Continental Nickel Limited

Continental Nickel Limited

July 16, 2008 08:00 ET

Continental Nickel Commences 2008 Diamond Drill Program on the Nachingwea Nickel-Copper Project, Tanzania

TORONTO, ONTARIO--(Marketwire - July 16, 2008) - Continental Nickel Limited (TSX VENTURE:CNI) is pleased to announce that it has commenced diamond drilling with two drill rigs on its 70% owned Nachingwea nickel-copper project in Tanzania, a 70:30 joint venture with IMX Resources NL ("IMX") of Australia. The Company is implementing a 2008 exploration program at Nachingwea budgeted at C$7.0 million.

Approximately 15,000 metres of drilling will be completed, initially focusing on the detailed drill testing of a number of high grade nickel-copper sulphide zones discovered in 2006-2007 at the Ntaka intrusion. The objective is to upgrade the various mineralized zones to resources, which if successful will form the basis of a resource estimate for the Ntaka area. Drill results will be released as they are received and validated.

Drill testing is also planned for later in 2008 to test regional conductive target areas identified from an airborne VTEM survey completed in December 2007. Five target areas which exhibit magnetic, electromagnetic and structural similarities to the Ntaka intrusion have been prioritized for initial follow up. Exploration is currently underway on these targets involving geological mapping, prospecting, soil geochemistry, line cutting and ground EM geophysical surveys. Compilation of historical data and initial field mapping has so far confirmed the presence of favourable ultramafic lithologies at two of the target areas.

The Company is also pleased to report that a Phase II 5,600 line kilometre airborne VTEM survey is underway on the property and is 60% complete. Completion is expected by the end of the month. This survey is designed to extend the coverage of the very successful Phase I 2007 survey. Upon completion, data will be processed and receipt of preliminary results is expected in the coming months.

Craig MacDougall, President & CEO of Continental Nickel Limited, reported "we are very pleased to announce that the 2008 exploration program at Nachingwea has moved to the drilling stage and we look forward to receiving encouraging results at Ntaka which may lead to the definition of resources. Our ongoing regional exploration is beginning to deliver results and is expected to yield exciting targets for drill testing later in the year."

Quality control, technical information and all aspects of the exploration program are being supervised by Patricia Tirschmann, P.Geo., Vice President of Exploration for CNI. Ms. Tirschmann is a qualified person as defined by National Instrument 43-101.

About Continental Nickel

Continental Nickel Limited is an exploration company focused on the exploration and discovery of nickel sulphide deposits in geologically prospective, but under explored regions globally. Current projects include its 70% controlling interest in the Nachingwea project in Tanzania, and an option joint venture on the St Stephen project in New Brunswick, Canada. Continental Nickel has 30,062,395 shares issued and outstanding (33,060,916 on a fully-diluted basis) and trades on the TSX Venture Exchange under the symbol CNI.

On behalf of Continental Nickel Limited

Craig MacDougall, President & Chief Executive Officer

CAUTIONARY STATEMENT: The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. This News Release includes certain "forward-looking statements". All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding potential mineralization and reserves, exploration results, future plans and objectives of Continental Nickel Limited, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Continental Nickel Limited's expectations are the risks detailed herein and from time to time in the filings made by Continental Nickel Limited with securities regulators.

Information in this announcement relating to exploration results is based on data compiled by Patricia Tirschmann, P. Geo., who is a registered member of the Association of Professional Geoscientists of Ontario and who is a full-time employee of the company. Patricia Tirschmann has sufficient relevant experience to qualify as a Competent Person under the 2004 Edition of the Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves. Patricia Tirschmann consents to the inclusion of the data in the form and context in which it appears.

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