Vancouver — Its Redstone mine has been in production for just over a year and its McWatters mine is in preproduction ramp-up, but falling nickel prices have forced Liberty Mines (LBE-t) to put both on care and maintenance while the company searches out a financial solution.
The Redstone underground nickel mine near Timmins, Ont., started commercial production in July 2007, processing 200 tonnes of ore daily from a 419,000-tonne resource averaging 2.32% nickel. The on-site concentrator, which has a flotation circuit designed specially to separate nickel sulphides from the high talc component typical of nickel ores in the Shaw Dome nickel belt, was built to handle 2,000 tonnes per day. The extra capacity was built in to accommodate ore from the McWatters mine.
At McWatters, less than 10 km east, construction got under way in late 2007 and preproduction began with 200 to 600 tonnes of ore produced daily. The underground mine was expected to produce 1,200 tonnes of ore daily from high-grade lenses by early 2009, with the rate building to 1,600 tonnes per day later in the year.
And in between McWatters and Redstone, Liberty is exploring the Hart deposit, where an initial estimate pegged indicated resources at 1.4 million tonnes grading 1.5% nickel and inferred resources at 286,000 tonnes averaging 1.36% nickel. The company foresaw developing its third mine at Hart and has submitted permit applications.
Unfortunately, Liberty was unable to close the financing it announced in late September, with which it hoped to raise US$32 million. The company needed that money for two key things: to pay off the principal owing on the previous $16.45-million financing and for continued development of the McWatters and Hart mines.
On the last day of October, Liberty announced its decision to put the Redstone and McWatters mines, as well as the Redstone concentrator, on care and maintenance. The company says it is seeking financing to support its intended restructuring and interim operations.
In a statement, Liberty president and CEO Gary Nash said, “Liberty is rich in mining assets and is seeking a business combination with a partner who is looking for a first-class mining asset that can finance our growth and production plans.”
Nash added that the company is proud to have, in the last three years, put two mines into operation, permitted and built a 2,000-tonne-per-day mill at McWatters, and discovered the resource at Hart.
On the news, Liberty shares fell 3.5 to 6, a penny above the company’s 52-week low. A year ago, Liberty was trading at $2.25. The company has 81.3 million shares issued.
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