NWT Mineral Exploration

[Tackler]

Baffinland stops drilling for the winter at Mary River

2004-10-07 10:04 ET - News Release

Mr. Gordon McCreary reports

BAFFINLAND PROVIDES IRON ORE EXPLORATION UPDATE

Baffinland Iron Mines Corp. has provided the following update regarding its 2004 drill program on the wholly owned Mary River iron ore deposits, located 160 kilometres south of Pond Inlet, Baffin Island, Nunavut, Canada. Drilling commenced on June 27 with two diamond drills and continued until Sept. 27 when cold weather restricted the availability of water for drilling. A total of 2,813 metres were drilled in 15 holes in 2004, bringing the total diamond drilling on the Mary River deposits to 6,132 metres in 45 holes. Difficult weather is nothing new in the Arctic, but the unusual amount of rain, low cloud cover and at times, the high winds, constrained drilling due to the totally air-supported nature of the program in 2004. Although the company did not drill as many holes or metres as it had planned in 2004, the results are highly encouraging due firstly to the expanded thicknesses of hematite in deposit No. 1 as the drill program stepped out significantly down dip from the previous drilling. The previous drilling had been restricted to a maximum vertical depth of only about 160 metres from the surface outcrop on the ridge line while this year's drilling, at times, probed deposit No. 1 at depths more than twice that of previous drilling. This season's program has also more than doubled the strike extent of the previous drilling on deposit No. 1 from approximately 1.2 kilometres to about 2.8 kilometres. In addition, the company drilled the first hole ever drilled on any of the other four deposits in the Mary River camp. A 122-metre hole that ended in mineralization with a 106-metre intercept of specular hematite was drilled in deposit No. 2, located about two kilometres east of deposit No. 1.

The first shipment of drill samples from the 2004 program, consisting of approximately six tonnes of material, was shipped on the backhaul of this year's Arctic sealift and has recently arrived at SGS Lakefield Research Limited. Lakefield will perform basic assays under a strict protocol designed for testing lump iron ores. Representative samples will be sent from Lakefield to Studien Gesellschaft fur Eisenerz-Aufbereitung (SGA) in Germany for detailed metallurgical testing to ISO standards for iron ore. The second batch of drill samples, consisting of about two tonnes of material, will be air freighted from Pond Inlet to Southern Canada in mid-October. Consequently, Baffinland expects to issue news about several batches of assay and metallurgical data over the next two months starting in late October. In addition, as the data become available, the company will update the appropriate section of the Baffinland website at www.baffinland.com with appropriate drawings such as cross-sections, to assist in the interpretation of the data.

In reviewing the logs for the 15 holes drilled in 2004, the most encouraging fact is the drill confirmation of a new zone of dominantly hematite mineralization in the upper portion of certain holes, with intercepts of 155 metres and 140 metres in holes No. 44 and 45, respectively. Estimated true thicknesses of these intercepts are about 80 per cent of the interval. These intercepts are in addition to the down-dip extensions of the previously drilled hematite and magnetite zone that was the source of previous resource estimates. Hole No. 44 was completed to a total depth of 401 metres with the combined hematite and magnetite intercepts in this hole totalling 280 metres. Hole No. 45 ended in mineralization at a depth of 320 metres due to insufficient water for drilling in late September. It is the intent to complete this hole to a depth of approximately 420 metres when the 2005 program begins in the spring.

As indicated in the Baffinland news in Stockwatch dated May 26, 2004, the objective of the 2004 and 2005 drill programs is to delineate a substantial resource to support a direct-shipping iron ore operation focused on European markets with a production rate of approximately 10 million tonnes per year. Justification for such an operation would require an approximate doubling of the tonnage of the resources delineated in the 1960s and the encouraging visual results of the 2004 drill program suggest that Baffinland is on track to more than accomplish this objective with an anticipated 10,000-metre drill program in 2005. Most of the heavy supplies for the 2005 program, such as drill salt, fuel and additional drilling equipment, were delivered to Pond Inlet by the sealift in early September. These supplies and additional supplies from Southern Canada are to be airlifted by Hercules aircraft directly to the upgraded Mary River airstrip in April, 2005. Subject to financing, Baffinland anticipates drilling will commence in the spring of 2005 with four diamond drills.