SOURCE: Liberty Mines Inc.

December 07, 2006 09:57 ET

Progress at the McWatters Nickel Mine

TIMMINS, ON -- (MARKET WIRE) -- December 7, 2006 -- Liberty Mines Inc. (TSX-V: LBE) ("Liberty or the Corporation") is pleased to announce that the planning and permitting for the McWatters nickel ("Ni") mine is progressing well. The mine is located approximately 9 km east of the producing Redstone nickel mine. Construction of a new 6 km road from Langmuir road (from which the 3 km Redstone mine road connects) to the McWaters mine site will begin soon.

The McWatters mine is a combination of an open pit to 100m deep and an underground component which extends a further 30m below part of the open pit. BH Martin Consultants Ltd. ("BHM") has designed a mine plan based on the 43-101 compliant resource calculation done by Roscoe Postle Associates in October 2005. The mine plan includes an open pit resource of 539,660 tonnes of ore from 15m to 100m below the surface of the pit grading 0.6% Ni, which is projected to be exploited in 18 months. The underground resource consists of 168,203 tonnes grading 2.77% Ni and will take about 6 months to mine. The mine is targeted to be in production in the third quarter of 2007 at an average mining rate of 1000 tonnes per day. Ore from the mine will be concentrated at the new Redstone mill situated at the Redstone mine site.

BHM and Liberty management have done economic studies on the McWatters deposit which project an undiscounted cash flow from mining operations of approximately CAD$63,000,000 at a nickel price of US$10 per pound. The open pit provides approximately CAD$19,000,000 of the total cash flow. It should be noted that this cash flow estimate is a projected figure that is not based on a formal 43-101 reserve calculation, and should therefore not be relied upon. It is included only as an estimate of the cash flow from operations from the mine based on the mine plan as stated.

"The McWatters open pit Ni grade is high enough to be mined and concentrated economically at the facilities of the nearby Redstone mill with Ni above US$6 per pound," said Liberty's President Gary Nash. "High nickel prices are a bonus and the open pit provides a ramp to access the rich ore zone below," he added.

Management is also pleased to announce the purchase of the west McWatters mining claim from Canadian Arrow Mines Limited ("CRO") for the sum of $100,000. The purchase and sale agreement provides for a 2% net smelter royalty ("NSR") in favor of CRO of which half of the NSR (1%) may be purchased by Liberty for $1,000,000. This claim facilitates construction of the new road to the McWatters mine and development at the mine site. It also clears the way for additional exploration west of McWatters deposit and on a known anomaly adjacent to the west of the purchased claim.

About Liberty Mines Inc.

Liberty Mines Inc. is a mineral exploration, development and mining company with a focus on the development and production of nickel, cobalt and platinum group metals from its properties in 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 potential mineralization and reserves, exploration results, and 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, assumed startup and operating costs detailed herein and from time to time in the filings made by Liberty with securities regulators.

Press Release 26-06

Contact Information

  • For further information please contact:
    Dr. Gary Nash, PhD (Physics)
    President & CEO
    Liberty Mines Inc.
    Phone (416) 238-9736
    Fax 780-437-7898
    e-mail: Email Contact