N@N

Care and maintenance costs in the first quarter of 2010 amounted to $1,343,900, a decrease of $86,334 (6%) from the $1,430,234 recorded in the first quarter of 2009. These costs include ongoing costs of the staff retained at the mine site, energy, taxes, insurance, equipment rentals and materials required to maintain the mine in good standing.

General and administrative expenses totaled $534,320 in the first quarter of 2010, slightly higher than the $525,338 recorded in the first quarter of 2009. The increase is mostly attributable to higher legal fees.

Stock-based compensation costs of $1,500 recorded in the first quarter of 2010 relate to previously granted stock options with graded vesting schedule. No stock options were granted during the first quarter of 2010.

A foreign exchange gain of $275,392 was recorded in the first quarter of 2010, versus an exchange gain of $61,225 in 2009. Exchange gains or losses arise from the revaluation of the US dollar cash balances and the US dollar convertible loan account.

The interest on the convertible loan amounted to $235,520 in the first quarter of 2010. Resource Capital Fund IV L.P. ("RCF") notified the Company of its option to receive common shares of the Company in payment of this interest. A total of 1,736,892 common shares were issued to RCF in full satisfaction of this liability.

Interest and other expenses decreased by $44,031 in the first quarter of 2010, compared to 2009. Interest and other expenses include costs incurred on mineral properties that were previously written off. In 2009, interest and other expenses include a provision for the interest on the unspent flow-through funds (Part XII.6 tax), interest paid on advances received from Xstrata on the ore delivered to their facilities, and costs incurred on mineral properties that were previously written off.

Interest and other income is mostly made up of interest earned on cash balances, and on short term deposits. The lower interest income in 2010, compared to 2009, mainly reflects lower interest rates.

Exploration Activity

Exploration efforts in the first quarter of 2010 have focused on the interpretation and compilation of the 2009 exploration programs on both the Sudbury and Southeastern Ontario projects. Exploration programs consisting of surface mapping and prospecting, geophysical surveys and diamond drilling are being designed to test priority targets on the Raglan Hills and Belmont projects in Southeastern Ontario.

The Company has submitted the Phase I Completion Notice to Landore Resources Canada Incorporated ("Landore") indicating that the Company has met all of the terms of the option agreement, by December 31, 2009, to form the 70:30 Joint Venture. If Landore opts not to participate in the Joint Venture, the Company can earn an additional 15% by financing a Feasibility Study on the project.

The Company received an interpretation of the surface TEM survey completed by Crone Geophysics on the Henderson property in the first quarter. The interpretation identified 3 moderate to weak, untested, near surface conductive plates that are coincident with conductors identified by the airborne geophysical survey in 2008. A diamond drill program is being designed to test these conductive plates later in 2010.

Three additional claims representing approximately 88 hectares were staked in Wollaston and Limerick Townships on the Thanet Metagabbro Intrusive in the first quarter of 2010. These claims will form part of the ongoing Belmont exploration project.

The Company continues to actively source additional high quality exploration properties and continues to review property submissions as they are received from individuals and corporations.

2010 Outlook

The feasibility studies completed in 2009 show robust economic returns for the capital plan proposed for the Lockerby Depth project. See press release No. 2009-11, dated October 19, 2009 for further details. Discussions for project financing began with several banks in late 2009. Site visits were arranged for the banks in early 2010. Nickel markets have strengthened, and the Company believes that a financing can be secured that will allow the development of the Lockerby Depth project to be launched on schedule in the summer of 2010.

Qualified Person

The foregoing scientific and technical information has been prepared or reviewed by Paul C. Davis, P.Geo., Vice-President Exploration of the Company. Mr. Davis is a "qualified person" within the meaning of National Instrument 43-101.

The Company follows rigorous quality control practices and procedures in full compliance of NI 43-101, and these are described on the Company's website and in all technical press releases.

First Nickel is a Canadian mining and exploration Company, whose principal asset is the Lockerby Mine near Sudbury, Ontario. In addition to its Lockerby operation, the Company maintains an active exploration program on projects near the mine around Sudbury, and elsewhere in Ontario. First Nickel's shares are traded on the TSX under the symbol FNI.

This news release contains forward-looking statements, which are subject to certain risks, uncertainties and assumptions, including the cash flows, metal prices, decrease costs, increase output, expected production, and expected exploration expenditures. 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 factors include fluctuating metal prices, lower unit costs and other factors described in the Company's most recent 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 ]. 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, except as may be required under applicable securities law.