named the Las Minas Project Area. During the second quarter, regional exploration focused on the Las Minas Project Area and El Tunico property. Mapping at Las Minas to identify the areas containing laterite is underway and to date an area of approximately 22 km2 in two zones has been interpreted with nickel laterite potential. This area is twice as large as that found at the Sechol Project. Wide spaced reconnaissance drilling at Las Minas is anticipated to commence by the end of the third quarter.

At the El Tunico property mapping of the laterite area is also advancing. To date an area with a 4 km strike length has been interpreted with nickel laterite potential. Wide spaced reconnaissance drilling is anticipated to commence by the end of the fourth quarter.

Process Technology

Jaguar is continuing its discussions and test work is proceeding on track with a well established operating company that has developed and is currently using an economical and environmentally-friendly pyrometallurgical process. Jaguar anticipates that the process may be adaptable for its Sechol Project, as this process has been treating ores similar to those found in Sechol for over 50 years. To assist and advise management in the development of a pyrometallurgical process for the Sechol project, a technical advisory team consisting of nickel industry experts was established to provide consultative expertise as required. The members of the team, led by Mr. Richard Weizenbach, B. Sc., Chemical Engineering, Project Director are Mr. Roland A. Bergman, M.Sc., P.Eng., Mr. Pat Raleigh, P.Eng., and Mr. John G. Schofield, Ph.D., P.Eng.

During the first quarter of 2005, the Company received reports from Process Research Ortech Inc. ("Ortech") and Commonwealth Scientific and Industrial Research Organization ("CSIRO"), independent consultants, on the results of certain leach tests conducted on the Company's Sechol nickel laterite deposits. The tests indicated that an excessive quantity of hydrochloric acid was required to recover the value metals in the samples. The reports recommended that additional testwork be carried out.

Notwithstanding the recommendation to continue testing by the independent process research consultants Ortech and CSIRO, the Company made the business decision that further expenditures on the ACLP at this time were not in the Company's best interest and that it would use its resources more effectively and economically by investigating an existing and proven pyrometallurgical process. This approach follows the Company's business strategy, which is to advance quickly to develop a profitable nickel mining operation in Guatemala at the earliest opportunity thereby enhancing shareholder value.

The Company remains committed to the fundamentals of the ACLP and will retain its patent rights and research data as the process may have commercial application for processing low magnesium laterite deposits.

Jaguar is also conducting bench scale laboratory tests on third party sulphide ore samples to investigate the merit of this variant of the Company's proprietary process technology.

Strategic Initiatives

In order to achieve its strategic goal to evolve from a junior exploration company to project development and ultimately a ferronickel producer, Jaguar will require additional capital and expertise. Management believes that the most appropriate tactic to execute its long-term strategy is to enter into a relationship with a well established producing company.

Therefore, the Company announced on May 25, 2005 that as a result of inquiries from interested parties, its Board of Directors had formed a Special Committee to establish the criteria and review process to identify the most advantageous strategic relationship for Jaguar and its shareholders. To assist in this regard, the Committee has retained Scotia Capital as its financial advisor. Discussions with potential strategic partners are ongoing.

The second quarter financial statements and Management's Discussion and Analysis can be reviewed via the SEDAR website (www.sedar.com).

About Jaguar Nickel Inc.

Jaguar Nickel Inc. (TSX:JNI) is a professionally managed Canadian nickel exploration and mine development Company. The Company's current exploration and development program is focused on the nickel laterite deposits of its licensed properties in Guatemala, Central America.

The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this release.

Jaguar Nickel Inc. (TSX:JNI)