NIRB. FILE NO. 08MNOS3 Baffinland Iron Mines Corporation's Phase 2 Development Proposal AFFIDAVIT OF GEORGIA MACDONALD 1, Georgia Macdonald, of the City of Winnipeg in the Province of Manitoba, Canada, AFFIRM THAT: v Lam a researcher for the applicant Oceans North, As such, I have personal knowledge of the facts set out in this affidavit, except where I have relied on the information of others that 1 believe to be true T have been providing background research in the context of Oceans North’s intervenor participation in the impact review process related to Baffinland Iron Mines Corporation's “Phase 2” project review before the Nunavut Impact Review Board Oceans North has conducted marine mammal research with local partners in Eclipse Sound and the surrounding region for over 9 years, Based on this research and analysis, as well as Oceans North’s understanding of broader research and local knowledge, Oceans North takes the position that further expansion of shipping through Milne Inlet and Eclipse Sound constitutes an unacceptable risk to narwhal in the region and, more broadly, an unacceptable risk to the regional marine environment. Moreover, we are not satisfied that the environmentalimpacts of shipping at present volumes (somewhere between 5-6 million tonnes in 2019) out of Milne Inlet are sufficiently understood. 1am informed and believe that, in 2018, Baffinland Iron Mines Corp. (the “Proponent”) and iiary raised $50,000,000 USD through the issuance of bonds on the open market. In its subsi advance of this issuance, documentary materials called a Preliminary Offering Circular were Oceans North recently became aware of the existence of these materials in September 2019 and obtained a commerejally-available copy through a New York-based service which makes such information available to the investment community. My colleagues and I began reviewing these materials immediately. A copy of the Preliminary Offering Circular is attached as Appendix A, While Oceans North’s review of these extensive materials is ongoing, we are confident that there are sufficient inconsistencies with the Proponent’s Nunavut Impact Review Board filings to warrant further investigation and to warrant the attention of those parties invested in this process and those parties impacted by this project. This Preliminary Offering Circular reveals a large body of information regarding project plans that raise fundamental questions about the reliability of the Proponent’s filings and participation in this impact review process and consultation with Nunavut Agreement beneficiaries and the broader public. My initial review suggests that there are several major inconsistencies between the proponent’s filings to NIRB and its communications and filings with the investment community. ‘These discrepancies make clear that vital information has not been provided to the NIRB, Nunavut Agreement beneficiaries, and the broader public. Throughout the present review process, key questions for consideration include the scale of the mine, the number and frequency of ships required for export, the shipping window, and the routes and operations of those ships. Answers to these questions inform our inquiry into known and potential impacts. It is therefore critical in an environmental impact review10. MW 12, process that a proponent answers such basic questions at the heart of a project proposal as development intention, scale, timeline, and impacts transparently and in good faith, ‘Through the Preliminary Off proponent intends to ship 18 mi Circular potential investors and creditors are told that the ion tonnes of ore through Milne Inlet annually as early as 2021. ‘The Proponent’s intention to immediately scale up from 12 million tonnes (upon receiving all permiti 2) to 18 million tonnes is described in multiple sections within the circular (e.g. Baffinland Iron Mines Corporation — Mary River Mine, Project #2943 Technical Report NI 43-101 —June 15, 2018 at p. 1-1, 1-2, 1-12, 18-12, 21-1 and following) but never ‘mentioned by the Proponent in the present review. The detailed development plan presented to investors represents an additional 6 million tonnes through a sensitive marine region and has not been disclosed to the Board, to Nunavut Agreement beneficiaries, or to the broader public. It appears based on these filings that work on an 18 million tonne output from Milne Inlet has already begun. The Proponent's proposal and FEIS Addendum describe a development plan for the scaling- up of Mary River operations culminating in the movement by rail and ship of 12 million tonnes of ore through Milne Inlet annually from 2020-21 with additional expansion shifting to Steensby Inlet in ensuing years (see e.g. p. 5.4 of the FEIS Phase 2 Addendum). Nowhere in these materials is an additional 6 million tonnes out of Milne Inlet mentioned, which raises serious questions about the true nature and impact of this project. The Project Description (ISD 02) explicitly states that the “total” project production will be 30 million tonnes per annum (mtpa), with 12 mtpa through Milne and 18 mtpa through Steensby. It