I've had some more time to digest and sleep on the 2007 results. One thing we have to focus on is that we continue to push along Hart to development. I know that we want to be conservative with our cash, but we need to ensure that Hart is operational in time to take over from our other deposits as they start to run low. The last thing we want is a dip in revenues during a mine transition because we delayed too much. If this means that we have to issue some shares later in the year, or visit our loan sharks again, then we will have to make the right decision when the time arrives.

We're looking at reaching our 1,500 mt/d target by the end of this year. I am always one to add a bit of time to any estimate, so I'll go with the assumption that by the beginning of 2009, we'll hit our target production. Until then, we can probably expect more of the same for the balance of the year, in the 300-500 mt/d range for 2008.

Per the NR:

"Subsequent to the year end, the production rate has steadily improved to over 200 tonnes per day and the Corporation should achieve or surpass that target rate for 2008."

For 2007, Liberty mined 53,649 tonnes of ore and sold 898,138 pounds of Nickel. With revenues of $11,395,092, this translates to an average nickel price during Q3-4 of $12.68/lb which seems about right.

I am using 200 mt/d for my Q1 estimates though the MD&A states that they have now exceeded that rate.

200 mt/d x 2% x 2,200 lbs/mt x 89% = 7,800 lb Ni/d. Average LME nickel prices in Q1 were in the $12-$13 range.

7,800 lb Ni/d x $12.50 x 90 days = $8,775,000

If we take mining costs to be about the same as Q3/4, at $110/mt, our mining costs for Q1 will be $1,980,000 (200x90x$110)

Amortization/depletion was $70/mt in 2007, so we'll use that number across = $1,260,000

If this is so, that gives us a healthy gross profit of $5,535,000 for Q1-08.

Even if I am optimistic and off the mark, we should easily generate more than half of that amount. And if that's the case, we should be able to offset our G&A expenses and generate a small profit.

On the cash flow side of things, the amortization/depletion expense is not a cash flow item, so we should be able to generate a good $2-$4mm in cash from operations for Q1. This may explain why we haven't had to go to the trough for more cash to fund construction/exploration until now, even though we ended 2007 with only $1.7mm in the bank. If we add $3mm in cash to that for Q1, that gave Liberty $5mm in cash to use for Redstone, McWatters, etc.

If we can turn a small operating profit at 200 mt/d, then use financing to further our development efforts, we're going to have an awesome 2009.

And on that note... if we turn a small profit in Q1 or Q2, our share price will react accordingly.

Going forward, our biggest risk factor will be nickel prices. Let us hope and pray that they stay at $10-12+ for the balance of 2008. In 2009 we can afford a drop and still turn a healthy profit.