Continental Nickel Limited

Continental Nickel Limited

August 21, 2007 10:23 ET

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

TORONTO, ONTARIO--(Marketwire - Aug. 21, 2007) - Continental Nickel Limited (TSX VENTURE:CNI) has commenced diamond drilling on its 70% owned Nachingwea nickel sulphide project in Tanzania. One drill rig is on site and a second drill rig is scheduled to arrive by early September. Nachingwea is a 70:30 JV with Goldstream Mining NL ("Goldstream") of Australia.

Initially, the drill program will focus on further evaluation of high grade nickel sulphide mineralization discovered by Goldstream in 2006. As reported by Goldstream, drill hole NAD013 returned 11.23% Ni, and 1.74% Cu over a core length of 3.0m and an additional 11 holes in the area had intersections of greater than 0.5% Ni. The current 7,500-10,000 metre drill program will evaluate targets in and around the area of the discovery. Results will be released as analytical data are received, validated and compiled.

In addition to the drill program, an extensive ground electromagnetic (EM) geophysical survey by Crone Geophysics & Exploration Ltd has commenced over the Ntaka intrusion which hosts the nickel sulphide mineralization described above. Conductive targets identified will be modelled and prioritised for drill testing in the current program.

CNI has budgeted C$9.5 million over the next two years for exploration including diamond drilling, regional airborne magnetic and EM surveys, ground EM surveys, geological mapping and geochemical sampling.

Craig MacDougall, President & CEO of Continental Nickel Limited, said "We are excited by the potential demonstrated to date in the area of the discovery and there is excellent potential for additional nickel sulphide targets elsewhere on this very large 7300 km2 Nachingwea property. The commencement of the exploration program is a major milestone for which we have worked very hard and I look forward to the exploration results."

The technical information contained in this release was compiled 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 developing and advancing quality nickel sulphide exploration projects in geologically prospective, but under explored regions globally. It is currently implementing an extensive multiphase exploration program on its 70% owned Nachingwea nickel sulphide project located in south east Tanzania. Continental Nickel has 26,933,000 shares issued and outstanding (29,338,415 fully-diluted) 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: 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.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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