Continental Nickel Commences Diamond Drilling at the St. Stephen Nickel-Copper Sulphide Project in New Brunswick

  Continental Nickel Limited (TSX VENTURE: CNI) ("Continental" or "CNI" or the "Company") is pleased to announce that it has commenced a diamond drilling program on the St. Stephen nickel-copper sulphide project in New Brunswick. The project is under option from Abitex Resources of Val d'Or, Quebec and the Company can acquire up to a 75% interest in the project.

This drilling program will consist of up to eight diamond drill holes, totalling approximately 1,500 metres. The drill holes will test the following targets:

1.  extensions to mineralization beyond the limits of previous drilling at
the historic sulphide zones at Rogers Farm and E zone,
2.  newly discovered and untested, high conductance, electromagnetic ("EM")
anomalies detected in a ground, Time Domain Electromagnetic ("TDEM")
geophysical survey completed in 2009 (see Press Release December 9,
2009).

At the Rogers Farm zone, two drill holes are planned. The first drill hole will test an EM anomaly that may represent a possible extension of the zone to the north along strike, and the second drill hole will test for a possible extension of mineralization at a depth of approximately 250 metres, largely below the level of previous drilling. Two holes are also planned at the E Zone to test a moderate strength EM anomaly where the results of EM plate modelling indicate that conductance increases with depth. Historic drilling at the E Zone has intersected mineralization grading up to 0.95% nickel and 0.45 % copper over 9.15 metres at shallow depths (less than 100 metres).

Two new EM anomalies, Billy's Brook and Triple J, that were discovered in the 2009 TDEM survey, will be drill tested in this drill program. The Billy's Brook anomaly is located approximately 700 metres west of the historic Rogers Farm Deposit and has been modelled as a high conductance anomaly with a 175 metre strike length. The Triple J Anomaly is located approximately 1.5 kilometres southwest of the Rogers Farm Deposit and is also modelled as a high conductance anomaly with a strike length greater than 400 metres. Drilling is also planned at the G anomaly where EM plate modelling has suggested that this anomaly was not adequately tested by previous drilling.

It is anticipated that the drilling program will be completed by early July and that the first assay results will be received in late July.

Craig MacDougall, President & CEO of Continental Nickel Limited, reported "We were very encouraged with the success of our 2009 TDEM geophysical survey, which discovered new, high conductance EM anomalies near and adjacent to known nickel-copper sulphide zones. The current program is focussed on drill testing these new EM targets as well as drilling for possible extensions of nickel-copper sulphide mineralization at the Rogers Farm and E Zones."

The Company has been awarded a matching grant of up to $40,000 from the New Brunswick Junior Mining Assistance Program in support of its 2010 drill program at the St. Stephen Project. In the recently released Fraser Institute "Annual Survey of Mining Companies 2009/2010", the province of New Brunswick ranks second worldwide (behind the province of Quebec) in the list of the world's most attractive jurisdictions for mineral exploration and development.

Background

The project consists of 129 contiguous claims totalling 2,064 hectares near the town of St. Stephen in south western New Brunswick. The project is exceptionally well-positioned with respect to infrastructure such as power and transportation with road links to bulk-shipping port facilities, all within 120 kilometres at Saint John.

The property hosts some seventeen historic, sub-cropping, nickel-copper, magmatic, sulphide occurrences within Devonian mafic to ultramafic intrusive rocks of the St. Stephen igneous complex. Resources have been previously estimated for three deposits at Rogers Farm, Hall-Carroll and C Zones, but pre-date and are not compliant with the reporting standards of NI 43-101. Based on the historic resource estimates, the Rogers Farm deposit, which is the largest deposit found to date, has an exploration target potential of approximately 500,000 tonnes grading 1% nickel and 0.45% copper to a depth of 150 metres. The Company considers this as a conceptual exploration target and is not treating the historical estimate as a current mineral resource. The historical resources should not be relied upon and should only be considered to be mineral occurrences that have the potential to be upgraded to resources by the application of exploration and evaluation to NI 43-101 standards.

The Company entered into an Option and Joint Venture Agreement with Abitex Resources of Val d'Or, Quebec, in April of 2008. Under the terms of the Agreement, the Company can earn an initial 50% interest in the project by completing scheduled cash payments totalling $150,000, issuing a total of 270,000 shares of Continental and completing $1.0 million in work expenditures by April 3, 2013. The Company can increase its interest to hold a 60% interest by completing additional cash payments and share issuances of Continental totalling $60,000 and 80,000 shares, respectively, and completing additional work expenditures totalling $1.0 million by April 3, 2015.

Upon completion of a feasibility study within five years of earning a 60% interest, the Company's interest will increase to 65% and can further increase to 75% if the study recommends a positive development recommendation and the Company gives notice that it intends to implement the study recommendation within two years of tabling the study.

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.

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 70% interest in the Nachingwea project in Tanzania, where NI 43-101 Mineral Resources have defined 40,000 tonnes of contained nickel. The Company is targeting an exploration threshold of 100,000 tonnes of contained nickel in Mineral Resources at Nachingwea. The Company also has an option joint venture on the St. Stephen project in New Brunswick, Canada. 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$13.2 million in the treasury.

On behalf of Continental Nickel Limited

Craig MacDougall, President & Chief Executive Officer

CAUTIONARY STATEMENT: No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. 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.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contacts: Continental Nickel Limited Craig MacDougall, P. Geo. President and CEO [phone] [phone] (FAX) [e-mail] www.continentalnickel.com Marguerite Manshreck-Head Investor Relations [phone]