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I was very tired, but it was great to be in Antarctica. Everyting was covered with snow. 1)It was so beautiful.

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What does 1) refer to in the last sentence? Antarctica, everything, or everything in Antarctica?

Most people would assume that "It" refers to everything in Antarctica.

In the given sentence, "1)" refers to "everything in Antarctica." It means that everything in Antarctica, which was covered with snow, was so beautiful.