Liberty Mines gets busy at Redstone (August 22, 2005)

Vancouver – Liberty Mines (LBE-V) has received its dewatering permit for the past producing Redstone nickel mine located 23 km southeast of Timmins, Ontario.

Once the mine is dewatered, the company anticipates immediate recommencement of production from the high-grade nickel sulphide deposit. Pumping of the flooded workings will commence in early-September and is expected to take about two months to complete.

Liberty is planning on production commencing in November at a projected rate of 400 tonnes per day. An existing 14 km high-voltage power line to the property is undergoing inspections and repairs to allow restoration of electricity to the mine site. Construction of a scaleable mill is planned for Redstone that will also have capacity for potential ore from other area nickel operations. Additionally, metallurgical testing of ore is almost finalized and will provide data for the design of a gravity Magnetic milling circuit.

Terms of a recently arranged financing, for dewatering and underground rehabilitation, will be disclosed upon finalization.

The company is eyeing the near-term cash flow potential from Redstone to advance area exploration and possible development of its other northeastern Ontario projects (McWatters-Langmuir nickel and the McAra high-grade cobalt properties).

Redstone was discovered in the late 1970s by a predecessor company to BHP Billiton (BHP-N), which subsequently optioned the project to Timmins Nickel in 1989. Timmins Nickel developed and mined the deposit until the early-1990s when low metal prices and financial constraints forced its closure.

Extensive drilling in the mid-1990s by Black Hawk Mining, now part of Glencairn Gold (GGG-T), defined a deeper resource from 750 foot level to the 1100 foot level. The mine was placed in production again, but only for about one year.

Liberty acquired Redstone in 2003, from a non-arms length company, with the project under a 2002 option agreement to INCO (N-T) that could earn 70% for cash payments of $520,000 over four years. The major conducted drilling, geophysics and put together a compilation study of previous data before opting out of the project in late-2004 by selling back its earn in rights to Liberty for $250,000 and 2 million shares.

Reported historic production from Redstone was about 275,000 tonnes of ore grading 2.4% nickel. Upon closure in 1996, an inferred resource of 182,000 tonnes grading 3.28% nickel remained above the 335-metre level. The resource figure pre-dates National Instrument 43-101.

In mid-2005, Liberty inked a strategic alliance with a Chinese smelting and refining company for the off-take of nickel concentrate produced from Redstone. The aspiring producer has tabled production goals of 15,000 tonnes of nickel per year.

Bitten by nickel bug, investors have driven up Liberty’s share price about 50% over the past week, to the 33 level, on high volumes. With its 33 million shares outstanding, Liberty has a market capitalization of $11 million.