Baffinland brings Mitsubishi on-board
2005-11-30 10:03 ET - News Release
Mr. Gordon McCreary reports
MITSUBISHI TO INVEST C$5.5 MILLION IN BAFFINLAND
Baffinland Iron Mines Corp. has signed a memorandum of understanding (MOU) with Mitsubishi Corporation that provides the framework for the participation of Mitsubishi in a private placement of 2.75 million Baffinland common shares, at a price of $2.00 per share, for gross proceeds to Baffinland of $5.5-million. Upon closing of the proposed transaction, scheduled by Dec. 31, 2005, Mitsubishi would own approximately 7.2 per cent of the Baffinland shares outstanding. The MOU contemplates that Mitsubishi shall be granted certain Asian marketing rights for a portion of future Baffinland iron ore production.
"We are very pleased to welcome Mitsubishi, one of the largest diversified trading and investment companies in the world, as our first strategic investor in Baffinland," stated Gordon McCreary, president and chief executive officer of Baffinland. He went on to say: "We believe that Baffinland's Mary River iron ore deposits are truly world-class and it is appropriate to have a world-class investor such as Mitsubishi to participate in the advancement of this project. With the assistance of Mitsubishi Baffinland plans on consistently developing sales opportunities in Asia with a portion of expected production to establish long-term relationships for future growth opportunities. I commend the iron ore specialists within Mitsubishi for their early recognition of the importance of our Mary River project and we look forward to a long, growing and mutually beneficial relationship with Mitsubishi."
Mitsubishi is Japan's largest diversified trading and investment company (sogo shosha) with over 200 bases of operations in approximately 80 countries worldwide. Mitsubishi is engaged in business with customers around the world in virtually every industry, including metals, energy, machinery, chemicals, food and general merchandise. In the iron ore sector, Mitsubishi's investments include 26.2-per-cent ownership of Iron Ore Company of Canada (IOC), Canada's largest iron ore producer, and 49-per-cent ownership of its sales division IOC Ores Sales Company, and 50-per-cent ownership of Compania Minera Huasco S.A. in Chile, in addition to a global trading presence.
During the past two years Baffinland has spent over $25-million on the advancement of its 100-per-cent-owned Mary River project, a high-grade, potential direct-shipping iron ore operation located in Nunavut, Canada. Recently Baffinland press released the available assay data from a portion of the 2005 drilling program and over the next several months Baffinland expects to release additional assay and metallurgical data, complete a new resource calculation, and complete a scoping study under the direction of Aker Kvaerner E&C.
This private placement is subject to receipt of all required regulatory approvals and receipt of appropriate internal approvals of Mitsubishi and Baffinland, all expected to be received by Dec. 21, 2005, and to be followed by a closing as soon as possible thereafter, but in any event no later than Dec. 31, 2005.
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