##### 



EXHIBIT 99.1
 
 INCO REPORTS EARNINGS FOR THE FIRST QUARTER 2006
 
 Inco
Delivers another Quarter of Robust Results; Market Fundamentals Strong
 
 (All dollar amounts are expressed in U.S. currency)
 (1) (2) (1) (2)
  (1) (1)
 
 (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. All of the adjustments made in arriving at adjusted net
earnings for the first quarters of 2006 and 2005 are set forth in the
table under Reconciliation Between Adjusted Net Earnings and Net Earnings
in Accordance with Canadian GAAP below.(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 diluted effect of our outstanding
warrants, share options and convertible debentures. The amount of dilution per
share attributable to these items is dependent upon our level of earnings and
the price of our common shares. For the first quarter of 2006 the number of
diluted shares used in this calculation was approximately 223 million shares
compared with 222 million shares for the corresponding period in 2005. 1




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Chief Executive Officers Message
  Nickel market gains momentum
  Excellent performance from operations; Voiseys Bay begins to make an impact
    Goro Project
   2




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##### 



Financial position remains strong
  Update on friendly offer to acquire Falconbridge
  th
  
 
 3




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##### 



Reconciliation between Adjusted Net Earnings and Net Earnings in Accordance with Canadian GAAP
   Basic Net Earnings(in millions except per share amounts)
    
    Net Earnings
    
    
    Per Share(3)First Quarter
    
    
    First Quarter2005
    
    
    
    
    
    
    20052006
    
    
    (Restated)(1)
    
    
    2006
    
    
    (Restated)(1)Adjusted net earnings
    
    $
    200
    
    
    $
    242
    
    
    $
    1.04
    
    
    $
    1.28Currency translation adjustments
    
    
    3
    
    
    
    5
    
    
    
    0.02
    
    
    
    0.03Net income tax benefits(2)
    
    
    4
    
    
    
    45
    
    
    
    0.02
    
    
    
    0.24Unrealized losses on certain
currency derivative contracts
    
    
    (5
    )
    
    
    
    
    
    
    (0.03
    )
    
    
    Favourable adjustment relating to
Goro Nickel S.A.S. minority interest
    
    
    
    
    
    
    25
    
    
    
    
    
    
    
    0.13Canadian GAAP net earnings, as reported
    
    $
    202
    
    
    $
    317
    
    
    $
    1.05
    
    
    $
    1.68
 (1)
    
    2005 results have been restated to correct minority interest balances.(2)
    
    The net income tax benefits recorded in the first quarter of 2006 relate primarily
to a change in tax law affecting one of our non-Canadian subsidiaries.(3)
    
    These amounts are based upon currently issued and outstanding shares and not diluted
shares. 4




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##### 



Outlook
   Second Quarter
    
    
    Full Year2006(1)
    
    
    2006(1)Nickel
    
       tonnes (thousands)
    
    
    61  63
    
    
    
    256   pounds (millions)
    
    
    135  140
    
    
    
    565Copper
    
       tonnes (thousands)
    
    
    38
    
    
    
    154   pounds (millions)
    
    
    85
    
    
    
    340PGMs
    
       troy ounces (thousands)
    
    
    85
    
    
    
    400
 
 (1)
    
    Includes 30 million pounds of nickel returned for sale by Inco from third party
toll smelting and refining arrangements, with about 5-10 million pounds of toll finished
nickel production expected in the second quarter of 2006.  5




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##### 



6




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##### 



(1)
 Amount of Change
    
    
    Basic
    
    
    Diluted(up or down)
    
    
    EPS Effect
    
    
    EPS Effect(2)Realized nickel price
    
    $0.10/lb.
    
    $
    0.14
    
    
    $
    0.12Realized copper price(3)
    
    0.10/lb.
    
