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Exhibit 99.1 (INCO NEWS RELEASE LOGO) INCO REPORTS RESULTS FOR FIRST QUARTER OF 2005   CANADIAN GAAP QUARTERLY NET EARNINGS
OF $313 MILLION REFLECT ANOTHER STRONG QUARTER   INCO REINSTATES COMMON SHARE QUARTERLY
DIVIDEND OF $0.10 PER SHARE   (All dollar amounts are expressed in U.S. currency)
 TORONTO, April 19, 2005  Inco Limited today reported adjusted net earnings(1) of
$238 million, or $1.26 per share ($1.09 per share on a diluted basis(2)), for the first
quarter of 2005, compared with adjusted net earnings(1) of $227 million, or $1.22 per
share ($1.08 per share on a diluted basis(2)), for the first quarter of 2004. The
adjustments made in arriving at adjusted net earnings(1) for the first quarter of 2005
reflected primarily (1) the exclusion of net tax benefits totalling $45 million concerning
principally a favourable settlement of outstanding tax claims applicable to certain prior periods,
(2) the exclusion of a $25 million favourable adjustment relating to minority interest for the Goro
project company, Goro Nickel S.A.S. (Goro Nickel), and (3) the exclusion of favourable non-cash
currency translation adjustments relating to changes in the Canadian-U.S. dollar exchange rate of
$5 million. The adjustments made in arriving at adjusted net earnings(1) for the first
quarter of 2004, as previously reported, are set forth under Reconciliation Between Adjusted Net
Earnings and Net Earnings in Accordance with Canadian GAAP below. Our net earnings for the first quarter of 2005 in accordance with Canadian generally accepted
accounting principles (Canadian GAAP) were $313 million, or $1.66 per share ($1.43 per share on a
diluted basis(2)), compared with net earnings of $254 million, or $1.36 per share ($1.20
per share on a diluted basis(2)), for the first quarter of 2004. Adjusted net earnings(1) for the first quarter of 2005 compare favourably, as reflected
in the Reconciliation Between Adjusted Net Earnings and Net Earnings in Accordance with Canadian
GAAP below, to the corresponding results for the first quarter of 2004 due primarily to higher
realized prices for nickel and copper and lower taxes, partially offset by increased nickel unit cash cost of sales
before by-product credits and lower deliveries of platinum-group metals and nickel. Net earnings in accordance with Canadian GAAP for the first quarter of 2005 were also higher than
the corresponding results for the first quarter of 2004. These favourable comparative results were
due principally to the same factors applicable to adjusted net
earnings as well as the inclusion of the adjustment for net tax benefits and
the favourable adjustment relating to minority interest for Goro Nickel
which were excluded in arriving at adjusted
net earnings as discussed above. All of the adjustments made in arriving at adjusted net earnings for the first quarter of 2005 and
2004 are set forth under Reconciliation Between Adjusted Net Earnings and Net Earnings in
Accordance with Canadian GAAP below.     (1)
    
    The adjusted net earnings reported in this release have
not been calculated in accordance with Canadian GAAP, the accounting principles
under which our consolidated financial statements are prepared, and there is no
standard definition in such principles for such adjusted net earnings or loss.
Accordingly, it is unlikely that comparisons can be made among different
companies in terms of such adjusted results reported by them. A reconciliation
of adjusted net earnings to net earnings in accordance with Canadian GAAP
appears below as well as an explanation of why we believe adjusted net earnings
is useful information.(2)
    
    The calculation of adjusted net earnings per share and net
earnings per share in accordance with Canadian GAAP on a diluted basis takes
into account the dilutive effect of our outstanding warrants, share options and
convertible debentures. The amount of dilution per share due to these items is
dependent on our level of earnings and the price of our common shares. For the
first quarter of 2005, the number of diluted shares used in this calculation
was approximately 222 million shares compared with 213 million shares, as
restated, for the first quarter of 2004.




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##### 



- 2 - Chief Executive Officers Message Inco continued to deliver
impressive results in the first quarter of 2005. The nickel market
remained very robust, with the average LME cash nickel price for the quarter surpassing the high
levels of last year, while at our operations we exceeded our February 2005 guidance for production
and nickel unit cash costs of sales after by-product credits for the quarter. We also continued to
make good progress in advancing our growth projects at Voiseys Bay and Goro. Based on our strong cash flow
from operations, very favourable financial position, confidence in
our growth program and positive outlook for the
nickel markets, I am pleased to announce that Incos Board of Directors reinstated a quarterly cash
dividend of $0.10 per share on our common shares. The dividend will be paid on June 1, 2005 to
shareholders of record on May 16, 2005. Nickel market The average LME cash nickel
price for the first quarter of 2005 was $6.97 per pound, higher than any
quarter for the past 16 years, as Chinese demand surged. China was, however, not the only growth driver for nickel, as world stainless steel
production remained strong. Three of the key markets for nickel
outside stainless steel, those being the high nickel
alloy, special nickel products and alloy steel markets, remain very strong. We expect demand for
nickel-containing products from the aerospace and energy industries to result in continued growth
in non-stainless steel nickel use for the balance of 2005. We believe that strong nickel and stainless steel demand, particularly in China, will continue for
the rest of 2005 and market conditions will remain tight given the continued shortfall in supply
relative to demand. While we expect the LME cash nickel price to remain volatile, these favourable
supply-demand fundamentals are expected to continue to have a positive effect on prices at
least through 2005. Operations: production and costs During the quarter we produced 122 million pounds of nickel, two million pounds ahead of our
February 2005 guidance. Production in Ontario was 57 million pounds in the first quarter and we
are on schedule to meet our 225 to 230 million pound production goal for this operation for the
year. Our Manitoba operations produced 29 million pounds for the first quarter, setting the stage
for on target 2005 production of 105 to 108 million pounds of nickel. Despite lower than average rainfall in the fourth quarter of 2004 and its effect on PT Incos
ability to generate hydroelectric power, production of nickel in matte at PT Inco was higher in the
first quarter of 2005 than the corresponding period of 2004. With
higher recent rainfall, reservoir dam levels at PT Incos
hydroelectric facilities are returning to normal levels. Finished nickel production from PT
Incos matte was lower in the first quarter of 2005 than the first quarter of 2004 due to the
timing of shipments of matte from Indonesia. For Inco as a whole, we are forecasting production of 110 to 115 million pounds of nickel in the
second quarter. This forecast reflects planned furnace maintenance at PT Inco as well as a
regularly scheduled maintenance shutdown of certain of our Ontario operations during the quarter.
We continue to look at ways to maximize production across the company and our full year forecast
remains at 490 to 500 million pounds of nickel.




