Continental Nickel Limited
TSX VENTURE : CNI

Continental Nickel Limited

September 26, 2011 08:00 ET

Continental Nickel Provides Exploration Update on Chilalo Copper Prospect, Nachingwea Property, Tanzania

TORONTO, ONTARIO--(Marketwire - Sept. 26, 2011) - Continental Nickel Limited (TSX VENTURE:CNI) ("CNI" or the "Company") is pleased to provide an exploration update on the new regional copper showing reported earlier this year (Press Release May 25, 2011). The showing is located approximately 23 kilometres northeast of Ntaka Hill on the Company's "Chilalo" prospecting license. The area surrounding the showing has been the subject of on-going exploration including sampling, prospecting and ground electromagnetic surveys. Representative grab samples have returned up to 1.48% copper and 3.05 g/t silver. Anomalous copper values of >100 ppm up to 1,780 ppm in soil samples have been identified over a strike length of 600 metres. In addition, a second gossan occurrence has been identified 6.5 kilometres northeast of the Chilalo malachite pits and has returned values of up to 0.42% Cu and 0.34% Zn in grab samples. The project is a 75:25 joint venture between CNI and IMX Resources Limited ("IMX") of Australia.

Laboratory geochemical results are provided in Table I below and also summarized in the location figure provided with this release.

In May of this year, the Company confirmed the existence of a new malachite-bearing copper showing and related artisanal mining activity located on one of its regional prospecting licenses located approximately 23 kilometres northeast of Ntaka Hill. At that time, the malachite mineralization was reported to be hosted in both graphitic gneisses and ultramafic rock. The company wishes to report that subsequent site visits have been made by the Company's Vice President of Exploration and that the malachite mineralization appears to be hosted primarily in high metamorphic grade felsic gneisses and amphibolite, typically adjacent to a highly oxidized, gossanous copper-bearing sulphide horizon. The gossanous sulphide horizon and related malachite mineralization can be traced in a series of pits extending in a northeast-southwest direction over a strike length of 400 metres. The mineralized horizon, where exposed, appears to be fairly narrow (< 5 metres in width) and dips moderately to the south. Representative grab samples of the heavily oxidized sulphide gossan and altered, mineralized felsic gneisses and amphibolite from the pits returned values of up to 1.48% copper and 3.05 g/t silver.

Detailed (50 x 25 metre) soil sampling has been carried out in the immediate area of the malachite pits, with more widely spaced (200 x 50 metre) soil sampling along strike to the east and west. Preliminary geochemical analyses were completed in the field using portable NITON XRF instruments and selected samples were subsequently sent for multi-element laboratory analysis. The latter are reported herein. Anomalous copper values of >100 ppm up to 1,780 ppm in soil samples have been identified over a strike length of 600 metres extending in a southwest direction along the trend of the main malachite pits and trenches. A second, 700 metre long trend of anomalous copper values ranging from 100 - 250 ppm is located further along strike to the southwest. Several other areas with anomalous copper values in soil samples have been detected including values of up to 625 ppm Cu and 925 ppm Zn in the vicinity of a second gossan showing ("Chilalo East") located 6.5 kilometres northeast of the Chilalo malachite pits. Grab samples of surface gossan from this location returned values of up to 0.42% copper and 0.34% zinc.

Surface time domain electromagnetic ("EM") surveys totalling 34 line kilometres have been completed over two grids and data interpretation and modeling is in progress. Preliminary results indicate the presence of several EM anomalies, including a high priority anomaly located west of the malachite pits and an EM anomaly coincident with the elevated copper and zinc values in soil samples in the vicinity of the Chilalo East gossan occurrence to the northeast.

The Company has contacted and met with local authorities in order to secure their support in efforts to remove the artisanal miners from the Chilalo malachite pits. The Company's land tenure has been acknowledged by the local authorities who also support on-going efforts to terminate the artisanal mining activities.

Patricia Tirschmann, VP Exploration, commented "The copper gossan and oxide occurrences on the Company's Chilalo license represent an exciting new target type within our regional land holdings. Soil sampling to date indicates that anomalous copper values in soils are widespread and may be stratigraphically controlled. We are looking forward to drill testing these developing geochemical and geophysical targets later this year."

