Liberty Mines Reports Financial Results for Third Quarter 2011

TSX:  LBE 

TORONTO, Oct. 28, 2011 /CNW/ - Liberty Mines Inc. (LBE;TSX) ('Liberty' or the 'Company') today reported its financial results for the three- and nine-month periods ended September 30, 2011. All amounts are in Canadian currency.

'Our third quarter performance, which was consistent with our expectations, reflects our focused efforts aimed at re-starting our mining operations, building out a solid management team and implementing our turn-around strategy,' said Mr. Chris Stewart, President and CEO of Liberty Mines.  'We are particularly encouraged by the progress we are making with our mill refurbishment work, which is both on schedule and on budget, and by drill results from our focused exploration activities that suggest expansion of our resource estimates.'

Q3 Operational highlights

        --  Continued ongoing refurbishment work at its Redstone Mill and
            tailings pond facility (TPF) as well as maintenance and care
            work at its Redstone and McWatters mines.
        --  Closed a series of transactions with Jilin Jien Nickel Industry
            Co. Ltd.  The transactions were designed to provide support for
            Liberty's 2011 business plan, restructure Liberty's financial
            obligations and reduce dilution risk to minority shareholders.
        --  Appointed Mr. Kim Oishi and Dr. Zhang Shu to the Company's
            board of directors.
        --  Ongoing drill results expanded nickel mineralization of the
            Hart East Project. The Project is accessible from the Company's
            main Hart Deposit, which has an indicated resource of 1.55
            million tons grading 1.4% nickel.

Financial Performance

Revenue for the three- and nine-month periods of 2011 were $159,000 and $2.2 million respectively. These compare to $9.8 million and $24.3 million for the corresponding period of 2010. The year-over-year declines were due to a shut-down in mining and milling operations implemented in February, 2011. Liberty shipped 16,778 pounds of nickel in Q3 2011 and 276,093 pounds of nickel on a year-to-date basis. In 2010, when the company was operating at capacity, Liberty sold 955,688 pounds of nickel, 47,817 pounds of copper, and 12,784 pounds of cobalt for Q3, and 2,318,924 pounds of nickel 120,119 pounds of copper, and 27,712 pounds of cobalt valued for the nine-month period.

Net loss for Q3 2011 was $8.3 million or $0.04 per basic and fully diluted share. The Q3 net loss included a foreign exchange loss of $1.6 million, interest expenses on long-term debt of $1.3 million and a dividend on preferred shares charge of $0.3 million.  On a year-to-date basis, Liberty incurred a net loss of $18.2 million or $0.11 per share basic and diluted.  In 2010, Liberty incurred a net loss of $2.7 million, or $0.11 per share, and $10.1 million, or $0.06 per share, for the three- and nine-month periods, respectively.  Liberty's mining and milling operations were fully functional in 2010.  As recently announced, Liberty expects that its mining and milling operations will resume in Q1 2012.

At September 30, 2011, Liberty had working capital of $3.7 million, including cash and cash equivalents of $1.2 million.

Liberty's financial statements for the third quarter ended September 30, 2011 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.

Liberty Mines Inc.

CONTACT:

Chris Stewart, President & CEO Joe Racanelli

Liberty Mines TMX Equicom

(416) 226-4360 ext 203 416 815 0700 ext 243

cstewart@libertymines.comjracanelli@equicomgroup.com