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##### 



- 3 - We produced 67 million pounds of copper in the first quarter, and expect to produce 245 to 255
million pounds for the year. We produced 112,000 ounces of platinum-group metals (PGMs) in the
first quarter, above our February 2005 guidance of 100,000 to 105,000 ounces. We have increased our
full year PGMs production target to 380,000 to 390,000 ounces. We remain on plan to meet our nickel unit cash cost of sales, after by-product credits, target for
the year. In the first quarter, while we realized net cost reductions and related savings of about
$3 million, we remain on plan to reach our 2005 goal of $60 million in cost reductions and savings
as we move through the year. External feed, which we purchase for processing at our Ontario and Manitoba operations, adds to our
costs, but this external feed has served as a bridge to fill our processing facilities until
production of low-cost Voiseys Bay concentrate begins later this year. With Voiseys
Bay on stream in 2006, our nickel unit cash cost of sales, after
by-product credits, is expected to drop to
about $1.95 a pound based upon our current assumptions in arriving at this estimate. Progress on growth projects We met several important milestones for our Goro project since the end of 2004. As part of the planned ownership realignment for Goro Nickel, in February 2005 the three Provinces
of New Caledonia, through agreements entered into with the French Governments agency, Bureau de
Recherches Géologiques et Minières, or BRGM, and Inco, acquired a 10 per cent ownership interest in
Goro Nickel. In early April 2005, Sumitomo Metal Mining Co., Ltd. and Mitsui & Co., Ltd. acquired
a 21 per cent interest in Goro Nickel. Under the agreements covering this transaction, our
Japanese partners in the Goro project will also be required to provide certain standby obligations
relating to the project as well as purchase 21 per cent of its production. Inco now holds a 69 per cent interest in Goro Nickel, with Sumitomo Metal Mining Co., Ltd. and
Mitsui & Co., Ltd. owning 21 per cent, and the three Provinces of New Caledonia holding a 10 per
cent interest. Engineering for the Goro project is about 35 per cent complete and we expect to start field
operations on schedule in May. Our estimated capital cost for the projects mine, process plant and
infrastructure remains at our previously announced figure of $1.878 billion within a minus 5 per
cent to plus 15 per cent reliability range. Voiseys Bay remains six months ahead of its original schedule. The mine and concentrator for Phase
1 is 82 per cent complete, and pre-stripping of the open pit has been transferred from a third
party contractor to our own mine crews. Key milestones ahead for the project include first ore to
be mined in July; first concentrate to be produced in August; first concentrate to be shipped in
November; and first finished nickel from concentrate to be produced in early 2006. With Voiseys Bay high grade, low cost concentrate on stream, our nickel production is currently
planned to be 540 million pounds in 2006, and, as mentioned above, our nickel unit cash cost of
sales after by-product credits is expected to decline to about $1.95
a pound in 2006. In early March 2005,
as part of our focus on special nickel products we acquired a
77 per cent interest in the nickel foam business of
Shenyang Golden Champower New Materials Corp., a leading Chinese producer of nickel foam. Added to
our existing nickel foam facilities, including our 77 per cent owned foam plant in Dalian, China
that began operations in the third quarter of 2004, this acquisition makes Inco the largest
producer of nickel foam worldwide and enhances our objective of
helping to meet the growing demand from our customers for this
product, particularly in the Asian battery market.




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##### 



- 4 - Continuing to build on a strong financial foundation In the first quarter we
generated $369 million of cash flow from operations, before an
increase in
working capital of $278 million, resulting in $91 million of net cash provided by operating
activities. Based upon the current First Call consensus mean LME
cash nickel price of $6.58 per pound for 2005, we expect to generate about $1.3 billion of cash
flow from operations this year before changes in working capital
and capital expenditures. With the expected increase in nickel
production in 2006 when Voiseys Bay is fully on stream, we currently believe that our cash flow from operations
before changes in working capital and capital expenditures would be about $1.5 billion for 2006 assuming nickel prices were
equal to the current First Call consensus estimate for those prices in 2006 of $6.08 per pound. We
do not, of course, endorse these consensus nickel prices given our continued position that we do
not publicly predict nickel prices. Our financial objectives continue to be to maintain and, where
possible, enhance our balance sheet strength, investment grade credit rating, and ready access to
capital markets. Our cash balance as of the
end of March was $928 million after making the balance of our
2004 tax payments of $245 million in the first quarter. With the
proceeds from the sale of a 21 per cent interest in Goro
Nickel to Sumitomo and Mitsui in early April 2005, our cash
balance as of mid-April 2005 was about $1.1 billion. Our financial leverage remains low at a
28 per cent debt-to-capitalization ratio. We are encouraged by what we accomplished in the first quarter. We are working hard to maximize
production and control those costs we can to make the most of a very strong nickel market that we
believe will continue for the balance of 2005 and at least into 2006. We continue to make progress
in bringing Voiseys Bay into production while meeting key milestones to advance our Goro project. I look forward to reporting on our performance for the second quarter of 2005.




