CaNickel Announces Updated Mineral Reserves and Resources for the Bucko Lake Nickel Project

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VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 26, 2012) - CaNickel Mining Ltd. (CML.TO) ("CaNickel" or the "Company") announces the results of an updated National Instrument ("NI") 43-101 Technical Report with an effective date of October 19, 2012 covering Bucko Lake Mine and its satellite properties, M11A, Apex, Halfway Lake, and Bowden Lake projects in Wabowden, Manitoba ("CaNickel 2012 Technical Report"), which will be made available for review on the SEDAR system at www.sedar.com and on the Company's website at www.canickel.com in due course.

The report was prepared by Lane A. Griffin, P.Geo., Paul L. Martin, P.Eng., and Chris C. Broili, P.Geo.. These authors are independent from the Company and qualified person as defined by NI 43-101.

The report is an update of the Mineral Reserves and Resources for Bucko Lake Mine and it's satellite properties based on drilling results obtained from surface and underground drilling completed from the 1960's to 2012, as well as an overview of the current mining and milling activities at Bucko Lake Mine. The report is also prepared in response to a technical disclosure reviewed conducted by British Columbia Security Commission in February 2012.

2012 Reserve and Resource Estimate

The mineral reserve and resource estimate for Bucko Lake Mine and its satellite properties as of April 1, 2012 are summarized in the table below:

Deposit
(values round to nearest 1,000)
Cut-Off
Grade (Ni%)
Tonnes Average
Grade
(Ni%)
Contained
Nickel
(lbs)
Bucko Lake Mine
Proven Reserves* 1.25% 616,000 1.43% 19,402,000
Probable Reserves* 1.25% 1,994,000 1.44% 63,129,000
Total Reserves* 1.25% 2,610,000 1.43% 82,531,000
 
Measured Resources** 1.00% 751,000 1.37% 22,680,000
Indicated Resources** 1.00% 2,845,000 1.28% 80,059,000
Total Measured and Indicated Resources 1.00% 3,596,000 1.30% 102,739,000
 
Inferred Resources*** 1.00% 5,043,000 1.41% 156,887,000
 
Satellite Deposits
M11A  
Indicated Resources** 1.00% 800,000 1.17% 20,639,000
Inferred Resources*** 1.00% 525,000 1.11% 12,850,000
 
Apex  
Inferred Resources*** 1.00% 41,000 1.19% 1,076,000
 
Bowden  
Inferred Resources*** 1.00% 2,044,000 1.16% 52,281,000
 
Halfway Lake  
Inferred Resources*** 1.00% 900,000 1.20% 23,814,000
Notes to the reserve and resource statement:
 
* Proven and Probable Reserves determined from Measured and Indicated Resources using a 1.25% nickel cut-off with a 15% margin incorporated into the cut-off grade evaluation. 2012 Reserves were calculated using $8.50 US per pound long term nickel price based on the 3 year trailing average nickel spot price and 2012 historical Bucko Lake Mine, Mill and G&A operating costs, mill recoveries and smelting charges.
 
** 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.
 
*** The quality 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.

Bucko Lake Mine

As per the CaNickel 2012 Technical Report, based on 1,000 tonnes per day or 363,000 tonnes per year using long term average nickel price of US$8.50 per pound, historical 2012 unit cost, and 6% discount rate, the pre-tax net present value of Bucko Lake Mine's Reserves was estimated as $80.0 million and the project economics is breakeven at US$6.75/lb nickel metal price.

Due to weak nickel price, Bucko Lake Mine currently is put into care and maintenance. Although the Company is carrying studies to optimize the mine plan, the restart-up operation at Bucko Lake Mine is uncertain and mainly depends on the nickel metal price.

M11A Deposit

Subject to the financial resources, the Company is planning to carry out a preliminary assessment study to investigate the possibility of developing the M11A deposit as a supplemental feed deposit to Bucko Lake Mine. More surface drilling programs conducted at M11A is expected.

Qualified Person

Lane A. Griffin, P.Geo., Paul L. Martin, P.Eng., and Chris C. Broili, P.Geo are qualified persons as defined by NI 43-101 and have reviewed and consented to this press release and that it fairly and accurately represents the information in the CaNickel 2012 Technical Report which supports the disclosure.

James Wong, P. Geo., P. Eng., is the qualified person for CaNickel under NI 43-101 and has reviewed and given consent to this press release.

ABOUT CANICKEL

CaNickel Mining Limited is a Canadian junior mining company that owns and operates the Bucko Lake Nickel Mine near Wabowden, Manitoba. The Company also holds nickel, copper and Platinum Group Mineral (PGM) projects in the Thompson Nickel Belt and Sudbury Basin.

Advisory Respecting Forward-Looking Information

This press release contains forward-looking statements under Canadian securities legislation. Forward looking statements include, but are not limited to, statements with respect to carrying studies to optimize the mine plan, restart-up operation at Bucko Lake Mine, and carrying out a preliminary assessment study to investigate the possibility of developing the M11A deposit. Generally, forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements, including but not limited to those risks of the Company described in its annual information form that is available under its profile on SEDAR at www.sedar.com. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements, except in accordance with applicable securities laws.

Contact:
CaNickel Mining Limited
Derek Liu
CFO and Corporate Secretary
604-254-8863
778-372-1806
info@canickel.com
www.canickel.com

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