Baffinland, voestalpine Sign Letter of Intent for Future Iron Ore Sales
01/02/2008 - Baffinland Iron Mines signs letter of intent for the future sale of up to 1.2 million tonnes/year of iron ore to voestalpine Rohstoffbeschaffungs GmbH, the company’s third letter of intent with an end-user steel company.
Baffinland Iron Mines Corp. has signed a letter of intent for the future sale of up to 1.2 million tonnes/year of iron ore to voestalpine Rohstoffbeschaffungs GmbH. The agreement, Baffinland’s third letter of intent with an end-user steel company, follows recently announced agreements with Salzgitter Flachstahl GmbH and ThyssenKrupp Steel AG.
Under the Letter of Intent, voestalpine would purchase up to one million tonnes of lump and two hundred thousand tonnes of fine iron ore per year over a fifteen-year period, to start in 2014. The Letter of Intent is an expression of interest only, and any binding contract of purchase and sale will be subject to, among other things, a production decision by Baffinland, and the future negotiation and consummation of a final sales contract with voestalpine.
Baffinland's Mary River Project is focused on the European market for the sales of its lump and fine iron ore. The company has currently targeted 16 million tonnes to be placed within the European market on an annual basis. This level of European market penetration would represent some 90% of Baffinland's intended initial output of 18 million tonnes per annum.
voestalpine is one of several steel companies that Baffinland is currently negotiating sales contracts with for the company’s planned bulk sample program. The company anticipates mining approximately 250,000 tonnes over the current winter and trucking it to Milne Inlet for transport to Europe where it will be used as feed for production-scale trials in various blast furnaces beginning in the third quarter of 2008. The results of this program will form an important final geological and metallurgical test prior to the establishment of contractual sales and purchase agreements with steel producers.
“Baffinland is pleased with the strong support of voestalpine, and the European steel industry,” said Gordon McCreary, Baffinland's President and CEO. “The Mary River project will be a premier producer of quality lump and we also believe that the fine iron ore will also be sought after as an excellent addition to the steel company's sinter mix.”
Analytical and metallurgical testwork at the Mary River Iron Ore Deposits is being completed by SGS Lakefield in Canada and Studien Gesellschaft fur Eisenerz-Aufbereitung in Germany.
voestalpine is one of several steel companies that Baffinland is currently negotiating sales contracts with for the company’s planned bulk sample program. The company anticipates mining approximately 250,000 tonnes over the current winter and trucking it to Milne Inlet for transport to Europe where it will be used as feed for production-scale trials in various blast furnaces beginning in the third quarter of 2008. The results of this program will form an important final geological and metallurgical test prior to the establishment of contractual sales and purchase agreements with steel producers.
“Baffinland is pleased with the strong support of voestalpine, and the European steel industry,” said Gordon McCreary, Baffinland's President and CEO. “The Mary River project will be a premier producer of quality lump and we also believe that the fine iron ore will also be sought after as an excellent addition to the steel company's sinter mix.”
Analytical and metallurgical testwork at the Mary River Iron Ore Deposits is being completed by SGS Lakefield in Canada and Studien Gesellschaft fur Eisenerz-Aufbereitung in Germany.
The company notes that mineral resources that are not mineral reserves do not have demonstrated economic viability. Due to the uncertainty that may attach to indicated mineral resources, there is no assurance that mineral resources will be upgraded to proven and probable ore reserves. Inferred mineral resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves.
Baffinland, a Canadian publicly-traded junior mining company, is focused on its wholly-owned Mary River iron ore deposits located on Baffin Island, Nunavut Territory, Canada.