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- 5 - Reconciliation Between Adjusted Net Earnings and Net Earnings in Accordance with Canadian GAAP We define adjusted net earnings and adjusted net earnings per share as a calculation of net
earnings that excludes items that, because of the nature, timing or extent of such items, we
believe do not reflect or relate to our ongoing operating performance. Accordingly, the items that
are excluded from this calculation would include asset impairment charges, non-cash currency
translation adjustments relating principally to liabilities that are not expected to be discharged
or settled for a number of years, income or other tax benefits or losses relating to the impact of
currency translation adjustments, certain tax losses where the related benefits are not normally
taken, adjustments for tax rulings and other decisions, interpretations and determinations
covering, or based upon, transactions which occurred or related to prior periods and for
revaluation of recorded future tax liabilities due to changes in laws or regulations affecting
future tax rates, interest income associated with tax refunds, project suspension and similar
costs, including related project currency hedging gains and losses, adjustments to minority
interests reflecting changes thereto due to subsequent events, losses or gains on debt retirements,
strike expenses, and other gains and losses of a non-recurring nature. The determination of which
items to exclude when calculating adjusted net earnings involves the application of judgment by us. The following table provides for the periods indicated, a reconciliation between our adjusted net
earnings and net earnings as reported in accordance with Canadian GAAP: Basic Net Earnings Per(in millions except per share amounts)
    
    Net Earnings
    
    
    Share(3)2004
    
    
    
    
    
    
    20042005
    
    
    (Restated)(1)
    
    
    2005
    
    
    (Restated)(1)Adjusted net earnings
    
    $
    238
    
    
    $
    227
    
    
    $
    1.26
    
    
    $
    1.22Net Income tax benefits(2)
    
    
    45
    
    
    
    6
    
    
    
    0.24
    
    
    
    0.03Favourable
adjustment relating to Goro Nickel S.A.S. minority interest
    
    
    25
    
    
    
    
    
    
    
    0.13
    
    
    
    Currency translation adjustments
    
    
    5
    
    
    
    15
    
    
    
    0.03
    
    
    
    0.08Goro project suspension costs and related currency hedging gains, net
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    0.03Canadian GAAP net earnings, as reported
    
    $
    313
    
    
    $
    254
    
    
    $
    1.66
    
    
    $
    1.36
   (1)
    
    The 2004 results have been restated due to the retroactive application of a
change in accounting policy for convertible debt.(2)
    
    The net income tax benefits relate primarily to the favourable settlement
of certain outstanding tax claims covering prior periods.(3)
    
    These amounts are based upon currently issued and outstanding shares and
not diluted shares. We believe that the reporting of adjusted net earnings, a calculation that, as noted above,
excludes asset impairment charges, non-cash currency translation adjustments and other items that,
given their nature, timing or extent, may obscure trends in the performance of our operations or
otherwise not be representative of our ongoing operations, provides our shareholders and other
investors with a potentially useful picture that eliminates the volatility of such items, whether
they are favourable or unfavourable, and may assist them in assessing our operating performance.
In addition, management uses such information internally for operating, budgeting and financial
planning purposes. Outlook Our current estimates for production for the second quarter and full year of 2005 for nickel,
copper and platinum-group metals (PGMs), including PGMs produced from purchased material, are as
follows:




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- 6 - Second Quarter
    
    
    Full Year2005
    
    
    2005Nickel  tonnes (thousands)
    
    
    50 to 52
    
    
    
    222 to 227 pounds (millions)
    
    
    110 to 115
    
    
    
    490 to 500Copper  tonnes (thousands)
    
    
    27 to 29
    
    
    
    111 to 116 pounds (millions)
    
    
    60 to 65
    
    
    
    245 to 255PGMs  troy ounces (thousands)
    
    
    120 to 125
    
    
    
    380 to 390
 We currently project that our nickel unit cash cost of sales after by-product credits for the full
year of 2005 will be about $2.70 to $2.80 per pound ($5,954 to $6,174 per tonne). A reconciliation
between our nickel unit cash costs of sales both before and after by-product credits as indicated
and cost of sales in accordance with Canadian GAAP for the first quarters of 2005 and 2004 is set
forth in the table entitled Reconciliation of Nickel Unit Cash Cost of Sales to Canadian GAAP Cost
of Sales below. The premium on our nickel products for 2005 we currently expect to realize over
the London Metal Exchange (LME) cash nickel prices is between $0.05 and $0.10 per pound ($110 and
$220 per tonne). Our premiums are affected by fluctuations in the LME cash nickel price and the
effect this has on the price we receive for the matte product produced by PT International Nickel
Indonesia Tbk (PT Inco), the lag effect that changes in the LME benchmark price have on the
pricing of certain of our nickel products, and how certain of our specialty nickel products are
priced. As reflected in the chart above, we have historically experienced, and expect to continue
to experience, some quarter-to-quarter variability in production levels of our primary metals
products due to planned maintenance shutdowns of operations and other normal planned actions. The current First Call consensus mean estimate for our adjusted net earnings per share for 2005 is
$3.45 on a diluted basis. Based upon the current First Call mean forecast for the average LME cash
nickel price for 2005, which we understand to be $6.58 per pound, and our understanding of the
latest mean forecasts by First Call and the London Bullion Market Association (LBMA) for the
prices for our other metal products for 2005, and taking into account our production, premium and
nickel unit cash cost of sales after by-product credits estimates indicated above, we are
comfortable with the current First Call consensus estimate for 2005 for our adjusted net earnings
per share of $3.43, on a diluted basis. We are not endorsing either First Calls consensus mean
estimate for our 2005 adjusted net earnings per share on a diluted basis or First Calls forecasts
for the LME cash nickel price, or the other benchmark metal prices
published by First Call and LBMA,
for 2005. Our policy continues to be that we do not publicly forecast where nickel and other metal
prices will be in the future given the historic volatility of these prices and the level of
economic uncertainty that currently exists in at least some of our key geographic markets. The LME
cash nickel price averaged
$7.28 per pound ($16,041 per tonne) for the April 1  April 19, 2005 period.
The LME cash nickel price on April 19, 2005 was $7.30 per pound
($16,100 per tonne). The earnings per share consensus mean estimate above refers to an estimate for adjusted net
earnings and excludes certain adjustments that would be made in the calculation of net earnings in
accordance with Canadian GAAP. Since such adjustments would include assumptions or forecasts
relating to changes in the Canadian-U.S. dollar exchange rate and other currency exchange rate
changes and other external factors that we do not believe we are in a position to predict with any
degree of certainty, we do not provide a reconciliation between any adjusted net earnings estimate
and a corresponding net earnings estimate in accordance with Canadian GAAP.




