Baffinland comments on short-term investments status


    TORONTO, Aug. 17 /CNW/ - Baffinland Iron Mines Corporation ("Baffinland"
or the "Company") advises on the impact of recent disruptions in global credit
markets on $43.8 million of its $45.9 million in cash and investments. The
remaining $2.1 million is held in cash and guaranteed investments not affected
by this situation.
    Baffinland's cash management criteria is to invest in products that are
ranked by the Dominion Bond Rating Service ("DBRS") as R1-High. In July and
August of 2007, Baffinland invested, on the basis of professional advice, a
total of $43.8 million in the following A Notes with three separate trusts
managed under the Coventree Capital Group Inc. ("Coventree"):

    Maturity                                                         Nominal
      Date                 Issuer                  Value Date         Value

    August 13,  Structured Investment Trust III    July 3, 2007    $9,949,500
    August 13,  Structured Investment Trust III    July 10, 2007    9,957,500
    August 15,  Skeena Capital Trust Series A      August 3, 2007   6,989,220
    August 16,  Lafayette Structured Credit Trust  August 2, 2007   6,987,400
    August 30,  Skeena Capital Trust Series A      July 30, 2007    9,960,700

    Coventree announced on August 13, 14 and 15, 2007 that it was
experiencing market disruption and as a result was unable to meet its
repayment obligations until its liquidity providers fund such repayments.
While the DBRS announced yesterday that the investments are under review, the
DBRS has rated the above trusts and their underlying assets as R1-High.
    Of the A Notes held by Baffinland, $33.9 million came due and payable on
the maturity dates shown above but were not paid and remain outstanding.
Another A Note in the amount of approximately $9.9 million comes due on
August 30, 2007.
    Baffinland is currently investigating the implications of these events,
which appears to be a result of the current lack of liquidity for asset backed
securities of the type held by Coventree rather than the creditworthiness of
its underlying assets.
    The Company currently believes it has sufficient cash available to
maintain financial obligations provided this market disruption is resolved in
a timely manner. In the interim, the Company is working diligently on a
short-term solution.

    Baffinland is a Canadian publicly-traded junior mining company that is
focused on its wholly-owned Mary River iron ore deposits located on Baffin
Island, Nunavut Territory, Canada. Baffinland's shares trade on the Toronto
Stock Exchange under the trading symbol BIM.

    This press release contains certain information that may constitute
forward-looking information within the meaning of securities laws.
Forward-looking information is based on certain factors and assumptions
regarding, among other things, expected mineral resources, iron ore prices and
the feasibility of constructing and operating a direct-shipping iron ore mine
at the Company's Mary River project. While the Company considers these
assumptions to be reasonable based on information currently available to it,
they may prove to be incorrect. Forward looking-information is subject to
certain factors, including risks and uncertainties that could cause actual
results to differ materially from what is currently expected. These factors
include risks relating to exploration and development risks, risks relating to
the worldwide price of, demand for and supply of iron ore, financing and
liquidity risks and risks relating to the construction and operation of a mine
at the Company's Mary River project. You should not place undue importance on
forward-looking information and should not rely upon this information as of
any other date. While the Company may elect to, the Company is under no
obligation and does not undertake to update this information at any particular

For further information:

For further information: Please visit Baffinland's website at, email or contact: Gordon A. McCreary,
President and Chief Executive Officer, (416) 814-3163; Robert J. Chausse, Vice
President and Chief Financial Officer, (416) 814-3170; Andreas Curkovic, The
Equicom Group, (416) 815-0700 ext. 262

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