First Nickel drills 9.6 m of 3.38% Ni at Lockerby East

Mr. William Anderson reports

FIRST NICKEL PROVIDES AN EXPLORATION UPDATE ON LOCKERBY AND WEST GRAHAM PROPERTIES

First Nickel Inc. has provided results of diamond drill programs for the third quarter of 2008 on Lockerby East, 17 Level, Lockerby East surface and West Graham projects. Assay results received in the third quarter include both diamond drill holes completed in the third quarter as well as drill holes completed in the second quarter. Assay results are pending on nine holes at the end of the third quarter.

The Lockerby East zone drill program was designed to upgrade the inferred resource to an indicated resource category approximately 200 metres below the lowest mining level.

Highlights of the completed drill program include FNI-3512 intersecting 9.6 metres grading 3.38 per cent nickel and 1.06 per cent copper, FNI-3446 intersecting 12.65 metres grading 3.17 per cent Ni and 1.31 per cent Cu, including an interval of 4.75 metres grading 6.06 per cent Ni and 2.04 per cent Cu, and FNI-3449 intersecting 5.3 metres grading 3.19 per cent Ni and 1.14 per cent Cu. Significant assay analyses from the 2008 drill program have been summarized.

The 17 level drill program tested three separate mineralized horizons that include a hangingwall, contact and footwall trends between the 17 and 23 levels. Geological modelling and resource estimation are in progress and scheduled for completion in the fourth quarter.

Highlights of the drill program on the Lockerby 17 level include FNI-1743 intersecting 14.6 metres grading 1.99 per cent Ni and 1.43 per cent Cu, and FNI-1746 intersecting 12.15 metres grading 1.5 per cent Ni and 0.71 per cent Cu. Significant assay analyses not previously reported have been summarized.

All underground diamond drilling was suspended on Oct. 19, 2008, as reported in Stockwatch on Oct. 20, coinciding with First Nickel's decision to place the Lockerby mine on care and maintenance.

A widely spaced exploration drill program targeting the downplunge extension of the Conwest deposit and the up-plunge extension of the high-grade Lockerby East zone was initiated from surface in the third quarter. Drilling has confirmed the presence of both contact- and hangingwall-hosted, nickel-copper sulphide mineralization between 700 and 800 metres vertical depth.

Highlights of the drill program include FNI-4003 intersecting 10.4 metres of hangingwall-style mineralization grading 1.33 per cent Ni and 0.64 per cent Cu, and FNI-4002 intersecting 2.6 metres of contact-style mineralization grading 1.82 per cent Ni and 0.96 per cent Cu. The surface diamond drill program is continuing and scheduled for completion in December. Significant assay analyses from the 2008 drill program have been summarized.

No drilling was completed on the West Graham property in the third quarter; however, assay analyses were received during this period. During the quarter, a composite sample has been submitted to SGS Lakefield Research Ltd. for a preliminary metallurgical program that consists of sample preparation and rougher kinetic tests that will provide an estimate of the recovery characteristics of the Conwest deposit.

Additionally, the company has commissioned Scott Wilson Roscoe Postle Associates to complete an independent National Instrument 43-101-compliant resource estimate on the Conwest deposit that is scheduled for completion in the fourth quarter. Significant assay analyses for the Conwest deposit from the third quarter of 2008 have been summarized.

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