Baffinland Iron Mines Corporation

Baffinland Iron Mines Corporation

October 17, 2006 08:26 ET

Baffinland Announces Flow-Through Private Placements to Fund Iron Ore Exploration

TORONTO, ONTARIO--(CCNMatthews - Oct. 17, 2006) -

Not for distribution to U. S. newswire services or for dissemination in the United States.

Baffinland Iron Mines Corporation (TSX:BIM) ("Baffinland" or the "Company") announced today that it has agreed to issue, by way of a brokered private placement led by Raymond James Ltd. ("Raymond James"), up to 2,909,090 common shares on a "flow-through" basis at a price of $2.75 per flow-through share for gross proceeds of up to approximately $8,000,000. In addition, Raymond James has been granted an option to sell up to a further 727,272 flow-through shares for additional gross proceeds of up to approximately $2,000,000. Concurrently with this brokered private placement, Baffinland plans to issue, by way of a non-brokered private placement, up to 2,181,818 flow-through common shares priced at $2.75 per flow-through share, for gross proceeds of up to approximately $6,000,000.

Closing of the private placements, which are currently expected to occur on or about October 26, 2006, are subject to certain customary conditions, including, but not limited to, the receipt by the Company of all necessary approvals and consents, including the approval of the Toronto Stock Exchange.

The proceeds of the private placements will be used to fund exploration at the Company's 100% owned Mary River project, a high grade, potential direct-shipping iron ore operation located in Nunavut Territory, Canada.

This press release contains certain information that may constitute forward-looking information within the meaning of securities laws. In some cases, forward-looking information can be identified by the use of terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. Particularly, information about the expected closing of the private placements and the potential for a direct-shipping iron ore operation is forward-looking information.

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 the closing of the private placements, exploration and development risks, risks relating to the worldwide price of, demand for and supply of iron ore 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 time.

The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or any applicable exemption from the registration requirements. This press release does not constitute an offer to sell or the solicitation of an offer to buy nor will there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

Contact Information

  • Baffinland Iron Mines Corporation
    Gordon A. McCreary
    President and CEO
    (416) 364-8820 x 25
    The Equicom Group
    Investor Relations: Andreas Curkovic
    (416) 815-0700 x 262
    The Equicom Group
    Investor Relations: Martti Kankas
    (416) 815-0700 x 243