Victory expands at Minago Nickel Project

Victory Nickel Inc. has signed an option agreement with Xstrata Nickel, (“Xstrata”), a business unit of Xstrata Canada Corporation, to acquire a 100% interest in five mineral claims located adjacent to Victory Nickel’s existing Minago property package.

Prior to the option, Victory Nickel held approximately 15,068 hectares of ground at Minago, incorporating the Nose Deposit, which is the area containing the entire current resource, and the North Limb, a zone of mineralization with a known strike length of 1.5 kilometres located to the north of the Nose Deposit. The option agreement with Xstrata adds five mineral claims (“the Properties”) totalling 691 hectares covering the extension of the North Limb to the north.

Victory Nickel currently has three drills turning at Minago to test for additional higher grade mineralization at depth in the Nose Deposit as well as to explore the North Limb, said Brian Robertson, President. The addition of these claims adds highly prospective exploration ground which we intend to test with this drill campaign and protects our current land position. Furthermore it offers us more flexibility in planning and development of the Minago mine which is now underway as part of the definitive feasibility study on the open pit portion of the deposit, he said.

Under terms of the agreement, Victory Nickel will acquire a 100% interest in the Properties through:

- A one-time cash payment of $150,000 upon signing; and,

- Incurring $500,000 of expenditures before September 30, 2008.

Once acquired, Victory Nickel’s 100% interest in the Properties will be subject to a net smelter return (“NSR”) royalty interest retained by Xstrata, as follows:

- In respect of nickel:

– A 2% NSR royalty when the LME three-month nickel price is equal to or greater than US$13,227.24 per tonne in that quarter; and,

– A 1% NSR royalty when the LME three-month nickel price is less than US$13,227.74 per tonne in that quarter.

- In respect of other metals, minerals and concentrates:

– A 2% NSR royalty.