Gladstone Pacific Nickel Ltd ACN (104 261 887) ("GPNL" or "the Company") - GPNL Terminates Ore Supply Heads Of Agreement With SMT

    TORONTO, July 29 /CNW/ - As announced on 22 July 2008, the cross equity
participation arrangements on the Ouinne SAS JV have now been fixed with
Société Minière Georges Montagnat ("SMGM"). GPNL today announces the
termination of its Heads of Agreement ("HOA"), to secure limonite nickel ore
supply from New Caledonia, with Société des Mines de la Tontouta ("SMT").
    The agreement with SMT provided GPNL with an option, upon payment of an
additional option fee before 1 January 2008, to participate in the development
of a new mine in New Caledonia. The date for payment of the option fee was
extended, however, despite the efforts of both parties; the lack of success in
obtaining access to the tenements for drilling purposes, has resulted in the
Company electing not to exercise its option.
    GPNL's CEO, Mr. John Downie, said, "It became clear that access to the
proposed new SMT mine site, to initiate drilling activities and then to
continue with ultimate development, would be difficult and take a considerable
amount of time. The Company's objectives will be better served by focusing its
resources at other more immediate opportunities."
    Mr. Downie further added, "GPNL's Feasibility Study (iDFS) did not
include the supply of ore from the location under this HOA with SMT. Instead,
it assumed that ore would be sourced from the Company's JV with SMGM at Ouinne
in New Caledonia. Drilling is progressing at Ouinne with 3,871 metres of its
8,000 metre program complete."
    The iDFS included the purchase of 600,000 to 800,000 wet metric tonnes of
limonite nickel ore per annum from SMT's existing mines under the HOA. The
Company will however now source this ore from Ouinne through its Joint Venture
with SMGM subject to appropriate approvals being granted by New Caledonian
    "The Company continues to progress development of its ore resource base
and will continue to work with SMT, outside of the previous HOA, to explore
additional resource opportunities" said Mr. Downie.

    This news release includes certain statements that may be deemed
"forward-looking statements". All statements in this news release, other than
statements of historical facts, that address future exploration drilling,
exploration activities and events or developments that the Company expects,
are forward looking statements. Although the Company believes the expectations
expressed in such forward-looking statements are based on reasonable
assumptions, such statements are not guarantees of future performance and
actual results or developments may differ materially from those in
forward-looking statements. Factors that could cause actual results to differ
materially from those in forward-looking statements include metal prices,
exploration success, continued availability of capital and financing, and
general economic, market or business conditions.

For further information:

For further information: Enquiries to: John Downie, Chief Executive
Officer - Gladstone Pacific Nickel, Tel: +61 (0) 7 3231 7100; Fiona Owen -
Grant Thornton UK LLP, Tel: +44 207 383 5100; Simon Rothschild - Bankside
Consultants, Tel: +44 207 367 8888

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Gladstone Pacific Nickel Ltd.

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