GPNL establishes 49% mining Joint Venture & interest in several mining tenements in the southeast region of New Caledonia

                          ("GPNL" or "the Company")

    -  GPNL establishes a mining Joint Venture with the shareholders in
       Société Minière Georges Montagnat ("SMGM") in New Caledonia.

    -  GPNL will acquire a 49% interest in the Joint Venture that will own
       and mine the tenements for US$5 million in cash and approximately 12
       million shares in GPNL issued to SMGM Shareholders.

    -  The Joint Venture which will own the tenements in New Caledonia will
       supply the laterite ore mined from them to GPNL's proposed High
       Pressure Acid Leach ("HPAL") facility in Gladstone, Australia

    TORONTO, Aug. 20 /CNW/ - GPNL is pleased to announce the signing of an
agreement with SMGM and its shareholders, which, once conditions precedent
have been satisfied, will establish an incorporated mining joint venture
("JV") in New Caledonia.
    The agreement is conditional on the receipt of various approvals by
31 December 2007. These include all approvals required in connection with the
proposed issue of GPNL shares to the SMGM Shareholders and those approvals
necessary for SMGM to transfer the tenements to the JV Company. Four tenements
in the region currently owned by SMGM will be transferred to the JV in which
GPNL (through its wholly owned subsidiary Gladstone Nouvelle Caledonie SAS)
will have a 49% interest and SMGM shareholders will hold 51%. GPNL will pay a
deposit of US$5 million immediately and issue, in about three years,
approximately 12 million shares to the SMGM shareholders. In the meantime GPNL
will have a nominal shareholding in the JV Company, and the right to appoint
half the JV Company's directors.
    "SMGM, a highly regarded major New Caledonian mining company, has
successfully managed mining operations in New Caledonia since 1956 and has
considerable experience and an extensive mining fleet. GPNL is proud and very
fortunate to be associated with SMGM", said CEO, John Downie.
    "SMGM has mapped the southern area of the tenements and already drilled
229 diamond drill holes for a total of 5,728 m. Based on our internal review
of the data, we believe that a resource exists of a size and grade that would
significantly support GPNL's Gladstone Nickel Project for a period way in
excess of 20 years", he added.
    Historical results from some selected drill holes referred to above are
provided in the table below:

    Drill                   Drill Hole     Drill Hole
    Hole        Width (m)   depth: From    depth: To        Ni%          Co%
    SGM5 02        32.6          12           44.6         1.42         0.17
    SGM5 10          24           8             32         1.47         0.05
    SGM5 13          26          15             41         1.27         0.14
    SGM5 30          18          19             37         1.89         0.10
    SGM5 37          22          11             33         1.47         0.09
    SGM5 53          33           1             34         1.46         0.16
    SGM5 74        16.2          16           32.2         1.37         0.29
    SGM6 12        29.3           3           32.3         1.48         0.17
    SGM6 14          33           8             41         1.37         0.10
    SGM6 104         14          13             27         1.52         0.22
    SGM6 112         22          14             36         1.47         0.09

    Additional confirmation drilling, known as "twinning", is being
undertaken in order to upgrade the existing known deposit to JORC compliant
resource status. This work has already commenced and will be completed within
two months. Over the next 6 months, further exploration drilling will be
completed to generate detailed mining, water management and environmental
plans for presentation to the Department for Industry Mines and Energy New
Caledonia (DIMENC) in Noumea, for its approval.
    Mr Downie said, "The tenement area covered by the JV is highly
prospective beyond the previously drilled southern area and further resource
verification work will be conducted. The mining tenements are ideally located
with close access to deep water shipping channels.
    "Our objective is to contribute to a sustainable, long term and mutually
respectful relationship with our local communities and partners", said Olivier
Pecqueux, GPNL's Director-General in New Caledonia. He added "As Gladstone
completes the final processing of the ore in Australia there will be no
requirement for residue dams to be constructed in New Caledonia, which is a
distinct advantage for us in our environmental commitments".
    It is intended that the JV's environmental commitment will include a plan
to implement a revegetation strategy with the objective of re-establishing the
native plant ecosystem and preserving the diversity of the flora. Floral
inventories, species selection for reforestation, seed collection and
propagation will be commenced well before mining begins.
    The JV agreement is structured on commercial terms with final details of
the ore pricing formula to be agreed within one month. All necessary approvals
to mine and GPNL's access to appropriate funding for the Gladstone Nickel
Project are key milestones associated with the success of the Project, failure
of which could result in the agreement ending. The JV will be funded by the
parties in proportion to their respective interests in the JV. Development
expenditures, to the extent not funded by external sources, would be funded in
the same manner unless the SMGM shareholders elect not to contribute their
share, when GPNL must contribute the shortfall. Any such shortfall is to be
repaid in proportion to amounts contributed
    GPNL will seek the approval of its shareholders for the share issue
provided for in the JV agreement as soon as practicable.

    Note to Editors:
    Gladstone Pacific Nickel Limited (GPNL) is an Australian mining
development company presently undertaking an Integrated Definitive Feasibility
Study (IDFS) for the Gladstone Nickel Project (GNP). The company's vision is
to build a major long-life nickel cobalt refinery at the deepwater Port of
Gladstone, in Central Queensland, Australia, treating abundant high grade
nickel laterite ores from New Caledonia and other south-west Pacific islands,
underpinned by beneficiated ores from its own Marlborough deposits. The
Project has the potential to be one of the largest of its type in the world
producing some 126,000 tpa nickel (8 -10% of global nickel demand) and
10,400 tpa of cobalt metal from its first two stages.

    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: John Downie, Chief Executive Officer, Gladstone
Pacific Nickel Ltd, Tel: +61 7 3211 8899; Christopher Caldwell, Joe Lunn,
Insinger de Beaufort, Tel: +44 207 190 7000; Simon Rothschild, Keith Irons,
Bankside Consultants, Tel: +44 207 367 8888

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Gladstone Pacific Nickel Ltd.

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