Baffinland Iron Mines Corporation
TSX VENTURE : BIM

Baffinland Iron Mines Corporation

October 26, 2005 18:20 ET

Baffinland Announces Thick Intervals of High Grade Iron

TORONTO, ONTARIO--(CCNMatthews - Oct. 26, 2005) - Baffinland Iron Mines Corporation (TSX VENTURE: BIM) ("Baffinland" or the "Company") is pleased to report the following thick intervals of high grade iron assays from the first batch of drill core from the Company's 2005 drill program on its wholly-owned Mary River iron ore deposits, located on Baffin Island, Nunavut Territory, Canada.

Highlights

- The total high grade iron intercepts contained in the nine holes released today is 1,751.3 metres at an average grade of 65.6% iron.

- The total of the multiple intercepts in a single hole is as much as 265.8 metres in six intervals at an average grade of 65.2% iron.

- The thickest continuous interval is 213.3 metres at an average grade of 65.5% iron.

- The highest grade of the thick and continuous intercepts is 69.2% iron over an interval of 139.9 metres.

- Deposit No. 1 remains open along strike and at depth and since many holes collared and/or ended in high grade mineralization the deposit is also open to potential additional thickness in certain areas.

Assaying and analytical work are performed by SGS Lakefield Research Limited ("Lakefield") under a strict protocol designed for testing lump iron ores. Samples are then sent from Lakefield to Studien Gesellschaft fur Eisenerz-Aufbereitung ("SGA") in Germany, where they are composited for detailed metallurgical testing to ISO standards for iron ore. The results of this metallurgical testing and the remaining assays will be released when the data becomes available. The attached table summarizes the assay data for the nine holes received to date from the 2005 program and the attached plan view map shows the location of the holes drilled in Deposit No. 1. Plan views showing the location of the drill holes and updated preliminary cross-sections to assist in interpretation of the data will be posted on the Baffinland website at www.baffinland.com as soon as they are available.

Overview

The hallmark of the Mary River iron ore deposits is the high grade nature of these exceptional iron oxide deposits of hematite and magnetite. The drilling completed in the 1960's indicated a resource of about 120 million tonnes grading approximately 68% iron. Considering that pure hematite grades 69.94% iron and pure magnetite grades 72.36% iron, it becomes evident how remarkably high grade the Mary River deposits are. Currently, the world's highest grade direct shipping iron ores (lump and fines) from Brazil, Western Australia and South Africa typically grade between 62% and 66% iron.

The drilling of Deposit No.1 in 2005 was designed to in-fill the drilling done in 2004 within approximately one kilometre of the axis of the fold between the south and north limbs of the deposit, as well as step out at depth in certain areas. The widely spaced 2004 program had been successful in more than doubling the drill-indicated strike length delineated in the 1960's to about 2.5 kilometres, more than doubling the depth of Deposit No. 1 and adding substantially to the thickness of the deposit with the discovery of an Upper Zone. The 2005 program extended the depth of Deposit No. 1 to more than 450 metres when measured from the top of the ridgeline on the north limb. The primary objective of the 2005 program was to build on the successes of the 2004 program such that a new resource calculation incorporating all of the drilling would be sufficient to justify investigating the feasibility of a 10 million tonne per year operation for at least 25 years.

Gordon A. McCreary, President and CEO of Baffinland stated that, "The assay results of the nine holes released today are nothing short of spectacular, with multiple intercepts in certain holes totalling as much as 265 metres of 65% iron and the average being almost 200 metres of multiple intercepts per hole grading almost 66% iron. The thickest continuous interval being reported today is 213.3 metres grading 65.5% iron and the highest grade of these thick and continuous intervals was 69.2% over 139.9 metres." Four of the nine holes released today ended in high grade mineralization and three of the holes collared in high grade mineralization after penetrating the glacial debris. Consequently the deposit is not only open along strike and at depth but it is also open to potential additional thickness in certain areas.

South Limb

Hole MR1-05-49 is the only hole being released today that was targeted exclusively in the south limb of Deposit No. 1, collared approximately 150 metres southeast of holes MR1-04-44 & 45 that were located approximately on the axis of the fold structure that differentiates the south limb from the north limb. Hole MR1-05-49 intersected six intervals totalling 265.2 metres at an average grade of 65.2% iron with the thickest and highest grade interval being 92.9 metres grading 68.3% iron near the bottom of the hole. This hole was drilled on the same cross-section as two holes drilled in 2004 (MR1-04-37 & 39) that had both collared in high grade mineralization and due to technical drilling difficulties had both ended in high grade mineralization. MR1-05-49 was a significant down dip step out from the other two holes on this cross-section having also collared in high grade mineralization after it penetrated 28 metres of glacial debris about 100 metres northeast of the two holes from 2004. The 2005 hole reached the foot wall and was completed to a total depth of 402 metres.

North Limb

Eight of the nine holes being released today were targeting the north limb of Deposit No. 1. Hole number MR1-04-45 had been drilled form the axis of the fold to a depth of 320 metres in 2004 where it was suspended due to the lack of water for drilling. In 2005 this hole was deepened by 72 metres, all in high grade mineralization, to a final depth of 392 metres where it was again suspended in high grade mineralization due to technical difficulties. Hole MR1-04-45 had therefore, both collared and terminated in high grade mineralization and yet intersected six intervals totalling 237.6 metres at an average grade of 67.0% iron with its thickest and highest grade interval being 139.9 metres grading 69.2% iron at the bottom of the hole.

Hole MR1-05-46 was also collared in high grade mineralization after penetrating 20 metres of glacial debris approximately 100 metres northeast of hole MR1-04-45. This hole encountered ten intervals totalling 231.9 metres at an average grade of 64.9% iron with the highest grade again being near the bottom of the hole with 41.8 metres grading 68.4% iron. The hole entered the footwall at 411.1 metres and was drilled to a total depth of 416 metres.