    
    0.08
    
    
    
    0.07Realized palladium price
    
    50.00/troy oz
    
    
    0.03
    
    
    
    0.03Realized 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
    
    
    0.06
    
    
    
    0.05Fuel oil price (West Texas
Intermediate)(3) (5)
    
    1.00/bbl
    
    
    0.007
    
    
    
    0.006Natural gas price(5)
    
    0.10/MM BTU
    
    
    0.002
    
    
    
    0.002
 
 (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 223 million diluted shares.(3)
    
    Includes the impact of hedging activities as of
December 31, 2005.(4)
    
    Represents the impact on Canadian dollar-denominated operating costs and excludes
the translation effect relating to Canadian dollar-denominated liabilities and to accrued
taxes for Canadian dollar currency translation effects associated with U.S. dollar-denominated
liabilities.(5)
    
    Increases in these costs and exchange rate have a negative effect on EPS.  7




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##### 



Commentary on Results for the First Quarter of 2006
 Results of Operations
  Three Months EndedMarch 31,(in millions of U.S. dollars except per share amounts)
    
    2006
    
    
    2005(Restated)Net sales
    
    $
    1,211
    
    
    $
    1,121Net earnings
    
    
    202
    
    
    
    317Net earnings per common share basic
    
    
    1.05
    
    
    
    1.68 diluted
    
    
    0.91
    
    
    
    1.43Cash provided by operating activities
    
    
    202
    
    
    
    91
 
 Net sales
  8




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##### 



Nickel unit cash cost of sales
  Three months endedMarch 31,2006
    
    
    2005Nickel unit cash cost of sales beforeby-product credits per pound(1)
    
    $
    3.14
    
    
    $
    2.89Nickel unit cash cost of sales afterby-product credits per pound(1)
    
    $
    2.59
    
    
    $
    2.54
 (1)
    
    Nickel unit cash cost of sales before and after by-product credits includes costs for
Inco-source and purchased nickel intermediates processed at our Canadian operations.     9




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##### 



Exploration
  Income and mining taxes
  Cash Flows and Financial Condition; Dividend Declaration
       10




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##### 



Access to Webcast of April 20, 2006 Presentation to the Investment Community on First Quarter
2006 Results and Related Matters
  www.newswire.ca/webcast www.newswire.ca/webcast www.inco.com
 www.newswire.ca/webcast
 Cautionary Statement Regarding Forward-Looking Statements
 This news release contains forward-looking statements regarding the Companys offer to
purchase all of the common shares of Falconbridge Limited, including statements regarding the
timing thereof and the anticipated timing of achievement of milestones in the regulatory clearance
process, anticipated financial or operating performance, and strategies, objectives, goals and
targets of the combined company, and forward-looking statements regarding the Company alone,
including anticipated financial or operating performance, the Companys costs on a stand-alone
basis, 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 2006 for the Company as a whole and at
its Indonesian, Voiseys Bay and other Canadian 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-product credits, third party toll smelting and
refining arrangements, production costs on its own mine production, 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 start-up, and
other schedules, capital costs and other aspects of its Goro project, arrangements covering copper
production and sales, capital expenditures at the Companys growth projects, overall capital
expenditures, contributions from shareholders and government programs and other external sources of
funds, and governmental clearances or approvals required, for its growth projects, tax payments,
planned maintenance and other shutdowns and subsequent start-ups at certain operations, new
collective labour agreements, including the risk of a disruption or work stoppage, and other issues
and aspects relating to its business and operations. Inherent in
 11




