Continental Nickel Updates Tanzania Exploration Program; New Sulphide Mineralization Intersected at Ntaka Hill

Continental Nickel Limited (TSX VENTURE:CNI) ("CNI" or the "Company") is pleased
to report that the first assays have been received from its 2012 drilling
program in Tanzania that commenced in May. Highlights are as follows:


Highlights of the 2012 Drilling Program to Date



--  New sulphide mineralization assaying 1.04% nickel and 0.22% copper over
    32.65 metres located near the northeastern edge of Sleeping Giant; 
    
--  Multiple intersections of disseminated sulphides in the hanging wall to
    Sleeping Giant assaying greater than 0.5% nickel, including 1.00% nickel
    and 0.20% copper over 14.80 metres; 
    
--  L Zone mineralization extended 50 metres to the south; and 
    
--  Ultramafic hosted sulphides intersected in both Ntaka and Lionja
    exploration holes. 



Patricia Tirschmann, VP Exploration, commented on the 2012 exploration program:
"The 2012 drilling program is well underway and we look forward to reporting
more new assays at regular intervals including results of recently completed
exploration holes. We are also eagerly awaiting results from the new VTEM
survey, particularly over high priority targets like the Hog gold showing. At
Sleeping Giant, the intersection of both new mineralization, as well as hanging
wall zones returning assay values greater than 0.5% nickel, is very encouraging.
New intersections at Sleeping Giant will be incorporated into the drilling
database and are currently expected to result in another mineral resource
estimate update in early 2013."


The Company has been implementing a CDN$10.0 million exploration program for
2012 on the Nachingwea project. This program has focussed on 1) carrying out
in-fill and step-out diamond drilling at the Sleeping Giant zone; 2) drill
testing exploration targets in the Ntaka and Lionja ultramafic intrusions; and
3) generating and exploring priority targets on the regional land holdings. The
program includes 20,000-25,000 metres of diamond and reverse circulation (RC)
drilling, a 2,500 line km regional airborne versatile time domain
electromagnetic (VTEM) survey and ground geophysical surveys. 


The 2012 drilling program was initiated in mid-May and is being carried out by
Capital Drilling (Tanzania) Limited with three diamond drill rigs currently in
operation. A total of 12,683 metres in 56 drill holes were completed to the end
of July, including in-fill and geotechnical drilling at Sleeping Giant and
exploration drilling at Ntaka Hill, Lionja and regional targets. Reported assay
results now include twelve drill holes from in-fill drilling at the Sleeping
Giant Zone as provided in Table I below. A location figure may be viewed using
the link provided with this release. Further assay results will be reported as
they are received, compiled and validated.


Sleeping Giant Drilling  

In-fill drilling is being carried out on 50 metre centres over the northern,
shallower half of the deposit area with the goal of upgrading the current
estimated mineral resource categories and further defining the near surface
zones of hanging wall mineralization situated within the northern end of the
conceptual pit for the Sleeping Giant zone. The drilling began on the
northernmost sections and is progressing southwards. Step-out drill holes are
also planned to test for the potential down-plunge extension of the high grade
core of the zone. 


Twelve holes totaling 2,371 metres and extending from sections 3700N to 3900N
are reported in Table 1. Significant results to date include:




--  Numerous hanging wall intersections of disseminated sulphides, including
    1.00% nickel and 0.20% copper over 14.80 metres from 83.2 to 98.0 metres
    in drill hole NAD12-266 (section 3900N) and additional intersections
    grading 0.50% nickel or better in drill holes NAD12-268, 269, 272, 274
    and 275. 
    
--  New mineralization intersected on Section 3750N which is located
    northeast of the Sleeping Giant zone just below the bottom of the
    conceptual open pit in an area where no previous wireframes had been
    interpreted. Drill hole NAD12-270 intersected a wide zone of
    disseminated to heavily disseminated sulphides grading 1.04% nickel and
    0.22% copper over 32.65 metres from 172.6 to 205.25 metres, including
    1.45% nickel and 0.25% copper over 14.05 metres. This mineralization is
    interpreted to represent either a new sulphide zone or a down dropped
    portion of the high grade core of the Sleeping Giant zone. 
    
