Continental Nickel Limited
TSX VENTURE : CNI

Continental Nickel Limited

March 02, 2012 16:12 ET

Continental Nickel Reports 150% Increase in Estimated Measured and Indicated Mineral Resources at the Ntaka Hill Nickel Project

TORONTO, ONTARIO--(Marketwire - March 2, 2012) - Continental Nickel Limited (TSX VENTURE:CNI) ("CNI" or the "Company") is pleased announce that the estimated measured and indicated mineral resources at a cut-off grade of 0.2% nickel have increased by 150% from the last reported mineral resource estimate (April 2011) to 12,786,000 tonnes grading 1.21% nickel and the inferred mineral resources have increased to 45,037,000 tonnes grading 0.30% nickel at its Ntaka Hill Nickel Project (the "Project"). The Project is part of the larger 75:25 joint venture between CNI and IMX Resources Limited (ASX:IXR) covering the Nachingwea property in Southern Tanzania.

Highlights

  • Contained nickel in measured and indicated mineral resources increased by over 150% to 154,700 tonnes at a grade of 1.21% nickel (0.2% nickel cut-off for all mineralized zones) from 60,900 tonnes at a grade of 1.22% nickel.
  • Contained nickel in inferred mineral resources increased to 135,000 tonnes at a grade of 0.30% nickel (0.2% nickel cut-off for all mineralized zones) from 131,000 tonnes at a grade of 0.76%.
  • Sleeping Giant and NAD013 zones are now considered to be a part of the same mineralized zone based on 2011 drilling results.
  • Contained nickel in measured and indicated resources in the combined Sleeping Giant and NAD013 zone has increased to 102,400 from 6,000 tonnes (previously NAD013 only) with an additional 125,200 tonnes in an inferred mineral resource (0.2% nickel cut-off).
  • The high-grade core of Sleeping Giant has been defined over a continuous strike length of 600 metres and remains open down plunge to the south.

Detailed results of the updated mineral resource estimate are presented in Table 1. Comparisons made above are with reference to the previous mineral resource estimate announced in April 2011 (Press Release, April 15, 2011).

Mr. David Massola, President and CEO, commented: "Continental is very excited about the large increase in estimated mineral resources at Ntaka Hill. This result increases our confidence in the Project and greatly reduces risk moving forward."

"Such a large increase in the mineral resources clearly confirms and surpasses the Upside Sensitivity Case presented in our 2011 Preliminary Economic Assessment (see Press Release November 15, 2011). Importantly, the new resource estimate is also expected to reduce stripping ratios and lead to reductions in cash operating costs compared to the Upside Sensitivity Case once optimized and incorporated into the development plan for the Project."

"This new resource estimate validates our strategy of advancing the project evaluation, permitting and development of Ntaka Hill while maintaining a strong commitment to exploration."

Detailed Results

This National Instrument 43-101 compliant mineral resource estimate was completed by Roscoe Postle Associates Inc. ("RPA") and incorporates the additional drilling completed on the Sleeping Giant zone since the April 2011 mineral resource estimate. The estimate is based on data obtained from 284 diamond drill holes totalling 50,716 metres completed to explore for and delineate the various zones at a nominal 25 to 100 metre drill section spacing. The drilling data included 12,981 metres (42 holes) of exploration diamond drilling completed in 2011.

Mineral resources were derived from a geostatistical block model using GEMS software and reported at various nickel cut-off grades constrained by preliminary pit shells constructed by Whittle software. Only mineralized intervals located within the pit shells are reported as mineral resources. Estimated mineral resources at 0.15%, 0.20% and 0.25% nickel cut-offs are provided in Table 1. A subdivision of the estimated mineral resources broken down by mineralized zone is included in Appendix 1 of this release.

Table 1 -Mineral Resources for Ntaka Hill Project at Various Cut-Off Grades

Category Tonnes
(000's)
% Ni % Cu % Co Contained Ni
(tonnes)
Cut-Off: 0.15% Ni
Measured 1,662,000 1.71 0.29 0.05 28,400
Indicated 11,147,000 1.13 0.25 0.03 126,300
M+I 12,809,000 1.21 0.25 0.03 154,700
Inferred 58,846,000 0.27 0.06 0.01 159,400
Cut-Off: 0.20% Ni
Measured 1,662,000 1.71 0.29 0.05 28,400
Indicated 11,125,000 1.14 0.25 0.03 126,300
M+I 12,786,000 1.21 0.25 0.03 154,700
Inferred 45,037,000 0.30 0.07 0.01 135,000
Cut-Off: 0.25% Ni
Measured 1,659,000 1.71 0.29 0.05 28,400
Indicated 11,105,000 1.14 0.25 0.03 126,200
M+I 12,764,000 1.21 0.25 0.03 154,600
Inferred 28,481,000 0.34 0.08 0.01 97,700

