Liberty Mines bought by Chinese company

$30 Million Cdn buys 51 per cent share

Posted By Len Gillis

Updated 8 mins ago

Liberty Mines headframe on the Redstone property.

More Photos

Liberty Mines Inc, a company that has it’s two major nickel mining operations in the Timmins area, is now owned by the Chinese.

A company news release confirms that Liberty was refinanced by Jilin JiEn Nickel Industry Co. Ltd. (JJNICL) last week. It means that JJNICL will own 51 per cent of the company, said a news release from Liberty.As China's fifth largest producer of the metal, JJNICL will pay $30-million (US$24-million) for a 51% stake in Liberty to secure raw resources.

In addition, about C$20 million owed to Ji En by Liberty will be paid in cash or nickel concentrate as part of an agreement approved by both companies' boards, Panshi, Jilin province-based Ji En said in a filing to the Shanghai stock exchange last week.

Despite repeated telephone calls, The Timmins Times was not able to get a comment on the sale from Liberty Mines president and CEO Dr. Gary Nash on how this will affect local operations.

Many northern contractors had taken legal action and placed liens against Liberty last falls when the bills were not being paid. Liberty has taken action to resolve those issues.

Liberty operates the Redstone nickel mine and milling operation near the extreme southeastern limit of Timmins in Eldorado Township. The company also has the McWatters Mine nearby in Langmuir Township, and the undeveloped Hart nickel project, also nearby in Eldorado Township.

Liberty’s operations ran into a cash shortage late last year because of the slump in the price of nickel.

On October 31, 2008 the company put its Redstone and McWatters properties into a “care and maintenance” mode until it was able to meet its financial obligations.

The financing of the China deal is subject to certain governmental or regulatory approvals that are required such as those from the Chinese government and the Toronto Stock Exchange (TSX).

A company news release says no insiders are participating in the transaction.

As the transaction represents a change in control of the Corporation and a dilution of more than 25 per cent of the outstanding common shares, shareholder approval is required.