TORONTO, ONTARIO--(Marketwire - May 16, 2011) - Continental Nickel Limited (News - Market indicators)  ("Company") is pleased to advise that it is mobilising to commence the next round of drilling on the Sleeping Giant deposit at its 75% owned Nachingwea nickel sulphide project in Tanzania. The Company has secured the services of Tanzanian-based drilling contractor, Tandrill Limited ("Tandrill"), to supply two drill rigs to carry out 15,000 metres of diamond drilling commencing in early June. 

This drilling program will test for extensions to the Sleeping Giant deposit which remains open in all directions. Drilling will initially concentrate on testing the shallow, up-plunge northern extent of the zone and western down dip extensions of the high grade mineralization intersected in 2010 (NAD10-220: 2.58% nickel and 0.41% copper over 23.3 metres, Press Release December 13, 2010; NAD10-226: 2.28% nickel and 0.57% copper over 17.25 metres, Press Release January 24, 2011). The drilling will also test for similar deposits along the western side of the Ntaka Intrusion including follow-up of the 2008 drill hole, NAD08-171, which intersected disseminated nickel sulphide mineralization at the end of hole which graded 0.63% Ni and 0.12% Cu over 4 metres (January 28, 2009 Press Release).

A drill plan and composite longitudinal section for the Sleeping Giant zone may be viewed using the link provided with this release.

John Nitschke, Executive Chairman and Acting Chief Executive Officer of the Company, commented "We look forward to the re-start of drilling at the Sleeping Giant Zone which will allow us to define the full extent of this new and exciting sulphide zone. This, together with continuing our exploration efforts on the Nachingwea land package and the commencement of studies to assess the viability of the already defined Resources, are three of the key things the Company needs to achieve this year. We are very pleased to secure the services of Tandrill Limited in this currently tight exploration services market. Tandrill has provided safe, reliable and high quality drilling services to the Company at Ntaka Hill since 2007."

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 75% interest in the Nachingwea project in Tanzania, where NI 43-101 compliant Mineral Resources (Measured and Indicated) have defined 60,900 tonnes of contained nickel, and an additional 131,000 tonnes of contained nickel in Inferred Mineral Resources. The project is a 75:25 exploration joint venture between the Company and IMX Resources Limited ("IMX") of Australia.

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

Continental Nickel Limited has 39,126,508 shares issued and outstanding (47,051,514 on a fully-diluted basis) and trades on the TSX Venture Exchange under the symbol CNI. The Company remains well-funded with currently C$10.0 million in the treasury as at December 31, 2010.

On behalf of, Continental Nickel Limited

John Nitschke, Executive Chairman and Acting Chief Executive Officer 

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, 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.

To view Figure 1 - please visit the following link:
http://media3.marketwire.com/docs/continental_nickel_map.pdf.  

To view Figure 2 - please visit the following link: 
http://media3.marketwire.com/docs/continental_nickel_map2.pdf.