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First Nickel in option agreement with Avion Resources regarding Dundonald Project near Timmins, Ontario

Fasken
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Client

Confidential Client

On January 3, 2008, Avion Resources Corp. announced that it had entered into an option agreement with First Nickel Inc. whereby Avion Resources can earn up to a 75% interest in the Dundonald Property located near Timmins, Ontario. Pursuant to the Option Agreement, Avion can earn up to a 75% interest in the property upon completion of the following payments: $150,000 following receipt of regulatory approval for the Option Agreement; $500,000 prior to the date that is one year from the date of receipt of regulatory approval for the Option Agreement; and $1,000,000 upon each of the next three anniversaries of the date of receipt of regulatory approval for the Option Agreement. Each of these payments is to be satisfied in cash as to 50% and by the issue of common shares of Avion as to 50%. In addition, to fully earn a 75% interest in the Dundonald Property, Avion is to incur exploration expenditures on the property in an aggregate amount of $4.5 million prior to the date that is four years from receipt of regulatory approval. Avion has granted First Nickel a back-in right to maintain a 51% interest in the property, which is exercisable if Avion Resources identifies a previously undiscovered indicated mineral resource of more than 50 million pounds of Nickel equivalent metal at the property. Avion Resources has assumed the Option Agreement from a private Ontario company in consideration for the payment of $250,000 and the grant of a 2% net smelter royalty on the property. First Nickel was advised in this transaction by Michael Bourassa of Fasken Martineau.

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