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Baffinland Announces Flow-through Private Placement To Fund Iron Ore Exploration |
06/10/2004 |
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TORONTO, ONTARIO – Baffinland Iron Mines Corporation (TSXV:BIM) (“Baffinland” or the “Company”) announced today that it has entered into an agreement to issue approximately 4,400,000 flow-through special warrants by way of private placement at a price of $1.25 per special warrant for total gross proceeds of approximately $5.5 million. A total of 3,600,000 flow-through special warrants will be offered for sale on a best efforts basis by a syndicate led by Haywood Securities Inc., and including Orion Securities Inc. and Dundee Securities Corporation. The balance of the special warrants will be offered directly by the Company on a non-brokered basis. The Company intends to use the net proceeds of the private placement, which will be paid to the Company immediately upon the closing of the private placement, to fund mineral exploration at the Company’s Mary River iron ore deposits, located on Baffin Island.
Closing of the private placement, which is currently expected to occur on or about June 15, 2004, is subject to certain customary conditions, including, but not limited to, the execution of a formal agency agreement and definitive subscription agreements with the subscribers and the receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange.
Baffinland is presently mobilizing personnel and supplies to the project site at Mary River, Baffin Island. Phase I diamond drilling (5000m) of the Company’s previously announced program is expected to commence in mid-June, 2004. The Company expects that the financing will fund Phase II of the 2004 program as well as the placement of strategic supplies for the 2005 season.
The 2005 program is intended to expand on the exploration work being completed in 2004 and is currently expected to consist of a minimum of 10,000 metres of large diameter core and continuation of environmental, socio-economic and engineering studies. Conceptually, 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 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 1960’s.
Each flow-through special warrant is exercisable by the holder for one common share of the Company, without payment of additional consideration, and will be automatically converted on the earlier of: (i) 4:00 p.m. (Toronto time) on the third business day following the date on which a final receipt is issued for a prospectus (final) in respect of a prospectus offering by the Company that qualifies the distribution of the common shares issuable upon exercise of the special warrants, and (ii) 12:01 a.m. (Toronto time) on the date that is 4 months and one day following the date of the closing of the private placement. The number of common shares issuable for each special warrant is subject to adjustment, in certain circumstances, in the event that the Company issues additional common shares by way of prospectus offering within 60 days of the date of the closing of the private placement.
Forward Looking Statements
Certain information in this press release may contain forward-looking statements. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict, including risks relating to the exploration and development of the Company’s iron ore deposits. Actual results might differ materially from results suggested in any forward-looking statements. The Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements. Additional information identifying risks and uncertainties is contained in the Company’s filings with the Canadian securities regulators, which filings are available at www.sedar.com.
The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or any applicable exemption from the registration requirements. This press release does not constitute an offer to sell or the solicitation of an offer to buy nor will there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.
Not for distribution to U.S. news wire services or dissemination in the United States.
THE TSX VENTURE EXCHANGE INC. HAS NEITHER APPROVED NOR DISAPPROVED THE CONTENTS OF THIS PRESS RELEASE.
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