Baffinland Iron Mines Corporation
TSX : BIM

Baffinland Iron Mines Corporation

June 19, 2008 17:00 ET

Baffinland Appoints AMEC for EPCM Services, Completes DFS Expansion Study and Provides an Operations Update

TORONTO, ONTARIO--(Marketwire - June 19, 2008) - Baffinland Iron Mines Corporation ("Baffinland") (TSX:BIM) is pleased to announce the appointment of AMEC to provide engineering, procurement and construction management services ("EPCM") for the Mary River Project (the "Project").

The assignment includes basic and detailed engineering services, logistics planning, procurement support and construction management services over the next six years.

AMEC is a global organization with extensive corporate resources, a worldwide staff of over 20,000 people, a proven track record and more northern experience than any other engineering/construction company, with over $30 billion of successful EPCM Northern Canadian projects completed or in progress.

Simon Naylor, President of AMEC Natural Resources Americas, stated "We are thrilled with the award of the Mary River Project. It fits perfectly with an AMEC core competency, project delivery in the Canadian North, and provides an exciting opportunity for us to work with Baffinland in the delivery of a world-class project."

Bob Stanlake, President of AMEC's Mining, Minerals and Metals business, added "AMEC has a long track record of delivering Arctic solutions, this contract demonstrates our tier one position in this market and our world class project management capability."

Rod Cooper, Chief Operating Officer for Baffinland, stated, "The appointment of AMEC as our engineering, procurement and construction management firm marks a significant milestone in advancing the Mary River Project through construction and into commercial operations. AMEC brings significant Arctic expertise with the construction of large-scale mining projects, and we look forward to working with them in the development of this world-class asset."

Gord McCreary, President and CEO, Baffinland, added, "On behalf of Baffinland, I would like to express our sincere appreciation to the various firms involved in the pursuit of our EPCM contract. The level of interest in our Mary River Project confirms management's long held opinion of the extraordinary quality of our iron ore assets and we look forward to AMEC joining the Baffinland team to assist in our relentless march to production as we strive to make our Project the best it can be."

DFS Expansion Study Update

Aker Solutions has completed a study for the potential expansion of the Mary River Project to a production rate of 30 million tonnes per annum, based on the development of a second open pit mine encompassing Deposits No. 2 and No. 3, located approximately 3 kilometres from Deposit No. 1. The study assumes the additional production, beyond the 18 million tonnes per annum planned in the Definitive Feasibility Study, would come on-line in the fourth year of production. The study is completed to a scoping-level of detail, with an estimating confidence of +/- 20 percent.

Results from the study are consistent with management's expectations and the study will contribute to strategic planning for the project. As the majority of the resources included in the Deposit No. 2 and No. 3 open pit are classified as "inferred", Canadian National Instrument 43-101 rules governing disclosure of economic results prevent our release of this information to the public. Baffinland is currently discussing this matter with the Canadian regulators.

Additional information relating to significant components of an expansion of the Mary River Project will be posted on the Company's website at www.baffinland.com in the near future.

Operations Update - Bulk Sample, Field Season Programs

Drilling, blasting and crushing results associated with the bulk sample continue to be favorable and are meeting expectations for fragmentation and crushing, providing additional confidence with respect to the important lump-to-fines ratio associated with the final product.

The early advent of spring-time melting throughout the project area has necessitated extensive work along the full length of the 100-kilometer Milne Inlet to Mary River road. Haulage of the bulk sample to Milne Inlet has therefore been interrupted over the past month, as all contractor resources have been diverted to road construction and maintenance. Blasted ore currently totals 166,956 tonnes, with 108,316 tonnes hauled to the crusher and 98,400 tonnes crushed. A total of 39,048 tonnes of ore has been hauled to Milne Inlet. Haulage will resume when road maintenance and repair is completed.

Progress continues with the 2008 field season programs, including geotechnical drilling, exploration drilling and environmental baseline studies.

The geotechnical program has commenced and is ahead of schedule with respect to the drilling associated with basic engineering design for the railway and port facilities. The sea-ice drilling program at the port was completed on schedule in early June. A total of five diamond drills have been engaged this season and have drilled in excess of 170 holes year-to-date, a continuous improvement over results achieved during 2007. Because drilling is ahead of schedule, three drills have been placed on temporary standby to allow the archeological investigations to advance ahead of the drill program.

The exploration field season is scheduled to commence during July and will include infill and geomechanical drilling on Deposit No. 1, as well as drilling in the vicinity of Deposit No. 1 that is required to support the basic engineering design and location of the mine infrastructure.

The environmental baseline studies, a continuation of efforts undertaken over the past three years, will continue throughout the year and will contribute to the regulatory review and approval process that was initiated in March 2008 with the submission of a Development Proposal and associated applications.

There are presently approximately 300 employees, contractors and consultants fully engaged in the execution of the 2008 programs at Mary River. So far this year, Inuit employment has ranged from 25% to 40%. Site programs are supported from three camp locations: one at Milne Inlet, the second previously announced expanded camp facility at Mary River and the third, a newly constructed field camp located at Steensby Inlet. A fourth field camp, located at the midway point between Mary River and Steensby Inlet, is scheduled to be established later this summer.

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.

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 made about the construction, operation, closure and reclamation of a conventional 18 mtpa open pit mine at Deposit No. 1, the DFS Expansion Study for a 30 mtpa operation, statements about the appointment of the engineering, procurement and construction management firm and the duration of their assignment, statements concerning progress, execution, completion and planning developments associated with the bulk sample, environmental baseline work, geotechnical drilling work and exploration drilling work are forward-looking information. 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 and initial capital costs, 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 Baffinland'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 exploration field season is scheduled to commence during July and will include infill and geomechanical drilling on Deposit No.1, the Company has assumed that it will have the necessary resources to carry out its exploration activities. In stating that the additional production beyond 18 mtpa will come online in the fourth year of production, the Company has assumed that it will have the necessary resources, financing, permits and approvals to construct and operate the open pit mine and the railway and to secure the appropriate ore carriers.

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 and development of mineral deposits, risks relating to changes in iron ore prices and 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, including the risk of changes in capital and operation costs, regulatory risks, including risks relating to the acquisition of the necessary licences 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. 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, it is under no obligation and does not undertake to update this information at any particular time.

Contact Information

  • Baffinland Iron Mines Corporation
    Gordon A. McCreary
    President and CEO
    (416) 814-3163
    or
    Baffinland Iron Mines Corporation
    Rodney A. Cooper
    Vice President Operations and COO
    (416) 814-3158
    Email: info@baffinland.com
    Website: www.baffinland.com