Notes to Mineral Resources in Table 1

  1. Mineral resource estimates were prepared in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") definition standards regarding mineral resources and mineral reserves.
  2. Assays of drill core were completed at ALS Minerals of Vancouver, BC and included a comprehensive Quality Assurance / Quality Control ("QA/QC") program. All aspects of the core sampling, assay procedures and QA/QC program have been reviewed by RPA and were judged to be of industry standard and suitable for use in the estimation of mineral resources. RPA also completed a data verification exercise including independent core sampling and assaying with acceptable results.
  3. Resource models were prepared based on drill section interpretation using nominal nickel grade wireframes of 0.1%, 0.5% and 1.0% nickel grade cut-offs. 3D solids were constructed cooperatively between CNI and RPA geologists, then reviewed and revised as necessary by RPA.
  4. The estimation employed statistical analysis and variography of nickel values with construction of block models by zone. Block cell size was 2.5 x 5 x 5 metres for zones J, G, M, L and H. Block size for Sleeping Giant and NAD013 was 10 x 10 x 10 metres with level 3 sub-celling (8 x 8).
  5. Grade interpolation to assign grade values to cells used Inverse Distance squared ("ID2") methods for zones J, G, M, L and H with Ordinary Kriging used for Sleeping Giant and NAD013.
  6. More than 3,500 bulk density determinations on core using the immersion method were used for the estimate, with densities assigned where data were not available, based on an analysis of the correlation between specific gravity and sulphur.
  7. Mineral resources are reported at cut-off values of 0.15%, 0.20% and 0.25% nickel and are based on open pit mining.
  8. No minimum mining width was used.
  9. Resource classification involved a review of geological and grade continuity and was based on drill hole spacing.
  10. Preliminary pits used to constrain the mineral resources reported were constructed using Whittle software based on the metallurgical and cost assumptions from the PEA completed in November 2011 (Press Release, November 15, 2011).
  11. Totals may differ due to rounding.
  12. The Company is not aware of any environmental, permitting, legal, title, taxation, socio-political or marketing issues that are material to the statement of the mineral resource estimate.
  13. The mineral resource estimate is effective as of March 2, 2012.
  14. A copy of the mineral resource estimation report completed by RPA will be posted on SEDAR and the Company's web site within 45 days of this release.

Qualified Persons / Quality Control

The mineral resource estimate was prepared by Roscoe Postle Associates Inc. of Toronto, Ontario under the supervision of Chester Moore, P. Eng., Principal Geologist. Mr. Moore is an independent qualified person as defined by National Instrument 43-101.

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 information in this release was prepared under the direction Ms. Tirschmann who is a qualified person as defined by National Instrument 43-101.

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 its Nachingwea property in Tanzania. 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 and 2011 diamond drill programs discovered new Ni‐Cu sulphide zones.

As at the date of this release, the Company has 42,738,508 common shares issued and outstanding (50,244,414 on a fully‐diluted basis) and trades on the TSX Venture Exchange under the symbol CNI.

On behalf of Continental Nickel Limited

Dave Massola, President and 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, potential or estimated metal recoveries, resources and reserves, cut-off grades, 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.

Appendix 1 -Mineral Resources by Mineralized Zone at 0.2% Ni Cut-Off

Category Tonnes
(000's)
% Ni % Cu % Co Contained Ni
(tonnes)
J Zone
Measured 845,000 1.67 0.25 0.06 14,100
Indicated 108,000 0.42 0.09 0.02 500
M+I 953,000 1.53 0.23 0.06 14,600
G Zone
Indicated 1,765,000 0.65 0.18 0.04 11,500
Inferred 934,000 0.48 0.15 0.03 4,500
M Zone
Measured 279,000 1.95 0.42 0.04 5,400
Indicated 126,000 1.67 0.35 0.04 2,100
M+I 405,000 1.86 0.40 0.04 7,500
L Zone
Measured 150,000 2.45 0.45 0.05 3,700
Indicated 50,000 3.07 0.60 0.05 1,500
M+I 200,000 2.60 0.49 0.05 5,200
NAD-013 Zone
Indicated 116,000 6.24 1.59 0.09 7,300
Inferred 1,088,000 0.52 0.12 0.02 5,600
H Zone
Measured 389,000 1.34 0.21 0.02 5,200
Indicated 622,000 1.33 0.18 0.03 8,300
M+I 1,011,000 1.33 0.19 0.03 13,500
Inferred 539,000 0.98 0.14 0.02 5,300
Sleeping Giant Zone
Indicated 8,338,000 1.14 0.25 0.02 95,200
Inferred 42,476,000 0.28 0.07 0.01 119,600

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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