TORONTO - Stock in Liberty Mines Inc. (TSX:LBE.TO - News) was up sharply Tuesday after the company announced that it was "very encouraged" by results of a pre-feasibility study on its Hart nickel project near Timmins, Ont., and reclaimed half of a net smelter royalty from a joint venture partner.

On the Toronto Stock Exchange, Liberty shares closed up 1.5 cents, or 13 per cent, at 13 cents.

Liberty said it has decided to reclaim half of the project's two per cent net smelter royalty from Canadian Arrow Mines for $1 million.

The payment was made under an option and joint venture agreement signed in 2006. Under terms of the agreement, Liberty optioned 100 per cent ownership of the Hart claims from CAM in exchange for various payments as well as the royalty.

Liberty was given the right to purchase the first one per cent of the NSR for $1 million, with the remaining NSR requires negotiations, the company said in a statement.

"Restructuring our Hart NSR represents a strategic decision to minimize royalty payments as we unlock the property's full potential," said Liberty president and CEO Chris Stewart.

"As our confidence in the Hart project increases, we want to ensure we are taking all appropriate steps to ensure we are maximizing the project's full value for all of our stakeholders."

Meanwhile, Liberty said it has completed an internal pre-feasibility study on the project and is now moving ahead with a feasibility study. Results from this detailed study are expected by the middle of the year.

"We are very encouraged by the preliminary results of our internal pre-feasibility study," Stewart added. "The results support our efforts to expand our life of mine through strategic exploration activities on our properties in Timmins."

Liberty Mines is a nickel producer focused on the exploration, development and production of nickel, copper, cobalt and platinum group metals from its properties in Ontario.