Continental Nickel Limited
TSX VENTURE : CNI

Continental Nickel Limited

May 25, 2012 10:04 ET

Continental Nickel Reports Up to 4.96 g/t Gold from New Gossan and Provides Exploration Update for Nachingwea Project in Tanzania

TORONTO, ONTARIO--(Marketwire - May 25, 2012) - Continental Nickel Limited (TSX VENTURE:CNI) ("CNI" or the "Company") is pleased to provide an exploration update for its Nachingwea project and also to report results for grab samples from the Hog showing recently discovered on one of its regional exploration licenses. The project is part of the 75:25 joint venture between CNI and IMX Resources Limited of Australia.

Highlights

  • Values of up to 4.96 g/t Au in grab samples from the Hog showing
  • 2 diamond drill rigs currently in operation completing in-fill drilling at Sleeping Giant zone (Ntaka Hill) with a third diamond drill rig expected to be on site by the end of May
  • 20,000 - 25,000 meters of drilling currently planned from May through December 2012
  • VTEM survey planned to cover prospective regional areas

Patricia Tirschmann, Vice President Exploration for the Company, commented: "We have a very exciting exploration program planned for 2012 with high quality drill targets identified at both Ntaka Hill and on the regional licenses. At the Ntaka intrusion, the exploration is focussed on identifying additional nickel sulphide mineralization which has the potential to add to the currently defined estimated mineral resource and, on our regional licenses, targets have been expanded to include those with the potential to host nickel, copper or gold mineralization. We are looking forward to drill testing a number of these targets this year."

2012 Exploration Program

The Nachingwea joint venture has a $10 million exploration program and budget for 2012, which will include the completion of 20,000 - 25,000 metres of diamond and reverse circulation (RC) drilling. The main objectives of the program are to:

  • carry out 15,000m of in-fill and step-out diamond drilling at Sleeping Giant to upgrade current estimated mineral resource categories and to test for the potential down-plunge extension of the high grade core of the zone;
  • drill test high priority exploration targets associated with the nickel-bearing Ntaka and Lionja ultramafic intrusions (~4,500m); and
  • continue to explore our extensive regional land position to identify copper, gold and nickel sulphide deposits.

Capital Drilling (Tanzania) Limited has been contracted to carry out the 2012 drilling program. The program was initiated in mid-May with two diamond drill rigs now operating at the Sleeping Giant zone. Drilling will be focused on the northern near surface portion of Sleeping Giant in order to upgrade the estimated Inferred and Indicated mineral resources to Indicated and Measured categories and on testing for potential extensions of the down-plunge portion of the high grade core of the zone which remains open to the south. A third diamond drill rig is expected to start by the end of May and will be testing exploration targets elsewhere within the Ntaka intrusion. This drilling is planned to target both high grade nickel sulphides and near surface disseminated nickel sulphides.

An extensive regional exploration program is planned and will comprise a 2,500 line km airborne versatile time domain electromagnetic (VTEM) survey, follow-up ground geophysical surveys, diamond and RC drilling (~2,500m), geochemical sampling, mapping and prospecting. Potential exploration targets on our regional land position have the potential to include nickel, copper and gold mineralization.

A number of drill ready regional targets have already been outlined, including the Chilalo 7 area where a coincident copper in soil and ground EM anomaly was identified in 2011 (see Press Release dated March 27, 2012). Airborne and ground geophysical surveys as well as geochemical sampling, prospecting and mapping will be employed to identify additional priority targets for drill testing later in the year.

Hog Showing

In late 2011, exploration on the regional licenses identified a new gossan located approximately 20 kilometres northeast of Ntaka Hill. The gossan is 1,150 metres long and 25-180 metres wide and remains open to the north and south. It is exposed along a narrow low lying ridge and consists of abundant sub-outcropping and loose gossanous boulders interpreted to be hosted within metasedimentary rocks.

Thirty-four sub-cropping gossan grab samples collected over a strike length of 900 metres were sent for laboratory analysis. A number of these samples were found to contain anomalous gold values, including four samples which returned values of greater than 1 g/t gold ranging from 1.86 to 4.96 g/t. Nine additional samples returned values between 0.4 and 1.0 g/t gold. The gold-bearing samples were collected at sample spacing of 30 to 180 metres over a strike length of 500 metres. A number of the grab samples also returned elevated silver values (1 - 18 g/t) and copper values (0.11 - 0.64%).

The Company plans additional mapping, prospecting and sampling over the Hog showing to more fully define its extents and significance. In addition, this new area of interest will be covered by the upcoming 2012 airborne VTEM survey.

Qualified Persons / Quality Control

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.

Quality Control

Lithogeochemical samples were collected by the Company's personnel and shipped to the ALS Chemex preparation lab in Mwanza, Tanzania. Sample pulps were sent by courier to the ALS Chemex analytical laboratory in Vancouver, Canada. Multi-element analyses including, Cu, Zn, Ag and sulphur, were completed using a HF-HNO3-HClO4 digestion and HCl leach preparation and an ICP-AES and ICP-MS finish (Analytical Code ME-MS61). Analyses for Pt, Pd, and Au were by fire assay with an ICP-AES finish (Analytical Code PGM-ICP23). Laboratory duplicates, standards and blanks were included and analyzed with each sample batch.

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% joint venture interest in the Nachingwea project in Tanzania, where measured and indicated mineral resources have been estimated at 12.8 Mt grading 1.21% nickel and inferred mineral resources have been estimated at 45 Mt grading 0.30% nickel (CNI press release April 17, 2012).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 2010-2012 diamond drill programs discovered new Ni‐Cu sulphide zones.

As at the date of this release, the Company has 42,793,508 common shares issued and outstanding (46,866,008 on a fully‐diluted basis) and trades on the TSX Venture Exchange under the symbol CNI. The Company had over $9.4 million in the treasury as at December 31, 2011.

On May 16, 2012 CNI and IMX Resources announced the entering into of definitive agreements under which IMX Resources would acquire CNI, subject to the terms and conditions of such agreements.

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 or targets, 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.

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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