Continental Nickel Limited
TSX VENTURE : CNI

Continental Nickel Limited

February 24, 2009 08:00 ET

Continental Nickel Discovers a Second Mineralized Intrusion at the Nachingwea Project and Defines Two New Drill Targets

TORONTO, ONTARIO--(Marketwire - Feb. 24, 2009) - Continental Nickel Limited (TSX VENTURE:CNI) is pleased to report the final assay results from the 2008 drilling program on its Nachingwea nickel sulphide project in Tanzania. The Nachingwea project is a 70:30 Joint Venture with IMX Resources NL ("IMX") of Australia. Continental Nickel completed a CAD$7.0 million exploration program at Nachingwea in 2008 and is well funded with over CAD$12.8 million remaining in the treasury.

In 2008, one hundred and nineteen drill holes, totalling 15,573 metres, were completed on the Nachingwea Project. One hundred and nine of those drill holes were completed on targets in the Ntaka intrusion to delineate nickel-copper resources in five separate sulphide zones. The results of these holes have already been reported. Ten diamond drill holes, totalling 2,183 metres, were completed at two regional exploration targets and the results are reported herein (see attached Table and Figures).

Highlights from the current release focus on the Lihonja target, 8 kilometres south-southwest of the Ntaka intrusion, where five of seven drill holes intersected ultramafic intrusive rocks with disseminated to net-textured sulphide mineralization. Assay results have confirmed anomalous nickel and copper concentrations associated with the mineralization. Follow up borehole EM (BHEM) surveys have detected a large and strongly conductive EM anomaly below the current depth of drilling.

At the Nambugu tenement, located 18 kilometres northeast of the Ntaka Intrusion, ongoing modelling and interpretation of the Company's regional airborne magnetic and VTEM data has defined a high priority exploration target which has not been tested by any drill holes.

Lihonja Target Area

The Lihonja target area is located approximately 8 kilometres south-southwest of the Ntaka intrusion. Seven drill holes, totalling 1,478.7 metres, were completed at Lihonja to test several ground EM geophysical targets delineated within a two by one and one half kilometre area. The interpretation of the targets was complicated by the presence of multiple, overlapping, conductive anomalies located at various depths.

Ultramafic rocks were intersected in five of the seven holes drilled at Lihonja (LID08-001, 2, 3, 4 & 7) and are locally mineralized with disseminated to net-textured pyrrhotite-rich sulphides. Assay results have confirmed anomalous nickel concentrations from the mineralized intervals of up to 0.54% nickel and 0.18% copper. Graphitic metasedimentary rocks, similar to those observed at the Ntaka intrusion were also intersected in the drill holes.

Borehole EM (BHEM) surveys were completed in all of the holes. Preliminary modeling indicates that the Lihonja area is underlain by an upper (shallower) conductive anomaly and a larger, lower (deeper) conductive anomaly. Most of the Lihonja drill holes targeted the upper anomaly which was explained by the presence of the pyrrhotite-rich sulphide mineralization and/or graphitic metasediments. The most conductive part of the lower anomaly is at a depth of approximately 150 to 300 meters below surface and is untested. The target is a very strong (greater than 10,000 Siemens) off-hole BHEM anomaly which was detected in the survey of drill hole LID08-004. This anomaly is the most conductive EM target of a significant size that has been identified to date at that Nachingwea project, including the Ntaka area. The Company intends to drill test this anomaly in 2009.

Mbuti Target Area

The Mbuti target area is located approximately fourteen kilometres northeast of the Ntaka Intrusion. Three drill holes (MBD08-08, 9 & 10), totalling 704.7 metres, were completed to test various conductive anomalies defined by ground EM surveys. All three holes intersected graphite-bearing metasedimentary rocks which explained the conductive targets.

Nambugu Target Area

Ongoing modelling and interpretation of the Company's regional airborne magnetic and VTEM data has identified numerous high priority anomalies. The most significant of these anomalies, so far identified, is located on the Nambugu tenement, 18 kilometres northeast of the Ntaka Intrusion. The VTEM anomaly has been detected over a strike length greater than 2.5 kilometres and has a 500 metre long core section characterised by higher conductivity and a strong b-field response, coincident with a 100nT magnetic high. This priority anomaly will be surveyed with a ground TDEM survey and drill tested in 2009.

