Five days after ArcelorMittal (MT-N) sweetened its takeover bid for Baffinland Iron Mines (BIM-T) by 15¢ per share, high-grade assay results from nineteen additional holes at the Mary River project on Baffin Island in Nunavut suggest the project is worth the new offer price.
On Dec. 18 the steel giant raised its Nov. 12 offer to $1.25 per share in cash. (Its offer of 10¢ in cash per 2007 warrant remained unchanged.) The amended offer comes with a higher break-fee of $15.5 million. Baffinland’s board of directors has approved the latest proposal and is recommending the bid to its shareholders.
In the meantime, Baffinland is releasing assay results from holes drilled at Deposits No. 2, No. 3, No. 4 and No. 5 over the course of 2010.
Twelve of the holes were drilled at Deposit No. 4, where Hole MR4-10-192intersected four zones assaying a composited 65.2% iron across 72 metres. Drilling tested the deposit across almost 3 km of strike length. The majority of the holes intersected high-grade zones of massive specular hematite and magnetite up to widths of 28 metres.
Five holes were drilled at Deposit No. 5 and followed the high-grade zone in broad, 400-metre step-out drill holes. Highlights include Hole MR5-10-207, which cut 69.1% iron across 16 metres.
Drilling also tested Deposits No. 2 and No. 3. Drilling at Deposit No.2 better defined the edges of the deposit, while drilling at Deposit No 3 extended the zone to the west where it was previously thought to be cut off by a fault. Hole MR3-10-210 intersected 67% iron across an accumulated width of 34 metres.
Baffinland says it expects to release in mid-January the results of a definitive feasibility study for a road haulage option that would result in early stage iron ore production.
Baffinland closed the day at $1.38 per share. Over the last year it has traded in a range of 35¢- $1.38 and has 345.9 million shares outstanding.
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