Hole MR1-05-47 was collared about 150 metres northeast of hole MR1-05-46 and did not enter high grade mineralization until 209 metres down the hole. This was the most disappointing result in the nine holes being released today, in that some geological event such as a post-mineralized fault, has affected the thickness of the Upper Zone in this area; however, the hole encountered five intervals totalling 123.9 metres at an average grade of 65.1% iron. The hole ended in high grade mineralization about 20 metres short of its targeted depth, due to technical difficulties, at a depth of 419 metres.

Hole MR1-05-48 was collared about 250 metres northeast of hole MR1-05-47 and intersected 36.0 metres grading 67.1% iron in the Upper Zone starting at a depth of 58.0 metres and returned 138.8 metres grading 65.1% iron in the Lower Zone starting at a depth of 205.8 metres. Although not as thick as some other sections, it was encouraging to encounter a mineable thickness of high grade Upper Zone mineralization in this hole, north of the geological structure inferred from hole MR1-05-47. The total for the two intervals in this hole was 174.8 metres grading 65.5% iron.

Hole MR1-05-50 was collared up dip on the same cross-section as hole MR1-05-47 and about 150 metres to the northwest. This hole returned five intercepts totalling 167.0 metres grading 66.5% iron including two Upper Zone intervals totalling 52.2 metres grading 64.4% iron.

Hole MR1-05-51 was drilled from a setup located about 75 metres southwest of MR1-05-48, between MR1-05-47 and MR1-05-48. This hole encountered five high grade intervals totalling 137.0 metres at an average grade of 64.3% iron including an Upper Zone intercept of 28.3 metres grading 64.1% iron.

Hole MR1-05-52 was collared about 75 metres southwest of hole MR1-05-50 and encountered four intervals totalling 150.6 metres at an average grade of 66.6% iron including three Upper Zone intervals totalling 34.9 metres at an average grade of 63.7% iron. This hole ended prematurely in high grade mineralization due to technical drilling difficulties.

The final hole being reported today is hole MR1-05-53 that was drilled from the same setup as hole MR1-05-49 but was drilled across the fold axis into the north limb returning two intervals totalling 262.7 metres at an average grade of 65.0% iron including the longest continuous intercept being reported today of 213.3 metres grading 65.5% iron. This hole was drilled to the footwall of the Upper Zone at 352.1 metres but was terminated at 357.0 metres before reaching the Lower Zone.

Conclusions

The management of Baffinland is very pleased with the quality of the drill results being released today and believes that this data bodes well for the results of a new resource calculation that will be completed after all of the 2005 assay data is available. The total length of high grade intervals in the 9 holes released today was 1,751.3 metres at an average grade of 65.6% iron. The new drilling in the nine holes represents 2,919.1 metres or just over one-third of the 8,072.6 metres of large diameter diamond drilling completed in 2005. Michael T. Zurowski, Executive Vice President and COO, stated that, "The increased thickness and persistence of the high grade mineralization to such substantial depths at Deposit No. 1 will impact greatly on the resource and preliminary open pit modeling that will be completed for the Scoping Study being prepared by Aker Kvaerner E&C and targeted for completion in the first quarter of 2006. The successes of 2005 increase anticipation of the 2006 program when initial drilling of the other known deposits is proposed, in addition to the advanced work at Deposit No.1 to complete the planned Feasibility Study by the middle of 2007."

Assay data for the remainder of the holes drilled in 2005 is expected to be released in two additional batches when the data becomes available from Lakefield. In addition, the results of metallurgical testwork from SGA will be released when that data becomes available.

The press release has been prepared under the supervision of Michael T. Zurowski, P. Eng., a Qualified Person as defined by National Instrument 43-101. The resource figure quoted in the text of this press release is a historical resource estimate, by Watts Griffis and McOuat Limited in the 1960's, containing approximately 116.7 million tonnes grading 68.3% Fe, 0.8% SiO2, 0.03% S and 0.03% P and a high sulphur resource containing 26.9 million tonnes grading 62.8% Fe, 3.8% SiO2, and 0.43% S and 0.03% P. Management believes that the historical estimate is relevant and conforms to an indicated resource under NI 43-101. Current drill results are not included in this historic resource estimate and as part of its advanced exploration program, management will be seeking to generate a new resource estimate based upon the new results as soon as possible.

This press release includes certain "Forward-Looking Statements" within the meaning of section 21E of the United States Securities and Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding potential mineralization and reserves, exploration results and future plans and objectives of Baffinland Iron Mines Corporation, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statement. Important factors that could cause actual results to differ materially from Baffinland's expectations are disclosed under the heading "Risk Factors" and elsewhere in Baffinland's documents filed from time to time with the TSX Venture Exchange Inc. and other regulatory authorities.

For further information visit the Baffinland website at www.baffinland.com, e-mail info@baffinland.com.

Please note: A Summary of Drill Hole Assays is available on CCNMatthews' website at the following link: www.ccnmatthews.com/docs/bafassay.pdf

Please note: A map of the Mary River Iron Ore Deposits is available on CCNMatthews' website at the following link: www.ccnmatthews.com/docs/baffmary.pdf

THE TSX VENTURE EXCHANGE INC. HAS NEITHER APPROVED NOR DISAPPROVED THE CONTENTS OF THIS PRESS RELEASE.

Contact Information

  • Baffinland Iron Mines Corporation
    Gordon A. McCreary
    President and CEO
    (416) 364-8820
    or
    Baffinland Iron Mines Corporation
    Michael T. Zurowski
    Executive Vice President and COO
    (416) 364-8820