First Nickel : FNI Reports Financial and Operating Results for the Three Months Ended March 31, 2015

TORONTO: May 8, 2015. First Nickel Inc. ("FNI" or the "Company") (TSX: FNI) announces its results for the three months ended March 31, 2015. The Company's unaudited condensed interim financial statements ("financial statements") and management's discussion and analysis ("MD&A") for the period have been filed on SEDAR and will be available at www.sedar.comand on the Company's website at www.fnimining.com. This news release should be read in conjunction with the Company's financial statements and MD&A for the period ended March 31, 2015. This news release contains forward- looking information that is subject to the risks and assumptions set out in our cautionary statement on forward-looking information, which is located at the end of this news release. (All dollar amounts herein are in Canadian funds unless otherwise indicated.)

 Production: The Lockerby Mine produced 2.2 million pounds of contained nickel and 1.4 million pounds of contained copper during the three months ended March 31, 2015.

 Revenue: Revenue for the three months ended March 31, 2015 was $9.7 million.

2015, or $7.72 (US$6.22) per GMV-net pound of nickel shipped.

 Development: In the three months ended March 31, 2015, following the adoption of the Lockerby Restructuring Plan, ramp and lateral development totaled 123 metres and 147 metres, respectively.

 Net loss: The Company had a net loss of $17.0 million for the three months ended March 31, 2015, including $4.5

million relating to the March 2015 debt restructuring ($3.8 million non-cash) and $4.1 million in foreign exchange losses on loans and borrowings.
 At March 31, 2015, the Company's unrestricted cash balance was $3.1 million.
 In January 2015, the Company announced the Lockerby Restructuring Plan, reducing costs, increasing exploration and recommencing the ramp development in order to extend the mine life. Site operating costs in the first quarter of 2015 were generally consistent with the previously disclosed guidance range, however, production in the first quarter was lower than planned. See section "Outlook for 2015".
 On March 12, 2015, the Company completed a debt restructuring that resulted in the full repayment of the US$17.4
million balance under the BNS credit facility, a reduction of outstanding debt from US$37.4 million to US$28.0 million and extension of debt maturities from March 2015 to December 2016.

In the three months ended March 31, 2015, the Company reported revenue of $9.7 million, cost of sales of $11.6 million and total cash production costs of $8.8 million.
Under the Company's gross-metal-value ("GMV") ore-processing agreement with Glencore Canada Corporation ("Glencore") (the "GMV Agreement"), the Company is paid for accountable gross metal value, which is determined based on the value of the metals contained in the ore delivered and a specified percentage based on the nickel grade of ore delivered. There are no specifically-identified processing costs under the GMV Agreement given that the specified GMV percentage results in revenues that are paid and recorded net of processing costs.

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Cash production costs and cash production costs per GMV-net pound of nickel shipped are non-GAAP financial performance measures and operating cash flow before working capital

adjustments is an additional GAAP financial performance measure, none of which have standardized definitions under International Financial Reporting Standards ("IFRS"). See page 19

of the Company's March 31, 2015 MD&A for further details.

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Canadian $, except for share amounts, for the three months ended 2015 2014

Depreciation 4,798,934 4,229,681

Tota l cost of sa le s 16,377,526 21,095,674

Exploration and evaluation 85,845 138,955

Loss on extinguishment of debt 4,475,794 - Other income (477,933) (566,739) Loss from operations (11,796,888) (4,993,538) Finance expense 5,214,543 4,260,465

Loss before taxes (17,011,431) (9,254,003)

Income & mining taxes - - Net loss and comprehensive loss $ (17,011,431) $ (9,254,003) Loss per share - basic and diluted $ (0.02) $ (0.01)

Weighted average number of common shares outstanding - basic 847,081,075 644,152,033

Safety, Health & Environment

The Company's directors, management, employees, and contractors continue to place the highest priority on safety, health
and the environment. Lockerby had no lost-time incidents during the three months ended March 31, 2015.
On April 28, 2015, the Company received, and is in the process of reviewing, charges served by the Ontario Ministry of Labour ("MOL") relating to the accident at Lockerby in May 2014. The legal aspects of this matter will take their normal course, but the Company's primary focus will remain on the health and safety of its people, and on doing everything in its power to prevent a similar tragedy from ever occurring in the future.
After the accident, the Company did an extensive independent engineering investigation of the affected area of the mine and delivered a report to the MOL. All orders and recommendations made as a result of this process were implemented and the Company has fully cooperated with the MOL in its investigation.