Craig MacDougall, President & CEO of Continental Nickel Limited, reported "the initial results at the Lihonja target are very encouraging. The discovery of a second, large, ultramafic intrusion, with sulphide mineralization accompanied by anomalous concentrations of nickel and copper, is a major step forward for this project, which we believe is a new nickel sulphide district in the making. The high conductance EM anomaly associated with ultramafic rocks at Lihonja is the best EM anomaly we have delineated so far in the Nachingwea area and is stronger than the anomalies associated with nickel sulphide mineralization at the Ntaka Intrusion. Resource estimates are in progress for five of the nickel sulphide zones at the Ntaka Intrusion and planning is underway for the evaluation of the regional exploration targets. We are looking forward to another year of exceptional exploration results in 2009."

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.

The data collected from the ground and borehole EM geophysical surveys were collected to contract survey specifications and have been reviewed and subsequently processed by Ms Sharon Taylor, P. Geo. Ms Taylor is an employee of the company who reports to and is under the direction of Ms. Patricia Tirschmann, P. Geo., Vice President of Exploration for CNI. Both Ms Taylor and Ms Tirschmann are qualified persons 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 (33,285,916 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., and Ms Sharon Taylor who are both registered members of the Association of Professional Geoscientists of Ontario and who are full-time employee's of the Company. Patricia Tirschmann and Sharon Taylor each have 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 and Sharon Taylor both consent 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.

----------------------------------------------------------------------------
Drillhole Location Az/Dip Length From To Inter- %Ni %Cu %Co
(UTM - (m) (m) (m) val
WGS84) (m)
----------------------------------------------------------------------------
Lihonja Target Area
----------------------------------------------------------------------------
LID08-01 449301E 360/-60 303.3 NSA NSA NSA
8876424N
----------------------------------------------------------------------------
LID08-02 448574E 270/-50 250.6 111.0 120.0 9.0 0.20 0.04 0.01
8876101N (i)incl:
114.0 115.0 1.0 0.44 0.08 0.02
----------------------------------------------------------------------------
LID08-03 449099E 360/-80 273.9 111.0 112.45 1.45 0.43 0.16 0.02
8875797N 131.0 131.5 0.5 0.36 0.12 0.02
144.6 145.0 0.40 0.54 0.18 0.04
----------------------------------------------------------------------------
LID08-04 448792E 360/-80 275.0 55.0 59.0 4.0 0.23 0.07 0.02
8876055N (i)incl:
58.0 59.0 1.0 0.41 0.13 0.03
----------------------------------------------------------------------------
LID08-05 448793E 360/-80 155.1 NSA NSA NSA
8875744N
----------------------------------------------------------------------------
LID08-06 452656E 270/-84 95.1 NSA NSA NSA
8875724N
----------------------------------------------------------------------------
LID08-07 448581E 270/-60 125.8 36.0 37.0 1.0 0.38 0.08 0.01
8876301N 41.0 42.0 1.0 0.42 0.06 0.02
----------------------------------------------------------------------------
Mbuti Target Area
----------------------------------------------------------------------------
MBD08-08 462828E 325/-50 175.4 NSA NSA NSA
8891819N
----------------------------------------------------------------------------
MBD08-09 463462E 325/-52 203.4 NSA NSA NSA
8892329N
----------------------------------------------------------------------------
MBD08-10 463848E 055/-75 326.0 NSA NSA NSA
8893628N
----------------------------------------------------------------------------
NSA - No Significant Assays


To view Figure 1 - Nachingwea Property VTEM Survey Color Image of Late-Time EM Amplitude, please visit the following link: http://media3.marketwire.com/docs/CNI224-F1.pdf.

To view Figure 2 - Nachingwea Property Lihonja Drilling and Color Image of Late-Time EM Amplitude Map, please visit the following link: http://media3.marketwire.com/docs/CNI224-F2.pdf.

To view Figure 3 - Nachingwea Property Mbuti Drilling and Color Image of Late-Time EM Amplitude, please visit the following link: http://media3.marketwire.com/docs/CNI224-F3.pdf.

To view Figure 4 - Nachingwea Property Nambugu Target VTEM Anomalies With B Field Profiles on Color Image of Late-Time EM Amplitude and VTEM Anomalies on Color Image of RTP Magnetic Field Contour Interval 10nT, please visit the following link: http://media3.marketwire.com/docs/CNI224-F4.pdf.

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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