Continental Nickel Limited
TSX VENTURE : CNI

Continental Nickel Limited

January 31, 2011 08:05 ET

Continental Nickel Reports the Discovery of New Ultramafic Intrusions From Its Regional Drilling Program on the Nachingwea Nickel Project, Tanzania

TORONTO, ONTARIO--(Marketwire - Jan. 31, 2011) - Continental Nickel Limited (TSX VENTURE:CNI) ("Continental" or "CNI" or the "Company") announced today that it has received the final assay results from a reverse circulation ("RC") drilling program completed as part of the 2010 exploration program on the Nachingwea Project ("Nachingwea") in Tanzania. The program targeted selected geochemical anomalies and airborne and ground electromagnetic ("EM") conductors located throughout the Company's vast land holdings. Ten out of twenty-four RC holes intersected favourable ultramafic intrusive rocks, two of which returned anomalous nickel-copper values including RC drill hole NRC10-022 which intersected 0.51% nickel and 0.05% copper over 6.0 metres. In addition, three other RC holes intersected polymetallic base metal mineralization with anomalous values in copper, zinc, and silver. The project is a 75:25 Joint Venture between CNI and IMX Resources Limited ("IMX") of Australia. 

Field activities from the Company's 2010 exploration program were completed in December 2010 and were highlighted by the discovery of the new Sleeping Giant nickel-copper sulphide zone with drill intersections up to 2.58% nickel and 0.41% copper over 23.3 metres (Press Release December 13, 2010). 

As part of its evaluation of various regional exploration targets, the Company also completed twenty-four RC drill holes totalling 2,257 metres. The RC program targeted soil geochemical and EM conductive targets selected within a 50 by 15 kilometre area surrounding the nickel-copper sulphide deposits discovered at Ntaka Hill and the new Sleeping Giant discovery. RC drill samples were analyzed with a portable Niton XRF analyser on site and anomalous samples were subsequently sent to an analytical lab for validation. A summary of drill collar locations and significant laboratory assay results are provided below as Table I. A location figure may be viewed using the link provided with this release. 

Of the twenty-four holes completed: ten intersected ultramafic intrusive rocks which are potential host rocks for nickel-copper sulphide mineralization, including two which intersected values over 0.5% nickel; three holes intersected disseminated, polymetallic, sulphide mineralization with anomalous values in copper, zinc and silver hosted in metasedimentary gneisses; nine holes intersected graphitic gneisses explaining and down grading the targeted EM conductors and two failed to reach or intersect the target. 

Four of the holes which intersected ultramafic intrusive rocks (mentioned above), including the two which intersected values over 0.5% nickel, were completed in the Lionja area located approximately 8 kilometres south of Ntaka Hill deposits. The RC drill holes tested a large, coincident nickel-copper soil geochemical anomaly outlined over a 1000 by 1100 metre area. This geochemical anomaly is located approximately 1.5 kms north-northwest of an area where the Company has previously drilled a number of diamond drill holes which intersected ultramafic hosted nickel copper sulphide mineralization grading up to 2.03% nickel and 0.41% copper over 2.25 metres (Press Release dated November 24, 2009). The results continue to highlight the Lionja area as an important nickel target area for further work.

Craig MacDougall, President & CEO of Continental Nickel Limited, said "The results of the RC drilling program continue to significantly increase our geological knowledge and understanding of our relatively unexplored and extensive land holdings. Additional indications of nickel sulphide mineralization have been intersected in the Lionja area, and ultramafic rocks with potential to host new nickel-copper mineralization have now been intersected at several new locations throughout our regional land package, both of which will help to focus future exploration efforts. In addition, we have intersected the first indications of polymetallic copper-zinc-silver mineralization suggesting exploration potential for the discovery of other types of base metal deposits."

Next Steps

With all exploration data now received from the 2010 exploration program, data compilation and program design for the 2011 exploration program is now in progress and is expected to be submitted to the Joint Venture for approval in February.

A revised Mineral Resource estimate for the Ntaka Hill area is currently in progress. Current NI 43-101 compliant Mineral Resources at Ntaka Hill (Measured and Indicated) total 3.1 million tonnes grading 1.31% nickel and 0.24% copper at a US$23/tonne Net Smelter Return cut-off (Press Release July 15, 2009). The study is being updated by URS/Scott Wilson of Toronto and the results are expected in February.

At the newly discovered Sleeping Giant zone, geological interpretation and 3D modelling are currently in progress in advance of incorporating these into the revised Mineral Resource Estimate mentioned above. 

