ArcelorMittal and Nunavut Iron Ore Acquisition Inc. announced February 18 they had taken-up 93% of the common shares of Baffinland Iron Mines Corp. pursuant to their joint offer for the Baffinland announced in mid-January. Resolution of who would own Baffinland followed a takeover battle that began on September 22, 2010, when Nunavut Iron made a hostile offer for Baffinland. Baffinland management resisted the offer, and ArcelorMittal entered the fray on November 8 with a counter offer that was supported by Baffinland management. Following an exchange of offers and counter offers, ArcelorMittal and Nunavut agreed to a joint offer, supported by Baffinland management, that gives ArcelorMittal 70% ownership of Baffinland, while Nunavut holds the remaining 30%. The agreement valued Baffinland at about C$590 million.
Baffinland’s primary asset is its high-grade, open-pit Mary River iron ore project located on northern Baffin island in the Canadian Arctic, about 160 km south of the community of Pond Inlet. The ore will be mined, crushed, screened and transported to the coast for shipping, with no chemical processing facilities required at the mine site. The Arctic climate will affect project construction, operation and logistics. The area endures bitter cold in the wintertime, with 24-hour darkness from November to January. Summers bring 24-hour daylight from May to August but continued cool to cold conditions.
On January 21, Baffinland submitted a Draft Environmental Impact Statement (DEIS) for the Mary River project to the Nunavut Impact Review Board. The DEIS considers a cumulative 21-million-mt/y iron ore mine at Mary River, consisting of a preferred 18-million-mt/y railway and year-round port alternative that would entail shipping iron ore from a proposed port at Steensby Inlet, south of the Mary River property, and a road haulage alternative of 3 million mt/y that would ship in the open water season from port facilities at Milne Inlet, northwest of the property.
The Mary River property hosts nine individual iron ore deposits. Based on drilling to the end of 2009, Deposit No. 1 held 418 million mt of measured and indicated resources grading 66.3% iron and 213 million mt of inferred resources grading 66.9% iron. Deposits No. 2 and No. 3 had 26 million mt of indicated resources grading 65% iron and 336 million mt of inferred resources grading 65.9% iron.
The actual size of the potential Mary River resource has not been quantified. Unofficial estimates range up to 4 billion mt.