Nov. 9, 2009 (Filing Services Canada) -- Liberty Mines Inc. (LBE - TSX), is pleased to report the financial results as of September 30, 2009 which reflects the start-up of mining operations during the quarter since being in care and maintenance since October 31, 2008. The Redstone nickel mine commenced operations during the week of August 24, 2009. As of September 30, 2009, 6,784 tonnes of mineralization was hauled to the Redstone nickel concentrator which processed 302.95 tonnes of concentrate grading 15.41% nickel; during the month of October, 831.97 tonnes of concentrate grading 17.01% nickel were processed and shipped to Xstrata Nickel in Sudbury for smelting. The concentrator started operations the week of September 15 with half staff only and is now fully staffed with 4 crews to allow operations to run 24 hours a day for 7 days a week.
Development of the McWatters nickel mine recommenced on August 4, 2009. At the end of the third quarter 2009, the ventilation raise to the 65m level was substantially complete and 60m of ramp development was required to reach the 140 meter level. The ramp to the 155m level and the ventilation raise connecting the 140m level to the 65m level are scheduled to be completed by early December 2009. Overburden stripping of the open pit will begin upon receipt of the amended closure plan and an amended Permit to Take Water. Mining at the open pit is tentatively scheduled to commence in the first quarter of 2010, subject to receipt of amended permits as stated. Pre-commercial production from the McWatters mine is scheduled for the latter part of November from the 85m level and the 155m level in the early part of December, 2009.
Gary Nash, Liberty's President and CEO, commented: "Today, we received our first payment from Xstrata Nickel since closing operations October 31, 2008. We have re-grouped from a staff of 8 key people in July 2009 to 104 workers today in our mines and concentrator. Production from the Redstone mine has met or exceeded our target of 8,000 tonnes per month with lower costs as a result of changing our mining methods. Development to the lower level at McWatters is on schedule to be completed this month. We plan to have the third ball mill in the concentrator commissioned early in 2010 allowing it to run at full capacity."
"The past year was a very trying time for management and our investors. Our perseverance is now paying off and with the price of nickel in the US$7.50-US$9 range, we look forward to substantially retiring our debt by the end of 2010, he added".
The following table summarizes the Company's consolidated financial results for the three and nine month periods ended September 30, 2009.
Summary of Consolidated Financial Results
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Three months ended Nine months ended
September 30 September 30
2009 2008 2009 2008
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Revenue $ 721,818 $ 3,838,317 $ 724,222 $ 16,153,233
Mining and 1,063,909 3,760,866 3,242,413 11,426,310
processing costs
Amortization
depletion 1,688,867 3,270,300 4,704,295 9,066,125
of operating assets
Operating loss (2,030,954) (3,192,849) (7,222,486) (4,339,203)
General and 1,067,515 1,216,092 1,881,275 4,177,886
administrative
expenses
Loss on Sale 46,299 362,410 97,157 362,410
of Equipment
Stock based 77,668 454,358 133,164 1,621,281
compensation
Impact Benefit - - - 1,033,958
agreement
Amortization and 19,250 299,867 57,750 783,073
accretion other
assets
Interest Income (2,287) (7,122) (3,936)
Interest and bank 57,028 44,837 68,890 218,709
Charges
Interest on 408,195 896,036 2,847,173 1,340,505
long-term debt
Interest on 415,040 581,849
preferred shares
Gain on
Extinguishment 203,612 (3,171,014)
of debt
Accretion interest
expense 0 508,927 0 817,020
Foreign exchange
loss (gain) (1,582,469) 84,267 (1,880,707) (1,043,985)
Asset Impairment
Charge 0 20,598,048 0 20,598,048
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Loss before
income taxes $(2,740,805) $(28,688,305) $(7,834,087) $(36,305,744)
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Loss for
the period $(2,740,805) $(26,093,305) $(7,834,087) $(39,117,502)
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Loss per
share - $ (0.02) $ (0.32) $ (0.08) $ (0.39)
basic and
diluted
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September 30, September 30,
2009 2008
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Total assets $ 59,476,145 $ 106,297,564
Total Long-term Liabilities $ 1,511,964 $ 22,083,070
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The company generated revenue for the three and nine month periods ended September 30, 2009 of $721,818 and 724,222 respectively. The third quarter and year to date revenues was significantly impacted with the mine on care and maintenance to late August 2009. The revenue for the third quarter is based on one week of production.
Mining and processing costs for the three and nine month periods ended September 30, 2009 was $1,063,909 and $3,242,493 respectively.
The company's net loss for the three and nine month periods ended September 30, 2009 was $2,740,805 ($0.02 per share) and $7,834,087 ($0.08 per share) respectively compared to $26,093,505 ($0.32 per share) and $39,117,502 ($0.39 per share) for the comparable periods of 2008.
Liberty announced a $4,500,000 credit facility with its major shareholder Jilin Jien Nickel Industry Co., Ltd. of China on July 30, 2009 to fund the development of the McWatters mine. The credit facility was advanced in three tranches: The first tranche of $1,000,000 was released on July 30, 2009 and the second and third tranches were funded in the last weeks of August 31, 2009 and September 30, 2009, respectively. The principal advanced bears interest at 8% on the unpaid balance and is payable in full with interest by July 30, 2010. Liberty may, at its option, prepay at any time all or any portion of the principal amount outstanding or any interest owing without notice or penalty provided that any such prepayment shall be applied firstly to interest and then to the payment of principal.
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; and assumed startup and operating costs detailed herein and from time to time in the filings made by Liberty with securities regulators.
For further information please contact:
Dr. Gary Nash, PhD (Physics), President & CEO
Phone (416) 238-9736 Fax 780-437-7898
e-mail: gnash@libertymines.com
Source: Liberty Mines Inc. (TSX: LBE) http:// www.libertymines.com
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