Baffinland
Baffinland Iron Mines Corp. (TSX: BIM) says it will cost $4.1 billion to develop the 100 per cent owned Mary River iron ore mine in Nunavut, a project designed to ship ore to European steel mills.
Toronto-based Baffinland said Tuesday that a feasiblity study on the project says the proposed open-pit mine would have a 20-year mine-life based on proven and probable reserves of about 365 million tonnes of iron ore.
The capital cost is forecast to be $4.1 billion, including a contingency of $438 million
Based on the shipment of 18 million tonnes of high-grade iron ore per year primarily to the European market, the proved reserves of 160 million tonnes and probable reserves of 205 million tonnes can sustain a mine life of more than 20 years, the company said.
"The completion of our (feasibility study) is a major milestone toward the development of our world class, direct-shipping iron ore deposits and results in significant reduction in project risk," said Gordon McCreary, president and CEO of Baffinland.
"In the second quarter of 2008, further risk reduction is expected with the completion of a scoping study demonstrating the scalability of the project by expanding output to 30 million tonnes per year based on the enormous resources delineated in Deposits Nos free credit report without a credit card. 1, 2 and 3.
"During the third quarter, further technical de-risking of the project is anticipated with the delivery of our bulk sample of 250,000 tonnes of lump and fine iron ore to certain European steel mills."
Baffinland is a junior miner focused on the Mary River iron ore deposits on Baffin Island.
Baffinland’s announcement Tuesday came a day after Brazilian mining giant Vale announced a deal that will raise iron ore prices 65 per cent for six major Asian clients amid booming global demand for the raw ingredient used to make steel.
Companhia Vale do Rio Doce SA, the world’s biggest iron ore producer and owner of Canadian nickel giant Vale Inco, reached an agreement on the new price with South Korean steelmaker Posco and with Japan’s Kobe Steel, JFE Steel Corp, Nippon Steel, Nisshin Steel and Sumitomo Metals.
It was the first price agreement between a major ore producer and big steelmakers, a move that typically sets the benchmark price for the industry.
In early trading Tuesday on the TSX, Baffinland shares rose 35 cents to $4, a gain of nearly 9.6 per cent.
Filed under: marketing by Pascal