Inco Limited reports a first quarter loss of $16

million (U.S.) / Restructuring and cost-cutting programs continue Toronto (PROTEXT) - Inco Limited reported a loss of $16million, or 13 cents a common share, for the first quarter of1999, compared with a loss of $13 million, or 13 cents a share,in the fourth quarter of 1998 and a loss of $41 million, or 29cents a share, in the first quarter of 1998. Fourth quarter 1998results included an after-tax gain of $20 million, or 12 cents ashare, resulting from the sale of the Company's 100 per centinterest in Inco Alloys International. First quarter 1998 resultsincluded an after-tax charge of $32 million, or 19 cents a share,associated with the Company's restructuring actions. Commenting on the first quarter 1999 results, Mike Sopko,Chairman and Chief Executive Officer, said that: ``While we areencouraged by the improvement in nickel prices in the firstquarter of 1999, our program to reduce costs and expensesthroughout Inco continues as part of our overriding objective torestore our profitability even in these difficult marketconditions. We continue to believe that the long-term growth innickel demand is excellent and that it will be only a matter oftime before prices return to higher and more normal levels.'' Realized nickel prices, the principal determinant of theCompany's profitability, for the Company's primary nickelproducts (including intermediates), averaged $5,181 per tonne($2.35 per pound) in the first quarter of 1999, compared with$4,630 per tonne ($2.10 per pound) in the fourth quarter of 1998and $6,173 per tonne ($2.80 per pound) in the first quarter of1998. The London Metal Exchange average cash nickel price for thefirst quarter of 1999 of $4,630 per tonne ($2.10 per pound)increased 17 per cent, compared with the fourth quarter of 1998but was down 15 per cent relative to the first quarter of 1998. The Company's realized price for copper averaged $1,455 pertonne ($0.66 per pound) in the first quarter of 1999, comparedwith $1,676 per tonne ($0.76 per pound) in the fourth quarter of1998 and $2,006 per tonne ($0.91 per pound) in the first quarterof 1998. Realized prices in 1998 benefited from the favourableimpact of the Company's copper hedging activities. Net sales from continuing operations were $438 million in thefirst quarter of 1999, compared with $403 million in the fourthquarter of 1998 and $500 million in the first quarter of 1998.

The Company's deliveries of primary metals are shown below:

First Fourth

First

Quarter Quarter Quarter

1999

1998

1998

------------------------- Nickel in all forms (tonnes)

62,030 59,307 64,267

------------------------- Copper (tonnes)

34,686 36,129 37,252

------------------------- Cobalt (tonnes)

466

455

515

-------------------------

(in thousands) Platinum-group metals (troy ounces)

105

108

62

------------------------- Gold (troy ounces)

14

13

15

------------------------- Silver (troy ounces)

