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NICKEL DEVELOPMENT NEWS Voisey’s Bay is a Go, Goro Goes Slow

TORONTO Spring has sprung and so has a crop of news from INCO LIMITED.



TORONTO Spring has sprung and so has a crop of news from INCO LIMITED.

The company has compiled a bankable feasibility study for development of the Voisey’s Bay nickel deposit in Labrador. The total cost will be in the neighborhood of US$776 million for a four-part initial development.

Inco proposes to mine the Ovoid and adjacent surface deposits and to build a 6,000-tonnes/day concentrator, which will come on-stream in 2006. Costs of the mine/mill development are estimated to be US$582 million, including US$35 million spent since last July on infrastructure and related work.

The second part of the initial development is a hydrometallurgical demonstration plant at Argentia, Nfld., to coincide with the first concentrate shipments. The R&D work in Toronto and the Argentia demonstration facilities carry a price tag of US$134 million. The third part is concentrate handling facilities at Thompson, Man., and Sudbury, Ont., at an estimated cost of US$47 million. The final part of the study recommends a US$13 million exploration program.

Inco estimates that the cost of producing a pound of nickel from the Voisey’s Bay deposit will be US$1.10-$1.15, assuming cobalt credits of US$7/lb, copper credits of US$0.90/lb and a 66-cent Canadian dollar.

On the other side of the world, the Goro nickel project in New Caledonia has been hit with revised and much higher cost estimates. In early December the company learned of a possible 30-45% increase in the estimated US$1.45 billion capital cost. The project has geotechnical challenges (such as stabilizing the ground at the site of the processing plant) that were aired last December; they will add US$100 million to the Goro price tag.

Inco is busy trying to find a way to control the costs at the Goro project, be it in engineering, construction, mining, processing, or elsewhere. While it takes time to review its options, the company is proceeding with the permitting process and other activities.

Ownership of the Goro project may be shifting. It is possible that a partner, perhaps Sumitomo Metal Mining consortium, could agree to purchase a 25% interest. Inco is also in talks with the French government concerning its 15% stake.

Inco’s entire presentation made March 20 can be viewed by clicking on Presentations at www.inco.com.


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