TORONTO, March 30, 2012 /CNW/ - Liberty Mines Inc. (LBE;TSX) ("Liberty" or the "Company") today reported its financial results for the 12-month period ended December 31, 2011. All amounts are in Canadian currency.
"Given all of the progress we have made over the past 12 months, 2011 will go down as the year we began the turnaround of Liberty Mines," said Mr. Chris Stewart, President and CEO of Liberty Mines. "Bolstered by a new management team and strong support from our controlling shareholder, we achieved each of our key objectives. Most notably, we took measures to complete the refurbishment of our Redstone Mill's tailings storage facility with all necessary approvals and permitting, and we launched an exploration program whose preliminary results confirm our belief that our properties in the Timmins area have the potential for significant resource expansion."
2011 Operational Highlights
- Initiated a plan to temporarily suspend operations and begin the refurbishment of the tailing storage facility (TSF) at the Redstone Mill, which will extend its life through 2015. The plan consists of repairs and upgrades to the existing TSF, milling of stock-piled inventory and re-start of underground operations.
- Appointed Chris Stewart President and CEO of the Company effective May 15. Mr. Stewart has more than 20 years of mining experience, including tenures at BHP Billiton and Lake Shore Gold.
- Conducted an exploration program consisting of 12,258 meters at the Company's properties in the Shaw Dome Nickel region that resulted in the discovery of the Hart East deposit as well as encouraging results at the Groves and Croxall properties. The drill results support the Company's belief that the properties provide the potential for significant resource expansion.
- Implemented care and maintenance work at the Company's Redstone and McWatters mines.
- Closed a series of transactions with Jilin Jien Nickel Industry Co. Ltd., and its wholly-owned subsidiary, Jien International Investments Ltd., Liberty's controlling shareholder. The transactions were designed to provide support for Liberty's 2011 business plan, restructure Liberty's financial obligations and reduce dilution risk to minority shareholders.
- Developed plans to build a new tailings pond facility that will have more than 15 years of tailings storage capacity.
- Appointed Mr. Kim Oishi and Dr. Zhang Shu to the Company's board of directors.
Operational Highlights Subsequent to Year-end
- Commissioned the Company's mill and concentrator at Redstone. Production is expected to resume in the coming days pending final approval from the Ontario Ministry of the Environment.
- Announced operational and strategic targets for 2012, including production of 4 million tons of nickel.
- Received a $5,000,000 loan from Jien International Investments Ltd., the Company's controlling shareholder. The purpose of the loan was to provide working capital for Liberty to address the timing around revenue payments from the resumption of mining activities.
Review of 2011 Financial Performance
Revenue for 2011 was $2.2 million, down from $32.3 million for 2010. The decline was due to a shut-down of mining and milling operations initiated in February, 2011.
In 2011, Liberty shipped 276,692 pounds of payable nickel concentrate, 13,843 pounds of copper, and 4,589 of cobalt. In 2010, when Liberty was operating at full capacity, it shipped 2.8 million pounds of payable nickel, 138,186 pounds of copper, and 36.606 pounds of cobalt.
Net loss for 2011 was $26.8 million or $0.14 per basic and fully diluted share. The loss included amortization expenses of $6.3 million, interest on long-term debt of $5.9 million and an inventory impairment charge of $1.1 million. In 2010, Liberty recorded a net loss of $22.0 million or $0.13 per basic and fully diluted share. Liberty's mining and milling operations were fully functional in 2010.
At December 31, 2011, Liberty had cash and cash equivalents of $1.3 million. This compares to negative cash of $661,279 at year end 2010.
Liberty's financial statements for the year ended December 31, 2011 are available at www.libertymines.com and www.sedar.com. The financial statements should be read in conjunction with the accompanying notes and management's discussion and analysis.
"The re-start of operations and recent success of our drilling program add to our momentum," Mr. Stewart also said. "We believe that this will be sustained through 2012 as we target production of 4.0 million pounds of nickel this year and resource expansion at our key projects in the Shaw Dome."
About Liberty Mines Inc.
Liberty Mines Inc. is a mid-tier 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. It owns and operates the only nickel concentrator in the Shaw Dome, a prospective nickel belt region near Timmins, Ontario. With a new management team in place, Liberty is focused on growth initiatives not only through a more aggressive exploration program on its current properties but also through potential acquisition or partnership opportunities beyond its core Timmins area projects.
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 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; regulatory approvals; receipt of mining permits and leases; and assumed startup and operating costs detailed herein and from time to time in the filings made by Liberty with securities regulators. Forward-looking statements speak only as of the date on which they are made. The Company undertakes no obligation to publicly update any such statement or reflect new information or the occurrence of future events or circumstances, except where required by securities regulations. Accordingly, readers should not place undue reliance on forward-looking statements.
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