Victory Nickel Again Improves Economics at Minago

Project Optimization Increases IRR Further to 22.9% and Improves NPV by 47.8% at a 6% Discount

TORONTO, ONTARIO -- (Marketwire) -- 08/10/11 -- Victory Nickel Inc. (the 'Company') (TSX: NI) (www.victorynickel.ca) today announced improved economics for its 100%-owned Minago nickel project in Manitoba. The improvement arises from a 24% increase in pit constrained measured and indicated resource announced earlier this year (see news release of May 2, 2011). The increased resource has extended the mine life from the Nose Deposit open pit from approximately seven years to approximately nine years.

The base case internal rate of return (IRR) has increased to 22.9% from the original estimate of 17.7% and the net present value (NPV) at a 6% discount rate has risen by $317.9 million, or 79%, to $720.5 million, compared with the feasibility study (FS) results announced by news release on December 14, 2009. Undiscounted cash flow has increased to greater than $1.5 billion (all figures in $Cdn, unless otherwise indicated).

'The process of optimizing the technical and financial aspects of the project continue and this improvement is more evidence of that work. We remain confident that additional economic enhancements will be realized from the efforts that are ongoing,' said Rene Galipeau, Vice-Chairman and CEO. 'While we continue to optimize the FS, we are also moving forward with financing initiatives, permitting, sourcing equipment and conducting additional metallurgical studies to improve the quality and marketability of the concentrates being produced.'

Mr. Galipeau added: 'This valuation relative to Victory Nickel's market cap is further indication that the markets are out of synch with asset values, a situation that must correct itself. The next milestone to moving the project forward is the receipt of the Environmental Act Licence which we expect later this month as advised by the Manitoba government and announced at the shareholders annual meeting in June.'


The table below compares the revised economics with those announced in the news releases of June 21, 2010 and December 14, 2009:

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Minago Sulphide            Base Case Economic Summary Comparison:
 Nickel Project:      August 9, 2011 - June 21, 2010 - December 14, 2009
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($millions,         August 9   Increase     June 21,   Increase     Dec. 14,
 except %)           2011(1)        (%)      2010(1)        (%)      2009(1)
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Undiscounted
 Cash Flow           1,525.0       44.7      1,053.7       14.8        917.7
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NPV@8%                 553.5       50.8        367.1       24.9        293.8
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NPV@6%                 720.5       47.8        487.6       21.1        402.6
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NPV@4%                 929.7       46.0        636.8       18.4        538.0
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IRR                    22.9%       15.7        19.8%       11.9        17.7%
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(1) Three-year trailing average US$metal prices and exchange rate as of
    market close December 10, 2009: Ni: $11.19/lb; Cu: $2.91/lb;
    Pd: $322.4/oz; Pt: $1,353.98/oz; Au: $836.25/oz; Co: $27.73/lb; Ag:
    $14.25/oz; Rh: $2,254.56/oz; $Can/$US exchange rate: 1.097

Qualified Person

Paul Jones, Vice-President, Exploration for Victory Nickel, is a Qualified Person under NI 43-101. Mr. Jones has reviewed and approved the technical contents of this news release.


About Victory Nickel

Victory Nickel Inc. is a Canadian company with four sulphide nickel deposits containing significant NI 43-101-compliant nickel resources. Victory Nickel is focused on becoming a mid-tier nickel producer by developing its existing properties, Minago, Mel and Lynn Lake in Manitoba, and Lac Rocher in northwestern Quebec, and by evaluating opportunities to expand its nickel asset base. Victory Nickel also owns shares in Prophecy Coal Corp (TSX VENTURE: PCY), Prophecy Platinum Corp. (TSX VENTURE: NKL)and Wallbridge Mining Company Limited (TSX: WM), the third largest landholder in the Sudbury Basin, which in turn owns an interest in Duluth Metals Limited.


Forward-Looking Information:

This news release contains forward-looking information. All statements, other than statements of historic fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future constitute forward-looking information. This forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company. Forward-looking information is subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: uncertainty of estimates of capital and operating costs, production estimates and estimated economic return; the possibility that actual circumstances will differ from estimates and assumptions; uncertainties relating to the availability and costs of financing needed in the future; failure to establish estimated mineral resources; fluctuations in commodity prices and currency exchange rates; inflation; recoveries being less than those indicated by the testwork carried out to date (there can be no assurance that recoveries in small scale laboratory tests will be duplicated in large tests under on-site conditions or during production); changes in equity markets; operating performance of facilities; environmental and safety risks; delays in obtaining or failure to obtain necessary permits and approvals from government authorities; unavailability of plant, equipment or labour; inability to retain key management and personnel; changes to regulations or policies affecting the Company's activities; the uncertainties involved in interpreting geological data; and the other risks disclosed under the heading 'Risk Factors' and elsewhere in the Company's annual information form dated March 31, 2011 filed on SEDAR at www.sedar.com. Forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.



Contacts:

Victory Nickel Inc.
Rene Galipeau or Sean Stokes

416.363.8527
416.626.0890 (FAX)
admin@victorynickel.ca
www.victorynickel.ca

CHF Investor Relations
Cathy Hume
416.868.1079 ext. 239
416.868.6198 (FAX)
cathy@chfir.com