BAFFINLAND RELEASES HIGH GRADE IRON ASSAYS FOR THE MARY RIVER PROJECT
Baffinland Iron Mines Corp. has released the following assays from the first batch of drill core from the company's 2004 drill program on its wholly owned Mary River iron ore deposits, located 160 kilometres south of Pond Inlet, Baffin Island, Nunavut. Assaying is being performed by SGS Lakefield Research Ltd. under a strict sampling protocol designed for testing lump iron ores. Representative samples are also being sent from Lakefield to Studien Gesellschaft fur Eisenerz-Aufbereitung (SGA) in Germany for detailed metallurgical testing to ISO standards for iron ore. The results of this metallurgical testing and the remaining assays will be released when the data become available. The attached table summarizes the assay data received to date. One hole was also drilled in deposit No. 2 (hole MR2-04-42) located approximately two kilometres east of deposit No. 1. Plan views showing the location of the drill holes and preliminary cross-sections to assist in interpretation of the data are available at the Baffinland website at www.baffinland.com.
It's all about grade (and metallurgy)
The hallmark of the Mary River iron ore deposits is the high-grade nature of these exceptional iron oxide deposits of hematite and magnetite. The drilling completed in the 1960s indicated a resource of about 120 million tonnes grading approximately 68 per cent iron. Considering that pure hematite grades 69.94 per cent iron and pure magnetite grades 72.36 per cent iron, it becomes evident how remarkably high-grade the Mary River deposits are. Currently, the world's highest grade direct shipping iron ores (lump and fines) from Brazil, Western Australia and South Africa typically grade between 62 per cent and 66 per cent iron. Historic metallurgical testwork on Mary River iron ores generally indicates that the hematite is suited as a premium-priced lump ore while the Lower reducibility of the magnetite makes it a poorer lump ore but an excellent sinter feed.
The drilling of deposit No. 1 in 2004 was designed to step out both north and south from the previously drilled strike length of 1.2 kilometres and was successful in more than doubling the drill-indicated strike length. In addition, holes were designed to probe the down-dip extension of deposit No. 1 and several holes penetrated the original Lower zone at depths more than twice that of the previous drilling. Extensions of the original Lower zone along strike were expected since deposit No. 1 can be traced at surface for approximately 3.5 kilometres. The results confirming the extension are important. However, the most surprising result of the 2004 drill program was the intersection of high-grade iron oxides dominantly in the form of high-grade hematite in a newly identified Upper zone. In hole MR1-04-37, the new Upper zone graded 66 per cent iron over three intervals totalling 95.4 metres. In hole MR1-04-39, this new zone graded 65.6 per cent iron over three intervals totalling 81.4 metres. Assays are still pending for substantial intersections in the Upper zone in three holes, MR1-04-34, MR1-04-44 and MR1-04-45.
Newly discovered Upper zone within deposit No. 1
The first of these Upper zone intercepts was in hole MR1-04-34 (assays pending) where the hole collared directly into hematite as soon as it penetrated the area of glacial overburden and recorded multiple intercepts totalling 116.7 metres in the combined Upper and Lower zones.
The next intersections of the Upper zone were in holes MR1-04-37 and MR1-04-39 that were both drilled from the same setup at slightly different angles and were also collared directly into hematite, after penetrating the overburden, approximately 250 metres northwest of MR1-04-34.
Hole MR1-04-37 had three intercepts in the new Upper zone and one intercept in the Lower zone totalling 162.1 metres at an average grade of 67 per cent iron. Hole MR1-04-39 also had four intercepts totalling 138.8 metres at an average grade of 66.9 per cent iron. Although both of these holes defined substantial intercepts in the Upper zone, due to technical drilling problems neither hole reached their targeted depths of 325 metres and ended in Lower zone mineralization at depths of about 200 metres.
Hole MR1-04-44 spotted along the axis of the fold in deposit No. 1, approximately 150 metres northwest of holes MR1-04-37 and MR1-04-39, was completed in the south limb of deposit No. 1 to its target depth of 401 metres yielding significant iron ore intercepts totalling over 250 metres in the combined Upper and Lower zones with assays pending.
The last hole drilled in the 2004 program, MR1-04-45 (assays pending), was drilled from the same setup as MR1-04-44 but was angled to intercept the north limb of deposit No. 1. Hole MR1-04-45 intersected 140.7 metres of dominantly hematite in the Upper zone and ended in mineralization with intercepts totalling 77.4 metres of Lower zone hematite and magnetite at a depth of 320 metres. This final hole of the 2004 program ended prematurely when drilling water was not available due to cold temperatures combined with high winds causing very low wind chill temperatures in late September. It is the intent to deepen this hole by 100 metres to a depth of approximately 420 metres when the drill program is reactivated in the spring of 2005.
Deposit No. 1 north limb extension
Holes numbered MR1-04-33, MR1-04-36, MR1-04-38, MR1-04-40, MR1-04-41 and MR1-04-43 were all focused on the northern extension of the north limb of deposit No. 1 with varying degrees of success. The most northerly hole, MR1-04-40, was drilled approximately 700 metres north of the most northerly hole drilled in the 1960s and intersected a total of 80.1 metres in six intercepts averaging 68.7 per cent iron. The two most significant intercepts in this hole were 49.8 metres grading 68.9 per cent iron and 18.8 metres grading 69.7 per cent iron, both dominantly magnetite.
