Exploration Update

RNS Number:0446C
Zambezi Nickel Ltd
14 August 2007



14th August 2007

                               Zambezi Nickel Ltd
                      ('Zambezi Nickel' or the 'Company')

                     Uranium and nickel exploration update


Highlights


*               Extensive exploration is underway on the Mozambique Mavita
nickel project.


*               On the Mpande licence in Zambia, field investigation of Mvula
uranium prospect confirms > 8km strike length of prospective lithology with
elevated uranium channel spectrometer readings.


*               Rock chip and soil sampling at the Mpande uranium project in
Zambia underway.



Zambezi Nickel today announces an update on its 2007 field season exploration
activities on its portfolio of uranium and nickel projects in Zambia and
Mozambique.


Zambian Uranium Joint Venture

As announced on 21 May 2007, Zambezi Nickel has entered into heads of agreement
with Zambezi Resources Limited with a view to entering into a joint venture
agreement, before the end of August 2007, in respect of certain of Zambezi
Resource Limited's uranium assets. The Company confirms that this is progressing
and a further announcement will be made when the joint venture agreement is
executed.


Exploration activity over high priority uranium targets by Zambezi Resources has
continued in the lead-up to the Company assuming management and funding of
exploration once all Joint Venture formalities are completed.


At the Mpande uranium project, first pass reconnaissance spectrometer and
scintillometer traverses of the Mvula linear uranium radiometric anomaly has
confirmed a strike length of > 8km of a radiometrically responsive rock type (a
dolomitic schist) of up to 150m apparent thickness in outcrop.  Rock chip and
soil sampling of this material is underway.


Once all Joint Venture issues are finalised, the Company will undertake an
accelerated exploration strategy over a variety of uranium targets that includes
the Oryx prospect, where uranium mineralisation of up to 6.44% U3O8 was
discovered in 2006.


Mozambique Mavita Nickel Project

Field exploration has recommenced at the Mavita nickel project in Mozambique,
following up on the discovery of nickel sulphides in the 2006 field season.  The
planned exploration programme at Mavita includes the completion of over 50 line
km of IP geophysical surveys, detailed geological mapping, soil and rock chip
sampling.



Commenting on the announcement Jim Kerr, Managing Director of Zambezi Nickel
said, "Following the discovery in March of nickel sulphides at the Mavita
project, the Company is focused on identifying specific target areas for drill
testing.  At the Mpande uranium project, we are encouraged by our initial
reconnaissance and look forward to receiving the results of the rock chip and
soil sampling as well as finalising the uranium JV with Zambezi Resources."



For more information, please call



Jim Kerr, Zambezi Nickel Limited                    Tel: [phone]
David Youngman, WH Ireland Limited                  Tel: [phone]
Jos Simson/Jane Stacey Conduit PR                   Tel: [phone]



About the Uranium Rights Joint Venture



Under the Uranium Rights Joint Venture with Zambezi Resources Ltd (AIM/ASX:
ZRL), Zambezi Nickel has the right to earn 51% of the uranium rights over 6800km
(2) of four granted exploration licences by spending US$5 million over 2.5
years.


With respect to the four exploration licences, the Company can increase its
uranium rights in the Chumbwe licence to 75% by completing a definitive
feasibility study over the Oryx prospect.  It can also increase its uranium
rights to 75% over the other three licences by completing a definitive
feasibility study on any one uranium resource.



Should a decision to progress to a mining operation be made, Zambezi Resources
can elect to contribute pro rata or dilute to a 2.5% Net Smelter Return royalty.



About the Mavita Project Memorandum of Understanding



The Mavita project comprises two granted exploration licences that are the
subject of a Memorandum of Understanding with BHP Billiton, under which Zambezi
Nickel must spend US$150,000 to earn 100% of the licences, with BHP Billiton
retaining a clawback right should Zambezi discover a JORC compliant resource
containing > 200,000 tonnes of contained nickel. Should BHP Billiton exercise its
clawback rights, it will assume control and funding of exploration for up to 1
year, after which it may elect to reimburse Zambezi 250% of total exploration
expenditure on the licences.  At this stage, Zambezi will dilute to a 2.5% Net
Smelter Return royalty.



Zambezi has fulfilled its earn-in obligations under the MOU and the licences are
currently being transferred from BHP Billiton subsidiary WMC Resources
Exploration Pty Ltd to Zambezi Nickel.




                      This information is provided by RNS
            The company news service from the London Stock Exchange
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