Baffinland Iron Mines Corporation (TSX: BIM ) is a Canadian publicly-traded junior mining company that is focused on its 100%-owned Mary River iron ore deposits located about 160 kilometres south of Pond Inlet, Baffin Island, Nunavut Territory, Canada. 

This company has had major increases in the volume of stock traded over the past 3 months.  Below I have posted a 5 year chart.  You will notice that during the darkest days of the recession the stock plummeted.  Next you will notice a huge spike in the volume of shares traded of BIM over the past 3 months.  The shares have not come anywhere near pre-recession levels so there may be tons of upside.

What’s going on at Baffinland? 

To answer this question you might want to read the most recent press releases from BIM or simply wade through the summary I have added below. 

Baffinland Iron Mines Corporation, TSX:BIM, recently announced better than expected drilling samples at it’s wholly owned Mary River Iron Ore Deposits.  In the press release, the company announced that during their 2009 drill program they intersected a cumulative 737 meters of sample with an average grading of 65.6% iron. 

Michael Zurowski, Executive Vice President of Baffinland, stated that “Mineralization continues to impress and the intersections in the upper portion of the South Limb confirm what was obvious to anyone who looked at the South Lim that there was a large amount of high grade iron ore.” 

For 2010, the company will continue to drill samples and create a regional mapping and sampling program that will extend from the know deposits to identify further zones of high grade iron oxide mineralization within 60km of the prospective strike length outlined by a 2008 airborne magnetic survey.

Things of notable interest from the most recent feasibility study include the following:

• 20 yr mine-life based on proven & probable reserves.
• Pre-tax IRR 20.5%, payback period of 3.7 years.
• After-tax IRR 15.9% with payback period of 4.3 years.
• Project pre-tax cash flow $18.1 billion over mine life.
• Project after-tax cash flow $11.2 billion over mine life.
• Project pre-tax NPV (7%) of $4.9 billion.
• Project after-tax NPV (7%) of $2.7 billion.
• Capital cost $4.1 billion ($438 million contingency)
• Iron ore price assumption in DFS 40% below 2008 benchmark.

According to the corporate website the following are reasons why this could be an outstanding investment:

• “The best undeveloped iron ore deposits in the world.”
• Large-tonnage, high grade, high quality iron ore.
• Multi-generational mine life.
• DFS shows robust economics and project scalability.
• Strategically located in politically stable jurisdiction.
• Local support
• Price of iron ore at record highs
• Experienced management team
• Strategic shipping partner and world class EPCM firm

As for my opinion, I am starting to become interested in adding this company to the speculative portion of my portfolio.  If I make an acquisition I will announce it just before.