also specifies the order of development- first 12 mtpa through Milne, then 18 mtpa through Steensby. The Public Consultation Report (TSD 04) has no mention of the possibility of 18 mtpa through Milne. It does, however, provide an explicit development timeline involving 12 mtpa through Milne, followed by 18 mtpa through Steensby for a combined total of 30 mtpa.14, 16. ‘The combined total of Milne and Steensby at 36 mtpa referenced in the circular has not been disclosed in this review process. The Socioeconomic Assessment (TSD 25) has no mention of the possibility of 18 mtpa through Milne. It does, however provide an explicit development timeline involving 12 mtpa through Milne (2020), followed by construction of the south railway and Steensby Port, with shipping of 18 mtpa from Steensby beginning in 2025. ‘The Cumulative Effects Assessment (CEA, TSD 27) specifies that the cumulative effects assessment for the Phase 2 project spans 41 years (2004-2044) and involves a 4.2 mtpa “Early Revenue Phas: ” (ERP), subsequent increases in mine production to 6 mtpa, 12 mtpa and 30 mtpa (with the intervening construction activities for the 12 mtpa North Rail operation and 18 mtpa South Rail operation). In sum, the Prelit inary Offering Circular contradicts the Proponent’s proposal and FEIS Addendum, the Project Description (TSD 02), the Public Consultation Report (TSD 04), the Socioeconomic Assessment (ISD 25), and the Cumulative Effects Assessment (CEA, TSD. 27) by informing prospective investors that the Proponent will inerease production for shipping from Milne Inlet as early as 2021 to levels 50% higher than the permitted level it currently seeks from NIRB and more than 300% of present volumes. Exporting this increased level through Eclipse Sound will result in many more ship transits through Eclipse Sound than the levels described in the project proposal. While the Proponent states in its EIS that we can anticipate a peak of 134-164 ship transits per season, the Proponent’s plan to ship 18 million tonnes annually through Milne Inlet suggest ship transits well in excess of 200. This throws into question the order, need, and timing for export through Steensby Inlet and undermines a rational environmental impact analysis. In addition to these other deficiencies, description of the Phase 2 labour needs in the FEIS Addendum and the Preliminary Offering Circular are not consistent. The investor materials suggest that the Proponent’s labour needs have been grossly exaggerated in the NIRB process. ‘This labour inflation undermines the Proponent’s assertions regarding the putative benefits of7. 18, 19, 20. 21 this expansion, ‘The Preliminary Offering Circular also suggests that the mine is far more profitable than previously disclosed. This calls into question the Proponent’s assertions that there is a financial need for expansion, ‘The Proponent’s plans as described in the Preliminary Offering Circular raise serious questions about the scope of the current review which does not address impact questions related to the shipping volumes proposed. A threshold for reasonable analysis of a proposal is to understand its scope. If the Proponent is telling the NIRB and the public one story about the ope of its project and, at the same time, selling bonds to investors based on a much different project scope, how are the NIRB, Inuit beneficiaries, and the public able to understand what is at stake? Oceans North is concerned that the Proponent may be ‘project splitting’ — intentionally breaking a project up into its component parts in order to avoid analysis at the appropriate production scale and subverts a public discussion about the potential impacts of the project as a whole. This approach undermines the ability of the public, and the NIRB, to make an informed decision about the Mary River Phase 2 expansion project. ‘This undermines our ability to assess impacts on the world’s largest summering narwhal population and the marine environment more generally. The development plans described in the circular also call into question the Proponent's decision to remove icebreaking shipping through Milne Inlet from its project proposal. The original (2014) proposal for Mary River Phase 2 called for shipping through Milne Inlet 10 months of the year. However, in response to concerns raised by the Inuit of Pond Inlet, it issued a revised proposal (2017) that removed icebreaking shipping through Milne Inlet. Given the Proponent’s described intention to ship 18 mtpa through Milne Inlet annually, the Proponent is likely considering icebreaking. ‘The Proponent has also designed its new ore dock for winter shipping (see e.g, Preliminary Offering Circular at p. 122),22. Oceans North has conducted no research and analysis addressing impacts to narwhal or any other marine impacts from potential shipments of 18 million tonnes through Milne Inlet, Lam aware of no other research addressing this volume of shipping in this sensitive marine area, SWORN (OR AFFIRMED) BEFORE ME at Winnipge, Manitoba, on Ogtober 28, 2019 A Barrister and Solicitor in Manitoba. ) ) ) ) ) ) GEORGIA MACDONALD )