TORONTO, ONTARIO, Jun.2 -- Continental Nickel Limited (TSX VENTURE: CNI) ("Continental" or"CNI" or the "Company") is pleased to provide an update on its planned 2010 exploration program on the Nachingwea nickel-copper sulphide project in Tanzania. The project is a 70:30 Joint Venture between CNI and IMX Resources Limited ("IMX") of Australia.
The Nachingwea Joint Venture has approved a $4 million exploration program and budget, which will include the completion of 9,000 metres of diamond and reverse circulation (RC) drilling in 2010. The program has two objectives:
1) to expand the current Mineral Resources at Ntaka Hill towards the exploration target of 100,000 tonnes of contained nickel; and
2) to continue to explore the vast regional land holdings to identify additional nickel sulphide deposits.
Planning for the 2010 program is now well advanced, and field crews have mobilized to the project in preparation for the diamond drill program at Ntaka Hill which is expected to commence in June.
At Ntaka Hill, the Company has outlined NI 43-101 compliant Measured and Indicated Mineral Resources totalling 3.1 million tonnes grading 1.31% nickel and 0.24% copper with 40,000 tonnes of contained nickel (see PressRelease dated July 15, 2009).
In 2010, a 5,000 metre diamond drilling program is planned with the goal of expanding the current Mineral Resource inventory towards the exploration target of 100,000 tonnes of contained nickel. The potential to increase the Mineral Resource inventory is derived from the following target areas (see Figure 1 attached):
1) drilling along potential extensions to the known sulphide deposits (H, G, L, M) which remain open beyond the current limits of drilling;
2) systematic drill testing of a new sulphide zone discovered in 2009 referred to as Ntaka C. Drilling will test a 500 metre long electromagnetic ("EM") conductor associated with the zone. Previous drill intersections included 2.53% nickel and 0.42% copper over 5.3 metres from drill hole NAD09-180 (see Press Release November 24, 2009);
3) infill diamond drilling of nickel sulphide zones intersected in 2006-2009. Drill holes to be evaluated for their resource potential include NAD09 (0.95% nickel and 0.27% copper over 10.0 metres), NAD07-024 (0.62% nickel and 0.13% copper over 62.8 metres) and NAD07-033 (0.72% nickel and 0.20% copper over 13.2 metres), and
4) drilling of untested TDEM ("Time Domain Electromagnetic") anomalies, such as the Grizzly and H North for potential new zones of nickelsulphide mineralization.
If the drilling at Ntaka Hill is successful, the Company plans to complete an updated Mineral Resource Estimate and commission a scoping study, if warranted, by year end.
At Lionja, approximately 8 kilometres south of Ntaka Hill, drilling completed in 2009 intersected nickel sulphide mineralization in drill
hole LID09-055 near the base of an ultramafic sill at a depth of approximately 200 metres. The intersection graded 0.91% nickel and 0.20% copper over 7.75 metres, including 2.03% nickel and 0.41% copper over 2.25 metres (see Press Release November 24, 2009). In 2010, approximately 1,000 metres of diamond drilling is planned to further explore the basal contact of the mineralized sill.
The Company intends to complete a detailed, 32,000 line kilometre, airborne magnetic and radiometric survey over the entire 7,500 square kilometre project area. This extensive survey will provide first pass airborne coverage beyond the areas previously covered by the 2007 and 2008 airborne VTEM ("Versatile Time Domain Electromagnetic") surveys, which covered approximately 30% of the Nachingwea project area.
The survey will help identify areas with possible mafic and ultramafic intrusions which have potential to contain undiscovered nickel sulphide deposits. Of particular interest in this year's program, is an area located approximately 35 kilometres northeast of Ntaka Hill, where stream sediment geochemical sampling conducted in late 2009, in an area of anomalies discovered by IMX, confirmed anomalous values for nickel, cobalt and chromium over a widespread area. Anomalies up to 1,950 parts per million ("ppm") nickel, 137 ppm cobalt and 1470 ppm chromium in stream sediment were obtained which are comparable to sampling results at Ntaka Hill where the current Mineral Resources have been outlined.
Upon completion of the airborne survey, selected targets will be prioritized and explored with additional stream and soil geochemical sampling, geological mapping, prospecting, and EM surveys. Selected targets from this work, plus anomalies already identified in the 2007 and 2008 airborne VTEM surveys will be prioritized and tested with reconnaissance reverse circulation ("RC") drilling. Approximately 3,000 metres of RC drilling are planned in 2010.
Continental's Interest in the Nachingwea Project is Expected to Increase 75% in 2010
Under the terms of the Nachingwea Joint Venture, the Company is to fund the first $15 million in exploration expenditures on the project, upon which its equity interest in the project will increase by 5% to hold a 75% interest. At 75:25, ongoing JV expenditures are to be funded by the joint venture parties pro rata or a non-participating party will have its interest diluted. As at March 31, 2009, the Company had expended $13.9 million and expects to satisfy the sole funding commitment by mid-year 2010. IMX has indicated that it intends to fund its respective share of the 2010 program.
Craig MacDougall, President & CEO of Continental Nickel Limited, said "Our objective in 2010 is to increase the Mineral Resources at Ntaka Hill towards 100,000 tonnes of contained nickel. Exploration funds are also being deployed towards regional exploration because of our strong belief in the potential of the Nachingwea area to host additional nickel sulphide deposits. The first drill results from Ntaka Hill are expected in late July."
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 (46,206,514 on a fully-diluted basis) and trades on the TSX Venture Exchange under the symbol CNI. The Company remains well-funded with over C$13.5 million in the treasury.