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") is
pleased to announce that it has completed the previously announced non-brokered
private placement (see the Company's news release dated May 31, 2011) of
3,572,000 common shares at a price of $1.40 per share for gross proceeds of
$5,000,800.


Continental intends to use the net proceeds of the private placement for further
exploration of the Nachingwea nickel project in Tanzania as well as for general
corporate activities. The Nachingwea nickel project is a 75:25 joint venture
between Continental and IMX Resources Limited ("IMX") (ASX:IXR).


The securities issued pursuant to the private placement are subject to statutory
hold periods pursuant to applicable securities laws expiring four months after
the date of closing. 


IMX participated in the private placement to the full extent provided under an
"Interrelationship Agreement" dated February 28, 2007, which provides IMX with a
pre-emptive right to participate in all future equity financings of the Company
on a pro rata basis to its non-diluted share ownership position. IMX purchased
1,322,869 common shares of Continental under the private placement thereby
increasing the number of common shares held by it from 14,490,269 to 15,813,138
and maintaining its shareholdings in Continental at 37.03%. IMX's registered
office is located at Suite 18, Level 2, 100 Railway Road, Subiaco, WA, Australia
6008. A copy of the applicable early warning report and Interrelationship
Agreement can be obtained from Continental or under Continental's profile on
SEDAR at www.sedar.com.


John Nitschke, Chairman and Acting Chief Executive Officer of Continental,
commented, "This placement in a very difficult market demonstrates the strength
that Continental gains from support by its major shareholders. The proceeds of
the private placement will fund three objectives for 2011, expansion of the
resource at the new Sleeping Giant deposit that is still open in all directions,
continued exploration of the broader Nachingwea tenements including following up
the very exciting malachite showing that was uncovered by artisanal miners over
the wet season and completion of a scoping study demonstrating the value of
bringing Ntaka Hill into production."


No fees were paid in connection with the private placement.

The participation in the private placement by certain "related parties" of the
Company; namely, holders of 10% or more of the issued and outstanding shares
(IMX - 1,322,869 common shares; Macquarie Group Limited - 675,000 common shares;
Geologic Resource Funds - 815,000 common shares) and management of Continental
(337,000 common shares) constitutes a "related party transaction" as such terms
are defined by Multilateral Instrument 61-101- Protection of Minority Security
Holders in Special Transactions ("MI 61-101"), requiring the Company, in the
absence of exemptions, to obtain a formal valuation for, and minority
shareholder approval of, the "related party transaction". Continental is relying
on the exemptions from the formal valuation and minority approval requirements
of MI 61-101 pursuant to which a formal valuation and minority approval are not
required in the event that at the time the transaction is agreed to, neither the
fair market value of the subject matter of, nor the fair market value of the
consideration for, the transaction, insofar as it involves interested parties,
exceeds 25 per cent of the Company's market capitalization. The related parties
acquired a total of 3,149,869 common shares of the private placement for gross
proceeds of $4,409,816. The participation by each of the related parties in the
private placement was approved by directors of Continental who are independent
of that related party.


The technical information in this press release was reviewed by Patricia
Tirschmann, P. Geo., Vice President, Exploration for Continental. Ms. Tirschmann
is a qualified person as defined by National Instrument 43-101.


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 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 Mineral Resources (Measured and Indicated) have been
estimated at 60,900 tonnes of contained nickel, and an additional 131,000 tonnes
of contained nickel in Inferred Mineral Resources. See Continental press release
of April 15, 2011. The project is a 75:25 exploration joint venture between the
Company and IMX.


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. 


As at the date of this release, the Company has 42,702,508 common shares issued
and outstanding (50,131,914 on a fully-diluted basis) and trades on the TSX
Venture Exchange under the symbol CNI. 


On behalf of Continental Nickel Limited

John Nitschke, Chairman and Acting CEO

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,
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.

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