140 million pounds of nickel

5 high quality exploration projects + Lockerby Mine, Sudbury On

Message: First Nickel Provides Preliminary 2014 Production Results and

2015 Production and Cost Guidance

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TORONTO, ONTARIO--(Marketwired - Jan. 27, 2015) - First Nickel Inc. ("FNI" or the "Company") (TSX:FNI) today provides its preliminary 2014 production results and outlook with respect to 2015 production and costs. All dollar amounts are in Canadian dollars ("CAD") unless otherwise specified.

2014 Lockerby Mine Highlights

Produced approximately 13.3 million contained1 and 6.9 million GMV-net payable1 pounds of nickel, at the lower end of the 2014 guidance range.

Produced approximately 7.8 million contained1 and 4.0 million GMV-net payable1 pounds of copper, at the upper end of the 2014 guidance range.

Shipped and sold approximately 249,000 tonnes of ore to Glencore1.

Mine site operating costs1 were approximately $64.5 million, 6% above the upper end of the 2014 guidance range.

The Company had an unrestricted cash balance of $5.3 million as at December 31, 2014.

2014 full-year financial and operating results will be released in March 2015.

2015 Overview

On January 12th, the Company announced the Lockerby Restructuring Plan (the "Plan") which reduces costs to a level that will enable FNI to continue to operate the Lockerby Mine through 2016, preserving the jobs of 115 FNI employees.
The Plan is founded on productivity improvements to be realized through a strong focus on basic and essential work, and it is expected to allow a reduction in costs while maintaining a safe environment and relatively consistent nickel production. Cost reductions and productivity changes resulted in a 30% reduction in FNI personnel, and a 75% reduction in third-party contractor personnel, for an overall workforce reduction of 45%. Costs at the Toronto corporate office have also been reduced as part of the Plan.
Ramp development below the 6800 level has recommenced and is expected to reach the 7100 level in the first half of 2016, and the underlying mine plan is essentially unchanged from the 2012 Technical Report. FNI has largely followed the 2012 Technical Report since re-opening the Lockerby Mine in 2012, while managing its liquidity during volatile commodity price environments. The Company expects to file a new Technical Report on the Lockerby Mine during the first half of 2015, as previously disclosed.
The Plan also includes the restart of exploration diamond drilling at Lockerby, with a planned 6,300 metres of underground exploration drilling in 2015 and 7,200 metres in 2016, targeting increased resources/reserves and an increased mine life beyond 2016.

Summary 2015 Outlook

Production of between 12.7 and 13.5 million pounds of contained1 nickel, consistent with 2014 production.

Production of between 6.9 and 7.5 million pounds of contained1 copper.

GMV-net payable1 production of between 6.4 and 6.8 million pounds of nickel, and between 3.5 and 3.7 million pounds of copper.

Mine site operating costs1 between $40.0 and $45.0 million, a reduction of 34% (midpoint) compared to 2014, reflecting the impact of Lockerby Restructuring Plan.

Cash production costs between $3.50 and $4.50 per pound2 of GMV-net1 payable nickel.


Contained nickel lbs (millions)
12.7 - 13.5

Contained copper lbs (millions)
6.9 - 7.4

GMV-net payable1 nickel lbs (millions)
6.4 - 6.8

GMV-net payable1 copper lbs (millions)
3.5 - 3.7

Mine site operating costs1 (CAD millions)
$40.0 - $45.0

Cash production costs per GMV-net1 Ni lb2 (CAD)
$3.50 - $4.50

Assumptions: Cu per lb US$2.75, CAD/USD 1.20

Capital expenditures

Capital expenditures, including underground development, are projected to be approximately $6.5 million in 2015.

Exploration expenditures

Exploration and evaluation expenses in 2015 are projected to be approximately $0.9 million, including 6,300 metres of exploration drilling and related costs.

General and Administrative ("G&A")

G&A expenses in 2015 are projected to be approximately $3.6 million, not including stock-based compensation or costs relating to any potential debt refinancing.

About FNI

FNI is a Canadian mining and exploration Company. The Company's mission is to be the most dynamic North American emerging base metal mining Company in which to work and invest and to be respected in the communities in which it operates. FNI owns and operates the Lockerby Mine in the Sudbury Basin in northern Ontario, which reached full production during 2013, providing a foundation from which to grow the Company. FNI's shares are traded on the TSX under the symbol FNI.

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