Baffinland to boost activity at Nunavut iron site

Last Updated: Thursday, December 31, 2009 | 4:30 PM CT Comments6Recommend17

CBC News

Baffinland Iron Mines Corp. intends to ramp up exploration work in 2010 at its Mary River site in Nunavut in order to move forward with plans to open an iron mine there.

This year has been one of battered stock prices and management changes at Baffinland, which owns the Mary River property in northern Baffin Island, about 160 kilometres south of Pond Inlet.

Environmental assessors in Nunavut are currently reviewing the company's proposal to open a mine at Mary River that would produce upward of 18 million tonnes of iron ore per year for 20 years.

In the meantime, Baffinland will set up two or three drill rigs there in 2010, which will mean more jobs for people in the Baffin region, company president Gordon McCreary told CBC News.

"My expectation is that we will spend in the order of about $30 million on programs in 2010, which will be probably about $5 million more than we had spent in 2009," he said in an interview.

Courting partners, investors

McCreary is courting potential investors to shoulder about half of the costs of the $4-billion project. Finding a strategic partner is his first priority in the new year, he said.

If a partner is secured early enough in the year, McCreary said, the company can look at mine development rather than more advanced exploration, which is the stage the Mary River site is currently in.

"We would have expected to have accomplished strategic partnering in the last half of 2008 if it were not for the fact that the world blew up financially," he said, referring to the global financial crisis.

"This is the window of opportunity for this project to be developed."

With markets recovering from the crisis, McCreary said he received eight new inquiries over the past year from interested companies, mainly from foreign-owned state companies.

"Now, there are approximately 20 confidentiality agreements signed with those types of companies," he said.

Baffinland will have a chance to sell Mary River to the world in February, when Canada hosts an international meeting of G7 finance ministers in Iqaluit. McCreary said he has been invited to make a presentation to international media about the project.