Continental Nickel Limited

Continental Nickel Limited

September 18, 2008 08:00 ET

Continental Nickel Continues to Intersect High Grade Nickel-Copper Sulphides at the Nachingwea Project, Tanzania, Including 7.46% Nickel and 2.04% Copper Over 6.35 Metres

TORONTO, ONTARIO--(Marketwire - Sept. 18, 2008) - Continental Nickel Limited (TSX VENTURE:CNI) is pleased to announce the first assay results from the second season of drilling on its 70% owned Nachingwea nickel sulphide project in Tanzania. The Nachingwea project is a 70:30 Joint Venture with IMX Resources NL ("IMX") of Australia. Continental Nickel is conducting a CAD $7.0 million exploration program at Nachingwea in 2008 and is well funded with C$17.6 million in the treasury.

Two diamond drills have been operating since July and it is anticipated that 12,000 to 15,000 metres of diamond drilling will be completed before year end. The drills are currently completing follow-up drilling of sulphide zones in the Ntaka intrusion where six new nickel-copper sulphide zones were discovered in the first season of drilling in 2007.

Eighty drill holes totalling 9,447 metres have been completed to date in 2008. Assay results have been received for ten diamond drill holes (see attached Table and Figures). Eight drill holes intersected high grades of nickel and copper in sulphide and oxide mineralization. The highlights include 6.35 metres grading 7.46% nickel and 2.04% copper, including 14.61% nickel and 3.04% copper over 1.85 metres and 14.95% nickel and 5.46% copper over 1.30 metres at the NAD013 sulphide zone, and 26.0 metres grading 1.68% nickel and 0.28% copper, including 2.01% nickel and 0.34% copper over 19.0 metres at the J sulphide zone. The remaining assay results will be reported as they are received and verified.

NAD013 Zone:

Twelve drill holes (totalling 1,642 metres) have been completed this year at the NAD013 sulphide zone. The assays have been received for three holes and are reported herein.

The current drilling and borehole EM surveying has confirmed that the NAD013 zone is folded and plunges southwest. The zone has now been traced for 150 metres along strike and remains open in both directions. The mineralized intervals are similar to the high grade mineralization intersected in 2007 with the longest intersection to date returned from hole NAD08-078 which intersected 6.35 metres grading 7.46% nickel and 2.04% copper.

The current drilling and borehole EM survey data indicate that the NAD013 sulphide zone thins rapidly up-dip and down-dip but remains open along strike and down plunge to the southwest. Borehole EM surveys are being completed in selected holes in order to map the thickest part of the zone and to search for off-hole anomalies that are part of the sulphide zone. Drilling is also planned to test the area along strike to the northwest where the zone is open.

J Zone:

The initial discovery of the J Zone was reported in 2007 after three exploration drill holes intersected thick intervals of net-textured to massive sulphide mineralization at shallow depths. One of the original discovery holes in 2007 was NAD07-069 which intersected 3.35% nickel and 0.46% copper over 21.0 metres including a 6.35 metre interval grading 7.11% nickel and 0.71% copper starting at a down hole depth of 30.0 metres.

Twenty-four drill holes totalling 1,837 metres have been completed in this year's work on sections spaced 25 metres apart over a strike length of 225 metres. Assay results have been received for seven of the 24 drill holes. Several long, high grade intersections have been made. The best intersection, in drill hole NAD08-077, graded 1.68% nickel and 0.28% copper over a core length of 26.0 metres.

Drill holes this year continue to intersect disseminated, net-textured and massive sulphides extending from grid line 1125N to 1250N for a strike length of 125 metres. The mineralized zone extends from surface down a shallow westerly dip for up to 100 metres. Mineralized intersections vary from less than 3 metres to 30 metres. The sulphide zone remains open to the north. The east side of the sulphide zone outcrops as surface gossans which contain malachite and azurite. The J zone mineralization appears to be limited down dip and may be localized along a natural sulphide channel which has been disrupted by faulting.

Along strike to the south of grid line 1100N, extending for an additional 100 metres along strike, drilling has shown that the sulphide zone is oxidized and contains locally significant intervals of oxide copper mineralization with abundant malachite and azurite observed. Assays are pending for drill holes in this area.

Additional drilling is planned to test for strike extensions to the north where the sulphide zone remains open and where EM targets have been identified.