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##### 



those statements are known and unknown risks, uncertainties, assumptions 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, in the case of the planned acquisition of Falconbridge, the risks that we will not be able to
obtain the required approvals or clearances from regulatory and other agencies and bodies on a
timely basis, or divestitures or other remedies required by regulatory agencies may not be
acceptable or may not be completed in a timely manner, we may not meet the other remaining
conditions of our offer, we may not realize the anticipated annualized benefits and operational and
other synergies and cost savings from the acquisition or related divestitures, restructurings,
integration and other initiatives associated with the planned combination of Inco and Falconbridge
and we may realize unanticipated costs and/or delays or difficulties relating to such integration,
and such other factors relating to Inco itself 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 nickel 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, required permitting, potential disruptions and
other key aspects of the Goro project, the timing of receipt of all necessary permits and
governmental, regulatory and other clearances or approvals, and engineering and construction
timetables, for the Goro project, the necessary shareholder and government program sources of
financing for the Goro and other projects, political unrest or instability in countries or
territories such as Indonesia and New Caledonia, risks involved in mining, processing and
exploration activities, research and development activities, the accuracy of our estimated
mineral/ore reserves and/or mineral resources, resolution of environmental and other proceedings
and the impact of various environmental regulations and initiatives, 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. Although the Company has attempted to identify important factors that could cause actual
actions, events or results to differ materially from those described in forward-looking statements,
there may be other factors that cause actions, events or results not to be as anticipated,
estimated or intended. There can be no assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ materially from those anticipated in
such statements. Accordingly, readers should not place undue reliance on any forward-looking
statements.
 Material Assumptions
 A number of assumptions were made by Inco in preparing its guidance for 2006 and making
certain other forward-looking statements for 2006 and beyond and in connection with our pending
acquisition of Falconbridge Limited. Such assumptions include, but are not limited to, those set
forth under the
 12




---



##### 



Outlook section of this press release and the slides and other material covering the
presentations being made as of this date which are available on our website and on the SEDAR system
in Canada. These assumptions include estimates on the U.S. dollar-Canadian dollar exchange rate
for 2006, global industrial production and in key geographic markets, interest rates, global nickel
and other metals demand and supply and in key geographical markets, and growth in the key end-use
markets for the metals produced by the Company, that we would not have any labour, equipment or
other disruptions at any of our operations of any significance in 2006 other than any planned
maintenance or similar shutdowns and that any third parties which we are relying on to supply
purchased intermediates or provide toll smelting or other processing do not experience any
unplanned disruptions. Some of the material assumptions made by us involve confidential or
particularly sensitive information and, accordingly, we do not believe it is appropriate to
disclose such assumptions for competitive or other business reasons. Forward-looking statements for
time periods subsequent to 2006 involve longer term assumptions and estimates than forward-looking
statements for 2006 and are consequently subject to greater uncertainty. Therefore, the reader is
especially cautioned not to place undue reliance on such long-term forward-looking statements.
 Important Legal Information
  INVESTORS AND SECURITYHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT
DOCUMENTS FILED OR THAT WILL BE FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION.
 www.sec.gov
 
 For further information:Media Relations:
    
    Steve Mitchell  (416) 361-7950Investor Relations:
    
    Sandra Scott     (416) 361-7758or www.inco.com
 13




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##### 



Inco Limited
 Key Financial and Operating Statistics
 For the three months endedMarch 31,2006
    
    
    2005Average Realized PricesNickel(1)
    
       per tonne
    
    $
    15,021
    
    
    $
    15,312   per pound
    
    
    6.81
    
    
    
    6.95Copper
    
       per tonne
    
    
    4,405
    
    
    
    3,365   per pound
    
    
    2.00
    
    
    
    1.53(1)     Including intermediatesLME Average Cash PricesNickel
    
       per tonne
    
    
    14,811
    
    
    
    15,362   per pound
    
    
    6.72
    
    
    
    6.97Copper
    
       per tonne
    
    
    4,944
    
    
    
    3,270   per pound
    
    
    2.24
    
    
    
    1.48DeliveriesNickel in all forms (tonnes)   Inco-source and tolled
    
    
    59,021
    
    
    
    53,747   Purchased finished
    
    
    4,622
    
    
    
    4,66263,643
    
    
    
    58,409Copper (tonnes)
    
    
    30,206
    
    
    
    32,648Cobalt (tonnes)
    
    
    486
    
    
    
    456Platinum-group metals (in thousands of troy ounces)
    
    
    89
    
    
    
    108Net Sales to Customers by Product (in millions)Primary nickel
    
    $
    956
    
    
    $
    894Copper
    
    
    133
    
    
    
    110Precious metals
    
    
    72
    
    
    
    69Other
    
    
    50
    
    
    
