Exploration at the Voisey's Bay site, located 36 km southwest of Nain, Labrador continues at a brisk pace. Since the discovery of the nickel, copper and cobalt deposit was announced on November 3, 1994, three major mining companies have had interest in the project. Teck Corporation purchased a 10.4 percent interest in Diamond Fields Resources (Diamond Fields then owned 100 percent of Voisey's Bay Nickel Company Ltd.). Inco Limited purchased 25 percent of Voisey's Bay Nickel Company Ltd. (VBNC) and approximately 7 percent of Diamond Fields Resources on June 28, 1995. On April 9, 1996 an offer by Inco to purchase the remaining shares of Diamond Fields Resources was accepted by Diamond Fields' Board of Directors. Inco completed the acquisition of Diamond Fields Resources Inc. on August 21, 1996.

The Deposit

Drilling in the Eastern Deeps is still ongoing and VBNC has indicated resources of 50 million tonnes. This resource is in addition to the 32 million tonnes of nickel-laden ore identified initially in the Main Ovoid. As of October 21, 1996, total reserves at Voisey's Bay are estimated to be in the 150 million tonne range. On January 31, 1997, Inco announced another discovery in the vicinity. Estimates from this zone vary but, in terms of nickel content, are significantly higher compared to the mineralization in the Eastern Deeps.

Development of the Mine and Mill

On September 26, 1996, a project description for the development of the mine and mill was submitted to the Federal government to initiate the environmental assessment process. It is hoped that the project will clear this process in 1998, allowing for production in the second half of 1999. In early January 1997, VBNC announced that SNC-Lavelin Inc. was awarded the project and construction management contract for the mine and mill complex. Later this year, VBNC is expected to establish a procurement and operations office in Happy Valley-Goose Bay to support on-going exploration activities in Labrador, and to co-ordinate logistics during the construction and operations phase of the mine/mill.

Development of the Smelter and Refinery

The Company proposes to construct and operate a smelter/refinery complex at Argentia. Before construction can begin, environmental assessment and permitting of the proposed complex must be completed. The project was registered by VBNC for environmental review on January 22, 1997. If approvals are received in 1997, the Company hopes to have the smelter/refinery complex operational in the year 2000. The smelter/refinery complex will produce up to 270 million pounds of nickel and 7 million pounds of cobalt per year. In addition to the nickel and cobalt, about 20 percent of the total copper in the ore, or 36 million pounds of the copper per year, will also be produced as a by-product at Argentia. The proposed smelter/refinery complex at Argentia and the mine/mill project at Voisey's Bay are expected to generate more than 3,500 direct and indirect long-term jobs in the Province.