UPDATE: Labrador Nickel Royalty LP Files Claim Vs Vale Inco

(Updates with statement from Vale Inco spokesman in final paragraph.)

Labrador Nickel Royalty Limited Partnership is suing Vale Inco Ltd. for allegedly underreporting the net smelter return on the sale of nickel concentrates from the Voisey's Bay mine in Labrador.

That NSR is the basis for payment of a 3% royalty to the limited partnership, which is 90% owned by International Royalty Corp. (ROY) and 10% owned by Altius Minerals Corp. (ALS.T).

Vale Inco, which is owned by Brazil's Vale S.A. (VALE), owns the the big Voisey's Bay nickel-copper-cobalt mine.

International Royalty said the limited partnership has filed its claim in the Supreme Court of Newfoundland and Labrador against Vale Inco, asserting that the NSR is being miscalculated. The claim requests specific damages for underpayment of past royalties and an order for correct calculation of future payments.

If successful, International Royalty estimates that its share of the royalty underpayments up to June 30 would exceed $26 million, before the deduction of royalty taxes. The partnership's total claim is $29 million.

Vale Inco's manager of corporate affairs in Newfoundland and Labrador, Bob Carter, said Vale Inco doesn't comment on matters before the courts.

-By Carolyn King, Dow Jones Newswires; 416-306-2100; [e-mail]