395

420

410

------------------------- The Company's finished nickel inventories were 30,498 tonnesat March 31, 1999, compared with 27,347 tonnes at December 31,1998 and 30,277 tonnes at March 31, 1998. Operating results from continuing operations were earnings of$2 million in the first quarter of 1999, compared with losses of$15 million in the fourth quarter of 1998 and $37 million in thefirst quarter of 1998. Operating results comprise earnings orloss before income and mining taxes, interest expense, generalcorporate income and expenses, and minority interest. Sales andcost of sales include deliveries of purchased nickel. The increase in operating results for the first quarter of1999, compared with the fourth quarter of 1998, was primarily dueto higher realized prices for and deliveries of nickel, partiallyoffset by a five per cent increase in nickel unit productioncosts. The increase in nickel unit production costs was primarilydue to higher employee and energy costs. The cash cost of nickelproduction, net of by-product credits, was $2,932 per tonne($1.33 per pound) for the first quarter of 1999, up slightly from$2,888 per tonne ($1.31 per pound) for the fourth quarter of 1998due to lower by-product prices, but down 18 per cent from $3,594per tonne ($1.63 per pound) for the first quarter of 1998. Firstquarter 1998 operating results included a pre-tax charge of $64million associated with restructuring actions, comprising $50million for severance costs relating to employment reductions anda writedown of $14 million relating to assets affected by theCompany's restructuring actions. First quarter 1999 operatingresults, compared with the first quarter of 1998, also reflectedlower realized prices for nickel, copper and cobalt, partiallyoffset by a 10 per cent decrease in nickel unit production costsand higher deliveries of platinum-group metals and nickel. Thedecrease in nickel unit production costs was primarily due toreduced employment and other costs, and improved ore grades andrecoveries. Cash provided by the Company's operating activities for thefirst quarter of 1999 was $19 million, compared with cash usedfor operating activities of $34 million in the first quarter of1998. Capital expenditures were $74 million in the first quarterof 1999, down from $106 million in the first quarter of 1998,principally reflecting lower spending in Indonesia associatedwith the expansion project of PT International Nickel IndonesiaTbk (``PT Inco'') as it nears completion. PT Inco currentlyexpects to complete its expansion project in the second half of1999. Dividends of $10 million were paid in the first quarter of1999 to minority shareholders of Inco TNC Ltd. (formerly TokyoNickel Company, Ltd.) (``Inco TNC'') as part of a series ofrelated transactions increasing the Company's equity interest inInco TNC from 51 per cent to 67 per cent. During the quarter, work on the pilot plant at the Company's85 per cent-owned Goro nickel project in the French OverseasTerritory of New Caledonia proceeded on schedule. In late April,key modules for the plant arrived at site. Construction iscurrently expected to be completed in August 1999. At March 31, 1999, the Company's total debt increased $87million to $1,610 million, compared with $1,523 million atDecember 31, 1998, reflecting principally the financing of theexpansion of PT Inco and other capital expenditures. TheCompany's total debt:equity ratio was 27:73 at March 31, 1999,compared with 26:74 at December 31, 1998. At March 31, 1999, thenumber of the Company's Common Shares issued and outstanding was166,059,082. The Board of Directors today declared a dividend of $0.6875per share in respect of the Company's 5.5% Convertible RedeemablePreferred Shares Series E, payable June 1, for the quarter endingMay 31, 1999, to shareholders of record on May 7. Voisey's Bay Update ------------------- Status of Negotiations with Provincial Government The Company and its wholly-owned subsidiary, Voisey's BayNickel Company Limited (``VBNCL''), recently have heldconfidential discussions on an informal basis with officials ofthe Province of Newfoundland and Labrador to review hownegotiations would be restarted on the key issues which theparties have identified with respect to the objectives forVoisey's Bay. The Company's position has been, and will continueto be, that the development of the Voisey's Bay deposit by theCompany should be based upon sound economic considerations andthe realization of an appropriate rate of return for theCompany's shareholders, while at the same time meeting thelegitimate requirements of both governments and the aboriginalgroups concerned. The Company has continued to evaluate possible concepts fordevelopment of the Voisey's Bay deposit, which would provide foran economically viable project and address the principal issuesof concern to the Province. The Company currently expects to bein a position to discuss these concepts with the Province oncethe federal and provincial governments have indicated how theyintend to deal with the key recommendations set forth in theApril 1, 1999 report of the panel overseeing the environmentalassessment process referred to below. The project has experienced delays, which have enabled otherprojects to be developed to meet at least part of the expectedlong-term growth in nickel demand. The governments and otherinterested parties must recognize that the economic viability ofthe Voisey's Bay project should be assessed in relation to thenumerous other nickel projects, both greenfield ones andexpansions of existing operations, around the world which arecurrently being evaluated with respect to their timing andfeasibility of development. Status of Exploration Program During the first quarter of 1999, exploration drilling andgeophysical work continued, consistent with the explorationprogram developed