LIBERTY PROVIDES PRE-FEASIBILITY STUDY FOR THE REDSTONE NICKEL MINE

1/11/2010 10:00 AM - FSC
Edmonton, AB January 11, 2010
FSC / Press Release
Liberty Provides Pre-Feasibility Study for the Redstone Nickel Mine
Edmonton, Alberta CANADA, January 11, 2010 /FSC/ - Liberty Mines Inc. (TSX: LBE), ("Liberty or the Company") is pleased to announce the results of an independent National Instrument 43-101 compliant pre-feasibility study completed by SRK Consulting (Canada) Inc. ("SRK") for the Redstone nickel mine. The study includes deep drilling to the 1150m level from surface and data from drilling within the mine completed in April 2008 which was not included in the interim technical report dated December 16, 2008.
The Redstone mineral resource estimate by SRK at a cut-off grade of 0.51% nickel ("Ni") consists of 599,000 tonnes in the Measured and Indicated categories grading 1.47% Ni and 0.02% copper ("Cu"); and 737,000 tonnes in the Inferred category grading 1.57% Ni and 0.03% Cu. The Proven and Probable Mineral Reserves were estimated at 259,900 tonnes with an average grade of 1.04% nickel ("Ni") using a nickel price of US$15,430 per tonne (US$7.00 per pound) and an exchange rate of $1.00 CDN =
.90 US. All revenue and costs are expressed in Canadian dollars unless otherwise indicated.
Some of the important points in the technical report are:
* Innovative mining methods, successful exploration and the realization of the significant mineralization in the hangingwall structures of the Redstone Mine has greatly enhanced its economics;
* There is a strong potential to increase the Inferred Resources in the lower zone between 510m and 1150m; and to upgrade the current Inferred resources to the Indicated category with additional drilling. The reserves would be positively increased and the life of mine ("LoM") extending accordingly;
* SRK estimates a mine life of 26 months with an average ore mining production rate of 10,000 tonnes per month (500 t/d with 5 days of operation per week);
* The undiscounted pre-tax LoM cash flow is estimated at $2.9 million;
* Sublevel longhole retreat (15 metre vertical spacing) is the preferred method for mining the underground disseminated mineralization;
* The sublevel longhole retreat mining cost is $38.47/tonne;
* The estimated unit cost for processing at 1,800 tpd (Redstone & McWatters combined) is $14.81per tonne milled;
* The use of a proven electric monorail system below 1600 level will complement diesel trucking above the 1600 level while enhancing capital and operating costs;
* The monorail system provides an opportunity if the mine production rate is ever increased as it doesn't have the same ventilation or interference issues as diesel trucks.
The resource and reserve estimates for the Redstone mine are presented in the following tables, respectively:
Redstone Mineral Resource Statement*
- SRK Consulting, October 19, 2009
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Classification Tonnage Grade Grade Nickel
(000's t) Ni(%) Cu(%) Tonnes
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Measured
Massive 148 2.43 0.03 3,600
Disseminated 0 0.00 0.00 0.00
Total 148 2.43 0.03 3,600
Indicated
Massive 41 1.76 0.04 720
Disseminated 410 1.10 0.01 4,500
Total 451 1.16 0.01 5,220
Total Measured
& Indicated
Massive 189 2.29 0.03 4,320
Disseminated 410 1.10 0.01 4,500
Total 599 1.47 0.02 8,820
Inferred
Massive 159 3.52 0.09 5,582
Disseminated 747 0.9 0.02 6,722
Total 905 1.36 0.03 12,304
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* Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. Reported at 0.51% nickel cut-off. Cut-off grades are based on a nickel price of US$7.00/lb and on a mill recovery of eighty-seven percent. All figures have been rounded to reflect the accuracy of the estimate.
Redstone Mine Mineral Reserve Statement
- SRK Consulting, December 31, 2009
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Contained
Classification Zone Quantity Grade Nickel
Tonnage Ni(%) (tonnes) (lbs)
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Proven Above 1660L 57,100 1.37 780 1,719,000
Proven Below 1600L 5,800 1.21 70 154,000
Proven Sub Total 62,900 1.35 850 1,873,000
Probable Above 1600L 54,200 0.70 379 836,000
Probable Below 1600L 142,800 1.04 1,483 3,269,000
Probable Sub Total 197,000 0.95 1,862 4,105,000
Proven/Probable TOTAL 259,900 1.04 2,712 5,978,000
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The in-situ Mineral Resources included into the Mineral Reserve estimate are based on a cut-off grade of 0.54 percent Ni for the sublevel longhole mining method.
The independent mineral resource and reserve estimates prepared by SRK are reported in accordance with Canadian Securities Administrators' National Instrument 43-101 and conforms to generally accepted Canadian Institute of Mining ("CIM") "Estimation of Mineral Resources and Mineral Reserves Best Practices" guidelines. A complete National Instrument 43-101 Technical Report, which will incorporate the resource and reserve estimation, will be filed on Sedar within 45 days of release of this press release.
This independent Technical Report was compiled by Mr. Glen Cole, P. Geo.(APGO) and Mr. Andrew MacKenzie, P. Eng. (APEO) as principal authors with assistance from the following independent professionals:
* Mr. Bruce Murphy, FSAIMM for the hard rock geotechnical assessment;
* Mr. Phil Bridson, P. Eng. on underground mine planning;
* Mr. Carlo Cattarello, P. Eng. on mineral processing;
* Mr. Rod Doran, P. Eng. on environmental aspects.
This report benefited from the review of Mr. Ken Reipas, P. Eng. SRK Principal Mining Engineer. By virtue of their education, relevant work experience and affiliation to a recognized professional association, these professionals are independent qualified persons as defined by National Instrument 43-101.
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. It owns and operates the Redstone nickel concentrator near Timmins Ontario.
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 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: mining risks; commodity prices; currency exchanges; regulatory approvals; and assumed startup and operating costs detailed herein and from time to time in the filings made by Liberty with securities regulators.
For further information please contact:
Dr. Gary Nash, PhD (Physics), President & CEO
Phone (416) 238-9736 Fax 780-437-7898
e-mail: gnash@libertymines.com
Press Release 1-10
Source: Liberty Mines Inc. (TSX: LBE) http:// www.libertymines.com
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