    48$
    1,211
    
    
    $
    1,121Nickel Production in all Forms (tonnes)
    
    
    61,439
    
    
    
    55,507Finished Nickel Inventories at end of Period (tonnes)
    
    
    25,008
    
    
    
    28,937
 14




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##### 



Inco Limited
 Reconciliation of Nickel Unit Cash Cost of Sales to Canadian GAAP Cost of Sales
 For the three monthsended March 31,(in millions of U.S. dollars except where noted)
    
    2006
    
    
    2005Cost of sales and other expenses, excluding depreciation and
depletion
    
    $
    733
    
    
    $
    603By-product costs
    
    
    (158
    )
    
    
    (164
    )Purchased finished and tolled nickel
    
    
    (99
    )
    
    
    (69
    )Delivery expense
    
    
    (10
    )
    
    
    (9
    )Other businesses cost of sales
    
    
    (9
    )
    
    
    (10
    )Non-cash items(1)
    
    
    (10
    )
    
    
    (7
    )Remediation, demolition and other related expenses
    
    
    (9
    )
    
    
    (7
    )Adjustments associated with affiliate transactions
    
    
    (27
    )
    
    
    9Other
    
    
    (19
    )
    
    
    (2
    )Nickel cash cost of sales beforeby-product credits(2)
    
    
    392
    
    
    
    344By-product net sales
    
    
    (226
    )
    
    
    (206
    )By-product costs
    
    
    158
    
    
    
    164Nickel cash cost of sales afterby-product credits(2)
    
    $
    324
    
    
    $
    302Inco-source nickel deliveries (millions of pounds)
    
    
    125
    
    
    
    119Nickel unit cash cost of sales beforeby-product credits per pound
    
    $
    3.14
    
    
    $
    2.89Nickel unit cash cost of sales beforeby-product credits per tonne
    
    $
    6,923
    
    
    $
    6,371Nickel unit cash cost of sales afterby-product credits per pound
    
    $
    2.59
    
    
    $
    2.54Nickel unit cash cost of sales afterby-product credits per tonne
    
    $
    5,710
    
    
    $
    5,600
 (1)
    
    Post-retirement benefits other than pensions.(2)
    
    Nickel unit cash cost of sales before and after by-product credits includes costs
for Inco-source and purchased nickel intermediates processed at our Canadian operations. 15




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##### 



Inco Limited
 Consolidated Statement of Earnings
  For the three monthsended March 31,(in millions of U.S. dollars except per share amounts)
    
    2006
    
    
    2005(Restated)Net sales
    
    $
    1,211
    
    
    $
    1,121Costs and
operating expensesCost of sales and other expenses, excluding depreciation and
depletion
    
    
    733
    
    
    
    603Depreciation and depletion
    
    
    68
    
    
    
    61Selling, general and administrative
    
    
    47
    
    
    
    43Research and development
    
    
    8
    
    
    
    7Exploration
    
    
    15
    
    
    
    9Currency translation adjustments
    
    
    (3
    )
    
    
    (5
    )Interest expense
    
    
    18
    
    
    
    7886
    
    
    
    725Other income, net
    
    
    8
    
    
    
    1Earnings before income and mining taxes and minority interest
    
    
    333
    
    
    
    397Income and mining taxes
    
    
    113
    
    
    
    83Earnings before minority interest
    
    
    220
    
    
    
    314Minority interest
    
    
    18
    
    
    
    (3
    )Net earnings
    
    $
    202
    
    
    $
    317Net earnings per common shareBasic
    
    $
    1.05
    
    
    $
    1.68Diluted
    
    $
    0.91
    
    
    $
    1.43Weighted average common shares outstanding, in thousandsBasic
    
    
    192,704
    
    
    
    188,398Diluted
    
    
    223,199
    
    
    
    221,828
 16




---



##### 



Inco Limited
 Consolidated Balance Sheet
  March 31,
    
    
    December 31,(in millions of U.S. dollars)
    
    2006
    
    
    2005ASSETSCurrent assetsCash and cash equivalents
    
    $
    751
    
    
    $
    958Accounts receivable
    
    
    734
    
    
    