for 1999. With four diamond drill rigs inoperation, drilling both in the main block area held by VBNCLwhere the Voisey's Bay deposit is located and in four regionalareas in Labrador has been designed to delineate extensions toknown deposits as well as test more regional geological andgeophysical targets away from the main block area. Fifteenboreholes were completed during the quarter with three still inprogress at the end of the quarter. All boreholes completed weresurveyed with the three component borehole EM system. A total of13,434 metres of drilling was completed during the first quarterof 1999, compared with 13,356 metres having been drilled in thefirst quarter of 1998. Drilling of the previously indicated new zone, the NED zone,located 400 metres north of the Eastern Deeps section wascompleted. Two holes drilled during the quarter on the west andeast sides of this new zone returned mineralized intercepts of25.2 metres grading 0.96% nickel, 0.82% copper and 0.056% cobaltand 15 metres grading 1.11% nickel, 0.93% copper and 0.074%cobalt, respectively. This zone is expected to add modestadditional tonnage and will be included in the updated estimateof the total resources at Voisey's Bay to be completed by mid-1999. Regional stratigraphic drilling was carried out during thefirst quarter of 1999 in areas located 1,000 metres east of theFar Eastern Deeps and seven kilometres southwest of the Ovoid.The troctolitic rocks in the boreholes drilled were notmineralized. Stratigraphic drilling will continue focusing onother targets near known mineralization. Preparations began late in the first quarter to mobilize ageophysical crew for the Franco target on the Kiglapait propertylocated about 60 kilometres north of the main block area.Drilling last fall in this area encountered narrow intersectionsof nickel mineralization. Follow-up drilling will focus on a sixkilometre long geophysical anomaly related to the base of anintrusion located on the southwestern edge of the Kiglapaitproperty. During the quarter, the mineral licenses held by VBNCLcovering the main block area, including the two licences coveringthe Voisey's Bay deposit, were extended for a second five-yearterm. The terms of the extension require VBNCL to continue tomeet certain minimum exploration expenditures on the propertiescovered by the licenses. Status of Environmental Permitting and Discussions withAboriginal Groups On April 1, 1999, the panel created to oversee the harmonizedenvironmental review process for the mine, mill and relatedfacilities and infrastructure in the Voisey's Bay, Labrador area(the ``Mine/Mill Project'') issued its report andrecommendations. The panel recommended that the Mine/Mill Projectproceed subject to a number of other separate recommendations. While the panel made over 100 recommendations as part of itsreport, the Company believes that all of the environmentalrecommendations can be addressed so long as they do not createunrealistic burdens on the project. The panel was complimentarywith respect to how the Company and VBNCL had collected data,implemented studies and considered the many environmental, socio-economic and aboriginal community issues that the panel hadrequired be evaluated. The panel's report included a limited number ofrecommendations outside the environmental area that could affectthe economics, scope and timing of development. One of theserecommendations focused on project life, proposing thatproduction levels should assure a 20 to 25 year project life. Twoother non-environmental recommendations concerned having (1) thegovernments reach agreements in principle on land claims oralternatives to adequately address certain issues of importanceto the Labrador Inuit Association (``LIA'') and the Innu Nationand (2) the Company/VBNCL reach separate impact and benefitsagreements (or IBAs) with the LIA and the Innu Nation. TheCompany has previously stated that, in addition to environmentalclearance, in order for the project to proceed the followingthree areas had to be adequately addressed on a timely basis: (1)having the governments and the LIA and Innu Nation reachappropriate arrangements on land claims; (2) having mutuallyacceptable IBAs in place; and (3) reaching agreement with theProvince on key issues relating to the project's scope. The Company continues to believe that, if the interestedparties work together, recognizing the economic, technical andother realities that must be taken into account, then these keyissues can be addressed to meet the needs and objectives of thegovernments and the LIA and the Innu Nation. The Company does notbelieve that there are any insurmountable issues in reachingmutually satisfactory IBAs on a timely basis so long as there isa clear recognition of the realities of what the project canafford. In March 1999, a decision was rendered by a Canadian federalcourt in the September 1997 action filed by a Newfoundland-basedorganization, whose members include environmental and othergroups. This ruling, which has not been appealed, confirmed thedecision made by a federal minister that the environmental reviewand approval process for any proposed smelter and refineryfacilities be separate from the process governing the Mine/MillProject. This news release contains forward-looking statementsregarding the Voisey's Bay project, the Goro nickel project andthe Company's other businesses and operations. Actual results maydiffer materially from those contemplated by these statementsdepending on, among others, such key factors as the timing ofreceipt of necessary federal and provincial environmental andother approvals, settlement of aboriginal land claims,exploration activities and results, engineering and constructiontimetables, financing arrangements, supply and demand for metalsto be produced, production levels and costs, and metals prices.

