Liberty Mines

Founded with a vision to exploit an abandoned nickel mine, Liberty Mines took control of its own destiny with the construction of a new nickel concentratorNickel has been mined in Canada for over 100 years. High concentrations of nickel-copper ore were discovered on the edge of the Sudbury Basin in Ontario in 1883, during construction of the Canadian Pacific Railway. Since then, Canada has become the third largest nickel producer in the world after Russia and Australia.Canadian nickel production was dominated for years by the International Nickel Company of Canada (later INCO), with another giant, Falconbridge, entering the arena in the 1930s. Both were acquired by overseas mining conglomerates in the ÔÇÿNickel WarsÔÇÖ of 2006, (INCO by the Brazilian company CVRD and Falconbridge by Swiss owned X-Strata), but recent years have seen the rise of a crop of junior exploration companies, and not just around Sudbury.In 2005, Gary Nash was an investor in Liberty Mineral Exploration Inc, less than satisfied with the companyÔÇÖs (lack of) plans to develop its resources. The Redstone Mine, in particular, 15 miles south east of Timmins, Ontario, had produced 276,700 tonnes of nickel between 1989 and 1996, graded at 2.4 percent. It had been closed in 1996 with an inferred resource of 182,000 tonnes (grading 3.28 percent nickel) remaining above the 335 meter level. Although the historical resource calculation was not compliant with National Instrument 43-101, Nash and others believed there was an opportunity to significantly increase reserves below the 335 meter level, too, as a result of down hole studies carried out by INCO in 2003.ÔÇ£These guys didnÔÇÖt want to be miners and we did,ÔÇØ was how Nash summed up the situation. So a hostile take-over was organized, and Nash and his fellow investors became the new board on 22 March, 2005. The company was renamed Liberty Mines Inc, at its Annual Meeting on 23 June, 2005, to signify its focus on bringing its nickel/cobalt properties into production.The new owners immediately announced a reversal of the previous strategy by deciding not to sell the companyÔÇÖs McWatters property to Canadian Arrow Mines, a deal that had almost been sealed a mere two weeks previously. Instead, they planned to reopen the Redstone Mine, put it into production as quickly as possible, and use the cash flow for the further exploration and development of McWatters. By the middle of April 2005, Liberty had assembled a technical mining engineering team to bring the Redstone Mine into production. There was quite a bit to do. ÔÇ£There were 150 million liters of water in there,ÔÇØ said Nash, ÔÇ£and some rehab work that needed to be done.ÔÇØ As it happened, after dewatering the mine was found to be in pretty good condition.Before production could begin, 14 kilometers (almost nine miles) of power line to the mine had to be cleared of trees and overgrowth before the lines could be inspected and repaired. Permits were already in place for the power line and a generating plant, but step down transformers and other electrical equipment necessary for dewatering and production had still to be assembled.Pre-production began at Redstone in May 2006, a little over a year after the new management took over. Although permitted to produce 400 tonnes a day, the mine operated at reduced capacity until the new nickel concentrator was constructed. Much of the equipment for the mill was purchased new, to secure the latest technology to ensure maximum nickel recoveries and metallurgical control in the crushing, flotation and tailings circuits. Although new equipment is more expensive than used machinery, management determined that the difference in costs would be quickly recovered through the additional revenue generated by the higher nickel recoveries achievable with the new equipment, and the lower maintenance costs compared with used equipment. The total cost of the mill is around $14 million, taking into account winter construction and additional equipment, including the addition of 13 flotation cells and a gravity circuit earlier this year to enable full production to be achieved with the ability to remove platinum and palladium from the nickel in concentrate to sell as a separate product.By early May 2006, Liberty had completed phase one of its deep drilling program at Redstone to investigate mineralization between the boreholes drilled by INCO in 2003. One borehole intercepted three zones between 449 meters and 461 meters grading as high as 23 percent nickel and averaged 12.3 meters of 2.59 percent nickel (Ni). The other also intersected three zones, from the 749 meter level to the 767 meter level, grading 1.24 percent to 5.86 percent Ni. Phase two drilling from within the mine at the 213 meter level would later bring the historic resource of 182,000 tonnes (grading 3.28 percent Ni) into reserves.Liberty is blessed with a particularly high grade of nickel (the grade is simply the nickel content of the ore, by weight, expressed as a percentage). Other Canadian producers have been happily mining nickel for over 100 years, graded around 1.4 percent. ItÔÇÖs the same nickel as anyone elseÔÇÖs, of course, once youÔÇÖve extracted it, but as it costs the same to mine a ton of one percent ore as it does a ton of two and half percent, thereÔÇÖs two and half times the value in the higher grade. In other words, youÔÇÖre getting more nickel for your buck. ÔÇ£Tonnage has an effect on mine life, but grade affects whether you can mine it at all. If itÔÇÖs a small deposit it has to be higher grade.ÔÇ£Cobalt and nickel are metals of the future,ÔÇØ said Nash, with both playing a fundamental role as basic materials to make batteries for use in hybrid vehicles. Cobalt alloys are used to produce high temperature steels, magnets, catalytic converters and in the medical industry for joint replacements. Cobalt retains its magnetic properties at a higher temperature than any other element. Pure nickel is needed to make corrosion resistant pipes and vessels which contain fluids used in nuclear reactors.┬á