Inco reaps PGM windfall, makes discoveries

Sky-high palladium and platinum prices are swelling what had been a little-mentioned byproduct credit into a major source of cash flow for Inco (N-T).

For 2000, the nickel giant’s revenue from platinum group metals (PGMs) was US$224 million, up US$94 million from 1999, when the company reported US$2.1 billion in total sales (more financial results for 2000 are pending). In 1998 and 1997, Inco posted byproduct sales from all precious metals of US$131 million and US$89 million, respectively.

The company has unveiled plans to boost its PGM output to 416,000 oz. in 2001 from 344,000 oz. last year, with material being sourced from Inco’s own Sudbury ores and from purchased feed.

Inco hopes to take advantage of record PGM price levels caused by supply disruptions from Russia. At presstime, spot palladium was selling at US$1,060 per oz., while spot platinum was selling at US$613 per oz. In 2000, palladium and platinum averaged US$685 and US$546 per oz., respectively, while in 1999, prices averaged US$359 and US$377 per oz., respectively.

Inco also reports further success at its PGM exploration programs in the Sudbury camp.

At the Copper Cliff North nickel mine, Inco personnel have discovered and brought into production a high-grade extension of the 138 orebody, situated some 400 metres north of the mine shaft.

The new deposit contains proven reserves of 300,000 tonnes grading an impressive 16.4 grams of combined PGMs and gold per tonne, plus 0.9% nickel and 4.5% copper. It remains open at depth.

Work is also ongoing at Pump Lake, a new deposit comprising three zones 2.5 km north of the same shaft. So far, Inco has delineated an indicated resource of 3.5 million tonnes grading 1.5 grams PGMs plus gold, 1.4% nickel and 1% copper, including 230,000 tonnes, in the East Flank zone, of 5.9 grams PGMs plus gold, 3.2% nickel and 1.5% copper.

At its Totten mine, Inco has boosted the PGM content and overall size of a high-grade nickel-copper discovery announced in October 1999. Indicated and inferred resources now stand at 10.1 million tonnes of 4.8 grams palladium and platinum, 1.5% nickel and 1.97% copper, including 1.4 million tonnes of inferred resource at 7.1 grams palladium and platinum, 1.4% nickel and 2% copper.

Inco says it expects to make “significant additions” to these figures since drilling and geophysical surveying indicate the deposit is still open. It is carrying out delineation drilling and wants to complete a feasibility study so as to bring the deposit rapidly into production.

At its McCreedy East mine, Inco has identified high-grade, narrow-vein copper-nickel-PGM mineralization in an area it believes is a faulted extension of McCreedy East’s 153 orebody.

The new zone has been intersected in nine holes over a strike length of 600 metres and downdip for 300 metres. Further exploration is needed to establish continuity and estimate a resource.

Highlights from drilling include:

– 3.9 metres of 58 grams PGMs plus gold, 2.9% nickel and 28.1% copper;

– 2 metres of 12 grams PGMs plus gold, 2% nickel and 31.1% copper; and

– 1.4 metres of 104 grams PGMs plus gold, 2% nickel and 2% copper.