Baffinland to shareholders: just say no

Workers plant explosives at the Mary River iron ore site on northern Baffin Island in an April, 2008 file photo. Mary River’s owner, Baffinland Iron Mines, urged shareholders Oct. 7 to reject a hostile takeover bid launched last month. (FILE PHOTO)

Baffinland’s board of directors is urging shareholders to reject a hostile takeover bid launched for the junior mining firm last month.

During a conference call for shareholders Oct. 7, Daniella Dimitrov, Baffinland’s vice-chair, said the offer of 80 cents per share, filed last month by Nunavut Iron Ore Acquisition Inc., isn’t enough.

“It fails to recognize the size and quality of the Mary River property,” she said, boasting that the property, located about 150 kilometres south of Pond Inlet, is “one of the best undeveloped iron ore projects worldwide.”

Baffinland’s shares took a major spike after the takeover offer was announced Sept. 22, peaking at $1.04 per share and sitting at $1.01 Oct. 7. Dimitrov said Baffinland’s financial advisors, CIBR World Markets, told the board the offer was “inadequate.”

Nunavut Iron Ore was founded in August for purpose of making a pitch to buy Baffinland.

Its board chairman, Jowdat Waheed, was a consultant for Baffinland until the end of April. Dimitrov said Nunavut Iron Ore’s offer was “timed opportunistically,” but wouldn’t directly respond to a shareholder’s question about whether the company plans legal action against Waheed.

A voicemail to Nunavut Iron Ore’s spokesman wasn’t returned by deadline.

Dimitrov said Baffinland was working on the creation of a joint venture with a multinational corporation, which she wouldn’t name, before the takeover bid was launched.

She wouldn’t directly say if that company is still interested, but said Baffinland is in negotiations with several potential suitors on other deals.

Dimitrov said is considering hauling ore from the first of seven deposits by truck, but is still seeking environmental approval for an elaborate rail and port project to ship the ore to European markets.

She also said the company expects to renew a lease for the Mary River site with the Qikiqtani Inuit Association. The current lease expires Oct. 31.