SOURCE: Liberty Mines Inc.

February 21, 2006 12:21 ET

Construction Proceeds for the Redstone Mill

TIMMINS, ON -- (MARKET WIRE) -- February 21, 2006 -- Liberty Mines Inc. ("Liberty") (TSX-V: LBE) is pleased to announce the commencement of the Redstone nickel concentrator project ("Mill"). The benthic results from studies, which began in June 2005, were received last month and hydrogeology and geotechnical studies are soon to be in progress at the site in preparation for permitting of the Mill. Water quality studies have been ongoing since June at the Redstone. Metallurgical details are being finalized and equipment is sourced for the crushing, grinding and flotation circuits. A Notice of Project Status was submitted to the Ministry of Northern Development and Mines for permitting, and an interministerial meeting was held on February 16 to discuss the Mill. Once all data is at hand for each of the ministries, the mandated time for review of permit applications is 45 days.

During the period of permitting and construction of the Mill, pre-commercial mining will be ongoing at the Redstone. The ore from the 245m level will be bulk sampled and the high grade sections will be sorted and shipped to China to generate cash flow during the construction of the Mill. The capital costs for the Mill will be paid from the $4,000,000 US pre-payment credit facility offered to Liberty by Jilin Jien Nickel Industry Company Inc. ("JJNICL"). Liberty was granted an exemption to process ore out of Canada in favor of JJNICL on November 23, 2005. Mining at the Redstone will commence as soon as Hydro One energizes the mine site, which is expected to be in March.

The Langmuir nickel mill infrastructure was recently purchased, which includes all working drawings for the mill design. The mill was designed by Noranda in the seventies and was used in production for about 5 years at Liberty's Langmuir #2 nickel mine site. The steel structure was favorably viewed by a local steel fabricator and will be moved to the Redstone site when the concrete foundations are poured. An application for a building permit with the City of Timmins is in progress for the construction of the Mill building. The building layout has been slightly modified to have the crushing circuit separate from the grinding and flotation circuits to more effectively deal with noise and dust. The Mill will initially handle up to 500 tonnes per day of ore and will be scalable to handle 1500 tonnes per day with additional equipment added to the circuit.

Management has fully realized the necessity of having a mill in order to produce a nickel concentrate to ship to China under the terms of the off-take agreement with JJNICL. The intention to construct a mill at the Redstone mine site was stated in the July 25 and September 21, 2005 news releases. A crushing circuit design was underway and a jaw crusher was sourced in October when the opportunity to buy the Bell Creek mill from the Placer Dome/Kinross joint venture ("PJV") in Timmins was presented to Liberty. Shortly thereafter, Barrick Gold made an offer to buy the PJV and Liberty's negotiations were put on hold. As part of that deal, Goldcorp is buying the PJV assets from Barrick and Liberty was told in the first week of February 2006 that no decision on the sale of the Bell Creek mill would be made until at least May 2006. The decision to terminate discussions with the PJV/Goldcorp was then made considering the uncertain outcome of the purchase of the mill.

A mill at the Redstone mine eliminates any transportation costs to another site and there are no deleterious environmental issues, which could be inherited by purchasing an existing tailings facility.

Furthermore, the Mill will be optimally designed to handle the Redstone and McWatters ores, which is usually difficult to do within an existing infrastructure. Management feels that it has exhausted all possibilities of buying or leasing a mill in the area, and that building a new one at the Redstone is the logical choice.

About Liberty Mines Inc.

Liberty Mines Inc. is a mineral exploration and development 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.

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