NUNAVUT – In late March, Toronto-based BAFFINLAND IRON MINES CORP. announced plans to complete a definitive feasibility study (DFS) for deposit No.1 of its 100%-owned Mary River project, 160 km south of Mittimatalik (Pond Inlet), Baffin Island, by December 2007.
The company has spent almost Cdn$60 million advancing the project, a potential direct-shipping ore operation with grades of 66% Fe, since reactivating exploration in 2004. The DFS is being managed by AKER KVAERNER E&C, which also managed the scoping study completed in May 2006.
The DFS is expected to enhance the results if the scoping study, including:
– expanding the annual output from deposit No.1 to 12.6M dry tonnes (t) per year from the 10M t/y.
– making Steensby Inlet on the south coast of Baffin Island the priority for the deep water port and terminal for the rail line rather than Milne Inlet on the north coast. This would extend the shipping season to 12 months from nine months per year and significantly reduce the amount of ice-strengthening that vessels servicing the operation would require.
Based on the infrastructure established for deposit No.1, Aker Kvaerner will complete a scoping study on deposit No.2 assuming an increase in total output by 2.4M t/y to 15M t/y. As well, it will complete a Blue Sky study based on the development of deposits Nos. 1, 2, 3 and 3A, assuming a further increase in output to 25M t/y. These new studies are expected to use a higher iron ore price assumption than that used in the scoping study. Iron ore prices have tripled since 2002.
The May 2006 scoping study concluded a 34-year mine life at a production rate of 10M t per year, with a pre-tax internal rate of return of 15%, a payback period of just under six years and a project cash flow in excess of Cdn$6 billion after taking into account capital costs of almost Cdn$1.5 billion.
Baffinlands plans in 2007 include additional traditional knowledge studies and environmental baseline studies. A 9,300-m diamond drilling program for infill, exploration and geotechnical purposes is planned using six drill rigs operated by BOART LONGYEAR.
A Mineral Development Advisory Group meeting is planned in June to obtain input from the regulators prior to completion of the detailed project description. In addition, discussions are ongoing between Baffinland and the QIKIQTANI INUIT ASSOCIATION to develop an Inuit Impact and Benefits Agreement “in principle” and will provide input into the final description of the project. The company plans to submit a detailed project description to the regulators before the end of 2007, to initiate the Nunavut Impact Review Board process.
For further information including a number of televised interviews with Gord McCreary, visit www.baffinland.com.