Continental Nickel Limited
TSX VENTURE : CNI

Continental Nickel Limited

October 22, 2008 08:00 ET

Continental Nickel Expands High Grade Nickel-Copper Zones at the Nachingwea Project, Tanzania

Drill results include 5.48% Nickel and 2.05% Copper over 6.25 metres and 2.56% Ni and 0.34% Cu over 16.0 metres

TORONTO, ONTARIO--(Marketwire - Oct. 22, 2008) - Continental Nickel Limited (TSX VENTURE:CNI) is pleased to announce additional 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 C$7.0 million exploration program at Nachingwea in 2008 and is well funded with over C$16 million in the treasury.

Two diamond drills have been operating since July and it is anticipated that over 15,000 metres of diamond drilling will be completed before year end. One drill continues to outline sulphide zones in the Ntaka intrusion where six new nickel-copper sulphide zones were discovered in the first season of drilling in 2007, while a second drill has begun drill testing regional targets identified in the 2007 VTEM survey.

One hundred and six (106) drill holes totalling 12,888 metres have been completed to date in 2008. Assay results have been received for an additional seventeen diamond drill holes (see attached Table and Figures) for a total of twenty-seven drill holes reported year to date. Excellent results continue as thirteen out of the seventeen drill holes reported in this release intersected high grades of nickel and copper in sulphide and oxide mineralization. The highlights include 6.25 metres grading 5.48% nickel and 2.05% copper, including 17.41% nickel and 3.27% copper over 1.60 metres from drill hole NAD08-080 at the NAD013 sulphide zone, and 16.0 metres grading 2.56% nickel and 0.34% copper, within a wider interval of 34.0 metres grading 1.66% nickel and 0.23% copper from drill hole NAD08-90 at the J sulphide zone. In addition drill hole NAD08-096 returned 4.37% copper over 22.0 metres from oxide mineralization at the J Zone. The remaining assay results will be reported as they are received and verified.

NAD013 Zone:

Fifteen drill holes (totalling 2,150 metres) have been completed this year at the NAD013 sulphide zone on twenty-five metre spaced drill sections. Assays have been received for an additional five holes reported herein for a total of eight holes reported to date.

The newly reported drill intersections confirm high grade nickel-copper sulphide mineralization over a 150 metre strike length with the zone remaining open in both directions. The current drilling and borehole EM surveying indicate the NAD013 zone is folded and plunges southwest where it appears to thin.

Mineralization intersected remains similar to the high grade mineralization intersected in 2007 with the 2008 drilling returning some of the longest intersections to date (not established as true thickness) including 6.25 metres grading 5.48% nickel and 2.05% copper from hole NAD08-080 and hole NAD08-078 (previously reported September 19, 2008) which intersected 6.35 metres grading 7.46% nickel and 2.04% copper.

Drill holes have been planned to test for strike extensions to the northwest and down plunge to the southwest.

J Zone:

Twenty-nine drill holes totalling 2,274 metres have been completed in this year's work program on sections spaced 25 metres apart over a strike length of 250 metres. Additional assay results have been received for twelve drill holes for a total of nineteen holes reported to date. The results continue to expand the sulphide and oxide mineralization at J Zone.

The sulphide portion of J Zone has been extended a further 50 metres along strike to the south where drilling continued to intersect disseminated, net-textured and massive sulphide mineralization. The sulphide mineralization now extends from 1075N to 1250N for a total strike length of 175 metres. The mineralization occurs at shallow depths (20 to 60 metres vertical), extends down a shallow westerly dip for up to 75 metres and is interpreted to be localized along a sulphide channel locally disrupted by faulting. Mineralized intersections vary from less than 3 metres to 34 metres, averaging 19 metres. Given the early stage of drilling, true thicknesses have not yet been determined, but drill intersections are thought to be close to true thicknesses.

New assay results from the sulphide portion of the zone include 16 metres grading 2.56% nickel and 0.34% copper from drill hole NAD08-090 within a wider intersection of 1.66% nickel and 0.23% copper over 34.0 metres. In addition significant zones of sulphide mineralization have been confirmed underlying the shallow oxide mineralization including 3.24% nickel and 0.24% copper over 10.0 metres from hole NAD08-085 and 7.0 metres grading 3.72% nickel and 0.32% copper from hole NAD08-095.

Drilling now appears to have cut off the sulphide portion of J Zone along strike to the north on section L1275N. However a down plunge extent may still be preserved south of L1000N which will be drill tested.

The oxide mineralization overlying the eastern edge of the sulphide zone and extending to surface up dip to the east is characterized by the presence of abundant iron and copper oxides, the latter comprised of malachite and azurite. The oxide zone has been extended along strike for 200 metres from line 1050N to 1250N with a dip length up to 50 metres. Drill intersections vary from several metres to 22.0 metres. The best intersection so far obtained from oxide mineralization is from drill hole NAD08-096 which graded 4.37% copper and 0.65% nickel over 22.0 metres.

