5 Life, Liberty and high nickel prices.

Squeezing out from under the umbrella of the nickel mining giants in northeastern Ontario is no easy task, but a necessary one for Liberty Mines Inc.

The small, independent junior began production on its Redstone nickel mine in mid-May, producing approximately 200 tonnes per day, according to president and CEO Dr. Gary Nash.

[ILLUSTRATION OMITTED]

Located 25 kilometres southeast of Timmins, the deposit was discovered in 1987 where 276,700 tonnes grading 2.4 per cent nickel was mined by several operators over a period of seven years until 1996, according to the company's website.

In 2003, Liberty took over the once-producing property and focused on reopening the mine. Motivated by high base metal prices, the company is continuing exploration at the Redstone Mine, its nearby McWatters' nickel property and the McAra Lake cobalt project about 100 km north of Sudbury, east of Shining Tree.

"The Redstone has 182,000 historical tonnes" as part of 1.5 million tonnes of potential reserves, Nash says.

Liberty has a three-phase drill program underway in order to prove up more reserves and extend the current two-year mine life. The phase one deep-drilling program has been completed as announced in a May 5 company report. Two boreholes drilled by Inco in 2003 were investigated. Drill holes intercepted three zones of mineralization between 449 m and 461 m, and another three zones at the 749-m level to the 767-m level.

Phase two involves drilling from the 213-m level, where a drift in the mine was extended in order to bring the historical tonnage into modern 43-101 standard by the summer.

"We're going to drill an exciting anomaly that Inco found at the 1,200-m level," Nash says, where an anomaly of 250 by 450 metres was discovered in 1989-phase three.

"If we hit a nice section of the large anomaly, it is potentially a multi-million (tonne) deposit in the total mine."

Nash describes it as "very prospective."

Expenditures for exploration and development from late 2005 and for 2006 at the Redstone Mine are between $2-$2.5 million. With a current labour force of 10 people (early May), Nash expects it will grow to approximately 45 employees once the mill is running and production ramps up to 360 tonnes per day. The mining will be performed by Dumas Contracting Ltd., the Timmins company that dewatered the mine.

In the interim, ore will be processed in Cobalt at SMC (Canada) Ltd. until Liberty has its mill constructed. From there, it will be shipped to China and received by Jilin Jien Nickel Industry Company Ltd.

"We're well advanced in our permit applications," Nash says. He anticipates construction on the mill will begin this summer and will be in production by early 2007, for a total cost of $5.5 million. A $4-million prepayment for the nickel in concentrate from the Jilin Jien Nickel Industry Company Ltd., described as Liberty's "strategic working partner," will help provide capital for the mill and 1,500-tonne-per-day nickel concentrator.

Ten km east on the McWatters nickel property, Nash anticipates spending about $100,000 on the surface pit once the permits come through.

"We've got 0.77 nickel starting about 20 m from surface," he says, with the deposit extending down to about 135 metres. He estimates production would be 1,000 tonnes a day.

Further south on the McAra property the company is investing approximately $200,000 exploring a rich cobalt deposit Nash describes as "probably the richest in North America," where the veins run at 11 per cent. There is also copper on the property, which Liberty will explore as well.

For all the hoops and requirements necessary to bring the mine to fruition, Liberty remains independent and unique as a potential future primary producer of both nickel and cobalt.

www.libertymines.com

QUICK FACTS

Liberty Mines

City: Mississauga

Founded: 1997

CEO: Gary Nash

No. of Employees: 10-20

www.libertymines.com

By ADELLE LARMOUR

Northern Ontario Business