Skye announces $65 million financing



    /NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN
    THE UNITED STATES/

    TSX Symbol: SKR

    VANCOUVER, Oct. 9 /CNW/ - Skye Resources Inc. ("Skye") (TSX:SKR) has
entered into an agreement with a syndicate of underwriters led by TD
Securities Inc. (the "Underwriters") pursuant to which the Underwriters have
agreed to purchase, on a bought deal basis, 5,400,000 units ("Units") from
Skye at a price of $12.10 per Unit for total gross proceeds of approximately
$65 million. Each Unit is comprised of one common share and one-half of a
common share purchase warrant of Skye with each whole warrant entitling the
holder to purchase one common share of Skye at a price of $15.13 for a period
of 15 months following closing of the offering. The Underwriters have also
been granted an option (the "Over-Allotment Option"), exercisable for a period
up to 30 days from closing, to purchase for sale up to an additional 15% of
the issue. Closing is expected to occur on October 26, 2007.
    The Underwriters will sell the Units in Canada in a public offering by
way of a short form prospectus. The Units are also being offered for sale in
the United States on a private placement basis pursuant to an exemption from
the registration requirements of the United States Securities Act of 1933, as
amended. The Units may also be offered for sale to qualified investors in
certain jurisdictions outside Canada and the United States.
    Pursuant to the terms of a Share Purchase Master Agreement between Skye
and CVRD Inco Ltd. ("Inco"), Inco has the right to participate in the
financing to maintain its current 12.61% equity interest in Skye. Inco must
exercise this right within 24 hours after the announcement of this financing.
Should Inco exercise in whole its right to participate in this financing (not
including any rights pursuant to the Over-Allotment Option), the number of
Units sold will increase by 779,059 Units for additional aggregate proceeds of
approximately $9.4 million.
    The net proceeds of this financing will be used by Skye to continue to
advance the refurbishment and expansion of the Fenix ferro-nickel project in
Guatemala, to fund ongoing exploration on the Fenix licenses, and for test
work and engineering studies on the hydromet expansion at Fenix as well as for
general corporate purposes.
    The Fenix ferro-nickel project remains on schedule to achieve initial
production in late 2009, as Skye continues to advance its plans to complete
the financing of the project in early 2008, either through a capital markets
transaction or an agreement with potential partners.

    About Skye

    Skye is an international mining company focused on becoming a new
mid-tier nickel producer. Skye acquired the rights to its Guatemalan lateritic
nickel project (the Fenix project) in December 2004 and in October 2006
completed a feasibility study for a ferro-nickel project at Fenix using proven
conventional smelting technology. In June 2007 Skye received its environmental
permits for the project, and expects to initiate construction during the first
quarter of 2008 with initial production in late 2009. www.skyeresources.com

    Cautionary Notices:

    This news release does not constitute an offer to sell or a solicitation
of an offer to buy any of the securities mentioned herein in the United
States. The securities have not been and will not be registered under the U.S.
Securities Act of 1933, as amended (the "U.S. Securities Act") or any state
securities laws and may not be offered or sold within the United States or to
U.S. Persons unless registered under the U.S. Securities Act and applicable
securities laws or an exemption from such registration is available.
    This news release contains certain forward-looking statements that
involve risks and uncertainties, such as statements of Skye's plans,
objectives, strategies, expectations and intentions. The words "may", "would",
"could", "will", "intend", "plan", "anticipate", "believe", "estimate",
"expect" and similar expressions, as they relate to Skye, or its management,
are intended to identify such forward-looking statements. Many factors could
cause Skye's actual results, performance or achievements to be materially
different from any future results, performance or achievements that may be
expressed or implied by such forward-looking statements. The forward-looking
statements included in this news release represent Skye's views as of the date
of this news release. While Skye anticipates that subsequent events and
developments may cause its views to change, it specifically disclaims any
obligation to update these forward-looking statements. These forward-looking
statements should not be relied upon as representing its views as of any date
subsequent to the date of the news release. All subsequent written and oral
forward-looking statements attributable to Skye or persons acting on its
behalf are expressly qualified in their entirety by this notice.

    %SEDAR: 00005296E




For further information:

For further information: Media Inquiries: Andrew Grant, Vice President,
Public Relations, Tel: (604) 602-9500, agrant@skyeresources.com; Investor
Inquiries: David Bryson, Vice President, Finance & Treasurer, Tel: (604)
602-9500, dbryson@skyeresources.com; Martti Kangas, Investor Relations, The
Equicom Group, Tel: (416) 815-0700 x 243, mkangas@equicomgroup.com; David
Feick, Investor Relations, The Equicom Group, Tel: (403) 538-4787,
dfeick@equicomgroup.com

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SKYE RESOURCES INC.

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