Liberty Mines Inc.
TSX : LBE

Liberty Mines Inc.

April 29, 2008 16:47 ET

Liberty Completes Debt Financing

EDMONTON, ALBERTA--(Marketwire - April 29, 2008) -

NOT FOR DISTRIBUTION TO THE UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Liberty Mines Inc. ("Liberty or the Corporation") (TSX:LBE) is pleased to announce that it has completed the brokered debt financing announced on March 31, 2008 co-led by Salman Partners Inc. and Casimir Capital L.P. resulting in gross proceeds to the Corporation for the sum of $13,045,000 and US$3,355,000 (all funds are expressed in Canadian dollars unless otherwise indicated). The size of the financing was reduced from $30,000,000 at Liberty's request. Liberty has arranged an additional credit facility for up to $15,000,000 at favourable terms to the Corporation, the details of which will be released shortly.

Pursuant to the financing, the Corporation has issued units consisting of one secured promissory note ("Note"), which matures on October 29, 2009, and 250 transferable share purchase warrants ("Warrants"). Each Note has a par value of C$1,000 and bears interest at 14% per annum, which interest was prepaid in full on closing. The Notes are secured by a charge on the two mining leases associated with the Redstone Mine and mill and the McWatters Mine, and other assets used in the Corporation's mining operations in respect of the leases, and such security is senior to any other security interests granted by the Corporation in respect of such assets.

Each Warrant is exercisable into one common share until April 29, 2010 and has an exercise price of C$2.50 per share, subject to adjustment. If and only if Liberty completes an equity financing at a price less than $2.50 before April 29, 2010, the warrant exercise price may be adjusted to the greater of the price of the financing and $1.33. The Warrants contain a "Put" provision under which the Warrant holders will be entitled to cause the Corporation to repurchase the Warrants at a price of $0.40 per Warrant if and only if, upon expiry of the Warrants, the immediately prior average 20 day closing stock price of the Corporation is less than $2.50. The Warrants are also subject to an acceleration clause whereby if the closing trading price of the Corporation's common shares is $3.75 or more for a period of 15 consecutive trading days, the Corporation will have the option to require the earlier exercise of the warrants within 30 days of formal notice from the Corporation.

At the option of the Corporation the term of the loan may be extended by a further 60 days (the "Extended Term"), subject to (i) the prepayment of 60 days interest at a rate of 14% per annum upon commencement of the 60 day term (the "Extended Term Interest"); and (ii) verification by the Agents that following the prepayment of the Extended Term Interest, Liberty will have the greater of at least (i) $1.5 million in cash reserves, or (ii) a minimum of two months in working capital sufficient to maintain the business and operations of Liberty in the normal course.

In connection with the financing, Liberty paid commissions totalling 6% of the gross proceeds received. The net proceeds of the financing will be used to fund current development costs to bring the McWatters nickel mine into production and for general working capital.

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.

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 production targets, 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

  • Liberty Mines Inc.
    Dr. Gary Nash, PhD (Physics)
    President & CEO
    (416) 238-9736
    (780) 437-7898 (FAX)
    Email: gnash@libertymines.com
    or
    Liberty Mines Inc.
    Chris Simister
    Manager Investor Relations
    (780) 485-2299
    (780) 485-2253 (FAX)
    Email: csimister@libertymines.com