--  An intersection in drill hole NAD12-267 on Section 3850N comprised of
    disseminated sulphides and narrow remobilized massive sulphide veins
    which graded 0.70% nickel and 0.20% copper over 25.30 metres from 110.0
    to 135.3 metres, including a higher grade portion grading 2.03% nickel
    and 0.35% copper over 3.8 metres. This mineralization is interpreted to
    correlate with L zone to the north and, as such, extends L zone an
    additional 50m to the south.  



In-fill drilling at Sleeping Giant is on-going with two diamond drill rigs and
assays will be reported as they are received.


Drilling of Ntaka Hill and Lionja Intrusions

Exploration drilling at the Ntaka ultramafic intrusion outside of the Sleeping
Giant zone has focused on a) testing previously untested electromagnetic
anomalies; b) testing coincident nickel and copper soil anomalies; and c)
following up on nickel mineralization intersected south and east of H zone in
2011. To date, eleven drill holes totalling 1,802 metres have been completed to
test seven exploration targets. All of these holes have intersected various
concentrations of sulphides hosted within the Ntaka ultramafic intrusion. 


Exploration drilling at the Lionja ultramafic intrusion located eight kilometres
to the south of Ntaka Hill is following up previously intersected nickel
mineralization as well as testing coincident nickel and copper in soil
anomalies. Six drill holes totalling 1,270 metres have been completed to test
targets at Lionja. Four of these were 50 to 200 metre step-out holes targeting
an ultramafic hosted mineralized horizon intersected in previous drilling. Five
of the six Lionja exploration holes completed to date have intersected various
concentrations of sulphides hosted within the ultramafic intrusion. Assays are
pending. 


Regional Exploration

Testing of regional targets is on-going with one drill rig. One hole totaling
216 metres has been completed to test the Noli exploration target and assays are
pending.


Airborne Survey 

The Company also confirms that a 2,500 line kilometre airborne versatile time
domain electromagnetic (VTEM) survey was initiated in late July and is being
flown by Geotech Airborne Limited. The survey will cover selected portions of
the regional land holdings, including the area of the newly discovered Hog gold
showing where surface gossan grab samples returned values of up to 4.96 g/t gold
(May 25, 2012 Press Release). 


The survey is scheduled for completion by mid August. Anomalies will be
prioritized and explored with additional soil geochemical sampling, geological
mapping, prospecting, and ground geophysical surveys in order to select targets
for drill testing later this year. 


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 Capital Drilling (Tanzania) Limited. 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 Ni sulphide analytical control
standards with a range of grades are inserted in every batch of 20 samples or a
minimum of one per sample batch. Analyses for Ni, Cu and Co are completed using
a peroxide fusion preparation and 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 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
project is a 75:25 exploration joint venture between the Company and IMX
Resources Limited ("IMX"). The Company also has an option to joint venture on
the St. Stephen project in New Brunswick, Canada where the 2010-2012 diamond
drill programs discovered new Ni-Cu sulphide zones. In May 2012 an Arrangement
Agreement was entered into between CNI and IMX under which the shares of CNI not
held by IMX would be acquired by IMX for shares and warrants in IMX. This
transaction is currently scheduled to be completed in September 2012 after CNI
holds a special meeting of shareholders to approve the transaction and certain
other conditions, including receipt of required regulatory approvals, to
completion have been met.


As at the date of this release, the Company has 42,793,508 common shares issued
and outstanding (46,866,008 on a fully-diluted basis) and trades on the TSX
Venture Exchange under the symbol CNI. The Company had over $6.6 million in the
treasury as at March 31, 2012.


On behalf of Continental Nickel Limited 

Dave Massola, President and CEO 

CAUTIONARY STATEMENT: The TSX Venture Exchange does not accept responsibility
for the adequacy or accuracy of this release. 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, 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                     
      Sleeping Giant Zone and Ntaka Hill, Nachingwea Project, Tanzania      
                                                                            