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- 7 - In terms of the current estimated sensitivity of our earnings per share, both for basic and diluted
purposes, to changes in nickel prices, for every change of 10 cents, up or down, per pound in our
realized nickel price over a full year, our Canadian GAAP basic and diluted net earnings per share
(EPS) over a full year would change, up or down, by about 12 cents and 10 cents, respectively. As
reflected in the table below, while our financial results are most sensitive to changes in (1) the
Canadian-U.S. dollar exchange rate given that a substantial portion of our expenses are incurred in
Canadian dollars and we have substantial Canadian dollar-denominated liabilities and (2) nickel
prices, our results are also sensitive to changes in copper and other prices as well as, on the
cost side, changes in oil and natural gas prices and changes in our share price given how we
account for share appreciation rights granted in connection with certain share options: ESTIMATES OF CURRENT 2005 SENSITIVITY OF BASIC
AND DILUTED EPS TO CERTAIN
METALS PRICES AND OTHER CHANGES
OVER ONE YEAR (IN U.S.$)(1) Amount of Change
    
    
    Basic
    
    
    Diluted(up or down)
    
    
    EPS Effect
    
    
    EPS Effect(2)Realized nickel price
    
    $0.10/lb.
    
    $
    0.12
    
    
    $
    0.10Realized copper price
    
    0.10/lb.
    
    
    0.08
    
    
    
    0.07Realized palladium price(3)
    
    50.00/troy oz
    
    
    0.03
    
    
    
    0.02Realized platinum price(3)
    
    50.00/troy oz
    
    
    0.03
    
    
    
    0.02Realized cobalt price
    
    1.00/lb.
    
    
    0.01
    
    
    
    0.01Cdn.-U.S. exchange rate(4) (5)
    
    
    0.01
    
    
    
    0.14
    
    
    
    0.11Fuel oil price (West Texas
Intermediate)(3) (5)
    
    1.00/bbl
    
    
    0.006
    
    
    
    0.005Natural gas price(3)(5)
    
    0.10/MM BTU
    
    
    0.001
    
    
    
    0.001Share appreciation rights(5) (6)
    
    
    1.00
    
    
    
    0.004
    
    
    
    0.003
   (1)
    
    Canadian GAAP basic (Basic EPS Effect) and diluted (Diluted EPS Effect) net
earnings per share. Each sensitivity assumes
other factors are held constant.(2)
    
    Based on 222 million diluted shares.(3)
    
    Includes the impact of hedging activities as of March 31, 2005.(4)
    
    The basic EPS effect represents (a) $0.07 for a non-cash balance sheet
translation effect relating to Canadian dollar-denominated liabilities, (b) $0.02 relating
to accrued taxes for Canadian dollar currency translation gains associated with U.S.
dollar-denominated liabilities and (c) $0.05 for operating cost translation effect. This
excludes currency translation adjustments relating to the deferred income tax liability for
Voiseys Bay once it begins commercial production. The diluted EPS effect represents (a)
$0.06 for a non-cash balance sheet translation effect relating to Canadian dollar
denominated liabilities, (b) $0.01 relating to accrued taxes for Canadian dollar currency
translation gains associated with U.S. dollar-denominated liabilities and (c) $0.04 for
operating cost translation effect.(5)
    
    Increases in these costs, exchange rates and our share price have a negative
effect on EPS.(6)
    
    Reflects the effect on EPS of a change in our common share price on our expense
accrual for share appreciation rights granted in connection with certain share options. Our capital expenditures for our existing operations and growth projects are also sensitive to
changes in exchange rates depending upon the currency in which such expenditures are incurred. It
is currently projected that our consolidated total capital expenditures for 2005 will be
approximately $1.45 billion. The funding required to meet these capital expenditures will take
into account capital contributions to be made by new shareholders in our Goro project and certain
previously announced government assistance relating to our growth
projects expected to total about $140 million.




