TORONTO, ONTARIO -- (Marketwire) -- 01/16/13 -- First Nickel Inc. ("First Nickel" or the "Company") (TSX:FNI) announces that it has entered into a loan facility with Resource Capital Fund V L.P. ("RCF") in the aggregate principal amount of US$5.0 million (the "Facility"). The Facility matures on December 31, 2013 and the proceeds will be used for working capital and corporate requirements. The Facility closed on January 15, 2013 and is subject to the satisfaction of certain post-closing conditions.

Description of the Loan Facility

The Facility will bear an interest rate of 12.0% per annum, paid quarterly in cash or, at RCF's option, common shares of the Company valued at the volume weighted average market price for the five days prior to the date the payment is due. The Facility will be secured by a first ranking perfected encumbrance over all assets associated with the Company's projects, all shares or equity interests of the Company and all intercompany debt. In connection with the Facility, a 3.0% Establishment Fee will be paid to RCF in common shares of the Company valued at the volume weighted average market price for the five days prior to the closing date.

Lockerby Development Rationalization

In response to the production shortfall coupled with the lower than anticipated grades and recoveries from material processed by Xstrata in the fourth quarter as described in the press release dated January 3, 2013, and to conserve working capital, the Company has rescheduled underground development priorities at Lockerby to focus on currently active mining horizons to ensure that production is maintained. The Company is reviewing its working capital position, as well as its planned capital expenditures with respect to its operations, and anticipates that it will be seeking additional, longer-term sources of financing in order to continue the build-out of the Lockerby Mine.

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 we operate. FNI is in the process of ramping up production at its Lockerby nickel / copper mine in the Sudbury Basin in northern Ontario. In addition to the Lockerby Mine, the Company owns exploration properties in the Sudbury Basin, the Timmins region of northern Ontario, and the Belmont region of Eastern Ontario. FNI's shares are traded on the TSX under the symbol FNI.

Forward-Looking Statements

This news release contains forward-looking statements, which are subject to certain risks, uncertainties and assumptions, including the cash flows, working capital, metal prices, costs, output, grades, expected development and 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.