----------------------------------------------------------------------------
Drill hole Location      Az / Length   From     To Interval % Ni % Cu   Zone
(NAD12-)   East/North     Dip    (m)    (m)    (m)      (m)                 
           UTM:WGS84                                                        
----------------------------------------------------------------------------
                                Section 3900N                               
----------------------------------------------------------------------------
266        450091mE  90 / -69  131.0  83.20  98.00    14.80 1.00 0.20     HW
           8883901mN                  Incl.                                 
                                      83.20  83.50     0.30 4.07 0.69       
                                      86.50  88.00     1.50 3.12 0.52       
                                      93.00  94.00     1.00 2.48 0.30       
----------------------------------------------------------------------------
                                Section 3850N                               
----------------------------------------------------------------------------
265        450033mE  90 / -69  136.1                         NSA  NSA     HW
           8883851mN                                                        
----------------------------------------------------------------------------
267        450144mE  90 / -69  166.5  94.00 105.00    11.00 0.62 0.10     HW
           8883851mN                                                        
                                     110.00 135.30    25.30 0.70 0.20 L Zone
                                      Incl.                                 
                                     131.50 135.30     3.80 2.03 0.35       
                                                                            
                                     147.90 148.40     0.50 1.94 0.02    SLG
                                                                            
----------------------------------------------------------------------------
268        450088mE  90 / -69  151.1  38.20  53.00    14.80 0.30 0.06     HW
           8883851mN                                                        
                                      85.10  85.60     0.50 3.24 0.70     HW
                                                                            
                                      89.80 103.00    13.20 0.64 0.09     HW
                                      Incl.                                 
                                      89.80  90.50     0.70 3.45 0.16       
                                      92.00  92.60     0.60 2.12 0.47       
----------------------------------------------------------------------------
                                Section 3800N                               
----------------------------------------------------------------------------
269        450198mE  90 / -69  158.3  30.00  46.00    16.00 0.51 0.12     HW
           8883801mN                                                        
----------------------------------------------------------------------------
271        450141mE  90 / -69  197.3  26.20  37.50    11.30 0.45 0.10     HW
           8883801mN                                                        
                                     102.40 113.00    10.60 0.39 0.08     HW
                                                                            
                                     118.00 142.00    24.00 0.32 0.06     HW
----------------------------------------------------------------------------
273        450030mE  90 / -69  250.3 101.45 108.00     6.55 0.56 0.11     HW
           8883801mN                                                        
----------------------------------------------------------------------------
                                Section 3750N                               
----------------------------------------------------------------------------
270        4502534mE 90 / -69  224.4 172.60 205.25    32.65 1.04 0.22   New/
           8883751mN                  Incl.                              SLG
                                     190.00 204.05    14.05 1.45 0.25       
----------------------------------------------------------------------------
272        450197mE  90 / -69  198.6  22.00  36.00    14.00 0.33 0.08     HW
           8883751mN                                                        
                                      45.00  65.00    20.00 0.32 0.07     HW
                                                                            
                                      96.00 106.00    10.00 0.73 0.16     HW
                                                                            
                                     120.65 127.00     6.35 0.55 0.13     HW
                                     136.00 145.90     9.90 0.60 0.11     HW
                                                                            
----------------------------------------------------------------------------
274        450142mE  90 / -69  245.4 107.80 136.00    28.20 0.50 0.09     HW
           8883751mN                                                        
----------------------------------------------------------------------------
276        450087mE  90 / -69  247.4  76.00  95.00    19.00 0.41 0.08     HW
           8883751mN                                                        
                                     111.65 118.00     6.35 0.33 0.07     HW
                                                                            
                                     190.75 191.15     0.40 5.93 2.37    SLG
----------------------------------------------------------------------------
                                Section 3700N                               
----------------------------------------------------------------------------
275        450131mE  90 / -69  265.0  30.00  41.45    11.45 0.33 0.09     HW
           8883701mN                                                        
                                     131.00 146.00    15.00 0.42 0.14     HW
                                      Incl.                                 
                                     135.00 140.00     5.00 0.65 0.13       
                                                                            
                                      234.2 236.00     1.80 1.18 0.35    SLG
----------------------------------------------------------------------------
                                                                            
Notes:                                                                      
                                                                            
Intervals represent core lengths, not necessarily true widths.              
Pt, Pd and Au assay results are not reported because in general, they are   
less than 1.0 g/t on a combined basis.                                      
NSA - No Significant Assays                                                 
HW = Hanging Wall    FW = Foot Wall    SLG = Sleeping Giant Zone            



To view the map associated with this press release, please visit the following
link: http://media3.marketwire.com/docs/Sleeping_Giant_Drill_Plan.png.