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- 8 - Commentary on Results for the First Quarter of 2005 Results of Operations The following table summarizes our results in accordance with Canadian GAAP for the periods
indicated: Three Months Ended March 31,
    
    2005
    
    
    2004(in millions of U.S. dollars except per share amounts)(Restated)Net sales
    
    $
    1,121
    
    
    $
    1,094Net earnings
    
    
    313
    
    
    
    254Net earnings per common share basic
    
    
    1.66
    
    
    
    1.36 diluted
    
    
    1.43
    
    
    
    1.20Cash provided by operating activities
    
    
    91
    
    
    
    380
 The increase in net earnings between the first quarter of 2005 and the first quarter of 2004
was primarily the result of higher realized prices for nickel and copper, higher net tax benefits
due primarily to the favourable settlement of tax claims relating to prior periods, and a
favourable adjustment relating to the minority interest in Goro Nickel S.A.S. (Goro Nickel).
This was partially offset by the unfavourable effect of higher nickel cash cost of sales before
by-product credits and lower deliveries of PGMs and nickel. The effect of certain of these items on our results of operations is set forth under
Reconciliation Between Adjusted Net Earnings and Net Earnings in Accordance with Canadian GAAP
above. Net sales Net sales increased slightly in the first quarter of 2005 due to higher selling prices for nickel
and copper, partially offset by lower deliveries of PGMs and nickel. Cost of sales and other expenses The following table
summarizes our nickel unit cash cost of sales before and after
by-product credits for the periods indicated: Three months ended March 31,
    
    2005
    
    
    2004Nickel unit cash cost of sales beforeby-product credits per pound
    
    $
    2.89
    
    
    $
    2.42Nickel unit cash cost of sales afterby-product credits per pound
    
    $
    2.54
    
    
    $
    2.00
 The increase in nickel unit cash cost of sales before by-product credits was principally due
to the higher average Canadian dollar exchange rate relative to the U.S. dollar exchange rate
compared with 2004, higher spending on supplies and services, lower
nickel production, and higher costs
for heavy oil, electricity and natural gas, partially offset by net cost reduction and
related savings achieved in the first quarter of 2005. The increase in nickel unit cash cost of sales after by-product credits was due to higher unit cash
cost of sales before by-product credits and lower by-product credits as a result of lower
deliveries of PGMs, partially offset by higher realized selling prices for copper. PGMs deliveries
in the first quarter of 2004 reflected an unusually high level due to the build up of
PGMs-containing material due to the strike in 2003 at our Ontario
operations and the processing of that material and
delivery of PGMs in the first quarter of 2004. We use purchased nickel intermediates to increase processing capacity utilization at our Canadian
operations. While the cost of purchased nickel intermediates is higher than that for processing our




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- 9 - own mine production and such cost increases as the prevailing prices, LME cash nickel or other
benchmark prices, on which this material is purchased by us increases, the price realizations
are also higher, resulting in margins on these purchases remaining relatively unchanged. A reconciliation of our nickel unit cash cost of sales before and after by-product credits to cost
of sales under Canadian GAAP for the periods indicated is shown in the table entitled
Reconciliation of Nickel Unit Cash Cost of Sales to Canadian GAAP Cost of Sales below. In the first quarter of 2005, we realized cost reductions and related savings of about $3 million.
We are currently targeting $60 million in cost reductions and related savings in 2005, recognizing
that the bulk of the targeted cost reductions and related savings are expected to be realized in
the second half of 2005. Nickel production decreased to 55,507 tonnes (122 million pounds) in the first quarter of 2005
compared with 57,671 tonnes (127 million pounds) in the first
quarter of 2004. The decrease was as
a result of lower production of finished nickel from PT Inco source nickel in matte due to the
timing of certain shipments of PT Incos nickel matte product. In addition, production of Ontario
source nickel was also lower due to a build-up of in-process inventories in anticipation of certain
maintenance work scheduled to take place in the second quarter of 2005. Selling, general and administrative expenses Selling, general and administrative expenses increased by $9 million in the first quarter of 2005
compared with the first quarter of 2004. This increase was primarily due to higher expenses
associated with share appreciation rights, based upon the price of our common shares, which had
been granted in connection with share options awarded in prior years. Currency translation adjustments Currency translation adjustments represented primarily the effect of exchange rate movements on the
translation of Canadian dollar-denominated liabilities, principally post-retirement benefits,
accounts payable and certain deferred income and mining taxes, into U.S. dollars. Favourable
currency translation adjustments of $5 million in the first quarter of 2005 were due to the
weakening of the Canadian dollar as of March 31, 2005 relative
to the U.S. dollar. The Canadian 
U.S. dollar exchange rate depreciated by one per cent during the first quarter of 2005 compared
with such exchange rate for the first quarter of 2004. Income and mining taxes Our effective tax rate for the first quarter of 2005 of 21 per cent was lower than the combined
statutory income and mining tax rate in Canada of about 40 per cent
due principally to (1) net tax benefits, as discussed above,
totalling $45 million relating principally to a favourable settlement in the quarter of outstanding
tax claims applicable to certain prior periods, (2) the benefit of the lower tax rates on
earnings generated in certain jurisdictions and (3) certain
gains that were not subject to tax based upon available
offsetting losses. Minority Interest For the first quarter of 2005, minority interest included a favourable adjustment of $25 million
reflecting the recovery of losses previously taken by Inco due to insufficient minority interest
balances existing in 2004 to absorb the share by the minority interest of the previously announced
impairment charge associated with the Goro project recorded in the second quarter of 2004.
Excluding this favourable adjustment, minority interest would have been $27 million, attributable
principally to PT Inco.