Holes MR1-04-33 and MR1-04-36 were both drilled from the same setup about 250 metres south of hole MR1-04-40. Unfortunately, hole MR1-04-36 was abandoned at 155 metres due to a washout under the drill platform and hole MR1-04-33 was completed to a final depth of 254 metres with only minor intercepts of economic interest. Although these holes intersected significant thicknesses of banded iron formation, most of the mineralization was not sampled in these two holes due to the expectation that grades would be substantially below 60 per cent iron and, as such, not of economic interest as direct shipping iron ore.
Hole MR1-04-41 intersected a total of 68.5 metres in four intercepts grading 68.5 per cent iron and was drilled about 300 metres south of holes MR1-04-33 and 36 and about 150 metres north of the most northerly hole drilled in the 1960s. Hole MR1-04-41 consisted of intercepts of magnetite and specular hematite.
Hole MR1-04-38 (assays pending) was drilled about 150 metres north of hole MR1-04-41 and intersected about 100 metres of dominantly magnetite mineralization. Hole MR1-04-43 was collared on the same section as the most northerly hole drilled in the 1960s but as a down-dip step-out hole. Hole MR1-04-43 was cased as the program wound down due to weather at the end of September and, as such, is planned to be drilled in 2005.
Deposit No. 1 south limb extension
Holes numbered MR1-04-31, MR1-04-32, MR1-04-34 and MR1-04-35 were focused on the southern extension of the south limb of deposit No. 1. Hole MR1-04-35, collared in overburden as a step-out hole on the southern limb of deposit No. 1, was unfortunately lost in overburden and, as such, never reached bedrock.
Hole MR1-04-34 (assays pending) was drilled up-dip on the same section as MR1-04-35 and collared in hematite after it penetrated about 10 metres of overburden. This hole was completed to a depth of 194 metres and intersected 116.7 metres of dominantly hematite from four intercepts in both the newly discovered Upper zone and the original Lower zone.
Hole MR1-04-31 (assays pending) was the most southerly hole drilled in 2004 and represents a step-out of over 700 metres from the most southerly hole drilled in the 1960s. This hole intersected over 50 metres of dominantly magnetite mineralization. Hole MR1-04-32 (assays pending) drilled on a section about halfway between holes MR1-04-31 and MR1-04-34 intersected about 30 metres of dominantly magnetite mineralization.
Deposit No. 2
Hole MR2-04-42 was drilled in deposit No. 2 and intersected 107.5 metres of dominantly specular hematite at an average grade of 63.5 per cent iron, including a 59.3-metre intercept of 68.7 per cent iron. Core recovery was 100 per cent for this hole and the competent nature of the core suggests the potential for a high percentage of lump ore, subject to more definitive metallurgical testing, compared with previous expectations for this deposit of specular hematite. Due to the lack of availability of drill salt at the time of drilling, this hole was halted in mineralization at 122 metres and will likely be deepened through the footwall contact in a future drill program.
Conclusions
As indicated in previous Baffinland press releases, 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 at a comparable grade and the encouraging 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. Recent meetings in Europe between Baffinland management and appropriate representatives of several large European steel mills have reinforced the validity of these objectives from a market perspective. 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 beginning in April, 2005. Subject to financing, Baffinland anticipates drilling will commence in the spring of 2005 with up to four diamond drills.
As encouraging as some of the assay data are in this first batch of results, Baffinland particularly looks forward to receiving and releasing the balance of the assay results from the 2004 program. Assays are pending on thick intersections of dominantly magnetite mineralization in holes MR1-04-31, MR1-04-32 and MR1-04-38. Most importantly, however, assays are pending on very thick intersections of dominantly hematite mineralization in holes MR1-04-34, MR1-04-44 and MR1-04-45. These three holes, together with assay results released in this press release for holes MR1-04-37 and MR1-04-39, are major step-outs from the drilling done in the 1960s. They are dominantly hematite mineralization and all provide important assay data on the newly discovered Upper zone. Importantly, all five of these holes drilled in the new Upper zone were collared in hematite after the holes penetrated the glacial overburden. Consequently, deposit No. 1 is not only open along strike to the north and south and down-dip but also remains open to further step-out holes to the east.
The press release has been prepared under the supervision of Michael T. Zurowski, PEng, a qualified person as defined by National Instrument 43-101. The resource figure quoted in the text of this press release is a historical resource estimate, by Watts Griffis and McOuat Ltd. in the 1960s, containing approximately 116.7 million tonnes grading 68.3 per cent iron, 0.8 per cent silicon dioxide, 0.03 per cent sulphur and 0.03 per cent phosphorus and a high sulphur resource containing 26.9 million tonnes grading 62.8 per cent iron, 3.8 per cent silicon dioxide, 0.43 per cent sulphur and 0.03 per cent phosphorus. Management believes that the historical estimate is relevant and conforms to an indicated resource under National Instrument 43-101. Current drill results are not included in this historic resource estimate and, as part of its advanced exploration program, management will be seeking to generate a new resource estimate based upon the new results as soon as possible.
SUMMARY OF DRILL HOLE ASSAYS
As of Nov. 26, 2004 |
