Continental Nickel Identifies New Drill Targets at the St. Stephen Nickel-Copper Project

  Continental Nickel Limited (TSX VENTURE: CNI)("Continental" or the "Company") is pleased to report that it has outlined two new and untested, highly conductive electromagnetic (EM) anomalies near known nickel-copper sulphide zones, from a ground geophysical survey recently completed at its St. Stephen nickel-copper project in New Brunswick. The project is under option from Abitex Resources (TSX VENTURE: ABE) of Val D'Or Quebec and the Company can acquire up to a 75% interest in the project.

Based on a compilation of historic data completed earlier this year, the Company selected two priority areas to be surveyed with a large loop, time domain electromagnetic (TDEM) survey, the first survey of this type to be conducted on the property. A total of twelve line kilometres of TDEM surveying from two fixed loops was completed as shown on the attached figure. The aim of the survey was to explore for extensions of known mineralization in the area of the Rogers Farm Deposit and to confirm new, untested, anomalies identified from a review of the airborne VTEM survey flown by Abitex in 2004.

In the Rogers Farm area, the survey detected a new high conductance anomaly (referred as the Billy's Brook Anomaly), located approximately 700 metres west of the Rogers Farm Deposit. The anomaly is 175 metres long and is untested by previous drilling. Surveying over the Rogers Farm Deposit, as expected, detected an extremely high conductance anomaly, over a 250 metre strike length, coincident with the deposit. Although no new extensions to the deposit were detected by the survey, historic drilling indicates that the deposit is open at depth. The survey also confirmed that a down dip extension is likely to the E Zone, located 200 metres east of the Rogers Farm Deposit, where historic drilling intersected up to 0.95% nickel and 0.45% copper over 9.15 metres. The survey results indicate that this zone is open at depth below the level of historic drilling.

In the second survey area, a second new high conductance anomaly (referred to as the Triple J Anomaly) was detected, 1.5 kilometres southwest of the Rogers Farm Deposit. This anomaly has similar conductivity to the anomaly of the Rogers Farm Deposit and has been modelled over a strike length of greater than 400 metres. It is also untested by previous drilling.

Based on these favourable results, including the discovery of two new, untested, high conductance EM anomalies, as well as potential depth extensions at the Rogers Farm and E Zones, the Company intends to design a drill program to test these targets in 2010.

Craig MacDougall, President & CEO of Continental Nickel Limited, reported "the completion of the first, modern, large loop, TDEM survey on this property has yielded, as we hoped, a number of compelling targets for drill testing. In addition to a significant down dip extension indicated at the E Zone, we have also discovered two new high conductance anomalies, of which the Triple J anomaly is not only similar in strength, but larger in size than the anomaly coincident with the Rogers Farm Deposit. This anomaly is in an unexplored area of the property and is untested by any previous drilling. We look forward with anticipation to the start of a drill program to test these quality targets in 2010."

The Company would like to acknowledge that the geophysical program completed at the St. Stephen Project was supported by a grant of $25,000 under the New Brunswick Junior Mining Assistance Program (NBJMAP).

Background

The project consists of 129 contiguous claims totalling 2,064 hectares near the town of St. Stephen in southwestern 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 located 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 (TSX VENTURE: ABE) of Val D'Or Quebec in April of 2008. Under the terms of the option 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 were 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 Chief Executive Officer 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 and discovery of nickel sulphide deposits in geologically prospective, but under-explored regions globally. Current projects include its 70% controlling interest in the Nachingwea project in Tanzania, where NI 43-101 Mineral Resources have been defined, and an option joint venture on the St. Stephen project in New Brunswick, Canada. Continental Nickel has 30,132,395 shares issued and outstanding (32,799,895 on a fully-diluted basis) and trades on the TSX Venture Exchange under the symbol CNI. The Company remains well funded with over C$10.1 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 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.

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