Micon Dumont Deposit Resource Estimation

Block-model resource estimations completed in November 2008, based entirely on Royal Nickel drilling.

• Focused on 3.4 kilometres strike from 6000E to 9400E.
• In this area, indicated resource occurs between 7300E to 8900E over 1.6 km strike.
• Does not include inferred historical resource or inferred resource outside of 6000E to 9400E range, which would add another approx. 25% to global resource.
• Substantial drilling program is ongoing to increase overall resource, define additional starter pits, and move inferred resource to indicated category.
• Future drilling programs should substantially increase overall resource by extending the resource to the NW beyond 6000E and by filling-in ungraded portions of the block model between 6000E and 9400E.

Metallurgical Program

• Preliminary metallurgical testing has been performed by Royal Nickel at SGS-Lakefield, Xstrata Process Support and CTMP.
• Composite samples representing variability of Dumont ore are being examined.
• Initial results indicate that significant improvements over historical recoveries are achievable into a high-grade concentrate.
• Preliminary work has demonstrated that recoveries of over 65% in concentrates grading over 20% nickel are achievable.
• Preliminary work has also shown that desliming of feed is essential to maximize efficiency and recovery for all ore types in a wet grinding / flotation process.
• Focus over past several months has been to develop a standard process flow sheet for grinding, desliming and flotation that can accommodate all variability within Dumont ores including variations in nickel mineralogy (Sulphide vs. Awaruite), chrysotile content and brucite content.

Conceptual Study

In August of 2008, Aker Metals, a division of Aker Solutions Canada Inc. was retained by the Corporation to produce a Conceptual Study ("Study") with the main focus of the Study to evaluate the economic potential of developing an open-pit mine to mine nickel from the Dumont Nickel Property.

The attached diagram from the Study shows a 75,000 tonnes per day ultimate pit outline (red) and starter pit outline (yellow). The starter pit consists of 48.6 million tonnes at an average grade of 0.35% Ni for the years 1 and 2. The ultimate pit outline is based on a 470 metre deep pit, with a strip ratio of 1.8:1, with mineable resources of 571 million tonnes, having an average head grade of 0.32% Ni, and resulting in an ultimate pit outline that reflects a mine life of 21 years.

Pit Outlines: