Continental Nickel Reports Copper Sulphide Mineralization at Chilalo Regional Targets, Nachingwea Project, Tanzania

Continental Nickel Limited (TSX VENTURE:CNI) ("CNI" or the "Company") is pleased
to report that metasedimentary-hosted copper sulphide mineralization has been
intersected in drilling completed in late 2011 to test regional geochemical and
geophysical targets on its Chilalo license located 23 kilometres northeast of
Ntaka Hill. The project is a 75:25 joint venture between CNI and IMX Resources
Limited of Australia. 


Highlights



--  Copper sulphide horizon confirmed over a 1 kilometre strike length with
    mineralization grading up to 5.27% copper, 15.05 g/t silver and 0.41%
    zinc over 0.4 metres at Chilalo 6 
--  New untested copper soil anomaly identified 450 metres north of current
    drilling at Chilalo 6 
--  Untested high priority targets to be drilled in 2012 at Chilalo 7 
--  New mineralization enhances the prospectivity of the regional land
    holdings 



Patricia Tirschmann, VP Exploration, commented: "It is exciting to see that
several years of progressive regional exploration have advanced to the point
where we are starting to identify new sulphide occurrences for more detailed
follow-up. The intersection of a laterally extensive zone of copper sulphide
mineralization in the Chilalo 6 area is another example of the potential for
significant metasedimentary-hosted copper-silver mineralization, in addition to
nickel-copper sulphide mineralization, on the Company's extensive land package.
We look forward to further drill testing of the highly prospective targets in
the Chilalo 6 and 7 areas and to following up additional regional targets in
2012." 


Regional exploration in 2011 identified prospective geochemical and geophysical
anomalies and surface gossans at two high priority areas, Chilalo 6 and 7, on
the Company's Chilalo license (see location map which may be viewed using link
provided with this release). The Chilalo 6 area is located 23 kilometres
northeast of Ntaka Hill where artisanal copper mining was reported earlier by
the Company (Press Release May 25, 2011). The Chilalo 7 area is located 6.5
kilometres northeast of Chilalo 6. 


During November 2011, a total of five diamond drill holes totalling 500.5 metres
were completed to test the targets identified in the Chilalo 6 area. Results for
five holes are reported herein and are provided below in Table I. A drill hole
location figure may be viewed using the link provided with this release. 


Since the drilling was terminated earlier than expected due to heavy rains that
restricted road access, targets in the Chilalo 7 area will be tested as part of
the 2012 regional exploration program.


Background

In May 2011, artisanal copper malachite mining activity was confirmed on the
Company's Chilalo license located 23 kilometres northeast of Ntaka Hill. The
malachite mineralization is hosted primarily in high metamorphic grade felsic
gneisses and amphibolite, adjacent to a highly oxidized, gossanous
copper-bearing sulphide horizon. The gossanous sulphide horizon and related
malachite mineralization was traced in a series of artisanal pits extending in a
northeast-southwest direction over a strike length of approximately 400 metres.
Soil sampling in the area identified a narrow copper soil anomaly extending to
the southwest of the artisanal pits over a total strike length of 1.8
kilometres. 


Several other copper soil anomalies were identified elsewhere on the Chilalo
license including values of up to 625 ppm copper, 630 ppb silver and 925 ppm
zinc and in the vicinity of a second gossan showing in the Chilalo 7 area. Grab
samples of surface gossans from this location returned values of up to 0.42%
copper, 1.19 g/t silver and 0.34% zinc.


Surface time domain electromagnetic surveys ("EM") were subsequently completed
over both the Chilalo 6 and Chilalo 7 areas. The surveys detected several EM
anomalies including an anomaly located 700 metres west of the artisanal pits at
Chilalo 6 and an anomaly coincident with the gossan occurrence at Chilalo 7. A
diamond drilling program was carried out in November 2011 to test selected
geochemical and geophysical targets. 


Drilling

Five diamond drill holes totaling 500.5 metres were completed in the Chilalo 6
area. Four of the holes (NRD11-046, 47, 49 & 50) tested the 1.8 kilometre long
copper soil anomaly and associated geophysical anomalies. The fifth hole
(NRD11-048) tested an EM conductor located 200 metres north of hole NRD11-047
and 150 metres southwest of a surface grab sample which returned 0.26% zinc. 


Drill holes NRD11-046, 047, 049 and 050 all intersected copper sulphide
mineralization that is interpreted to be correlated with the surface copper soil
anomaly. The mineralization typically consists of narrow, locally brecciated,
semi-massive sulphide (pyrite and chalcopyrite) veins and/or sulphide
disseminations hosted in variably sheared pelitic paragneisses. Copper-bearing
samples from these holes also contain elevated levels of bismuth (up to 43 ppm),
cadmium (up to 26 ppm), cobalt (up to 200 ppm), molybdenum (up to 28 ppm), lead
(up to 1,685 ppm), selenium (up to 162 ppm) and tellurium (58 ppm). The best
copper-silver-zinc values were obtained in holes NRD11-047 and 050. 


Drill hole NRD11-047 was drilled approximately 800 metres southeast of the main
artisanal pit and intersected a zone of disseminated to semi-massive pyrite and
chalcopyrite which graded 1.89% copper, 5.64 g/t silver and 0.19% zinc and over
1.20 metres including 5.27% copper, 15.05 g/t silver and 0.41% zinc over 0.4
metres. 


Drill hole NRD11-050 was drilled approximately 475 metres northeast of hole
NRD11-047 and intersected a zone of disseminated to semi-massive pyrite and
chalcopyrite which graded 0.50% copper, 2.18 g/t silver and 0.06% zinc over 6.00
metres including two higher grade intervals containing 1.35% copper, 2.07 g/t
silver and 0.21% zinc over 0.6 metres and 1.03% copper, 8.46 g/t silver and
0.07% zinc over 1.0 metres. 


Drill hole NRD11-048 was drilled 200 metres to the north of NRD11-046 and tested
a 300 meter long, EM anomaly coincident at its east end with a surface grab
sample containing 0.26% zinc. The EM conductor can be correlated with a wide
interval of locally sheared graphitic paragneisses intersected between 53.9 and
86.2 metres. A 9.3 metre interval within the graphitic paragneisses contained
disseminated and blebby sulphides which returned elevated zinc and silver values
of 0.13% zinc and 1.35 g/t silver including one sample assaying 0.34% zinc and
6.91 g/t silver over 0.70 metres. 


Comment on Mineralization 

The mineralization intersected in holes NRD11-046, 047, 049 and 050 can be
correlated with the 1.8 kilometre long copper soil anomaly which extends
southwest from the artisanal pits at Chilalo 6. Copper sulphides have now been
identified over a strike length of approximately 1 kilometre from the artisanal
pits southwest to holes NRD11-049. 


At this early stage of exploration on the prospect, the mineralization is viewed
as having similarities to various stratiform sedimentary-hosted and sedimentary
exhalative ("SEDEX") copper deposits including copper-silver deposits of the
African copper belts and the Broken Hill deposit in Australia. The sulphides are
hosted in high metamorphic grade pelitic paragneisses, are characterized by
anomalous copper and silver and have been structurally modified to varying
degrees by shearing and brecciation. Mineralized samples also contain elevated
abundances of other trace elements including bismuth, cadmium, cobalt,
molybdenum, lead, selenium and tellurium. 


The new Chilalo mineralization represents the fourth occurrence of drill
intersected copper-silver-zinc mineralization hosted in paragneisses on the
Company's regional licenses. Three other occurrences were reported from reverse
circulation drilling carried out in 2010 (Press Release Jan 31, 2011). 


New Target

In the Chilalo 6 area, a new soil geochemical anomaly located 450 metres north
of the current drilling and 600 metres northwest of the artisanal pits was
identified from the results of in-fill sampling carried out in 2011. Anomalous
copper values in soil were obtained over an area 300 metres by 150 metres in
size with a maximum value of 1,115 ppm copper, 654 ppm zinc, 620 ppb silver, and
23ppb gold. This copper geochemical anomaly is not yet fully defined and could
possibly link up with anomalous copper samples observed immediately north of the
artisanal pits. Additional soil sampling and drill testing are planned in 2012. 