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- 10 - Cash Flows and Financial Condition Net cash provided by operating activities in the first quarter of 2005 was $91 million,
compared with $380 million in the first quarter of 2004. The decrease in net cash provided by
operating activities was primarily due to a $245 million payment made during the first quarter of
2005, representing the balance of income and mining taxes due in
respect of 2004. Net cash used for investing activities increased to $226 million in the first quarter of 2005
compared with $167 million in the first quarter of 2004. The increase was principally due to
higher capital spending for our Voiseys Bay project and at our Ontario operations. At March 31, 2005, cash and cash equivalents were $928 million, down slightly from $1,076 million
at December 31, 2004, reflecting planned capital expenditures during the first quarter of 2005 as
well as the payments, as noted above, of the balance of certain taxes due in respect of 2004.
Total debt was $1,841 million at March 31, 2005, compared with $1,868 million at December 31, 2004.
Total debt as a percentage of total debt plus shareholders equity was 28 per cent at March 31,
2005, compared with 30 per cent at December 31, 2004. As previously announced, on April 11, 2005 Sumitomo Metal Mining Co., Ltd. and Mitsui & Co., Ltd.,
through a jointly owned company they formed, acquired a 21 per cent ownership interest in Goro
Nickel, the project company for our Goro project. Under the terms of the agreements entered into
covering this transaction, Sumitomo Metal Mining and Mitsui paid in total approximately $150
million for the 21 per cent interest. This amount includes their pro rata share of project capital
and other expenditures made since Inco announced its initial decision in July 2001 to proceed with
this project and certain advances made by Inco to fund the project. This amount is subject to
certain adjustments tied to the actual capital cost of the project. Reinstatement of Quarterly Cash Dividend in the amount of $0.10 Per Common Share On April 19, 2005, our Board of Directors has reinstated a quarterly cash dividend on the
Companys Common Shares and declared a quarterly dividend of $0.10 per share, payable June 1, 2005
to shareholders of record as of May 16, 2005. This quarterly dividend will be payable in U.S.
dollars to all shareholders who are U.S. residents and will be convertible into and payable in
Canadian dollars for all Canadian residents based upon the Bank of Canada noon rate of exchange on
May 16, 2005 unless a Canadian resident elects to receive their dividend in U.S. dollars by
advising our transfer agent and registrar, CIBC Mellon Trust Company, in writing of such election
before May 16, 2005. Shareholders can find out how to make this written election by contacting
CIBC Mellon Trust Company at 1-800-387-0825. No dividend will be payable on fractional shares.
Based upon current tax legislation in Canada and applicable tax treaties, this dividend will be
subject to a Canadian withholding tax of 15 per cent for shareholders resident in the United
States, the United Kingdom and most western European countries and may be subject to higher
withholding taxes applicable to other non-residents of Canada. The dividend may be subject to U.S.
back-up withholding taxes for U.S. residents who have not filed a W-9 or equivalent form meeting
applicable U.S. regulatory requirements. When the Company eliminated its quarterly cash dividend in February 1999, it suspended its Optional
Stock Dividend Program. This program will continue to remain suspended along with the Companys
Share Purchase Plan that has been suspended since 2003 while the Company evaluates whether either
or both of them should be reinstated in some form, replaced or terminated. It is currently
expected that this evaluation will be completed in the next few months.




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##### 



- 11 - Accounting Changes Convertible debt Effective January 1, 2005, on a retroactive basis, we adopted revisions to CICA Section 3860,
Financial Instruments  Disclosure and Presentation. The revisions related to the accounting for
instruments for which the issuer has the right to settle in cash or its own shares. Such an
instrument must be bifurcated between debt and equity in accordance with the revised standard.
This change impacted the accounting treatment for our LYON Convertible Notes, Convertible
Debentures due 2023 and 31⁄2% Subordinated Convertible Debentures due 2052 which were previously
treated as equity in accordance with EIC-71, Financial Instruments that may be Settled at the
Issuers Option in Cash or its own Equity Instruments. Consistent with this change, we record
interest expense in lieu of accretion charges with respect to these convertible debt securities. Earnings per share Effective January 1, 2005, on a retroactive basis, we also adopted revisions to CICA Section 3500,
Earnings Per Share. The revisions related primarily to (1) the use of year to date
weighted-average rates when applying the treasury stock method and (2) instruments where, if an
instrument can be settled in cash or shares, an entity should assume that the instrument will be
settled in shares if share settlement is more dilutive. In 2004 and prior years, we presumed, with
respect to our LYON Convertible Notes, cash settlement and, accordingly, this instrument was not
considered in the calculation of diluted earnings per share. Access to Webcast of
April 20, 2005 Presentation to the Investment Community on First
Quarter 2005 Results and Related Matters As previously announced, interested investors can listen to our presentation to the investment
community, currently expected to include an analysis of Incos first quarter 2005 financial
and operating results, on a live, listen-only basis, or access the archival webcast or the recording
of the presentation through the Internet or by calling the toll-free telephone number in North
America as indicated below. The presentation is scheduled for April 20, 2005, beginning at 3 p.m. (Toronto time), and can be
accessed by visiting the website of a third-party webcasting service we will be using, Canada
NewsWire Ltd., at www.newswire.ca/webcast, at least five minutes before the start of the
presentation. Copies of any slides or other statistical information to be used for the conference
call can be accessed and will be available for online viewing by persons with a computer system and
Internet connection meeting certain minimum requirements through
www.newswire.ca/webcast by
clicking on the event title or through Incos website,
www.inco.com, by clicking on the Latest
Quarterly Webcasts link on the homepage. The archival webcast of the presentation can be accessed via the Internet through
www.newswire.ca/webcast. A recording of the presentation can be listened to until 11:59 p.m.
(Toronto time) on May 4, 2005 by dialling 1-800-558-5253 in North America and by entering the
reservation number 21235983. This recording is also available outside North America by dialling
416-626-4100 and by entering the same reservation number. This news release contains forward-looking statements regarding the Companys costs, its position
as a low-cost producer of nickel, production levels for nickel, copper and platinum-group metals
for its second quarter and full year 2005 and for 2006 at its Canadian, Indonesian and other
operations, nickel market conditions and nickel demand and supply both globally and for certain
markets and uses, premiums realized on its metals prices, nickel unit cash cost of sales after by-




