In Spite of Delays to Feasibility Study, Baja Moves to Construction

Baja Mining Corporation [BAJ:TSX] announcedsite test to determine the best procedure for
early this month that the wait for the delayedroof bolt installation during mining development.
Definitive Feasibility Study (DFS) report on its ElThe postponed work on the site test was finally
Boleo project is soon to be over. Its completioncompleted in November 2006. The drill rig setback
brings Baja one big step closer to first productiondelayed completion of the in-fill drill program until
slated to begin in 2009.January of this year.
Baja owns a 100% interest in the El BoleoBaja reported the findings of this in-fill drill program
project, an advanced polymetallic (Cu-Co-Zn-Mn)in an April 4th news release. The data and
property located on the east coast of Bajaupdated resource model resulting from the final
California Sur, Mexico near the town of Santa20,000 meters of in-fill drilling increased measured
Rosalia. The Boleo property has a mining historyand indicated resources by more than 20%.
that dates back 140 years. Baja's companyMeasured resources of 74,600,000 tonnes were
website puts production estimates on thereported at 1.92% copper equivalent, 0.93%
property for the period 1868 to1972 atcopper, 0.080% cobalt, 0.48% zinc, 2.72%
approximately 19 million tonnes of copper ore atmanganese and indicated resources of
an average grade of approximately 4.3% copper.202,600,000 tons at 1.50% copper equivalent,
It is Mexico's largest copper-cobalt deposit and0.62% copper, 0.050% cobalt, 0.66% zinc, 3.10%
one of the largest copper deposits inmanganese.
development in North America.Although Baja Mining's April 4th news release
Baja Mining's management is comprised ofreported the Definitive Feasibility Study is
knowledgeable industry tradesmen, many oftargeted for release in late April Greenslade told
whom have at least thirty years of experienceme today the actual 43-101 report will be filed on
and have brought numerous projects intoSedar some time in May. He said the nine or ten
production. El Boleo was staked in 1992 by Mintecvolume series of reports that comprise the
International Corporation of Barbados. At the timefeasibility study won't be available for review until
Mintec was owned and operated by current BajaJune.
president, John Greenslade, and fellow businessIn January of this year Baja published a
partners. In April of 2004, Mintec became aPreliminary Economic Assessment (PEA) and
subsidiary of Baja Mining (formerly FirstGreenslade thinks the Definitive Feasibility Study
Goldwater, Inc.). Shortly after, Baja commencedwill show improved results over those reported in
the work for the DFS on the property.the PEA. "But, the capital and operating costs," he
By July of 2006, the bulk of this work wasadded, "I'm not expecting to change. The
completed and Baja expected to finalize the studydifference will be that we've updated the
with a follow-up mine test in September of lastgeological resource with more infill drilling and
year. Until this site test was complete the finalwe've made some corrections to the geological
mine plan could not be drawn up. But Mothermodel that we discovered." He expects to see
Nature's wrath coupled with unforeseen setbacksslightly improved economics on the project.
delayed this work until the beginning of January.To limit the effects of the DFS delay on the
"We got hit with two category five hurricanes,"construction schedule Baja's management has
said Greenslade, "which slowed us down a littlemoved early on initializing construction financing
bit." The torrential flooding damaged the roadsset to be finalized later this year. The company
leading to the test mine site.has been involved in discussions with the primary
I asked Greenslade if severe weather like this isbank for several months and operating
typical of the region and what preventativedocuments will be delivered to the financial
measures Baja takes in minimizing damage. Heinstitution in May. Greenslade expects final signed
told me that the El Boleo property is locatedcontracts and securities will not be registered with
within the hurricane alley of the Pacific Coast, butthe lenders until late August or September. Along
the storms usually hit Cabo San Lucas and thenwith primary debt financing Baja is looking to
divert back out to sea. "It typically gets hit oncemake subordinate offtake agreements linked to
or twice every ten years," he said. "Last yearthe market price at time of delivery. Greenslade
was a little unique in that it got hit by twosaid the ultimate terms are not finalized yet and
hurricanes within three weeks."won't be released until this summer at the earliest.
To minimize damage, Baja uses diversionaryWhile the delays of the Definitive Feasibility Study
tactics around the processing plant such ashave no doubt caused a few headaches and
creating a berm up along the creek walls to keepfrustrated grimaces amongst Baja Mining's
the plant high enough above the flood plane.management and shareholders it certainly hasn't
Flooding is diverted along a dry river bed throughdampened their resolve to bring the El Boleo
diversion ditches. Flood protection and diversionproject into production.
barriers are also used to protect mine openings."We're targeting 2009 for first production," said
The other unforeseen setbacks contributing toGreenslade. Baja has already started negotiations
the DSF hold-up were the delays in delivery ofwith the construction contractor and will probably
roof bolting equipment to the test site and inbreak ground this July. "Right now we're into base
acquiring drill rigs for the approximate 38,800line engineering work leading to detailed engineering
meter in-fill drill program The roof boltingtowards final construction.
equipment was needed in order to finish the mine