Baffinland Iron Mines Corporation

Baffinland Iron Mines Corporation

May 16, 2007 16:37 ET

Fednav to Provide Shipping Solutions for Baffinland's Mary River Iron Ore Project

TORONTO, ONTARIO--(Marketwire - May 16, 2007) –

Attention Business Editors:

Baffinland Iron Mines Corporation (TSX: BIM) ("Baffinland" or the "Company") announced today that Fednav Limited ("Fednav") has agreed in principle to develop and deliver shipping solutions for Baffinland's Mary River Iron Ore Project (the "Project"), subject to certain conditions, located on Baffin Island, Nunavut Territory, Canada. Fednav and Baffinland have entered into a non-binding Heads of Agreement with the intention of executing a final binding agreement shortly.

In accordance with a non-binding Heads of Agreement between Fednav and Baffinland, Fednav will be exclusively responsible to Baffinland for all matters related to iron ore shipping services. Under this agreement, Fednav will supervise the production of detailed ship specifications for the ice-strengthened cape-size ore carriers required to transport iron ore from the Project to customers. In addition, they will assist in berth design, ship-loading equipment and port operational procedures and will liaise with regulatory authorities on behalf of the Project. Fednav will assist Baffinland in the permitting process and the negotiations of the Inuit Impact and Benefits Agreement and will also assess operational costs for running the ships including full technical management and crewing.

This non-binding agreement contemplates that other shipping companies will undoubtedly be part of the delivery of the shipping solutions for the Project and defines the terms and conditions under which those other shipping companies could participate as the Project advances toward full operation.

Fednav will also provide shipping transportation services for the Project, including ocean transportation of the Company's proposed 250,000 tonne bulk sample scheduled for August and September, 2008. The bulk sample program is conditional on Baffinland obtaining regulatory approvals and additional financing. On May 7, 2007, Baffinland announced a positive screening decision for the bulk sample by the Nunavut Impact Review Board.

"We are extremely pleased to be working with Fednav on our Mary River Project. Their un-paralleled expertise in Canadian Arctic shipping will strengthen our plans and assist our team of professionals in developing a truly world-class mining operation," stated Gordon McCreary, President and CEO of Baffinland. He went on to add "Fednav's wholly-owned consulting subsidiary, Enfotec Technical Services, has provided ice navigation consulting services to Baffinland and was instrumental in the recent decision to focus on the southern routing from Steensby Inlet that is expected to allow shipping 12 months per year. This decision is expected to greatly enhance the economic returns for the Project when it is included in the Definitive Feasibility Study scheduled for completion in December 2007."

Paul Pathy, Executive Vice President of Fednav, stated that, "Fednav is excited to be part of the Mary River Project and a key member of the Baffinland team. Fednav's history of innovation in the Arctic combined with the great promise of Baffinland's first-rate iron ore resources amounts to a powerful and truly Canadian partnership."

Fednav, a privately owned Canadian company, is a leading international dry-bulk shipping company with a highly diversified and modern ice-strengthened fleet of ships. Fednav has participated in every major bulk shipping project in the Canadian Arctic and has provided innovative and practical solutions that have helped to develop shipping in the Canadian Arctic for over 50 years. Fednav currently provides bulk shipping solutions for CVRD-Inco's Voisey's Bay Nickel operations, Xstrata's Raglan Mine to the south of the Mary River Project and Teck Cominco's Red Dog mine in Alaska. While in operation, Fednav provided bulk shipping services to Breakwater's Nanisivik Mine and Teck Cominco's Polaris Mine to the north of the Mary River Project and was a major provider of ice-class tug and barge shipping services to the petrochemical companies drilling in the Beaufort Sea in the 1970s and 1980s.

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 entering into of a final binding agreement with Fednav, the bulk sample program 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 placement, the execution of a final binding agreement with Fednav, exploration and development risks, risk 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.

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Contact Information

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

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