Qualified Persons

The quality control, technical information and all aspects of the exploration program are supervised by Patricia Tirschmann, P. Geo., Vice President, Exploration for CNI. Ms. Tirschmann is a qualified person as defined by National Instrument 43-101 and is responsible for the preparation of this release.

Quality Control

All soil and rock samples are shipped to the ALS Chemex preparation lab in Mwanza, Tanzania. Sample pulps are sent by courier to the ALS Chemex analytical laboratory in Vancouver, Canada. Field duplicates and a field standard from the project site are inserted in every batch of soil samples at intervals of a maximum of every 50 samples. Multi-element analyses for the soil samples are completed by HF-HNO3-HClO4 acid digestion and an HCl leach followed by an ICP-MS finish (Analytical Code ME-MS61). Multi–element analyses for the rock samples are completed either by HF-HNO3-HClO4 acid digestion and an HCl leach followed by an ICP-MS finish (Analytical Code ME-MS61) or by lithium metaborate fusion and ICP-MS finish (Analytical Code ME-MS81d). Cu analyses for selected rock samples are also completed by sodium peroxide fusion and dissolution with an ICP finish (Analytical Code CU-ICP81). Analyses for Pt, Pd and Au are completed by fire assay with either an ICP-AES finish (Analytical Code PGM-ICP23; soil samples) or an ICP-MS finish (Analytical Code PGM-MS23; rock samples).

About Continental Nickel Limited

Continental 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 Mineral Resources (Measured and Indicated) have been estimated at 60,900 tonnes of contained nickel, and an additional 131,000 tonnes of contained nickel in Inferred Mineral Resources (CNI press release April 15, 2011). The project is a 75:25 exploration joint venture between the Company and IMX Resources Limited.

The Company also has an option to joint venture on the St. Stephen project in New Brunswick, Canada where the 2010 diamond drill program discovered new Ni‐Cu sulphide zones.

As at the date of this release, the Company has 42,713,508 common shares issued and outstanding (51,031,914 on a fully‐diluted basis) and trades on the TSX Venture Exchange under the symbol CNI. The Company remains well funded with over C$13.6 million in the treasury as at June 30, 2011.

On behalf of Continental Nickel Limited

Dave Massola, President and CEO

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, potential or estimated metal recoveries, resources and reserves, exploration results, future plans and objectives of Continental Nickel Limited, is forward‐looking information that involves various risks and uncertainties. There can be no assurance that such information will prove to be accurate and actual results and future events could differ materially from those anticipated in such information. 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 collected under the supervision of or compiled by Patricia Tirschmann, P. Geo., who holds the position of Vice President, Exploration and is a full time employee of Continental Nickel Limited. Ms. Tirschmann is a registered member of the Association of Professional Geoscientists of Ontario and 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. Ms. Tirschmann consents to the inclusion of the data in the form and context in which it appears.

Table 1: Geochemical Results for Rock Grab Samples,
Chilalo Prospecting License PL6073/2009, Nachingwea Project, Tanzania.
Sample No. Easting Northing Cu % Zn % Ag g/t Description
Chilalo Malachite Pits
23453 469200 8899310 0.43 0.04 < 1 Malachite- bearing amphibolite
23454 469314 8899374 0.74 0.27 2.47 Oxidized sulphide gossan
23455 469250 8899354 1.48 0.04 3.05 Oxidized sulphide gossan
23457 469162 8899320 0.84 0.02 0.70 Altered felsic gneiss
23458 468965 8899221 0.34 0.03 0.08 Altered felsic gneiss
23459 468965 8899221 0.32 0.05 0.23 Altered felsic gneiss
Chilalo East Gossan Occurrence
23451 475521 8902242 0.42 0.16 < 1 Gossan
23452 475440 8902113 0.20 0.34 < 1 Gossan
Notes:
Samples 23451 - 23453: Cu and Ag analyses by lithium metaborate fusion and ICP-MS finish;
Ag lower detection limit = 1 g/t
Samples 23454 - 23459: Cu analyses by sodium peroxide fusion and dissolution with an ICP finish

To view the Chilalo Geochem and Geophysics image associated with this release, please visit the following link: http://media3.marketwire.com/docs/CNIF926.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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