Baffinland reports signficant operational progress


    TORONTO, Sept. 10 /CNW/ - Baffinland Iron Mines Corporation (TSX: BIM)
("Baffinland" or the "Company") reports significant progress in operations on
its Mary River Project on Baffin Island. This news release has been prepared
to update the marketplace with regard to the progress that Baffinland has made
in 2007 to advance its Mary River Project, prior to the site visits this week
by mining analysts from the brokerage industry and representatives of
potential debt providers for the building of the project. In addition, later
this month a Baffinland team will be hosting public meetings in several
communities in the Baffin Region to discuss the Company's development plans.
Consequently, this press release is publicly disclosing updated information
about many important issues that are expected to be topics of discussions with
both our site visitors and at the subsequent community meetings.
    Baffinland's primary activities in 2007 can be broadly characterized as
those in support of exploration, the bulk sample program and various studies.
These studies include the Definitive Feasibility Study ("DFS"), the Scoping
Study investigating expansion to 15 million tonnes per year and the Strategic
"Blue Sky" Study looking at subsequent expansion to 25 million tonnes per
year. The DFS remains on track for completion in December 2007 and the other
studies remain scheduled for completion in the first quarter of 2008. "We
expect the robust nature of our world class direct-shipping iron ore project
to be confirmed by these studies" stated Gordon McCreary, President and CEO of
Baffinland. He went on to state that "Although we have had some delays in
advancing the bulk sample program, we are still targeting the delivery of up
to 250,000 tonnes of lump and fines to several steel mills starting in third
quarter of 2008. The high level of interest by the global steel industry in
our Mary River Project suggests that the bulk sample will be oversubscribed.
We have recently begun dialogues with steel mills to formalize off-take
contracts for the bulk sample and investigate long term off-take contracts for
the 12.6 million tonne per year initial project output identified by the DFS."

    Drilling Programs

    The productivity of drilling improved during 2007 for the Mary River
exploration, geomechanical and geotechnical programs. As at August 31, 2007, a
total of 8,090 metres were drilled for such programs compared to a total of
7,067 metres drilled for the entire 2007 field program. A total of 9,300
metres was budgeted for 2007; however, the forecast to the end of the drill
season in early October, is now anticipated to surpass 10,000 metres.
    Drilling for the exploration program has confirmed continuity between
deposits No. 3 and No. 3A although the thickness appears to diminish to the
east. Drilling on 450 metre centres has confirmed continuity over a 1,800
metre strike length with the deposit open along strike and at depth. As is the
norm, the new drilling has shown the original interpretation to be too
simplistic and we await additional drilling and the assay results to assist in
a more comprehensive interpretation and a resource model leading to the
estimation of an inferred resource. Comparing this years' drilling to that of
2006 on Deposit No.3, we continue to target a significant specular hematite
resource as the ultimate result. In addition to exploration drilling on
Deposit No. 3 exploration activities during 2007 were also focused on infill
drilling on Deposit No. 1. As at August 31, 2007, exploration and
geomechanical drilling totaled 3,995 metres on Deposit No. 1 and 1,809 metres
on Deposit No. 3.
    Geomechanical drilling up to August 31, 2007, totalled 1,269 metres. In
addition, 1,257 metres of exploration drilling on Deposit No. 1 were also
evaluated for this purpose. The geomechanical program is necessary to
understand rock characteristics and long-term pit stability to be incorporated
into the pit design and is essential for pit modeling in support of the DFS.
    Drilling for the 2007 geotechnical program focused on the following areas
essential to the DFS and future infrastructure design: port sites drilling,
overburden drilling at the Mary River project site and drilling on the Mary
River to Steensby Inlet rail corridor. Drilling commenced from the sea ice for
the port sites and was successfully completed before the spring thaw. An
initial program of 43 geotechnical holes was planned for the rail route. This
program has been completed one month ahead of schedule and additional holes
have been added to further reduce the risk associated with volumetric
calculations in the definitive feasibility study. For the eight months ended
August 31, 2007, a total of 2,286 metres of geotechnical drilling were
completed with additional drilling planned.

    Bulk Sample Program

    Mobilization activities have commenced and are progressing well for the
bulk sample program. Extraction of up to 250,000 tonnes of high grade hematite
and magnetite ores is planned to progress continuously until shipment from
Milne Inlet during the 2008 summer season. Site activity levels have recently
increased, coinciding with receipt of the approvals necessary to commence
activities in support of the bulk sample program. There are currently about
200 workers on site supporting 2007 operational programs. Although we had a
later start than planned with regard to some of the activities that support
the bulk sample program, we are exploring operational efficiencies with the
object of making up for lost time and delivering the full 250,000 tonne bulk
    An all season support camp for the bulk sample program is being
established at Milne Inlet and is in the final stages of commissioning, with a
larger all-season camp to be installed at the Mary River site as soon as the
road allows transportation of materials. Installation of the new Mary River
camp is currently anticipated to commence in the period between mid to late
    In preparation for the bulk sample and continuing exploration and
engineering activities, three dry-cargo ships were scheduled to arrive in
August and September 2007 and a tanker is currently delivering 8.25 million
litres of fuel to a new bulk fuel storage facility constructed at Milne Inlet.
  Two of the three dry-cargo sealifts have been received, and the final ship
is scheduled for late September 2007. With the arrival of these sea-lifts, the
majority of the materials and supplies required to support the bulk sample and
2008 drilling programs will have been mobilized to site. The transition to
bulk fuel will allow the project considerable savings on future transportation
costs for fuel required to haul ore and to support future field exploration
and geotechnical drilling programs.

