Nov. 10, 2010 (Filing Services Canada) -- Liberty Mines Inc. (LBE - TSX), ("Liberty or the Company") wishes to announce the departure of Dr. Gary Nash, President & CEO and announces the appointment of Jay Richardson as interim CEO while the Company undertakes a search for a new CEO. Dr. Nash has also resigned as a director of the Company.
Liberty also wishes to report financial results for the third quarter ended September 30, 2010 ("Q3") from its mining operations at the Redstone and McWatters nickel mines near Timmins Ontario. All dollar amounts are expressed in Canadian dollars unless specified otherwise.
Third quarter highlights:
* The Redstone nickel concentrator ("Mill") processed 95,587 tonnes during Q3; an increase of 69% over the 56,520 tonnes processed during the second quarter of 2010.
* Milling cost per tonne in Q3 was $17.57.
* Average metallurgical recovery was 82.1% (from an average head grade of 0.63%) with 49.5% of the ore processed from the McWatters open pit.
* Metal sold to Xstrata was 955,688 pounds of nickel ("Ni"), 47,817 lbs of copper, and 12,784 lbs of cobalt subject to final settlement.
* Cost to produce a pound of nickel in Q3 was US$6.89* from McWatters underground ore.
* Cash operating profit from mining operations was $486,377 before non-cash charges.
Mine production statistics during Q3:
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Mine Tonnes Produced Grade Ni %
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Redstone 8,221 0.75
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McWatters Underground 41,712 0.94
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McWatters Open Pit 76,170 0.34
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Mill processing statistics during Q3:
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Mine Wet Grade Dry
Tonnes Ni % Tonnes
Milled Milled
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Redstone 5,803 0.75 5,715.4
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McWatters Underground 42,427 0.94 41,916.3
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McWatters Open Pit 47,357 0.34 46,705.2
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* This non-GAAP statistic includes mining, milling, transportation, smelting, refining, price participation and marketing costs but excludes mine depletion and operating asset amortization charges. The average head grade processed in Q3 was 20.3% lower than in the second quarter of 2010 which increased the cost to produce a pound of nickel.
As explained in the October 12, 2010 press release, the mined grade of the underground panels at McWatters was significantly less than the reserve grade. Consequently, the anticipated cost to produce a pound of nickel during the last half of 2010 near US$4.50 cannot be achieved. However, ore grades from development of the 65m, 85m, 120m and 140m levels were mainly consistent with the estimated reserve grades from those sections of the mine. Development from those levels enables approximately 550,000 tonnes of ore grading 0.70%-0.74% Ni to be mined by sublevel caving, which represents about 85% of the underground deposit. Based on that range of head grades, the cost to produce a pound of nickel is estimated to be approximately US$5.50 provided the Mill processes around 40,000 tonnes of ore per month.
Outlook
Sublevel caving is about to being at McWatters with a reserve grade of 2-2 1/2 times the open pit ore grade milled during Q3. The pounds of nickel in concentrate from the Mill and the ensuing gross smelter revenue should increase proportionately.
Financial Results
Revenue including final settlement adjustments was $8.9 million and $23.8 million for the three and nine months ended September 30, 2010 compared to $0.72 million and $0.72 million for the same periods of 2009. Cash operating profit for the three and nine months ended September 30, 2010 was $0.5 million and $2.4 compared to a cash operating loss of $2.1 million and $7.3 million during the same periods last year. Net losses for the three and nine months ended September 30, 2010 were $2.7 and 10.1 million compared to $2.7 and $7.8 million for the same period of 2009.
Net working capital for the nine months ended September 30, 2010 was a deficiency of $39.3 million compared to $30.6 million as at December 31, 2009.
Liberty had capital expenditures of $0.8 million and $2.7 million during the three and nine months ended September 30, 2010. The majority of the expenditures related to the additional equipment required to bring the McWatters mine into full production. Mine development expenditures of $0.2 and $3.6 million for the three and nine months ended September 30, 2010 related to the continued development of the McWatters mine. Expenditures related to the development of the McWatters open pit was $72,193 during Q3 and year to date is $571,531.
Liberty Mines financial statements for the third quarter ended September 30, 2010 are available at www.libertymines.com and www.sedar.com. These financial statements should be read in conjunction with the notes and management's discussion and analysis available at the same websites.
About Liberty Mines Inc.
Liberty Mines Inc. is a producer of nickel and is focused on the exploration, development and production of nickel, copper, cobalt and platinum group metals from its properties in Ontario, Canada. It owns and operates the Redstone nickel concentrator near Timmins Ontario.
CAUTIONARY STATEMENT
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. This News Release includes certain "forward looking statements". All statements other than statements of historical fact included in this release, without limitation, statements regarding future plans and objectives of Liberty, are forward looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Liberty's expectations are: exploration risks; commodity prices; regulatory approvals; receipt of mining permits and leases; equipment failures and shortage of supplies; and assumed startup and operating costs detailed herein and from time to time in the filings made by Liberty with securities regulators. Forward-looking statements speak only as of the date on which they are made. The Company undertakes no obligation to publicly update any such statement or reflect new information or the occurrence of future events or circumstances, except where required by securities regulations. Accordingly, readers should not place undue reliance on forward-looking statements.
For further information please contact:
Bill Woods, CFO
Phone (780)485-2299
e-mail: BWoods@libertymines.com
Source: Liberty Mines Inc. (TSX: LBE) http:// www.libertymines.com
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