Lac Rocher

Lac Rocher Links December 2008 Preliminary Economic Assessment

The Lac Rocher nickel discovery occurs in the zoned, unmetamorphosed "Discovery Intrusion" that is in sharp intrusive contact with the enveloping country rock. The 3.2 metre massive sulphide intersection at the footwall contact of the intrusion obtained from drill hole NLR-99-01 returned a weighted average of 10.8% nickel as part of a 61.5 m interval grading 1.69% nickel. Substantial sulphide mineralization (>8%) has been intersected over a 175 m interval at the north end on the Discovery Intrusion where it occurs as massive lenses and disseminations and coarse aggregates of pyrrhotite, pentlandite, chalcopyrite, and minor pyrite.

There is a Measured & Indicated NI 43-101 compliant resource of 0.8 million (M) tonnes grading 1.12% Ni for 20M lbs of nickel, and an Inferred Resources of 0.44M tonnes grading 0.65% Ni for another 6M lbs of nickel, all at 0.5% nickel cut-off.

Mafic and ultramafic intrusions are known or have been discovered at several sites in the Lac Rocher region while nickel sulphide mineralization has so far been discovered in the Discovery Intrusion and at Anomaly E. The presence of more than one site of known nickel sulphide mineralization and numerous potential regional hosts to such mineralization are ample reason to consider the Lac Rocher region prospective.

Diamond drilling in 2007 returned results grading up to 9.5% nickel over 2.29 m within a larger intercept of 45.92 m grading 1.42% nickel. Results from this program (all analyses were conducted by Laboratoire Expert in Quebec, or ALS Chemex in Ontario) continued to confirm the presence of a high-grade, high-sulphide content nickel zone located within 150 m of surface, along with a larger disseminated nickel zone. The drilling tested for possible extensions to nickel sulphide mineralization and provided metallurgical samples for a Preliminary Economic Assessment (PEA) to evaluate the production and cash generation potential at Lac Rocher.

The December 2008 PEA, completed by Roche Limited Consulting Group, proposes two phases of mining that would extract 317,730 tonnes of material at a grade of 1.57% nickel, 0.58% copper and 0.053% cobalt. This would result in the production of 38,400 tonnes of a mixed nickel-copper-cobalt concentrate containing some 4,040 tonnes of nickel (8.9 million pounds), 1,680 tonnes of copper (3.7 million pounds) and 160 tonnes of cobalt (0.35 million pounds).

The PEA shows that metal prices of US$9.74/lb nickel, US$3.65/lb copper and US$30.43/lb cobalt (at an exchange rate of Cdn$1.00:US$0.95) are necessary for the project to break even on a pre-tax, 100% equity basis.  The Company is re-visiting the calculations in the PEA with respect to the current commodity-price environment and higher Canadian dollar.

The PEA envisions the Lac Rocher deposit being contract mined in two phases using mechanized cut-and-fill mining over a span of 24-26 months. In Phase One, 65,000 tonnes would be extracted at 1.75% nickel, 0.57% copper and 0.062% cobalt; in Phase Two an additional 252,730 tonnes would be extracted at 1.52% nickel, 0.59% copper and 0.051% cobalt.

All extracted material is assumed to be transported offsite to the Copper Rand mill in Chibougamau , Quebec. In addition to those noted above, the December 2008 PEA was based on the following parameters:

• Concentrate grading 10.5% nickel, 3.9% copper and 0.33% cobalt;
• Recoveries of 81% for nickel, 91% for copper and 95% for cobalt;
• An exchange rate of Cdn$1.00:US$0.95; and,
• Transportation, at a cost of $35.00 per tonne of mined material to Chibougamau for processing.

The Company intends to maintain the project in a condition that will allow it to be quickly advanced to production when justified by metal prices. To that end, an Environmental Impact Study (EIS) has been submitted and construction of an access road completed.

The PEA includes the use of inferred mineral resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that any value from such resources will be realized in whole or in part. Mineral resources that are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation or other relevant issues.