TSX: LBE
TORONTO, Nov. 13, 2012 /CNW/ - Liberty Mines Inc. (TSX: LBE) ("Liberty" or the "Company") today reported its financial results for the three- and nine-month periods ended September 30, 2012. All amounts are in Canadian currency.
"Since the start of 2012, we have completed a number of significant milestones designed at positioning Liberty for the long term," said Chris Stewart, President and CEO of Liberty Mines. "Included among these were the re-furbishment of our tailings storage facility, the shipment of more than 1.1 million pounds of payable nickel concentrate to our primary customer Xstrata, lowering our average cash costs to $8.02 per pound on a year to date basis, the expansion of our Hart East Deposit, and the development of a positive preliminary economic assessment for our Hart Deposit."
Mr. Stewart added, "Some of this progress was particularly reflected in our third quarter results, which included a revenue total of $3.9 million, the shipment of approximately 372,000 pounds of payable nickel concentrate, and the lowering of corporate and administration expenses by more than $560,000. Despite the significant advances we have made since implementing our turn-around strategy, we continue to face a low nickel price environment that is delaying the re-start of our operations. Until nickel prices recover sufficiently, we will operate in a care and maintenance mode and preserve the value of our ore."
Q3 2012 Financial and Operational Highlights
- Revenue was $3.9 million.
- Production totalled 44,309 tonnes of material with an average grade of 0.55% nickel.
- Processed and shipped 423,265 pounds of nickel concentrate to the Xstrata smelter in Sudbury.
- Temporarily suspended its Timmins operations on August 14, 2012 due to a low nickel price environment.
- Announced a positive preliminary economic assessment for the Hart Nickel Project in the Shaw Dome Region that included a pre-tax net present value (NPV) of $35.8 million using an 8% discount rate, a $10 per pound nickel price and a life of mine production of 38,497,588 pounds of payable nickel.
Selected Q3 Financial Highlights
| All amounts in thousands except share data |
September 30, 2012 |
September 30, 2011 |
| Revenue |
$3,869 |
$159 |
| Site operational costs |
$5,791 |
$1,850 |
| Net (loss) income |
$(8,461) |
$(8.490) |
| Basic earnings (loss) per share |
$(0.04) |
$(0.04) |
| |
September 30, 2012 |
December 31, 2011 |
| Cash and Cash Equivalents |
$638 |
$1,304 |
| Total Assets |
$89,665 |
$84,266 |
| Total Liabilities |
$122,450 |
$91,064 |
Review of Q3 Financial Performance
Revenue for Q3 2012 was $3.9 million, up from $159,000 for the corresponding period of 2011. The growth was due to a re-start of mining and milling operations effective March 31, 2012. Liberty had suspended mining and milling operations in February 2011 due to maintenance and repair work need for its tailings storage facility. In Q3 2012, the average price of nickel was $7.41 per pound. In the corresponding period of 2011, the average price of nickel was $10.00 per pound. As a result of declining nickel prices, Liberty announced the temporary suspension of operations on August 14, 2012. For the nine-month period of 2012, Liberty generated revenue of $9.3 million, up from $2.2 million for 2011.
Liberty generates revenue through the sale of nickel concentrate and related by-products produced from its mining and milling operations in Timmins, Ontario. Liberty has a 100 percent off-take agreement with Xstrata.
Operating expenses for Q3 2012 were $5.8 million, up from $1.9 million last year. The increase in operating expenses is primarily due to the re-start and subsequent ramp-up of production activities through August 14, 2012. Liberty's production activities were suspended throughout Q3 2011, and the Company operated in a care and maintenance mode. For the nine-month period 2012, operating expenses were $16.5 million, up from $6.6 million. As previously noted, Liberty suspended operations on August 14, 2012 due to declining nickel prices. The Company currently operates its Timmins assets in a care and maintenance mode.
Net loss for Q3 2012 was $8.5 million or $0.04 per share (basic and fully diluted). The loss included amortization/depletion expenses of $2.6 million, interest on long-term debt of $2.8 million and dividends on preferred shares of $0.3 million. Liberty recorded a net loss of $8.5 million or $0.04 per share for the same period in 2011 when its operations were suspended. For the nine month period of 2012, Liberty recorded a net loss of $26.8 million or $0.13 per share. This compares to a net loss of $18.2 million or $0.10 per share for the six-month period of 2011.
At September 30, 2012, Liberty had cash and cash equivalents of $0.6 million. This compares to $1.3 million at year end 2011.
Liberty's financial statements for the period ended September 30, 2012 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.
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.
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: 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.
SOURCE: Liberty Mines Inc.
For further information:
Chris Stewart, President & CEO
Liberty Mines
(416) 226-4360 ext 203
cstewart@libertymines.com
Joe Racanelli
TMX Equicom
416 815 0700 ext 243
jracanelli@equicomgroup.com
