Baffinland Iron Mines Corporation

Baffinland Iron Mines Corporation

August 23, 2007 14:39 ET

Baffinland Secures Credit Facility to Provide Liquidity

TORONTO, ONTARIO--(Marketwire - Aug. 23, 2007) –

Attention Business Editors:

Baffinland Iron Mines Corporation ("Baffinland" or the "Company")(TSX:BIM) announced today that it has arranged a $21 million senior secured credit facility from its corporate banker, the Bank of Nova Scotia, to provide liquidity to the Company which was constrained due to the recent illiquidity of asset-backed commercial paper.

As previously reported, $43.8 million of the Company's $45.9 million in cash and investments was invested in certain non-bank asset-backed commercial paper R1 High A Notes (the "Investments") with three separate trusts with maturity dates ranging from August 13 to August 30, 2007. On August 13, 2007, Coventree Capital Group Inc. announced that due to market disruption it was unable to meet its repayment obligations until its liquidity providers funded such repayments.

The non-revolving, six-month credit facility, primarily collateralized with the outstanding Investments, will provide the Company with the ability to drawdown up to $21 million immediately.

"This credit facility provides us with sufficient cash to continue to operate and meet our financial obligations while the longer-term liquidity matter is being resolved in the marketplace", said Gordon A. McCreary, President and Chief Executive Officer. "As a result of this expedited support from the Bank of Nova Scotia, we are continuing to move forward with our plans."

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 time.

Contact Information

  • Baffinland Iron Mines Corporation
    Gordon A. McCreary
    President and Chief Executive Officer
    (416) 814-3163

    Baffinland Iron Mines Corporation
    Robert J. Chausse
    Vice President and Chief Financial Officer
    (416) 814-3170

    The Equicom Group
    Andreas Curkovic
    (416) 815-0700 ext. 262