First Nickel Reports Lockerby Nickel Production at 80% of Full Production Rate in Third Quarter, Affirms Full Year Production and Cost Outlook

TORONTO, ONTARIO--(Marketwire - Oct. 19, 2012) - First Nickel Inc. ("FNI" or the "Company") (TSX:FNI) today announced its preliminary third quarter production numbers for the Lockerby Mine in Sudbury, Ontario.

FNI produced approximately 2.0 million pounds of payable nickel and 1.4 million pounds of payable copper in the third quarter of 2012, an increase of 25% and 17%, respectively, over the prior quarter. Year to date, the Company has produced 4.9 million pounds of payable nickel and 3.4 million pounds of payable copper. In the third quarter of 2012, nickel production was at 80% of the full production rate forecasted for the Lockerby Mine.

Ore production during the third quarter of 2012 was 60,060 dry metric tonnes (653 tonnes per day), or 82% of the planned full production rate of 800 tonnes per day. The third quarter ore production rate was the highest achieved at Lockerby since 2002.

As previously disclosed, the Company expects to be at or near the full production rate of 10 million pounds of payable nickel per annum in the fourth quarter of 2012.

2012 Production

	Six months ended June 30, 2012		Three months ended September 30, 2012		Nine months ended September 30, 2012
Ore tonnes	90,5411		60,060		150,601
Nickel payable pounds	2.9M		2.0M		4.9M
Copper payable pounds	2.0M		1.4M		3.4M
1 Wet metric tonnes of 92,748, as previously reported.

2012 Production and Cost Outlook (unchanged from January 25, 2012)

• Production of between 6.3 million to 7.4 million pounds of payable nickel
• Total cash production costs estimated to be $56.2 to $61.4 million²
• Total cash production costs of $6.00 per pound² of nickel by year end

	Six months ended June 30, 2012			Six months ended December 31, 2012			Three months ended December 31, 2012
Nickel payable pounds		2.5 - 2.9M			3.8 - 4.5M			2.1 - 2.5M
Copper payable pounds		1.8 - 2.0M			2.7 - 3.0M			1.4 - 1.6M
Total Cash Production Costs2	$	27.8 - 30.2M		$	28.4 - $31.2M		$	15.1 - $16.6M
Assumptions: Ni per lb - US$8.50, Cu per lb - US$3.25, CAD/USD $1.00

In July 2012, the Company released the Optimization Study, comprised of a technical report from Stantec and an updated Lockerby Mine Plan which detailed an optimized mining method and updated costing for the Lockerby Mine. This study demonstrated a 4.8 year mine life from July 1, 2012, with average annual production of 10 million pounds of payable nickel and 7 million pounds of payable copper at an average total estimated cash production costs of $5.56 per pound of nickel (net of by-product credits).

FNI will announce its full third quarter financial results by November 14, 2012.

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. Once the Lockerby Mine reaches full production (expected by end of 2012), it is expected to produce at a rate of approximately 10 million pounds of payable nickel and approximately 7 million pounds of payable copper annually, providing a strong base of cash flow from which to grow the Company. 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, 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.

² Non-GAAP Financial Measures The cash cost per pound of nickel produced, and total production costs are non-GAAP financial measures that do not have a standardized meaning under International Financial Reporting Standards ("GAAP"), and as a result may not be comparable to similar measures presented by other companies. Management uses these statistics to monitor operating costs and profitability, and believes that certain investors use this information to evaluate the Company's performance and ability to generate cash flow in addition to conventional GAAP measures. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Total cash production costs include mining costs, treatment, equipment operating lease costs, mine site general and administration costs, environmental costs, Vale royalty, transportation, and refining of concentrate, less by-product credits from sales of copper, cobalt and PGE's . The cash production cost per pound of nickel produced is the total production costs divided by pounds of nickel produced.