Production

Monthly production is based on the quantity of ore hoisted to surface and the associated average grade of nickel and other contained metals, which is established by an agreed-upon third-party laboratory.
In the three months ended March 31, 2015, Lockerby produced 2.2 million pounds of contained nickel at an average grade of
2.09% Ni, and 1.4 million pounds of contained copper at an average grade of 1.30% Cu. Contained-nickel production in the first quarter of 2015 was 20% lower than the 2.7 million pounds produced in the first quarter of 2014, reflecting a 15% decrease in ore tonnes produced combined with a 5% decrease in average nickel grades mined. Contained nickel production in the first quarter was also below the levels reflected in the Lockerby Restructuring Plan for the first three months of the year. Lower tonnes mined in the first quarter mainly reflect the impact of challenges experienced with the implementation of the Lockerby Restructuring Plan, which included lower equipment availabilities experienced, and the assumption of new tasks by FNI personnel, where the work had been formerly performed by contracted labour. Nickel grade was also below expected levels, reflecting stope sequencing considerations and slightly higher ore dilution experienced. As a result of lower production realized in the first quarter, the Corporation's production outlook for 2015 is expected to change
(see the section "Outlook for 2015").

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For the three months ended 2015 2014

Revenues are recorded based on the quantity of crushed ore that is delivered to Glencore and the associated average grade of nickel and other contained metals, which is established by an agreed-upon third-party laboratory. Monthly revenue is initially recorded provisionally, and settled via a final payment from Glencore approximately 90 days after the month of delivery
The Company recorded total revenue of $9.7 million in the three months ended March 31, 2015, compared to $16.8 million in the three months ended March 31, 2014. Lower revenues in the first quarter were driven by lower nickel market prices (approximately a $4.0 million impact) and lower production and GMV-net payable nickel (approximately a $3.0 million impact). Lower market nickel prices during Q1 2015 reduced final-settlement revenue by $2.5 million and resulted in a mark- to-market charge of $1.1 million as at March 31, 2015. The final settlement and mark-to-market adjustment differences can be attributed to the movement of the nickel market price from December 2014 to March 2015, a period of provisional revenue. The average nickel market price over first quarter decreased by 14%; from a December average of US$7.25 to a March average of US$6.26. During the first quarter of the prior year, nickel market prices rose by 12%. The Company may from time to time enter into forward sales agreements to mitigate provisional pricing exposure to changing nickel and copper prices.

Canadian $, for the three months ended 2015 2014

Provisional net nickel revenue

11,496,052

Nickel final settlement (1,920,919) 530,157

Nickel price adjustment (405,348) 733,035

Provisional net by-product revenue 3,288,625 4,140,854

By-product mark-to-market and final settlement adjustment (514,702) (112,823)

Total revenue

Cash production costs2

16,787,275

Cash production costs is a non-Generally Accepted Accounting Principles ("GAAP") measure that is based on the cost of sales less by-product revenues. Cash production costs of $8.8 million in the three months ended March 31, 2015 were $4.0 million lower than the comparative prior-year period. Cash production cost per GMV-net pound of nickel shipped was $7.74
in the first quarter of 2015, compared to $8.23 in the first quarter of 2014.

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Cash production costs and cash production costs per GMV-net pound of nickel shipped are non-GAAP Financial performance measures, neither of which has standardized definitions

under IFRS. See page 19 of the Company's March 31, 2015 MD&A for further details.

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Canadian $, except production amounts, for the three months ended 2015 2014

By-product revenue - mark-to-market and final settlement adjustments 514,702 112,823

Total cash production costs (net of by-product credits) $ 8,804,669 $ 12,848,635

Cash production cost per GMV-net pound of nickel1 shipped - USD $

7.46

1 Cash production cost per pound is based on cash production cost for the commercial production period divided by associated net payable nickel shipped for the same period.

Exploration

The Company's exploration strategy is focused on base metals and is guided by the objectives of increasing resources and reserves in conjunction with the development and/or acquisition of quality projects, resulting in multiple mining operations. As part of the mine restructuring plan, the Company plans to recommence exploration in 2015.

