TSX:  LBE 

TORONTO, Aug. 23, 2012 /CNW/ - Liberty Mines Inc. (TSX: LBE) ("Liberty" or the "Company") today announced that a positive preliminary economic assessment has been completed for its Hart Project, a nickel deposit located in Timmins Ontario, and approximately five kilometers from the Company's Redstone mill.  The preliminary economic assessment was prepared by Stantec Consulting.  All dollar amounts are in Canadian currency.  A final version of the Preliminary Economic Assessment will be filed on SEDAR within 45 days as required.

Preliminary Economic Assessment Study Highlights

• Estimated pre-tax Net Present Value (NPV) of $35.8 million using an 8% discount rate and a $10 per pound of nickel price.
• Estimated pre-tax NPV of $81.5 million using an 8% discount rate and a $12 per pound nickel price.
• Life of mine is 8 years.
• Total life of mine production of 38,497,588 payable nickel pounds.
• Total gross revenue is estimated at $429.3 million using a $10 per pound nickel price. The gross revenue includes fees generated from the production of copper and cobalt by-products).
• Estimated total capital costs (CAPEX) for the project is estimated at $105million.
• Estimated mining operating costs (OPEX) of $109.6 million, or an average of $64.43 per tonne.
• Estimated Internal Rate of Return (IRR) of approximately 23%.
• Cut-off grade of 0.46% Nickel.

"We are very encouraged by the positive results of the Preliminary Economic Assessment and our prospects for the Hart Project," said Chris Stewart, President and CEO of Liberty Mines Inc.  "The PEA suggests that the Hart Project has the potential to become economically viable, generate positive cash flow, and take advantage of the available capacity at our Redstone Mill.  Recent drill results, although preliminary at this time, also suggest that the deposit has the potential for mineralization expansion at depth and stronger economics."

Mr. Stewart added, "With the only operating mill in the Shaw Dome Region, a large land package that includes the Hart East Deposit whose initial drill results demonstrated the potential for a significant mineralized zone, as well as the opportunity for property consolidation in the region, we believe that Liberty's prospects are extremely strong over the long term, particularly as the price of nickel recovers."

Hart Project Description

The Hart Project will be a stand-alone underground mine used for the extraction of nickel ore, and will share synergies with Liberty's existing assets and facilities.   Underground production will be done primarily via long-hole mining and transported to surface using diesel trucks.    The Hart Mine is expected to produce an average of 750 tonnes of nickel ore per day throughout its 8 year life of mine.

The Preliminary Economic Assessment assumes that construction of the mine will begin in 2013 and will reach a steady rate of production by 2017.

To see an image of the Hart & Hart East projects, click the following link: http://files.newswire.ca/1063/Hart_Hart_East.pdf

Summary of the Hart Project Mineral Resource Estimate

The Preliminary Economic Assessment was based on resource estimates prepared by SRK Consulting (Canada) Inc. according to NI43-101 standards and filed as a technical report on the property on March 4, 2010 summarized as follows:

Table 1: Hart 2010 Resource Estimate Summary:

Category	Resource  Estimates
	Tonnes	Grade Ni (%)	Contained Nickel (lbs)
Indicated Resources	1,546,000	1.40	47,779,000
Inferred Resources	322,000	1.27	8,990,000

Summary of Capital Cost Estimates

The total capital costs required to build the Hart Mine are estimated to be $100.8 million. Specific costs are detailed as follows:

Surface Construction	$8,625,420
Underground Construction	$8,943,041
Ramp	$20,701,800
Lateral Waste Development	$8,750,752
Raises	$4,092,421
Boreholes	$1,035,000
Indirects	$29,588,860
Equipment Purchase	$19,013,500
Capital Costs Total	$100,750,794

Summary of Mining Operating Costs in Project Period Estimates

The total mine operating costs, including during mine development and production phases, are estimated to be $109.6 million, which represents an average cost per tonne of $64.43.

Direct	Indirect	Total	Direct	Indirect	Total
$50,284,607	$59,318,224	$109,602,831	$29.56	$34.87	$64.43

Economic Analysis and Sensitivities

The estimated pre-tax NPV is $35.8 million using an 8% discount rate and a $10 per pound of nickel price.  With a $12 per pound of nickel price, the estimated pre-tax NPV is $81.5 million. The impact of varying price points of nickel per point on the project's NPV are detailed as follows:

USD Price of Nickel per Pound	NPV @ 8%
$9.00	$12,965,897
$10.00	$35,803,684
$11.00	$58,641,470
$12.00	$81,479,257
$13.00	$104,317,044
$14.00	$127,154,831

Cautionary Note concerning Resource Estimates used in this PEA

Liberty cautions that the PEA referred to in this announcement is preliminary in nature and includes inferred mineral resources as per Table 1 above that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves.  Mineral resources that are not reserves do not have demonstrated economic viability.  Due to the inclusion of inferred resources in the PEA,the Company also cautions there is no certainty that the PEA will be realized.

Qualified Persons

Qualified Persons for the Hart resource estimates consist of Mr. Glen Cole, P. Geo., and Mr. Andrew MacKenzie, P. Eng., who prepared the resource estimate contained in the Hart technical report filed March 4, 2010 referenced herein.  Each of Mr. Cole and Mr. MacKenzie are Qualified Persons under NI43-101 and are independent of the Corporation.    Qualified Person for the Hart Preliminary Economic Assessment, the main subject of this disclosure, is Mr. Mark Hatton, P.Eng from Stantec.

In addition to the Qualified Persons responsible for the preparation of the above referenced technical reports, Ms. Heather Miree, P. Geo., V.P. Exploration for Liberty Mines Inc. has acted as Qualified Person, as defined by NI43-101, concerning the exploration portion of this disclosure and Mr. Keyvan Salehi, P. Eng., V.P. Technical Services and Business Development for the Corporation, has acted as Qualified Person regarding the engineering and economic portions of this disclosure.  Both Ms. Miree and Mr. Salehi are employees of the Corporation, thus are not independent of it.

About Stantec

Stantec provides professional consulting services in planning, engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, project management, and project economics for infrastructure and facilities projects. We support public and private sector clients in a diverse range of markets at every stage, from initial conceptualization and financial feasibility study to project completion and beyond. Our services are provided on projects around the world through approximately 12,000 employees operating out of more than 190 locations in North America and 4 locations internationally. Stantec trades on the TSX and the NYSE under the symbol STN.

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.

PDF available at: http://stream1.newswire.ca/media/2012/08/23/20120823_C9044_DOC_EN_17192.pdf

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