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

Quality Control

The RC drilling program was carried out by Tandrill Limited of Tanzania. RC cuttings were collected from the bottom of the cyclone in large clear plastic bags at successive 1 metre samples intervals over the entire length of the hole. Each one metre interval of material was split via riffle splitter and a 1.5 - 2kg sub-sample was collected and stored in a clean calico bag. The residual split material was collected and sequentially piled at the drill site to form a reference core farm for quick logging purposes. The bagged samples were assigned a unique sample number, labelled and transported to camp by company personnel where preliminary analytical measurements were carried out on each sample using a portable NITON XRF analyzer. Based on the NITON analyses, selected samples were identified for validation laboratory analysis and a 500g split of the selected sample was collected, placed in a clean calico bag, sealed and labelled with the same unique sample number. Blank samples and commercially prepared and certified Ni sulphide analytical control standards were inserted approximately every 20 samples or a minimum of one each per sample batch. Samples batches were sent to the ALS Chemex preparation lab in Mwanza, Tanzania for final sample preparation and sample analytical pulps were sent by courier to ALS Chemex analytical laboratory in Vancouver, Canada. Multi-element analyses including Ni, Cu, Co, Zn, Pb and Ag were completed using a HNO3-HClO4-HF-HCl digestion, HCl leach and ICP-AES finish (Analytical Code ME-ICP61). Analyses for Pt, Pd, and Au were by fire assay with an ICP-AES finish (Analytical Code PGM-ICP23).

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. A revised Mineral Resource Estimate incorporating the diamond drill results from the 2010 exploration program is currently in progress.

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 the 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$9.0 million in the treasury.

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, 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.

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 I: Summary of Recent Assay Results – Regional RC Drilling Program, Nachingwea Project, Tanzania.
 
Drill
hole
(NRC10-)
Location
East/
North
UTM:WGS84
Az /
Dip
Length
(m)
From
(m)
To
(m)
Interval
(m)
%
Ni
%
Cu
%
Co
  Holes Intersecting Ultramafic Rocks
022 448601mE
8877302mN
090 / -80 94.0 23.0 29.0 6.0* 0.51 0.05 0.02
023 448875mE
8877150mN
090 / -65 70.0 20.0 22.0 2.0* 0.23 0.04 0.01
024 451982mE
8877992mN
315 / -80 105.0 6.0 11.0 5.0* 0.22 0.003 <0.01
029 462703mE
8900071mN
180 / -50 25.0 13.0 25.0 12.0* 0.20 <0.01 0.01
034 464694mE
8901778mN
025 / -75 100.0 89.0 100.0 11.0 0.21 <0.01 0.01
038 448401mE
8877302mN
360 / -90

75.0

16.0

26.0
25.0

37.0
9.0*

11.0
0.23

0.17
0.03

0.02
0.01

0.01
039 448499mE
8877404mN



360 / -90




75.0




3.0
Incl:

11.0
18.0
38.0
32.0


12.0
19.0
49.0
29.0*


1.0
1.0
11.0
0.26


0.57
0.52
0.31
0.07


0.09
0.12
0.09
0.01


0.02
0.01
0.01
042 436292mE
8872898mN
120 / 050 100.0       NSA NSA NSA
044 430037mE
8867904mN
270 / -80 115.0
(A)
      NSA NSA NSA
045 439469mE
8861172mN
090 / -80 97.0
(A)
6.0 15.0 9.0 0.20 <0.01 0.01
Holes Intersecting Polymetallic Cu-Zn Mineralization
Drill
hole
(NRC10-)
Location
East/
North
UTM:WGS84
Az /
Dip
Length
(m)
From
(m)
To
(m)
Interval
(m)
%
Cu
%
Zn
Ag
(g/t)
037 454901mE
8892500mN
45 / -80 120.0 84.0 91.0 7.0 0.09 0.12 2.56
040 443004mE
8881021mN
070 / -65 99.0 62.0 68.0 6.0 0.26 0.32 3.07
041 439628mE
8877148mN

090 / -75


70.0


14.0

38.0
23.0

41.0
9.0*

3.0
0.18

0.26
0.24

0.16
2.57

2.23
Other Holes
Drill
hole
(NRC10-)
Location
East/
North
UTM:WGS84
Az /
Dip
Length
(m)
From
(m)
To
(m)
Interval
(m)
%
Cu
%
Zn
Ag
(g/t)
025 455249mE
8874300mN
090 / -80 140.0       NSA NSA NSA
026 464301mE
8899001mN
360 / -75 105.0       NSA NSA NSA
027 464813mE
8900102mN
045 / -60 99.0       NSA NSA NSA
028 463680mE
8899540mN
035 / -75 100.0       NSA NSA NSA
030 468599mE
8900601mN
315 / -60 105.0       NSA NSA NSA
031 461653mE
8900303mN
050 / -70 88.0       NSA NSA NSA
032 460270mE
8900717mN
090 / -60 80.0       NSA NSA NSA
033 459225mE
8901700mN
360 / -80 80.0       NSA NSA NSA
035 462702mE
8900106mN
180 / -50 85.0       NSA NSA NSA
036 468352mE
8895524mN
360 / -70 100.0       NSA NSA NSA
043 431998mE
8874202mN
360 / -80 130.0       NSA NSA NSA
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
(A): Abandoned before target depth
*: oxidized

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