2015 Lockerby Restructuring Plan

On January 12, 2015, the Company announced that it was restructuring the Lockerby mine in order to reduce costs, increase exploration and extend the mine life in order to counter low nickel prices (the "Lockerby Restructuring Plan").
The Lockerby Restructuring Plan aims to realize productivity improvements and is expected to allow a reduction in costs while maintaining relatively consistent nickel production. The Lockerby Restructuring Plan resulted in a 30% reduction in the Company's personnel and a 75% reduction in third-party contractor personnel, for an overall workforce reduction of 45%. Costs at the Toronto corporate office were also reduced as part of the Lockerby Restructuring Plan.
As part of the Lockerby Restructuring Plan, ramp development has recommenced below the 68 level and is expected to reach the 71 level in the first half of 2016. The underlying mine plan is essentially unchanged from the 2012 Stantec Study. The plan also included 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 increasing mine life. Additionally, the Corporation continues to target mineral resources in the Lockerby East Zone. See "Outlook for 2015" section for details about the impact of the restructuring plan on 2015 production and operating costs

Lockerby site operating costs and capital expenditures in the first quarter of 2015 were consistent with FNI's business plan and 2015 production and cost guidance (provided by way of a January 27, 2015 press release), however, production and underground development did not meet planned rates. The combination of the operating shortfall and continued weakness in the nickel price, including a recent six -year low, has led FNI to re-evaluate the Lockerby operation.
Over the coming weeks, the Company will be evaluating a range of options from continuing the current operating plan at Lockerby to discontinuing ramp development and mining only the ore remaining on and above the 6800 level. In any scenario, expected 2015 production will be lower than, and operating costs wil l likely be different from the respective levels previously set forth in the Company's 2015 guidance. Production and cost guidance for 2015 will be updated in the coming weeks, once further information is available.

General and administrative expenses (excluding share-based compensation) and exploration expenditures are projected to be approximately $3.6 million and $0.9 million, respectively, in 2015. The increase in expected exploration expenditures is a result of the restart of exploration diamond drilling at Lockerby as part of the Lockerby Restructuring Plan.

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Qualified Person

The foregoing scientific and technical information has been prepared under the supervision of, or reviewed and approved by Paul C. Davis, P.Geo., Vice-President Exploration of the Company. Mr. Davis is a "Qualified Person" within the meaning of NI 43-101.
The Company follows rigorous quality control practices and procedures in full compliance with NI 43-101, and these are described on the Company's website and in all technical press releases.

About FNI

FNI is a Canadian mining and exploration company. FNI'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 fu ll production during 2013 and provides a foundation from which to grow the Company. FNI's shares are traded on the TSX under the symbol FNI.
To learn more about the Company please visit www.fnimining.comand follow us on LinkedIn and Twitter @FNI_Mining.

Cautionary Statement Regarding Forward-Looking Information

Certain statements contained in this news release may contain forward-looking information about FNI. Forward-looking information can often be identified by the use of forward-looking terminology such as "anticipate", "believe", "continue", "budget", "forecast", "estimate", "schedule", "expect", "goal", "intend", "target", "potential", "objective", "may", "plan" or "will" or the negative thereof or variations thereon or similar terminology. Forward-looking information may include, but is not limited to: the continued operation of the Lockerby Mine; expectations of obtaining financing in the near term; future financial or operating performance of the Company and its projects; the future price of metals; the long term supply and demand for nickel; continuation of exploration activities; mineral reserve and mineral resource estimates; the realization of mineral resource estimates; costs of production and key supplies; capital, operating and exploration expenditures; forecasts of sales and production; costs and timing of the development of new and existing deposits; costs and timing of future exploration; th e requirements for additional capital; government regulation of mining operations; environmental risks, reclamation expenses and/or title disputes or claims.
By its nature, forward-looking information is based on certain factors and assumptions which involve known and unknown risks, uncertainties and other factors which may cause the actual results, realization of mineral resources, performance or achievements of the Company, financial position or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Accordingly, actual events may differ materially from those implied by any forward-looking information. Readers are cautioned not to place undue reliance on forward-looking information, which speak only as of the date the statements were made and readers are also advised to consider such forward-looking information while considering the risk factors set forth in the MD&A for the year ended December 31, 2014 under the heading "Risks and Uncertainties" and under the heading "Risk Factors" in the Company's Annual Information Form for the year ended December 31, 2014. The Company disclaims any intention or obligation to publicly update or otherwise revise any forward-looking information whether as a result of new information, future events or other such factors which affect this information or to explain any material difference between subsequent actual events and such forward-looking information, except as required by applicable law.

FOR FURTHER INFORMATION PLEASE CONTACT:

Thomas Boehlert Paul Davis
First Nickel Inc. First Nickel Inc. President & CEO VP, Exploration
T: 416 362-7050 x 225 T: 416 362 7050 x 226
E: tboehlert@fnimining.com E: pdavis@fnimining.com

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