The Ni deposits of the Cape Smith-Wakeham Bay belt have been formed by the selective replacement of ultrabasic rocks (and to a minor degree sediments). The replacement began soon after the commencement of serpentinization of the ultrabasics. Sulfides of Fe, Ni, and Cu replaced unaltered portions of the olivine and pyroxene but none of the alteration minerals, such as serpentine and amphibole. The textures exhibited by the sulfides, therefore, are those normally associated with the silicate minerals of basic igneous rocks. The mineralization probably originated from the serpentinization of olivine and pyroxene which contained small amounts of Cu and Ni. The hypothesis of Wager, Vincent, & Smales, which claims that nickeliferous pyrrhotite deposits are the product of basic magma in which the S pressure was high enough during the early stages of crystallization to cause the Ni to form sulfides rather than entering olivine and pyroxene, does not seem to apply to the Ni deposits of the Cape Smith-Wakeham Bay belt.