Regional Exploration:

Ground TDEM surveys continue over several new target areas identified in the 2007 airborne VTEM survey. The targets are similar in size, and have similar magnetic and electromagnetic characteristics to the sulphide-bearing Ntaka Intrusion. Work to date has confirmed the presence of favourable ultramafic rocks at two of the target areas and drilling has now commenced on specific ground TDEM targets associated with ultramafic rocks located 7 kilometres south of the Ntaka intrusion. It is anticipated that 3,000 to 5,000 metres of drilling will be completed on new target areas in 2008.

Craig MacDougall, President & CEO of Continental Nickel Limited, reported "step out drilling continues to successfully expand the extents of the mineralized zones at both NAD013 and J Zones with results confirming solid intervals of mineralization with attractive and in some cases exceptional grades. With the initial discoveries from our first exploration season, last year, now moving to the drill delineation stage, the Nachingwea project is quickly evolving into an exceptional and advancing new nickel sulphide project for which few can compare globally."

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.

----------------------------------------------------------------------------
Drillhole Location Az / Dip Length From To Interval % Ni % Cu % Co
(NAD08-) (local grid) (m) (m) (m) (m)

----------------------------------------------------------------------------
NAD013 Zone
----------------------------------------------------------------------------
080 1150N / 116 / 181.6 126.30 132.55 6.25 5.48 2.05 0.07
91E -62 Incl:
130.95 132.55 1.60 17.41 3.27 0.21
----------------------------------------------------------------------------
084 1150N / 116 / 172.7 120.6 122.0 1.4 1.72 0.13 0.02
91E -73
162.75 164.6 1.85 1.42 0.25 0.05
----------------------------------------------------------------------------
086 1150N / 116 / 154.3 69.25 69.60 0.35 2.27 0.19 0.08
91E -50
134.85 135.4 0.55 5.08 0.73 0.08
----------------------------------------------------------------------------
089 1125N / 116 / 194.9 147.0 148.95 1.95 2.16 0.25 0.03
80E -62
188.0 193.4 5.4 0.63 0.16 0.03
----------------------------------------------------------------------------
092 1100N / 116 / 208.6 140.6 143.55 2.95 0.80 0.69 0.03
68E -62
165.5 167.25 1.75 3.98 0.32 0.06
----------------------------------------------------------------------------
J Zone
----------------------------------------------------------------------------
083 1125N / 100 / 103.6 NSA NSA NSA
114E -74
----------------------------------------------------------------------------
085 1125N / 100 / 58.9 18.0 20.0 2.00(i) 0.64 0.08 0.02
159E -63
20.0 30.0 10.0 3.24 0.25 0.16
----------------------------------------------------------------------------
087 1100N / 100 / 70.9 49.1 49.90 0.80(ii) 1.18 0.17 0.03
140E -73
----------------------------------------------------------------------------
088 1200N / 100 / 103.9 NSA NSA NSA
87E -77
----------------------------------------------------------------------------
090 1225N / 100 / 77.0 19.9 22.0 2.1(i) 2.34 0.31 0.08
117E -75
22.0 56.0 34.0 1.66 0.23 0.05
Incl:
22.00 38.0 16.0 2.56 0.34 0.08
----------------------------------------------------------------------------
091 1250N / 100 / 76.9 40.55 47.95 7.40 0.39 0.16 0.02
94E -75
----------------------------------------------------------------------------
093(iii) 1225N / 100 / 46.4 2.7 25.5 22.8(i) 1.77 0.74 0.08
160E -55
----------------------------------------------------------------------------
094 1250N / 100 / 55.1 2.20 13.0 10.8(i) 1.35 0.37 0.05
144E -75
13.0 23.85 10.85(ii) 1.77 0.43 0.07
----------------------------------------------------------------------------
095 1100N / 100 / 74.6 13.75 23.00 9.25(i) 0.94 0.93 0.07
162E -68
23.0 30.0 7.00(ii) 3.72 0.32 0.16
----------------------------------------------------------------------------
096 1075N / 100 / 68.0 5.0 27.0 22.0(i) 0.65 4.37 0.04
166E -73
27.0 33.5 6.50 1.84 0.74 0.09
----------------------------------------------------------------------------
097 1075N / 100 / 69.8 22.0 24.4 2.4(i) 1.51 0.17 0.05
140E -73
24.4 26.0 1.6 2.16 0.15 0.08
----------------------------------------------------------------------------
101 1025N / 100 / 69.4 NSA NSA NSA
136E -69
----------------------------------------------------------------------------
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
(ii) - Additional assays pending
(iii) - Drill Hole NAD08-093 had 3.0 metres of core loss between 19.0 to
23.0 metres


To view the maps associated with this release, please visit the following links:

http://media3.marketwire.com/docs/cni1022a.pdf

http://media3.marketwire.com/docs/cni1022b.pdf

http://media3.marketwire.com/docs/cni1022c.pdf

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