Updates Minago Resource Estimate

660 million pounds of in-situ nickel

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Updates Minago Resource Estimate

posted on Jan 06, 2009 01:32PM

January 6, 2009

Victory Nickel Updates Minago Resource Estimate

TORONTO, ONTARIO--(Marketwire - Jan. 6, 2009) - Victory Nickel Inc. ("Victory Nickel" or the "Company") (TSX:NI) (www.victorynickel.ca) today announced that it has received a revised resource estimate for its 100%-owned Minago nickel deposit on Manitoba's Thompson Nickel Belt.

The revised resource estimate prepared by Wardrop Engineering Limited ("Wardrop") reports only the nickel that is present in sulphide minerals (denoted NiS). This is necessary to allow accurate determination of a recovery curve at various grades. Previous Minago resource estimates have been reported on a Total Nickel basis at a 0.25% cut-off grade. The adoption of NiS values for the resource estimate (using a 0.20% nickel sulphide cut-off grade as a minimum for economic viability) provides a more accurate determination of the recoverable nickel.

The NiS resource estimate is as follows:
---------------------------------------------------------------------------
           Sulphide Nickel Resource Estimate, January, 2009
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Classification
At 0.2% Nickel Sulphide Cut-off        Tonnes   Grade   NiS In-Situ Nickel
 Grade                              (millions) (% NiS) (millions of pounds)
Measured Resource                         9.1    0.47                   94
Indicated Resource                       35.0    0.42                  327
---------------------------------------------------------------------------
Total Measured and Indicated             44.1    0.43                  420
---------------------------------------------------------------------------
Inferred Resource                        12.0    0.44                  115
---------------------------------------------------------------------------

"Using a sulphide nickel resource gives us a more reliable understanding of the metal that will be recoverable at Minago," said President Steve Harapiak.

In order to facilitate comparison with the total nickel resource estimate used in the November, 2006 Preliminary Economic Assessment ("PEA") (see news release dated February 20, 2006), Wardrop also provided a revised Total Nickel resource estimate, based on the same dataset as used for the NiS resource above, as follows:

---------------------------------------------------------------------------
           Total Nickel Resource Estimate, January, 2009
---------------------------------------------------------------------------
Classification                    Tonnes    Grade     Total In-Situ Nickel
At 0.25% Nickel Cut-off Grade  (millions)   (% Ni)     (millions of pounds)
Measured Resource                   11.1     0.56                      136
Indicated Resource                  43.1     0.51                      484
---------------------------------------------------------------------------
Total Measured and Indicated        54.2     0.52                      620
---------------------------------------------------------------------------
Inferred Resource                   14.6     0.53                      170
---------------------------------------------------------------------------

The January, 2009 Total Nickel resource represents a 2% increase in the amount of in-situ nickel metal in Measured resources and a 14% increase in in-situ nickel metal in Indicated resources over the resource reported in the PEA. These increases result primarily from the inclusion of drill results from the winter 2008 drill program. In addition, the January, 2009 resource was developed using a more constrained resource shell compared to that used for the PEA, which excludes a considerable volume of rock at depths below 400 metres and resulted in a 67% decrease in the amount of in-situ nickel in inferred resources (inferred resources are not used to calculate the economics in a feasibility study). Additional drilling is required in order to return tonnage at depth to the resource estimate given the new parameters used.

"The Minago deposit remains open at depth with no indication of reduced grade or volume, and diamond drilling and geophysics completed to date continue to indicate significant potential to upgrade and increase resources," said Paul Jones, Vice-President, Exploration. "We are currently considering exploration programs for 2009 to evaluate this potential, and are confident that additional drilling will bring mineralization at depth into the resource for underground mining which was projected in the PEA to begin in year eight."

Capital Cost Update

In addition, the Company has received preliminary indications from Wardrop that final capital costs for Minago will come in considerably in excess of those estimated in the PEA. The feasibility study is scheduled for completion in the first quarter of 2009.

Notes:

1. A 0.2% nickel cut-off grade was used for the NiS resource versus the 0.25% cut-off used for Total Nickel. A higher cut-off grade was used in the Total Nickel resource estimate to account for unrecoverable nickel in silicate.

2. Wardrop conducted both the January, 2009 NiS and Total Nickel resource estimates using data from historic and recent drilling. A total of 78 drillholes from the historic dataset, 44 drillholes from the 2006-07 winter drill campaign, and 10 holes from the 2008 drill program were used. This represents a total of 19,875 assay intervals that define the zone of mineralization on the deposit.

3. The interpolation plan of the Minago deposit resource estimation was completed using ordinary kriging with Nearest Neighbour (NN) and Inverse Distance Squared (ID) check models. The estimations were designed as a three pass system per each domain. The first pass estimated a block only if a minimum of two drillholes and six data points were found within the restrictive search ellipsoid. The second pass allowed a block to be interpolated if it was not interpolated during the first pass, and if a minimum of two drillholes and four data points were found within the larger sample search ellipsoid. The third pass allowed a block to be interpolated if it was not interpolated during the second pass, and if a minimum of two data points were found within the larger sample search ellipsoid.

4. Mineral resources which 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, socio-political, marketing, or other relevant issues.

5. The Quantity and grade of reported inferred resources in this estimation are conceptual in nature and there has been insufficient exploration to define these inferred resources as an indicated or measured mineral resource and it is uncertain if further exploration will result in upgrading them to an indicated or measured mineral resource category.

6. Cliff Duke, P. Eng., of Wardrop, is responsible for the resource estmation. Mr. Duke is an independent Qualified Person (QP) in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects and has reviewed and is responsible for the mineral resource presented in this news release.

7. All exploration work is supervised by Paul Jones, Vice-President, Exploration for Victory Nickel, who acts as QP under NI 43-101 and has reviewed and approved the contents of this news release.

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