Inco to drill at Voisey’s Bay

Drills will be back at work on the main mineralized zones of the Voisey’s Bay property this season, indicating that there may be some headway in the year-long dispute over development of the large nickel deposit in Labrador.

Owner Inco (N-T) says it will start surface drilling on the Eastern Deeps deposit in early September “in preparation for its eventual underground exploration.” Opposition to the project from local aboriginal groups has, up to now, kept Inco from receiving approval for underground drilling and sampling of the deposit.

Negotiations for development of the project were broken off by the Newfoundland government in July 1998 when Inco refused to go ahead with plans to construct a complex in Newfoundland to smelt and refine nickel from Voisey’s Bay. The company insisted the plan was uneconomic at prevailing nickel prices, and proposed instead to build a mine and mill at Voisey’s Bay

and process concentrates at its other Canadian operations.

The Newfoundland government, insisting that its own studies had shown the smelter-refinery project was economic, told Inco that a development agreement was out of the question. The Innu Nation and the Labrador Inuit Association then withdrew from the approval process, saying the negotiations

could not proceed until a detailed development plan was set.

Inco has insisted that underground work is essential to proving a minable reserve on the Eastern Deeps, and that a larger reserve is, in turn, the key to making a smelter and refinery complex at Argentia, on the southwest coast of Newfoundland, economically feasible.

The company says it expects to have a new resource estimate for the property later in July. It is unlikely that this new estimate will include any

change in the reserve figures, which currently take in only the mineralization in the deposit’s Ovoid zone: 32 million tonnes grading 2.83% nickel, 1.68% copper and 0.12% cobalt.

Other drilling will test targets at prospects elsewhere on the main Voisey’s Bay property. At Sarah, 6 km north of the Ovoid deposit, Inco is now drilling extensions to narrow high-grade mineralization discovered in previous work. A second prospect, Red Dog, 2 km south of the Ovoid, will also see some drilling this season, as will targets on Inco’s Kiglapait property, 60 km north of the Voisey’s Bay claim group.

In all, Inco has budgeted $3.6 million for the work, which will total 10,000 metres of drilling. Inco’s spending since it started work on the Voisey’s Bay project is now up to $80 million.

Inco’s producing mines, meanwhile, are extending their normal summer shutdowns by two weeks to limit production — part of the company’s strategy to reduce costs and support the nickel market. The nickel operations in

Thompson, Man., are shutting down for six weeks and those in Sudbury, Ont., are closing for five. Production at both centres resumes in early August.

Previously scheduled mine closures are also bringing Inco’s production down. Sudbury’s Levack and McCreedy West mines, which both operate from the

Levack shaft, are closing now, and Little Stobie will cease mining in August. The company’s Crean Hill mine will go out of production in 2000 and

the Coleman mine will follow in 2001. Currently no mine closures are planned for Thompson.