Unaudited Condensed Consolidated Financial Statements AreAttached.

INCO LIMITED

------------------------------

(U.S. dollars in millions)

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)

----------------------------------------------

First Quarter

FourthQuarter

1999

1998

1998

--------- --------- -----------

Net sales

$ 438 $ 500

$ 403

--------- --------- -----------

Costs and expenses

Cost of sales and operating

417

525

406

Selling, general and

administrative

21

28

26

Research and development

3

5

4

Exploration

6

8

6

Interest

20

22

20

--------- --------- -----------

Total costs and expenses

467

588

462

--------- --------- -----------

Loss before taxes and

minority interest

(29)

(88)

(59)

Income and mining taxes

(11)

(42)

(29)

--------- --------- -----------

Loss before minority interest

(18)

(46)

(30)

Minority interest

(2)

1

3

--------- --------- -----------

Loss from continuing

operations

(16)

(47)

(33)

Earnings from discontinued

operations

-

6

20

--------- --------- -----------

Loss

(16)

(41)

(13)

Dividends on preferred shares

(6)

(6)

(7)

Dividends on class VBN shares

-

(1)

-

--------- --------- -----------

Loss applicable

to common shares

$ (22) $ (48)

$ (20)

--------- --------- -----------

--------- --------- -----------

Net earnings (loss) per

common share

Basic and fully diluted

Continuing operations

$ (0.13) $ (0.32) $ (0.25)

Discontinued operations

-

0.03

0.12

--------- --------- -----------

$ (0.13) $ (0.29) $ (0.13)

--------- --------- -----------

--------- --------- -----------

Common shares outstanding

(weighted average,

in thousands)

166,059 166,038

166,059

--------- --------- -----------

--------- --------- -----------

INCO LIMITED

------------------------------

(U.S. dollars in millions)

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)

------------------------------------

March 31, December 31,

1999

1998

----------- -------------

Assets

Cash and marketable securities

$ 96

$ 82

Accounts receivable

238

256

Inventories

487

473

Other current assets

63

63

------ ----------

Total current assets

884

874

Capital assets

6,248

6,241

Other assets

239

227

------ ----------

$7,371

$7,342

------ ----------

------ ----------

Liabilities and

shareholders' equity

Long-term debt due within one year $ 64

$ 66

Accounts payable and

accrued liabilities

452

471

Taxes payable

28

23

------ ----------

Total current liabilities

544

560

Long-term debt

1,546

1,457

Deferred taxes

170

186

Post-retirement benefits

462

455

Future removal and site

restoration costs

40

38

Minority interest

273

288

Shareholders' equity

4,336

4,358

------ ----------

$7,371

$7,342

------ ----------

------ ----------

INCO LIMITED

------------------------------

(U.S. dollars in millions)

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

----------------------------------------------

First Quarter

1999

1998

--------- ---------

Operating activities

Loss before minority interest

$ (18)

$ (46)

Charges (credits) not affecting cash

Depreciation and depletion

66

64

Deferred income and mining taxes

(17)

(68)

Other

2

7

Decrease (increase) in

non-cash working

capital related to operations

(11)

12

Accruals less than payments

for post-retirement benefits

(3)

(3)

--------- ---------

19

(34)

--------- ---------

Investing activities

Capital expenditures

(74)

(106)

Other

(2)

(3)

--------- ---------

(76)

(109)

--------- ---------

Financing activities

Net increase in borrowings

87

143

Common shares issued

-

1

Preferred, class VBN and common

dividends paid

(6)

(11)

Dividends paid to minority interest

(10)

(1)

--------- ---------

71

132

--------- ---------

Discontinued operations

-

(6)

--------- ---------

Increase (decrease) in cash and

marketable securities

14

(17)

Cash and marketable securities at

beginning of period

82

56

--------- ---------

Cash and marketable securities

at end of period

$ 96

$ 39

--------- ---------

--------- --------- ots Original Text Service: Inco Limited Internet:http://www.newsaktuell.de Contact: Investor Relations: SandraScott, Tel: (Toronto) 001 416 361-7758 Media Relations: JerryRogers, Tel: 001 416 361-7754

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