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Continental Nickel Receives RC Drilling Results from Nachingwea Project in Tanzania

Continental Nickel Limited (TSX VENTURE:CNI) announced today that it has received the final assay results from a reverse circulation drilling program completed as part of the 2010 exploration program on the Nachingwea Project 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.

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.

Source: Continental Nickel Limited

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