    Operational Summary

    In a press release on March 28, 2007 Baffinland announced two important
operational changes to be incorporated in the DFS as compared to the May 2006
Scoping Study: the increase in the initial production rate by 26% to
12.6 million tonnes per year and the decision to make Steensby Inlet on the
south coast of Baffin Island our preferred port site. Although the rail
corridor is 50% further to the potential port site on the south coast, there
is a significant enhancement to shipping from Steensby Inlet to market, where
less ice-strengthened cape-sized ore carriers are expected to extend shipping
to 12 months per year. It was also announced at the time that Baffinland was
going to refrain from commenting on an expected timeline for the project until
the logical timeline became apparent through the work on the DFS. Although the
delivery of the DFS is still over three months from now, it has recently been
determined by the work done to date for the DFS that production is now
expected to begin in 2013 in order to build the stockpiles that will result in
first commercial deliveries in 2014. This schedule assumes that permits will
be in hand to commence construction in the summer of  2010 and that the
necessary debt and equity financing will be available as needed.
    Baffinland also indicated in the press release of March 28, 2007 that the
26% expansion of production and the additional rail distance to Steensby Inlet
were expected to add to the capital cost estimate in the DFS as compared to
the Scoping Study of May 2006. Although we will not be able to quantify this
until the DFS is completed, the additional rail distance to Steensby Inlet of
approximately 50 kilometres and the less gentle topography compared to the
Milne Inlet route are expected to add to capital costs and have added to the
expected construction time. Also contributing to the expectation of increased
capital costs is the impact of the increase in the price of steel on the cost
of many of the projects components. Countering this impact is the fact that
strong steel demand and pricing has also resulted in substantial increases in
expectations for iron ore prices for the foreseeable future.
    Rod Cooper, Vice President Operations and COO, stated "We eagerly await
the DFS and other studies that will be the results of the collective efforts
of the many people that make up the Baffinland team. We fully expect the
world-class nature of the Mary River to be clearly demonstrated by these
studies and we are gratified by the high level of interest by many engineering
firms and construction companies in future participation in the development of
the Mary River Project."

    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 may relate to management's future outlook and
anticipated events or results, and may include statements or information
regarding the future plans or prospects of the Company.  Without limitation,
statements about the Company's plans to complete a definitive feasibility
study, including the scheduled timing thereof and other related statements,
statements about the planned bulk sample program and related statements,
statements about the completion of a project description and draft
environmental impact statements, statements about the Company's planned
drilling program, statements about the timing of the commencement of
construction, statements about the timing of the first commercial delivery,
and statements about the timing of initiation or completion of other project
requirements such as regulatory processes and approvals, are forward-looking
    Forward-looking information is based on certain factors and assumptions
regarding, among other things, expected mineral resources, iron ore prices,
the timing and amount of future exploration expenditures, the estimation of
additional capital requirements, the availability of necessary financing and
materials, the receipt of necessary regulatory approvals, the feasibility of
constructing and operating a direct-shipping iron ore mine at the Company's
Mary River project and assumptions with respect to environmental risks, title
disputes or claims, weather conditions and other similar matters. While the
Company considers these assumptions to be reasonable based on information
currently available to it, they may prove to be incorrect. Without limitation,
in stating that the Company has scheduled the completion of a definitive
feasibility study in December of 2007, to initiate constructions in the summer
of 2010, to undertake its first commercial mining in  2013 followed by
commercial deliveries in 2014, a bulk sample program in 2008, initiate the
regulatory process by the end of 2007, and related statements, the Company has
assumed, among other things, that iron ore prices will not change materially
from the prices used in its current financial forecasts and that it will
obtain the financing and regulatory approval and other authorizations required
to enable the exploration, development and mining activities required in order
to complete such activities.  In stating that the Company anticipates
completion of its project description in 2007 and environmental impact
statement in 2008 and in making other statements about the IIBA process, the
Company has assumed, among other things, that it will successfully negotiate
and complete an environmental assessment process through the Nunavut Impact
Review Board and that it will successfully negotiate and execute an Inuit
Impact Benefits Agreement.
    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 inherent in the 
exploration for and development of mineral deposits,  risks relating to
changes in iron ore prices and changes in the worldwide demand for and supply
of iron ore, uncertainties inherent in the estimation of mineral reserves and
resources, risks relating to the remoteness of the Mary River Property
including access and supply risks, reliance on key personnel, construction and
operational risks inherent in the conduct of mining activities, regulatory
risks, including risks relating to the acquisition of necessary licenses and
permits, financing, capitalization and liquidity risks, including the risk
that the financing required to fund all currently planned exploration and
related activities may not be available on satisfactory terms, or at all,
environmental risks and insurance risks.
    The information provided in this press release is given as at August 31,
2007.  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 time, except as
required by law.

For further information:

For further information: Please visit Baffinland's website at, email or contact: Gordon A. McCreary,
President and CEO, (416) 814-3163; Rodney A. Cooper, VP, Operations and COO,
(416) 814-3158; Andreas Curkovic, The Equicom Group, (416) 815-0700 ext. 262

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