Inco Redeems Class VBN Shares

Canada’s first experiment with targeted shares came to a close on December 14, 2000, when Inco Limited (Inco) redeemed all of its outstanding Class VBN Shares for a total value in excess of C$286 million. The redemption price for each share was C$7.50 plus 0.45 of a warrant to purchase one Inco common share. The warrants issued to Class VBN Shareholders as part of the redemption price are exercisable at any time up to August 21, 2006, at an exercise price of C$30.00 and are listed on both the Toronto and New York stock exchanges.

The Class VBN Shares were issued by Inco as part of the consideration in connection with its acquisition in August 1996, of Diamond Fields Resources Inc. and Diamond Fields’ interest in the Voisey’s Bay nickel deposit in Newfoundland, and were created to provide the holders with a financial participation, based upon the dividend policy applicable to the class, in any adjusted net income generated from the commercial development of the Voisey’s Bay deposit.

Inco’s in-house legal team, Stuart F. Feiner and Julie Lee Harrs, were advised throughout the process by Osler, Hoskin & Harcourt LLP and, with respect to US legal matters, by Sullivan & Cromwell. The legal team at Oslers was comprised of Dale R. Ponder, Andrew J. MacDougall, Robert C. Lando, Martin Saipe and Brian J. Temins on corporate and securities matters and Jack A. Silverson and Colin Smith on Canadian tax matters. The Sullivan & Cromwell team was comprised of Donald R. Crawshaw, Susan J. Krembs, Jill A. Edwards and Sven O. Milelli on corporate and securities matters and WillardB. Taylor, Ronald E. Creamer and Christopher S. Kippes on US tax matters. Michel Roy at Desjardins Ducharme Stein Monast provided advice on Quebec securities law and other matters and Leon Getz, Q.C. of Getz Prince Wells advised with respect to British Columbia securities law.