Next Steps

Regional soil geochemistry and EM geophysical surveys have proven effective in
identifying the location of prospective new mineralized horizons. In the Chilalo
6 area, recent drilling has confirmed the presence of a copper sulphide horizon
hosted in pelitic paragneisses over a strike length of approximately 1
kilometre. However, the mineralization intersected to date has been narrow and
the sulphide horizon appears to have undergone both shearing and brecciation
based on textures observed in drill core. As the next step in the evaluation of
this prospective target, the Company plans to carry out an induced polarization
("I.P") survey in 2012 to identify structures that may host wider portions of
the mineralized horizon and to identify potential zones of disseminated
mineralization which do not have an EM response. High priority targets will then
be selected for drill testing. 


Additional soil sampling is also planned to more fully define the new and
untested copper soil anomaly in the Chilalo 6 area. Subsequent drill testing of
this target and also of the high priority geochemical and geophysical targets in
the Chilalo 7 area will be carried out as part of the regional 2012 drilling
program. 


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. Ms. Tirschmann is a qualified person as defined by National
Instrument 43-101. 


Quality Control

The drilling was completed by Tandrill Limited of Tanzania. Drill core samples
(NQ) are cut in half by a diamond saw on site. Half of the core is retained for
reference purposes. Samples are generally 1.0 metre intervals or less at the
discretion of the site geologists. Sample preparation is completed at the ALS
Chemex preparation lab in Mwanza, Tanzania. Sample pulps are sent by courier to
the ALS Chemex analytical laboratory in Vancouver, Canada. Blank samples and
commercially prepared and certified control standards with a range of grades are
inserted in every batch of 20 samples or a minimum of one per sample batch.
Duplicate pulps are also prepared for selected samples from a re-split of the
coarse reject. Multi-element analyses including Cu, Zn, Pb and Ag are completed
using a HF-HNO3-HClO4 digestion and HCl leach preparation and an ICP-AES and
ICP-MS finish (Analytical Code ME-MS81). Ore grade Cu analyses are completed
using a peroxide fusion preparation and an ICP-AES finish (Analytical Code
ME-ICP81). Analyses for Pt, Pd, and Au are by fire assay with an ICP-AES finish
(Analytical Code PGM-ICP23). 


About Continental Nickel Limited

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 75% 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 March 2, 2012). 


The Company also has an option to joint venture on the St. Stephen project in
New Brunswick, Canada where the 2010 and 2011 diamond drill programs discovered
new Ni-Cu sulphide zones. 


As at the date of this release, the Company has 42,738,508 common shares issued
and outstanding (51,126,914 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 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. 




   Table I: Summary of Assay Results - Regional Chilalo Drilling Program,   
                        Nachingwea Project, Tanzania.                       
----------------------------------------------------------------------------
              Location                                                      
                 East/                                                      
Drill hole       North      Az / Length  From    To Interval   Cu    Ag   Zn
(NRD11-)     UTM:WGS84       Dip    (m)   (m)   (m)      (m)    %   g/t    %
----------------------------------------------------------------------------
                               Chilalo 6 Area                               
----------------------------------------------------------------------------
046           468638mE 360 / -60  83.90 49.00 52.00     3.00 0.12  0.46 0.05
             8898998mN                                                      
----------------------------------------------------------------------------
047           468505mE 360 / -60 112.20 27.70 28.90     1.20 1.89  5.64 0.19
             8898961mN                  Incl.                               
                                        28.50 28.90     0.40 5.27 15.05 0.41
----------------------------------------------------------------------------
048           468500mE 360 / -70 119.90 74.00 83.30     9.30 0.02  1.35 0.13
             8899096mN                  Incl.                               
                                        81.70 82.40     0.70 0.01  6.91 0.34
----------------------------------------------------------------------------
049           468324mE 340 / -55  92.10 63.30 65.60     2.30 0.46  1.82 0.05
             8898850mN                                                      
----------------------------------------------------------------------------
050           468950mE 355 / -60  92.40 49.00 55.00     6.00 0.50  2.18 0.06
             8899135mN                  Incl.                               
                                        49.00 49.60     0.60 1.35  2.07 0.21
                                          and                               
                                        53.00 54.00     1.00 1.03  8.46 0.07
----------------------------------------------------------------------------
                                                                            
Note:                                                                       
Intervals represent core lengths, not necessarily true widths.              



To view the location map associated with this release, please visit the
following link: http://media3.marketwire.com/docs/cni0327map.pdf.


To view the drill plan associated with this release, please visit the following
link: http://media3.marketwire.com/docs/cni0327plan.pdf.