First Nickel Arranges US$10 Million Convertible Working Capital Facility

TORONTO, ONTARIO, Jun 16 (MARKET WIRE) --
First Nickel Inc. ("First Nickel" or the "Company") (TSX: FNI) announces
that it has entered into a commitment letter with Resource Capital Fund
IV L.P. ("RCF") for a US$10 million convertible working capital facility
maturing on December 31, 2013 (the "Facility"). The proceeds of the
Facility will be used as working capital, for general corporate purposes
and to begin incremental capital development activities at the Lockerby
Mine that will expedite launch of the full capital development project
when full financing for the project is arranged. The Facility is expected
to close on or about July 15, 2009 and is subject to certain closing
conditions, including the approval of the Toronto Stock Exchange, and
entering into definitive documentation.

"While we would have preferred to issue equity at higher levels, under
the current turbulent market conditions and financial environment, we are
very pleased to have the opportunity to associate with a group that
shares our belief in the long term potential of the Company and the
nickel business. The injection of US$10 million into the Company provides
the necessary capital to maintain our operating and exploration teams,
continue the care and maintenance of the Lockerby Mine for the next year
and initiate value added capital programs that will facilitate the launch
of the full development program on the Lockerby Depth project. The
transaction will enhance shareholder value by removing the uncertainty
regarding funding needed to maintain a healthy balance sheet in these
difficult financial markets and at the same time advance the business.
With this commitment by a very credible and strong partner, we can now
focus on optimizing the mine plan and seek full funding for the project
in time to participate in and profit from the strong metals markets that
we anticipate in the near future, " stated William Anderson, President
and Chief Executive Officer of First Nickel.

Under the TSX Company Manual, shareholder approval would be required as a
result of the number of common shares issuable pursuant to the Facility
being in excess of 25% of the currently issued and outstanding common
shares of the Company and as a result of the Facility materially
affecting control of First Nickel if the Facility is converted into
common shares. First Nickel has applied to the TSX under the provisions
of Section 604(e) of the Company Manual for an exemption from shareholder
approval requirements as the Company does not have sufficient time to
seek shareholder approval and is relying on the financial hardship
exemption. There is no certainty that the TSX will grant the exemption. A
Special Committee of independent directors of the Company has carefully
reviewed the terms of this Facility and has determined that the
completion of the financing and reliance on the financial hardship
exemption is reasonable and in the best interest of the Company given the
Company's current financial difficulty and the limited availability of
alternative financing arrangements.

As a consequence of relying upon the financial hardship exemption under
Section 604(e) of the TSX Company Manual, the TSX has informed the
Company that it will, in the ordinary course, commence a listing review.
The Company is confident that it will be in compliance with all of the
TSX listing requirements.

Description of the Convertible Working Capital Facility

The targeted closing date for the transaction is July 15, 2009 or in any
event no later than July 31, 2009 upon satisfaction of the conditions
precedent. The Facility will be drawn in a single advance of US$10
million on closing.

The Facility will bear an interest rate of 8.0% per annum, paid quarterly
in cash or, at RCF's option, in common shares of the Company valued at
the market price. The market price is determined by the weighted average
trading price of the Company over the 20 trading days prior to the
calculation date. The Facility will be secured by the assets associated
with the Lockerby, West Graham, Raglan Hills and Belmont projects.

RCF, at its discretion, has the right to convert all or any portion of
the Facility, whether outstanding or previously repaid, at any time prior
to the expiry date, into common shares of First Nickel at a conversion
price of C$0.11. The Facility, if converted in full would represent
107,054,546 common shares of the Company and when combined with the
2,150,000 common shares issued to RCF by the Company as an establishment
fee represents 41.2% of the common shares of the Company on an as
converted basis. If the Company elects not to proceed with the Facility,
it will be obligated to issue one million common shares to RCF as a
termination fee.

For the purpose of calculating the number of shares to be issued upon the
payment of interest and the conversion of principal, RCF and the Company
will use a fixed C$/US$ exchange rate of 1.1776.

In addition to the above terms, the Facility also contemplates the
following:

- RCF has the option to participate in any equity raisings on a pro-rata
basis to its actual and/or prospective shareholding in the Company until
December 31, 2013 or thereafter so long as any amounts due remain
outstanding.

- For one year, the Company will not raise equity or convertible debt at
a price less than the conversion price without the written consent of RCF.

- RCF will have the option to nominate one director to the Board of the
Company, with a maximum of seven members, as long as the aggregate actual
and/or prospective shareholding is greater than 10% of the issued shares
of the company until December 31, 2013 or thereafter so long as any
amounts due remain outstanding.

- RCF will have the option to nominate a total of two directors to the
Board of the Company, with a maximum of eight members, as long as the
aggregate actual and/or prospective shareholding is greater than 25% of
the issued shares of the Company until December 31, 2013 or thereafter so
long as any amounts due remain outstanding.

About RCF

RCF is one of several successive private equity funds with mandates to
make investments in mining companies and projects across a diversified
range of commodities and geographic regions. Since inception in 1998, the
Resource Capital Funds have invested in 80 companies with projects in 35
countries relating to in excess of 20 different commodities. With
approximately US$1 billion under management, the Funds are long term
investors that invest throughout the commodity cycle and have facilitated
the development of a number of junior and mid-tier companies and assets
that are recognized in the marketplace.

About First Nickel

First Nickel is a Canadian mining and exploration Company. Its current
activities are primarily focused on the Sudbury Basin in northern
Ontario, the location of the company's redevelopment stage property (the
Lockerby Mine) and two of its exploration properties. First Nickel also
has exploration properties in the Timmins region of northern Ontario and
the Belmont region of Eastern Ontario. First Nickel's shares are traded
on the TSX under the symbol FNI.

Some of the statements contained in this press release are
forward-looking statements, such as statements that describe First
Nickel's future plans, intentions, objectives or goals, and specifically
include but are not limited to completion of the proposed Facility,
maintaining operating and exploration teams, continued care and
maintenance of the Lockerby Mine; and the launch of the full development
program on Lockerby Depth project. In certain cases, forward-looking
statements can be identified by the use of words such as "expects",
"will", "enable", "anticipates", "estimated" or words of similar effect.
Since forward-looking statements are not statements of historical fact
and address future events, conditions and expectations, forward-looking
statements inherently involve unknown risks, uncertainties, assumptions
and other factors well beyond the Company's ability to control or
predict. Actual results and developments may differ materially from those
contemplated by such forward-looking statements depending on, among
others, such key factors as negotiating and entering into definitive
agreements for the Facility, completion of the Facility, fluctuating
metal prices, and other factors described in the Company's Annual
Information Form under the heading "Risk Factors" which has been filed
electronically by means of the System for Electronic Document Analysis
and Retrieval ("SEDAR") located at www.sedar.com. The forward-looking
statements included in this document represent First Nickel's views as of
the date of this document and subsequent events and developments may
cause First Nickel's views to change. These forward-looking statements
should not be relied upon as representing First Nickel's views as of any
date subsequent to the date of this document. Although First Nickel has
attempted to identify important factors that could cause actual actions,
events or results to differ materially from those described in
forward-looking statements, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or
intended. Accordingly, readers should not place undue reliance on any
forward-looking statements.

Contacts:
First Nickel Inc.
William Anderson
President & CEO
(416) 362-7050
(416) 362-9050 (FAX)
wanderson@firstnickel.com

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