Nunavut Iron Increases Its Offer Price for Baffinland Common Shares to $1.45
per Share

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

• Revised Offer continues to represent a premium to ArcelorMittal's offer
• Offer remains open for acceptance until 11:59 p.m., January 10, 2011

TORONTO, Dec. 31 /CNW/ - Nunavut Iron Ore Acquisition Inc. ("Nunavut Iron") announced today that it has increased its offer to purchase Common Shares of Baffinland Iron Mines Corporation ("Baffinland") so that, for each Baffinland Common Share taken up, the holder would receive $1.45. 

"This increase means our Offer remains the clearly superior choice for Baffinland shareholders," said Bruce Walter, Chairman of Nunavut Iron.  "In light of ArcelorMittal's amendment to its offer announced earlier today, Nunavut Iron is continuing to assess its options beyond the increase of the Offer price to $1.45."

In addition, it remains Nunavut Iron's intention to promptly further amend its Offer to provide further consideration for Common Shares taken up. This additional consideration would be in the form of an exchange right in respect of common share purchase warrants that Nunavut Iron proposes be issued by Baffinland, as described in more detail in Nunavut Iron's press release and Notice of Variation and Extension of December 29, 2010.

The maximum number of Common Shares to be taken up and paid for under the increased Offer remains that number of Common Shares which, together with any Common Shares owned by Nunavut Iron and its affiliates, constitutes 60% of the Common Shares outstanding on an in-the-money fully diluted basis.  To the knowledge of Nunavut Iron, as of December 30, 2010, this number would be 195,312,171 Common Shares, based on 393,389,284 in-the-money fully diluted Common Shares outstanding and the 40,721,400 Common Shares currently owned by Nunavut Iron and its affiliates.  The increased Offer remains subject to the same conditions as Nunavut Iron's offer as varied on December 15, 2010. 

Nunavut Iron's increased Offer of $1.45 per common share taken up remains open for acceptance until 11.59 p.m. (Toronto time) on January 10, 2011.

The notice of variation in respect of the increased cash consideration being offered in the Offer will be mailed to registered holders of Baffinland Common Shares and Convertible Securities promptly and will be available on SEDAR at www.sedar.com.

ABOUT NUNAVUT IRON AND IRON ORE HOLDINGS, LP

Nunavut Iron was incorporated under the laws of Canada on August 27, 2010 and has not carried on any material business other than in connection with matters directly related to the Offer. Nunavut Iron is wholly owned by Iron Ore Holdings.

Iron Ore Holdings is a limited partnership formed under the laws of Delaware for the purpose of making the Offer.  Iron Ore Holdings is owned by Bruce Walter, the Chairman of Nunavut Iron, Jowdat Waheed, the President and Chief Executive Officer of Nunavut Iron, and funds managed by The Energy & Minerals Group, which is providing the majority of the equity financing for the Offer.  The Energy & Minerals Group is a private investment firm with a family of funds with over US$2 billion under management that invest in the energy and minerals sectors. 

Caution to Readers

This press release does not constitute an offer to sell or the solicitation of an offer to buy securities in Canada, the United States or any other jurisdiction.  Any such offer to sell or the solicitation of an offer to buy any securities will be made only pursuant to appropriate documentation in compliance with all applicable securities laws.  No such offer or any sale of any securities will be made in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

Certain statements contained in this press release or in documents referred to in this press release including statements with respect to the Warrant Proposal, Nunavut Iron's intentions following an acquisition of control of Baffinland and other statements that are not historical facts are "forward-looking statements". Forward-looking statements are subject to inherent risks and uncertainties, and are necessarily based upon a number of assumptions that, while considered reasonable by Nunavut Iron and its controlling shareholders, which give rise to the possibility that actual results or events could differ materially from expectations expressed or implied by such statements.  The reader of this document is cautioned that such forward-looking statements are not guarantees of future performance or achievement. In particular, the Warrant Proposal requires compliance with applicable legal requirements, elements of its implementation are beyond the control of Nunavut Iron, and implementation may not be completed on a timely basis, if at all. The forward-looking statements contained in this news release describe Nunavut Iron's and its controlling shareholders' expectations at December 28, 2010 and, accordingly, are subject to change after such date. Nunavut Iron and its controlling shareholders disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable laws.

For further information:

SHAREHOLDERS OF BAFFINLAND IRON MINES CORPORATION

Kingsdale Shareholder Services Inc.
Toll Free 1-888-518-1562 (English or French)
Outside North America, Bankers and Brokers Call Collect 416-867-2272
Facsimile: 416-867-2271, Toll Free Facsimile 1-866-545-5580
Email: [email protected]

or visit www.baffinlandoffer.com

MEDIA

John Lute
Lute & Company
416-929-5883

Email: [email protected]