Continental Nickel Commences Diamond Drilling at the St. Stephen Nickel-Copper Sulphide Project in New Brunswick

TORONTO, ONTARIO -- (Marketwire) -- 12/02/11 -- Continental Nickel Limited (TSX VENTURE: CNI) ('Continental' or 'CNI' or the 'Company') is pleased to announce that it has commenced a diamond drilling program on the St. Stephen nickel-copper sulphide project in New Brunswick. The project is under option from Abitex Resources of Val d'Or, Quebec and the Company can acquire up to a 75% interest in the project.

The 2011 drilling program will consist of approximately 1,000 metres of diamond drilling to test new EM targets identified in the 2011 airborne EM survey and also to follow-up nickel-copper mineralization intersected in 2010 in the St. Stephen intrusion. Logan Drilling Limited from Stewiacke, Nova Scotia has been contracted to carry out this work.

In 2010, the Company reported the discovery of new nickel-copper sulphide zones while drill testing EM anomalies at the Triple J and G targets. Highlights included 2.00% nickel and 0.56% copper over 3.3 metres, within a wider interval grading 1.0% nickel and 0.29% copper over 9.30 metres from diamond drill hole SSD10-003 drilled at Target G (Press Release, August 18, 2010) and 21.4 metres grading 0.63% nickel and 0.22% copper at the newly discovered Triple J Zone (Press Release, September 15, 2010). These were the first significant drill intersections obtained in the untested western portion of the St. Stephen Intrusive Complex and were discovered while testing EM anomalies identified in 2009 by the first modern time domain ground EM surveys carried out over the intrusion.

The 2011 drill targets include:

--  Untested, high conductance, electromagnetic ('EM') anomalies detected in
    the new June 2011 airborne EM survey including three untested targets in
    the western part of the intrusion.


--  Extension of the G target mineralization discovered in 2010, where both
    BHEM and airborne EM results indicate that mineralization extends to the
    north.

Dave Massola, President and Chief Executive Officer of Continental Nickel Limited, reported 'the 2010 drill program achieved considerable success with the discovery three new nickel-copper sulphide zones at Triple J, G and Billy's Brook while drill testing new, high conductance, ground EM anomalies. The 2011 exploration will build on this success by further exploration of the newly discovered sulphide zone at G zone, as well as other unexplored targets. The St. Stephen intrusion is viewed as having excellent potential to host additional nickel sulphide deposits.'

The Company would like to acknowledge the support it has received from the New Brunswick Junior Mining Assistance Program, under which it has been awarded a matching grant of $40,000 in support of its 2011 exploration program at the St. Stephen Project and a matching grant of $20,000 in support of its 2011 exploration program at the Milltown Project.

Project Summary

A project summary on the St. Stephen Project is provided on the Company's web site at www.continentalnickel.com.

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. The information in this release was prepared under the direction of Ms. Tirschmann for Continental Nickel Limited. Ms. Tirschmann is a qualified person 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 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 Joint Venture between the Company and IMX Resources Limited ('IMX') of Australia.

The Company also an option to earn up to a 75% interest in the St. Stephen nickel project in New Brunswick, Canada, where it has discovered new nickel-copper sulphide zones from its recently completed 2010 diamond drill program.

As at the date of this release, the Company has 42,738,508 common shares issued and outstanding (51,156,914 on a fully-diluted basis) and trades on the TSX Venture Exchange under the symbol CNI. The Company remains well funded with over C$13.6 million in the treasury as at June, 2011.

On behalf of Continental Nickel Limited

David Massola, President & 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, 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.

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.

Contacts:

Continental Nickel Limited

Dave Massola

President and Chief Executive Officer

(905) 815-0533 Ext. 228

(905) 815-0532 (FAX)
info@continentalnickel.com
www.continentalnickel.com