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##### 



- 12 - product credits, nickel inventories, its
financial results, including adjusted net earnings per share on a diluted basis, cash flow from
operations, cash generation, the effect on and sensitivity of financial results to changes in
nickel and other metal prices, exchange rates, energy and other costs and its common share price,
cost reduction and related savings objectives, construction, commissioning, initial shipment and
other schedules, capital costs and other aspects of its Goro and Voiseys Bay projects, capital
expenditures and hydroelectric power generation at PT Inco and the effect thereon of lower water
levels, overall capital expenditures, tax payments, planned maintenance and other shutdowns at
certain operations and other issues and aspects relating to its business and operations. Inherent
in those statements are known and unknown risks, uncertainties and other factors well beyond the
Companys ability to control or predict. Actual results and developments may differ materially from
those contemplated by these statements depending on, among others, such key factors as business and
economic conditions in the principal markets for the Companys products, the supply, demand and
prices for metals to be produced, purchased intermediates and nickel-containing stainless steel
scrap and other substitutes and competing products for the primary metals and other products the
Company produces, developments concerning labour relations, the Companys deliveries, production
levels, production and other anticipated and unanticipated costs and expenses, metals prices,
premiums realized over LME cash and other benchmark prices, tax benefits and charges, changes in
tax legislation, hedging activities, the Canadian-U.S. dollar and other exchange rates, changes in
the Companys common share price, the capital costs, scope, schedule, and other key aspects of the
Goro project, the timing of receipt of all necessary permits and governmental, regulatory and other
approvals, and engineering and construction timetables for, the Voiseys Bay and Goro
projects and PT Incos latest project to increase its production, the necessary shareholder
financing for the Goro project, political unrest or instability in countries such as Indonesia,
risks involved in mining, processing and exploration activities, market competition, the ability to
continue to pay quarterly cash dividends in such amounts as Incos Board of Directors may determine
in light of other uses for such funds and other factors, and other risk factors listed from time to
time in the Companys reports filed with the U.S. Securities and Exchange Commission. The
forward-looking statements included in this release represent the Companys views as of the date of
this release. While the Company anticipates that subsequent events and developments may cause the
Companys views to change, the Company specifically disclaims any obligation to update these
forward-looking statements. These forward-looking statements should not be relied upon as
representing the Companys views as of any date subsequent to the date of this release. April 19, 2005
IN 05/03 For further information:Media Relations:
    
    Steve Mitchell(416) 361-7950Investor Relations:
    
    Sandra Scott (416) 361-7758or www.inco.com




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##### 



- 13 - Inco Limited Key Financial and Operating Statistics Three months ended March 31,
    
    2005
    
    
    2004Average Realized PricesNickel(1)  per tonne
    
    $
    15,312
    
    
    $
    14,660 per pound
    
    
    6.95
    
    
    
    6.65Copper  per tonne
    
    
    3,365
    
    
    
    2,793 per pound
    
    
    1.53
    
    
    
    1.27(1) Including intermediatesLME Average Cash PricesNickel  per tonne
    
    
    15,362
    
    
    
    14,737 per pound
    
    
    6.97
    
    
    
    6.68Copper  per tonne
    
    
    3,270
    
    
    
    2,731 per pound
    
    
    1.48
    
    
    
    1.24DeliveriesNickel in all forms (tonnes) Inco-source
    
    
    53,747
    
    
    
    54,617 Purchased finished
    
    
    4,662
    
    
    
    6,18358,409
    
    
    
    60,800Copper (tonnes)
    
    
    32,648
    
    
    
    29,740Cobalt (tonnes)
    
    
    456
    
    
    
    392Platinum-group metals (in thousands of troy ounces)
    
    
    108
    
    
    
    147Net Sales to Customers by Product (in millions)Primary nickel
    
    $
    894
    
    
    $
    891Copper
    
    
    110
    
    
    
    83Precious metals
    
    
    69
    
    
    
    80Other
    
    
    48
    
    
    
    40$
    1,121
    
    
    $
    1,094Nickel Production in all Forms (tonnes)
    
    
    55,507
    
    
    
    57,671Finished Nickel Inventories at end of Period
(tonnes)
    
    
    28,937
    
    
    
    29,177




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##### 



- 14 - Inco Limited Reconciliation of Nickel Unit Cash Cost of Sales to Canadian GAAP Cost of Sales For the three months ended March 31,
    
    2005
    
    
    2004(in millions of U.S. dollars except where noted)Cost of sales and other expenses, excluding depreciation and
depletion
    
    $
    603
    
    
    $
    557By-product costs
    
    
    (164
    )
    
    
    (139
    )Purchased finished nickel
    
    
    (69
    )
    
    
    (90
    )Delivery expense
    
    
    (9
    )
    
    
    (8
    )Other businesses cost of sales
    
    
    (10
    )
    
    
    (11
    )Non-cash items(1)
    
    
    (7
    )
    
    
    (9
    )Remediation, demolition and other related expenses
    
    
    (7
    )
    
    
    (5
    )Adjustments associated with affiliate transactions
    
    
    9
    
    
    
    (6
    )Other
    
    
    (2
    )
    
    
    1Nickel cash cost of sales beforeby-product credits(2)
    
    
    344
    
    
    
    290By-product net sales
    
    
    (206
    )
    
    
    (189
    )By-product costs
    
    
    164
    
    
    
    139Nickel cash cost of sales afterby-product credits(2)
    
    $
    302
    
    
    $
    240Inco-source nickel deliveries (millions of pounds)
    
    
    119
    
    
    
    120Nickel unit cash cost of sales beforeby-product credits per pound
    
    $
    2.89
    
    
    $
    2.42Nickel unit cash cost of sales beforeby-product credits per tonne
    
    $
    6,371
    
    
    $
    5,335Nickel unit cash cost of sales afterby-product credits per pound
    
    $
    2.54
    
    
    $
    2.00Nickel unit cash cost of sales afterby-product credits per tonne
    
    $
    5,600
    
    
    $
    4,410
   (1)
    
    Post-retirement benefits other than pensions.(2)
    
    Nickel cash cost of sales before and after by-product credits includes costs for both Inco-source and purchased nickel intermediates.




