Continental Nickel Limited

Continental Nickel Limited

October 14, 2010 09:46 ET

Continental Nickel Increases its Interest to 75% in the Nachingwea Nickel Sulphide Project in Tanzania

TORONTO, ONTARIO--(Marketwire - Oct. 14, 2010) - Continental Nickel Limited (TSX VENTURE:CNI) ("Continental" or "CNI" or the "Company") is pleased to announce that it has notified its joint venture partner IMX Resources Limited ("IMX") of Australia that it has completed total aggregate expenditures on the Nachingwea nickel sulphide project of C$15 million, and as a consequence, its interest in the project has increased by 5% to 75%. 

Under the terms of the Shareholders Agreement dated February 28, 2007 CNI was to sole fund expenditures on the Nachingwea Project until the sooner of either: a) completion of a feasibility study, or b) completion of expenditures totalling C$15 million. Upon satisfying either a) or b), CNI's interest increases by 5% to hold a 75% interest in the project, and further expenditures are then to be shared by the joint venture partners pro rata to their respective interests. 

Also, should CNI earn its increased interest by completing expenditures totalling C$15 million without completing a feasibility study, it then has 90 days to elect to sole fund a feasibility study which, once completed, would increase the company's interest in the project a further 5% to hold 80%.

The Company does not intend to make this election within the 90-day election period because the decision to undertake a feasibility study will be contingent on the results of a revised Mineral Resource estimate and a scoping study which are anticipated to be commissioned upon completion of the 2010 exploration program. However, the Company may at a later date propose to sole fund a feasibility study, subject to agreement with IMX, for which its interest would increase by 5% to hold an 80% interest upon completion of the study. 

Craig MacDougall, President & CEO of Continental Nickel Limited, said "This is another major milestone for the Company and consolidates further its controlling interest in this exciting and fast developing nickel sulphide project. Our ongoing 2010 exploration drill program has, as reported, intersected extensions to sulphide zones which have potential to add to our current Mineral Resource inventory, and has also resulted in the discovery of a new, potentially large, nickel sulphide zone at Sleeping Giant for which additional drilling is being planned." 

Qualified Persons

The information in this release was prepared under the direction of Craig MacDougall, P. Geo., President and CEO for Continental Nickel Limited. Mr. MacDougall is qualified persons as defined by National Instrument 43-101.

About Continental Nickel

Continental Nickel Limited is focused on the exploration, discovery and development of nickel sulphide deposits in geologically prospective, but under-explored regions globally. The Company's key asset is its 75% interest in the Nachingwea project in Tanzania, where NI 43-101 Mineral Resources have defined 40,000 tonnes of contained nickel, and ongoing exploration is underway to evaluate the potential to expand these Resources.

The Company also has an option joint venture on the St. Stephen project in New Brunswick, Canada where it has discovered new Ni-Cu sulphide zones from its recently completed 2010 diamond drill program. 

Continental Nickel Limited has 38,943,664 shares issued and outstanding (46,211,514 on a fully-diluted basis) and trades on the TSX Venture Exchange under the symbol CNI. The Company remains well-funded with over C$10.8 million in the treasury.

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, resources 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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