First Nickel Inc. announced that it is has entered into a commitment letter with three of its major shareholders and lenders: Resource Capital Fund IV L.P. (RCF IV), Resource Capital Fund V L.P. (RCF V and, together with RCF IV, RCF), and West Face Long Term Opportunities Global Master L.P. and/or its affiliates to complete a transaction to refinance all of its outstanding debt obligations. The company's outstanding indebtedness is currently approximately $38 million in the aggregate, comprising four separate instruments: (a) the $18 million revolving credit facility (BNS facility) with the Bank of Nova Scotia (BNS), which matures on March 12, 2015; (b) the $10 million convertible loan (RCF IV convertible facility) with RCF IV, which matures on March 31, 2015; (c) the $5 million term loan (RCF V loan) with RCF V, which matures on March 31, 2015; and (d) the $5 million term loan (West Face loan) with West Face, which matures on March 31, 2015. Pursuant to the commitment letter, the company has agreed to issue 624,150,000 common shares to RCF IV in full satisfaction of FNI's outstanding obligations under the RCF IV convertible facility, which represents a per common share issue price of CAD 0.02 and a USD - CAD exchange rate of 1:1.2483 to convert the outstanding principal amount under the RCF IV convertible facility into Canadian dollars.

Upon the issuance of the common shares, the RCF IV convertible facility will be terminated and the security previously granted to RCF IV will be released. Pursuant to the commitment letter, the company has agreed to amend and restate the RCF V loan and the West Face loan. The RCF V loan will be increased to $15.5 million and the West Face loan will be increased to $12.5 million.

The amended loans will mature December 30, 2016 and both will bear interest at an annual rate of 10%. Interest will be payable in cash or, at the election of the applicable lender, in common shares of the company. Certain proceeds from the amended loans will be used to pay out the outstanding balance under the BNS facility.

Following repayment in full, the BNS facility will be terminated and the standby letters of credit securing the BNS facility posted by RCF V and West Face will be returned and cancelled. The credit facilities made available by RCF V and West Face backstopping the letters of credit posted with BNS will also be terminated.