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##### 



- 15 - Inco Limited Consolidated Statement of Earnings (unaudited) For the three months ended March 31,
    
    2005
    
    
    2004(in millions of U.S. dollars except per share amounts)(Restated)RevenuesNet sales
    
    $
    1,121
    
    
    $
    1,094Other income, net
    
    
    1
    
    
    
    51,122
    
    
    
    1,099Costs and expenses (income)Cost of sales and other expenses, excluding depreciation and
depletion
    
    
    603
    
    
    
    557Depreciation and depletion
    
    
    61
    
    
    
    57Selling, general and administrative
    
    
    43
    
    
    
    34Research and development
    
    
    7
    
    
    
    9Exploration
    
    
    9
    
    
    
    6Currency translation adjustments
    
    
    (5
    )
    
    
    (15
    )Interest expense
    
    
    7
    
    
    
    11Goro project suspension
    
    
    
    
    
    
    (6
    )725
    
    
    
    653Earnings before income and mining taxes and minority interest
    
    
    397
    
    
    
    446Income and mining taxes
    
    
    82
    
    
    
    158Earnings before minority interest
    
    
    315
    
    
    
    288Minority interest
    
    
    2
    
    
    
    34Net earnings
    
    
    313
    
    
    
    254Net earnings per common shareBasic
    
    $
    1.66
    
    
    $
    1.36Diluted
    
    $
    1.43
    
    
    $
    1.20Weighted average common shares outstanding, in thousandsBasic
    
    
    188,398
    
    
    
    187,222Diluted
    
    
    221,828
    
    
    
    213,287




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##### 



- 16 - Inco Limited Consolidated Balance Sheet (unaudited) March 31,
    
    
    December 31,(in millions of U.S. dollars)
    
    2005
    
    
    2004(Restated)ASSETSCurrent assetsCash and cash equivalents
    
    $
    928
    
    
    $
    1,076Accounts receivable
    
    
    763
    
    
    
    601Inventories
    
    
    890
    
    
    
    834Other
    
    
    91
    
    
    
    63Total current assets
    
    
    2,672
    
    
    
    2,574Property, plant and equipment
    
    
    7,725
    
    
    
    7,587Deferred charges and other assets
    
    
    617
    
    
    
    576Total assets
    
    $
    11,014
    
    
    $
    10,737LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilitiesLong-term debt due within one year
    
    $
    120
    
    
    $
    107Accounts payable
    
    
    300
    
    
    
    331Accrued payrolls and benefits
    
    
    198
    
    
    
    208Other accrued liabilities
    
    
    468
    
    
    
    399Income and mining taxes payable
    
    
    57
    
    
    
    279Total current liabilities
    
    
    1,143
    
    
    
    1,324Deferred credits and other liabilitiesLong-term debt
    
    
    1,721
    
    
    
    1,761Deferred income and mining taxes
    
    
    1,880
    
    
    
    1,891Post-retirement benefits
    
    
    678
    
    
    
    671Asset retirement obligation
    
    
    174
    
    
    
    171Other deferred credits
    
    
    57
    
    
    
    58Total liabilities
    
    
    5,653
    
    
    
    5,876Minority interest
    
    
    691
    
    
    
    529Shareholders equityConvertible debt
    
    
    418
    
    
    
    418Common shareholders equityCommon shares issued and outstanding 189,002,037
(2004  188,133,439 shares)
    
    
    2,916
    
    
    
    2,891Warrants
    
    
    62
    
    
    
    62Contributed surplus
    
    
    571
    
    
    
    571Retained earnings
    
    
    703
    
    
    
    3904,252
    
    
    
    3,914Total shareholders equity
    
    
    4,670
    
    
    
    4,332Total liabilities and shareholders equity
    
    $
    11,014
    
    
    $
    10,737




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##### 



- 17 - Inco Limited Consolidated Statement of Cash Flows (unaudited) For the three months ended March 31,
    
    2005
    
    
    2004(in millions of U.S. dollars)(Restated)Operating activitiesEarnings before minority interest
    
    $
    315
    
    
    $
    288Charges not affecting cashDepreciation and depletion
    
    
    61
    
    
    
    57Deferred income and mining taxes
    
    
    (5
    )
    
    
    14Other
    
    
    12
    
    
    
    6Contributions greater than post-retirement benefits expense
    
    
    (14
    )
    
    
    (5
    )Decrease (increase) in non-cash working capital related to
operationsAccounts receivable
    
    
    (12
    )
    
    
    (59
    )Inventories
    
    
    (56
    )
    
    
    (97
    )Accounts payable and accrued liabilities
    
    
    43
    
    
    
    42Income and mining taxes payable
    
    
    (225
    )
    
    
    168Other
    
    
    (28
    )
    
    
    (34
    )Net cash provided by operating activities
    
    
    91
    
    
    
    380Investing activitiesCapital expenditures
    
    
    (226
    )
    
    
    (139
    )Other
    
    
    
    
    
    
    (28
    )Net cash used for investing activities
    
    
    (226
    )
    
    
    (167
    )Financing activitiesRepayments of long-term debt
    
    
    (48
    )
    
    
    (46
    )Long-term borrowings
    
    
    16
    
    
    
    Common shares issued
    
    
    20
    
    
    
    12Dividends paid to minority interest
    
    
    (1
    )
    
    
    Other
    
    
    
    
    
    
    (1
    )Net cash used for financing activities
    
    
    (13
    )
    
    
    (35
    )Net increase (decrease) in cash and cash equivalents
    
    
    (148
    )
    
    
    178Cash and cash equivalents at beginning of period
    
    
    1,076
    
    
    
    418Cash and cash equivalents at end of period
    
    $
    928
    
    
    $
    596