China buys Redstone ore.

A strong focus has propelled Liberty Mines Inc. forward on the development and production of its Redstone nickel mine and mill.

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Located about 25 kilometres southeast of Timmins, this small junior miner recently received all of its permitting for the mill within six months, record time for a process that can take up to two years. With 20 employees and crews of about 100 construction and mining contractors on site, the Redstone mine is a busy place.

The company's production has increased to 200-tonnes per day from 120 since mid-May with an average grade of 2.4 per cent.

"It has enabled us to produce some cash flow," says Gary Nash, CEO and president.

Construction of a 6.5 km access road from the McWatters mine site to the Redstone is underway Also, the company has hired its own ore miners, all part of a strategy to build a stand-alone enterprise.

As an independent, nickel-producing junior, little has discouraged Liberty from its goal to mine and produce nickel along side its larger competitors. When all efforts to find a Canadian company that would refine its nickel were exhausted, Nash sought partnerships in China. Now, Jilin Jien Nickel Industry Company Ltd., is presently purchasing the ore concentrate, custom milled at SMC (Canada) Ltd. in Cobalt.

"It is a Band-Aid solution to make a little cash while the nickel prices are high," Nash says.

In the interim, the construction of the 1,500-tonne per day mill is well underway The $8.9-million phase one includes the construction of the crushing and mill buildings with their respective equipment, and the thickened tailings facility The concrete work was performed in November, and the crusher building is completed. A 27,000-square-foot pre-engineered building for the mill will arrive in December. This will house three ball mills and a 40-foot, diameter deep cone paste thickener for the tailings. Flotation tank cells will be used for metallurgical recovery of the nickel.

The mill's $2-million second phase will add 13 tank cells, a gravity circuit and more controls. The facility is expected to be operational by April 2007, increasing the number of employees and production to 360 tonnes per day as well as reducing extra transportation and milling costs.

Liberty has mined about 15,000 tonnes of the 182,000 historic tonnes. Underground drilling at Redstone began in September to prove up 325,000 tonne of targeted reserves.

In October, a new zone was discovered in the hanging wall of the 244-metre (m) drift. It has a lateral extent of 30 m, a vertical extent of about 74 m, and is about two-to-three metres thick, grading around 2.6 per cent, which Nash describes as "typical Redstone grade."

Phase two of the deep drilling program involves deepening three boreholes drilled during phase one in April 2006 and extending them into the known mineralized zone at the 701-m to 762-m level. Two other boreholes will be drilled at the 549-m and 610-m levels.

The 250-m by 450-m anomaly discovered by Inco Ltd. at the 1,219-m level will also be drilled. This has been described as a "real plum" by former and present Inco employees, according to Nash.

www.libertymines.com

By ADELLE LARMOUR

Northern Ontario Business