Regional Exploration:

Ground TDEM surveys have commenced over several new targets identified in the airborne VTEM survey completed in 2007. The targets are similar in size, and have similar magnetic and electromagnetic anomalies, as the sulphide-bearing Ntaka Intrusion. Compilation of historical data and initial field mapping has confirmed the presence of favourable ultramafic rocks at two of the targets. Conductive targets identified from the geophysical surveys will be modelled and prioritized for drilling which is anticipated to start in the next month. It is anticipated that 3,000 to 5,000 metres of drilling will be completed on the new targets in 2008.

Craig MacDougall, President & CEO of Continental Nickel Limited, reported "the first ten drill holes from the Company's second season of drilling at Nachingwea were very successful at intersecting high grade nickel-copper sulphides over considerable strike lengths at both of the targets tested so far. The continuity of mineralization demonstrated at the NAD013 and J Zones suggests there is a high probability that we will be able to define resources at both zones upon completion of the drill program. In addition we look forward to begin testing some of our developing regional targets for new mineralization where early indications are positive."

Quality Control

The drilling was completed by Tandrill Limited of Tanzania. Drill core samples (NQ) are cut in half by a diamond saw on site. Half of the core is retained for reference purposes. Samples are generally 1.0 metre intervals or less at the discretion of the site geologists. Sample preparation is completed at the ALS Chemex preparation lab in Mwanza, Tanzania. Sample pulps are sent by courier to ALS Chemex analytical laboratory in Vancouver, Canada. Blank samples and commercially prepared and certified Ni sulphide analytical control standards with a range of grades are inserted in every batch of 20 samples or a minimum of one per sample batch. Analyses for Ni, Cu and Co are completed using a peroxide fusion preparation and ICP-AES finish (ME-ICP81). Analyses for Pt, Pd, and Au are by fire assay with an ICP-AES finish (PGM-ICP23).

The quality control, technical information and all aspects of the exploration program were supervised by Patricia Tirschmann, P.Geo., Vice President, Exploration for CNI, and 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: 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.

Table I: Summary of Recent Assay Results, Nachingwea Project, Tanzania.

Drill- Location
hole (local Az / Dip Length From To Interval % Ni % Cu % Co
(NAD08-) grid) (m) (m) (m) (m)
NAD013 Zone
075 1200N / 116 / 98.9 NSA NSA NSA
133E -55
076 1175N / 116 / 118.6 67.45 69.00 1.55 1.30 0.23 0.03
107E -50
078 1175N / 116 / 127.6 99.10 105.45 6.35 7.46 2.04 0.10
107E -64 Incl:
99.1 100.95 1.85 14.61 3.04 0.20

104.15 105.45 1.30 14.95 5.46 0.21
J Zone
071 1175N / 100 / 103.6 9.00 21.00 12.00(i) 1.20 2.28 0.08
165E -59
072 1175N / 100 / 85.7 40.00 44.00 4.00 0.65 0.16 0.02
110E -79
073 1200N / 100 / 85.6 20.00 54.00 34.00 1.64 0.25 0.05
137E -77 Incl:
24.00 33.00 9.00 2.12 0.31 0.07

43.35 48.00 4.65 3.25 0.37 0.10
077 1200N / 100 / 91.6 32.00 58.00 26.00 1.68 0.28 0.05
112E -77 Incl:
33.00 52.00 19.00 2.01 0.34 0.06
079 1225N / 100 / 67.6 24.00 43.00 19.00 2.06 0.25 0.06
142E -74 Incl:
24.00 33.00 9.00 2.70 0.31 0.08
081 1150N / 100 / 73.5 15.00 24.00 9.00(i) 1.50 0.76 0.05
165E -63
082 1125N / 100 / 67.7 35.00 56.00 21.00 1.38 0.21 0.05
140E -73 Incl:
41.00 53.0 12.0 2.05 0.29 0.07

44.0 47.0 3.0 4.31 0.54 1.13

Note: Intervals represent core lengths, not necessarily true widths. Pt, Pd
and Au assay results are not reported because in general, they are less
than 1.0 g/t on a combined basis.
NSA - No Significant Assays
(i) Mineralized zone oxidized.

To view 'Total Field Magnetics and TDEM Targets', please click the link below:

To view 'Drill Plan - NAD013 Zone', please click the link below:

To view 'Drill Plan - J Zone', please click the link below:

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.

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