NORTHERN SUN MINING CORP LBEFF

RE: Where's the Beef??

[victor2009]

dellrey6666,

LBE didn't just shuffle around its debt, it arranged for $8 million more to fund its 2011 business plan. It also extended the repayment terms for the debt financing to eliminate debt payments including interest, for eighteen months. I was hoping some explanation of exploration and Hart development might be provided - but with positive cash flow from the McWatters operation and $8 million financing, I think its safe to assume that Hart will be brought on line in time to take over from McWatters. I expect that the funding will be sufficient to do additional exploration on other properties.

I don't know that there is a "feed problem". My understanding was that with the small feed from Redstone, along with McWatters, there was more ore for processing than the mill would handle - stock piling was mentioned. What are you basing this "feed problem" conclusion on?

The other thing beyond shuffling debt, is that Jilin Jien capped its equity position at 60%. I would think this would have some positive effect on the share price in the future, although it isn't evident in today's lack of action on the market. A number of the bashers had said it was a forgone conclusion that JJ would convert everything and end up with 80-90% of the common shares and take LBE private. Today's Press Release blew that theory out of the water, and confirmed what was originally stated as Jilin Jien's intentions - to use Liberty as a vehicle to develop a mid tier mining operation. There may still be a few that believe large China based public companies would invest $80 million or so in a subsidiary and not care if it made money - but any with that belief will not have a market influence. I would think that Jilin Jien's apparent faith in LBE is indicated by the fact that they believe it has the potential to generate cash flow for debt service and an equity return.

Those that are critical of majority control by a major foreign company, might consider the benefits of having a owner that will provide debt financing of $50 million to a company with market cap of $22 million. I don't think there will be many examples of similar successful financing, and anything similar will likely have terms much more costly than those called for in this arrangement. There is talk on the URSA forum that ISM may want to go to the market to get financing for that company - I would say if they do try, that we'll find out very quickly it's not that easily done.