Nickel Rim South Project

Description of Operation

Discovered in 2001, this high grade, poly-metallic resource was found at depths of 1,100 to 1,700 metres and promises to be one of Xstrata Nickel’s highest grade mines. The project is located nine kilometers north of the Sudbury smelter with a 14.5 million tonne inferred resource grading 1.6% nickel, 3.1% copper, 0.03% cobalt, 1.7 g/t platinum, 1.9 g/t palladium, and 0.7 g/t gold. Preliminary underground drilling results have shown mineral location, thickness and grades to be consistent with expectations. The Nickel Rim South project remains on schedule to ramp up to 60% of its ultimate 1.25 million tonne per annum production capacity in 2009 and within its current stage (Deposit Definition) budget of C$627 million. Funds to complete the mine in 2009 and 2010 (Full Mine Stage) will be approved in 2008.

Brief History of the Operation

Discovered in 2001, Nickel Rim South is expected to provide a high value ore feed for more than 15 years, while significantly reducing Sudbury’s unit cost, and will play a key role in transforming Xstrata Nickel’s Sudbury operations from closure to growth.