Liberty Mines Inc.
TSX : LBE

Liberty Mines Inc.

May 14, 2008 08:00 ET

Liberty Reports First Quarter 2008 Financial Results

EDMONTON, ALBERTA--(Marketwire - May 14, 2008) - Liberty Mines Inc. ("Liberty or the Company") (TSX:LBE) reported a gross profit of $1,156,026 for the three months ended March 31, 2008 up 372% from the $244,975 reported for the three months ended December 31, 2007. The strong gross profit realized in the first quarter of 2008 is a result of cost efficiencies from the 23% increase in mining activity at the Redstone mine averaging 205 tonnes per day compared to 166 tonnes in 2007 and a slight increase in revenue over the previous quarter.

Revenue for the three months ended March 31, 2008 was $7,924,153 up 3.1% from the $7,682,377 reported for the three months ended December 31, 2007 as a result of stronger nickel prices which was slightly offset by the accountable pounds of nickel sold. The Company sold 571,543 accountable pounds of nickel for the three months ended March 31, 2008, down 4.7% from the 599,489 accountable pounds of nickel sold in the previous quarter.

Mining and processing costs totaled $4,005,343 down over 14% from the $4,689,517 realized for the three months ended December 31, 2007 as a result of increased mining cost efficiencies from higher levels of production in the first quarter. The Company's cash operating cost per pound of nickel sold was US$6.98 (CDN$7.01) per pound for the three months ended March 31, 2008 compared to US$7.97 (CDN$7.82) per pound for the three months ended December 31, 2007 which includes mining, milling, smelting, refining, price participation and marketing costs but excludes mine depletion and operating asset amortization charges. The Company anticipates the cost to produce a pound of nickel to remain in the US$6.00 to US$7.25 range for the remainder of fiscal 2008 as the McWatters mine will not be declared to be in commercial production until late 2008. With the combined commercial production of the Redstone and McWatters mines at 1,400 to 1,500 tonnes per day at a much lower cost per tonne, the Company will be able to produce a pound of nickel at a target cost of US$3.50 per pound.

Amortization and depletion of operating assets for the three months ended March 31, 2008 total $2,762,784 compared to $2,340,061 in the fourth quarter of 2007. The increase in depreciation and amortization is due to additional mining equipment acquired in the first quarter of 2008, which was slightly offset by a reduction in mine depletion based on the lower accountable pounds produced quarter over quarter.

General and administrative costs for the three months ended March 31, 2008 totaled $1,233,205 as a result of increased personnel to deal with the higher activity levels, higher start up costs associated with the establishment of a Company site security group, safety and environmental monitoring costs, and increased legal and accounting fees.

The Company's net loss for the three months ended March 31, 2008 was $865,047 ($0.01 per common share - diluted) compared to $665,709 ($0.01 per common share - diluted) for the three months ended March 31, 2007 as detailed in the following table:



----------------------------------------------------------------------------
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Three months Three months
ended March 31, ended March 31,
2008 2007
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Revenue $ 7,924,153 $ -
Mining and processing costs $ 4,005,343 $ -
Amortization and depletion of
operating assets $ 2,762,784 $ -
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Gross profit $ 1,156,026 $ -

General and administrative expenses $ 1,233,205 $ 278,490
Stock based compensation $ 704,708 $ 392,579
Amortization and accretion other assets $ 210,020 $ 9,940
Interest $ (545) $ 9,661
Foreign exchange $ (162,315) $ (24,961)
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Loss before income taxes $ (829,047) $ (665,709)

Income taxes $ (36,000) $ -
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Loss for the period $ (865,047) $ (665,709)
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Loss per share - basic and diluted $ (0.01) $ (0.01)

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March 31, December 31,
2008 2007
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Working capital deficiency $ (14,881,910) $ (2,102,096)
Total assets $ 99,085,777 $ 86,839,787
Shareholders' equity $ 66,571,242 $ 72,458,763
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The Redstone mine produced a total of 18,474 tonnes of mined ore for the three months ended March 31, 2008, or approximately 205 tonnes per day. The production rate slightly exceeded the quarterly production target by 2.6% and is consistent with the Company's current production targets for the Redstone mine for the remainder of fiscal 2008. The mining cost per tonne of ore for the three months ended March 31, 2008 was $106.63, as compared to $111.54 for the fourth quarter of 2007. The decrease in the mining cost per tonne was a result of operating efficiencies realized through the increase in tonnes of ore mined for the first quarter of 2008 compared to the fourth quarter of 2007.

Processing costs per tonne averaged $42.23 for the three months ended March 31, 2008 compared to $34.27 for the three months ended December 31, 2007. The increase in the mill processing cost per tonne is a result of lower tonnage through the Redstone mill in early first quarter of 2008. The Company anticipates the mill processing costs to remain in the $32.00 to $37.00 range for the second quarter of 2008 and decreasing to a target of $14.50 once the mill is at full production with the increased tonnage from McWatters later in 2008.

Cash flow from operations for the three months ended March 31, 2008 was $4,927,355 compared to $1,663,965 for the previous quarter. The increase in cash generated from operations is mainly the result of the increased mined tonnage from the Redstone mine. This was offset by higher accounts payable balances quarter over quarter.

"We achieved the desired production level at the Redstone Mine and anticipate similar results for the second quarter of 2008. Pre-production at the McWatters Mine is now scheduled for July as a result of having to remove some loose rock at the portal; but we are on target to produce 1400-1500 tonnes per day from the combined Redstone and McWatters Mines in November. We will then have an efficient mining and milling operation producing significant cash flow for the Corporation." said Liberty's President and CEO, Gary Nash.

This press release contains non-GAAP measures like operating cost per tonne of ore, net cash cost per pound of nickel, etc. Please see the Corporation's MD&A on SEDAR for discussion of non-GAAP performance measures.

Complete results will also be available on SEDAR and on the Company's website www.libertymines.com on May 14, 2008.

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

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, metallurgical recoveries, mining and processing costs 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.

No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.

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