CNI Continental Nickel Limited

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES


Continental Nickel Limited (TSX VENTURE:CNI)("Continental" or the "Company")
announces a non-brokered private placement of 230,000 flow-through ("FT") shares
at a price of $1.10 per share for gross proceeds of $253,000 to one
institutional investor, subject to regulatory approval and closing. In addition,
the Company proposes to complete a second non-brokered, non-flow-through,
private placement to its largest shareholder, IMX Resources Limited ("IMX") of
Australia. IMX, under the terms of an "Interrelationship Agreement" dated
February 28, 2007, has elected to exercise its pre-emptive right to participate
in this financing of Continental on a pro-rata basis to maintain its non-diluted
share ownership interest in the Company. The private placement will involve the
issuance of 207,269 common shares at a price of $0.92 per share for gross
proceeds of $190,687. The share price of $0.92 per share is based on the closing
price of the common shares of the Company on December 16, 2009. Gross proceeds
from the two placements are expected to total $443,687.


The proceeds raised in the FT placement will be used to fund exploration
programs at the St. Stephen nickel and copper project in New Brunswick. The St.
Stephen 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 Company recently
completed a ground geophysical survey (see press release of December 9, 2009) on
the St. Stephen Property and outlined two new and untested, high conductance
electromagnetic (EM) anomalies near known nickel-copper sulphide zones. The
Company intends to drill test these and several other identified targets in
2010. The gross proceeds raised from the flow-through offering will be used for
"Canadian exploration expense" as defined in the Income Tax Act (Canada) and
will be renounced for the 2009 taxation year.


The proceeds raised in the IMX placement will be used for ongoing exploration at
the Company's Nachingwea Project in Tanzania and for general corporate purposes.
Currently, the Company is compiling the results of the 2009 exploration program
to enable target selection for exploration in 2010. The main objectives of the
2010 program will be to increase the current NI 43-101 compliant Mineral
Resources at Ntaka Hill, currently estimated at 3,085,000 tonnes grading 1.31%
nickel and 0.24% copper (see press release of July 15, 2009), as well as
continue to explore the large regional land holdings for additional nickel
sulphide deposits in this new emerging nickel district.


In connection with the flow-through private placement, the Company will pay a
cash finder's fee of 5% of the gross proceeds raised under the offering. No fees
will be paid in connection to the IMX private placement.


Both the FT shares and common shares will be subject to a four month statutory
hold period from closing. The FT Offering is scheduled to close on or about
December 22, 2009 and the IMX Offering is expected to close shortly thereafter.
Both offerings are subject to certain conditions including, but not limited to,
the receipt of all necessary approvals including the approval of the TSX Venture
Exchange.


IMX currently owns 14,283,000 common shares of Continental Nickel, representing
47.4% of the 30,132,395 issued and outstanding common shares. Upon closing of
the proposed financings, IMX will own 14,490,269 common shares of Continental
Nickel and maintain their interest at 47.4% on a post-closing basis. The private
placement by IMX was unanimously approved by the directors of Continental Nickel
exclusive of Mr. Bruce Burton, who is the nominee director of IMX. The private
placement by IMX is a "related party transaction" as defined by Multilateral
Instrument 61-101-Protection of Minority Security Holders in Special
Transactions ("MI 61-101") under applicable securities laws as IMX is the
majority shareholder of Continental. However, Continental is exempt from the
valuation and minority approval requirements of MI 61-101 for related party
transactions because the fair market value of the private placement is not more
that 25% of the market capitalization of the Company.


This news release does not constitute an offer to sell or a solicitation of an
offer to buy any of the securities in the United States. The securities have not
been and will not be registered under the United States Securities Act of 1933,
as amended (the "U.S. Securities Act") or any state securities laws and may not
be offered or sold within the United States or to U.S. Persons as defined under
applicable securities laws unless registered under the U.S. Securities Act and
applicable state securities laws or an exemption from such registration is
available.


About Continental Nickel

Continental Nickel Limited is focused on the exploration and discovery of nickel
sulphide deposits in geologically prospective, but under-explored regions
globally. Current projects include its 70% controlling interest in the
Nachingwea project in Tanzania, where NI 43-101 Mineral Resources have been
defined, and an option joint venture on the St. Stephen project in New
Brunswick, Canada. Continental Nickel has 30,132,395 shares issued and
outstanding (32,799,895 on a fully-diluted basis) and trades on the TSX Venture
Exchange under the symbol CNI. The Company remains well funded with over C$9.3
million in the treasury.


On behalf of Continental Nickel Limited

Craig MacDougall, 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 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.

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