    673Inventories
    
    
    1,105
    
    
    
    996Other
    
    
    86
    
    
    
    68Total current assets
    
    
    2,676
    
    
    
    2,695Property, plant and equipment
    
    
    8,676
    
    
    
    8,459Accrued pension benefits asset
    
    
    633
    
    
    
    611Deferred charges and other assets
    
    
    266
    
    
    
    245Total assets
    
    $
    12,251
    
    
    $
    12,010LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilitiesLong-term debt due within one year
    
    $
    75
    
    
    $
    122Accounts payable
    
    
    310
    
    
    
    253Accrued payrolls and benefits
    
    
    210
    
    
    
    221Other accrued liabilities
    
    
    524
    
    
    
    533Income and mining taxes payable
    
    
    88
    
    
    
    36Total current liabilities
    
    
    1,207
    
    
    
    1,165Deferred credits and other liabilitiesLong-term debt
    
    
    1,840
    
    
    
    1,852Deferred income and mining taxes
    
    
    2,018
    
    
    
    2,018Accrued post-retirement benefits liability
    
    
    744
    
    
    
    732Asset retirement obligation
    
    
    169
    
    
    
    168Deferred credits and other liabilities
    
    
    122
    
    
    
    131Total liabilities
    
    
    6,100
    
    
    
    6,066Minority interest
    
    
    768
    
    
    
    761Shareholders equityConvertible debt
    
    
    351
    
    
    
    362Common shareholders equityCommon shares issued and outstanding 193,406,249
(2005  192,237,394 shares)
    
    
    3,034
    
    
    
    3,000Warrants
    
    
    62
    
    
    
    62Contributed surplus
    
    
    577
    
    
    
    578Retained earnings
    
    
    1,359
    
    
    
    1,1815,032
    
    
    
    4,821Total shareholders equity
    
    
    5,383
    
    
    
    5,183Total liabilities and shareholders equity
    
    $
    12,251
    
    
    $
    12,010
 17




---



##### 



Inco Limited
 Consolidated Statement of Cash Flows
  For the three monthsended March 31,(in millions of U.S. dollars)
    
    2006
    
    
    2005(Restated)Operating activitiesEarnings before minority interest
    
    $
    220
    
    
    $
    314Items not affecting cashDepreciation and depletion
    
    
    68
    
    
    
    61Deferred income and mining taxes
    
    
    17
    
    
    
    (5
    )Other
    
    
    8
    
    
    
    12Contributions greater than post-retirement benefits expense
    
    
    (10
    )
    
    
    (14
    )Decrease (increase) in non-cash working capital related to
operationsAccounts receivable
    
    
    (61
    )
    
    
    (12
    )Inventories
    
    
    (60
    )
    
    
    (56
    )Accounts payable and accrued liabilities
    
    
    (12
    )
    
    
    43Income and mining taxes payable
    
    
    55
    
    
    
    (225
    )Other
    
    
    (23
    )
    
    
    (27
    )Net cash provided by operating activities
    
    
    202
    
    
    
    91Investing activitiesCapital expenditures
    
    
    (337
    )
    
    
    (226
    )Other
    
    
    (1
    )
    
    
    Net cash used for investing activities
    
    
    (338
    )
    
    
    (226
    )Financing activitiesRepayments of long-term debt
    
    
    (56
    )
    
    
    (48
    )Long-term borrowings
    
    
    
    
    
    
    16Common shares issued
    
    
    10
    
    
    
    20Common dividends paid
    
    
    (24
    )
    
    
    Dividends paid to minority interest
    
    
    (1
    )
    
    
    (1
    )Net cash used for financing activities
    
    
    (71
    )
    
    
    (13
    )Net decrease in cash and cash equivalents
    
    
    (207
    )
    
    
    (148
    )Cash and cash equivalents at beginning of period
    
    
    958
    
    
    
    1,076Cash and cash equivalents at end of period
    
    $
    751
    
    
    $
    928
 18