May 14 (Bloomberg) -- Inspiration Mining Corp. sued a Liberty Mines Inc. executive for defamation in a lawsuit seeking C$12 million ($11.9 million) in damages over an Internet posting about the potential returns from one of its properties.

The suit might threaten a potential joint venture, a Liberty executive said today. Liberty owns a nickel mine next to an Inspiration site near Timmins, Ontario. The alleged comments by Vice President William Randall, made anonymously on an investor Web site, helped send its stock down 57 percent, Inspiration said in court papers filed April 25.

``The corporation will lose, and has now continued to lose, since Oct. 25, in excess of a market capitalization value of over C$100 million,'' Inspiration said in the Ontario Superior Court filing in Toronto. The company obtained a court order forcing disclosure of the author. The suit threatens a potential partnership of the firms, Liberty President Gary Nash said.

``If Inspiration wants to push this, they're going to open up a can of worms that they wish they hadn't,'' Nash said, declining to provide details on the proposed venture. Inspiration President Randy Miller didn't return a call seeking comment.

Randall, who didn't return a call for comment, wrote the Web post in reaction to an Inspiration report about an estimate on the amount of nickel on Inspiration's property, Nash said. Randall apologized ``profusely'' to Liberty's management for the Nov. 11 posting and will remain in his job, Nash said.

`It's a Mess'

``He shouldn't have done it,'' Nash said, adding that he was confident the matter would be settled. ``It's a mess.''

Inspiration, based Vancouver, sued three other individuals for alleged defamatory postings. According to the complaint, the three other defendants are: Don MacDonald, a chartered accountant in Lloydminster, Alberta, who used the pseudonym ``Millright''; Dennis Stolzmann of Edmonton, Alberta, who posted under the name ``Dman517'' and Gus Stoddart of Lethbridge, Alberta, who used the name ``Formula4.'' The company seeks C$12 million in damages from each defendant.

Leo Klug, a lawyer for Inspiration, said the defendants were served with the suits last week. None of the three could be reached for comment today.

Ontario residents have 30 days to respond to a lawsuit, while those outside the province have 40 days. Klug said no one has responded yet.

Inspiration fell 5 percent, or 11 cents, to C$2.12 in trading on the Toronto Stock Exchange. Liberty, based in Edmonton, Alberta, fell 8.4 percent, or 7 cents, to 76 cents after reaching a one-year low of 71 cents earlier today. Its shares have fallen 79 percent in the past year.

The case is Between Inspiration Mining Corp. and Stockhouse Media Inc., 07-cv-345122, Ontario Superior Court of Justice (Toronto).

As you well know this lawsuit is now ancient history. I was merely asking if somebody had a copy of Pentlandite's post. Nothing more.