-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, R1QklSIs9dUd7BvSD3x9vCPNOfpus84J0K7pSeTcFeEROiPR3t6APkqCMiDOrx82 Ca2aUBWX7hJjjEe995IxQA== 0001062993-09-001770.txt : 20090515 0001062993-09-001770.hdr.sgml : 20090515 20090515170901 ACCESSION NUMBER: 0001062993-09-001770 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20090131 FILED AS OF DATE: 20090515 DATE AS OF CHANGE: 20090515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LIBERTY STAR URANIUM & METALS CORP. CENTRAL INDEX KEY: 0001172178 STANDARD INDUSTRIAL CLASSIFICATION: METAL MINING [1000] IRS NUMBER: 270019071 STATE OF INCORPORATION: NV FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-50071 FILM NUMBER: 09834379 BUSINESS ADDRESS: STREET 1: 5610 E SUTLER LANE CITY: TUCSON STATE: AZ ZIP: 85712 BUSINESS PHONE: 520-731-8786 MAIL ADDRESS: STREET 1: 5610 E SUTLER LANE CITY: TUCSON STATE: AZ ZIP: 85712 FORMER COMPANY: FORMER CONFORMED NAME: LIBERTY STAR GOLD CORP DATE OF NAME CHANGE: 20040210 FORMER COMPANY: FORMER CONFORMED NAME: TITANIUM INTELLIGENCE INC DATE OF NAME CHANGE: 20020425 10-K 1 form10k.htm ANNUAL REPORT FOR THE YEAR ENDED JANUARY 31, 2009 Filed by sedaredgar.com - Liberty Star Uranium & Metals Corp. - Form 10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended January 31, 2009

[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                              to                             

Commission file number 000-50071

LIBERTY STAR URANIUM & METALS CORP.
(Name of registrant as specified in its charter)

Nevada 90-0175540
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
   
5610 E Sutler Lane, Tucson, Arizona 85712
(Address of principal executive offices) (Zip Code)

Registrant's telephone number (520) 731-8786

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Name of each exchange on which registered
Nil Nil

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $0.001
(Title of class)

Check whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act Yes [   ]    No [X]

Check whether the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. [   ]

Note: Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the
Exchange Act from their obligations under those Sections.

Check whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes [X]    No [   ]

Check if there is disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained in this form, and no
disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated
by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [   ]


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Indicate by check mark whether the registrant has submitted electronically and posted on its corporate
Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of
Regulation S-T (§ 229.405 of this chapter) during the preceeding 12 months (or for such shorter period that the
registrant was required to submit and post such files).
Yes [X]    No [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definition of “large accelerated filer”, “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [   ] Non-accelerated filer           [    ]
Accelerated filer           [   ] Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [   ]    No [X]

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to
the price at which the common equity was sold, or the average bid and asked prices of such common equity, as of the last
business day of the registrant’s most recently completed second fiscal quarter.

Note: If determining whether a person is an affiliate will involve an unreasonable effort and expense, the issuer may calculate the
aggregate market value of the common equity held by non-affiliates on the basis of reasonable assumptions, if the assumptions
are stated.

40,917,674 shares of Common Stock @ $0.05(1) = $2,045,884
(1) Closing price on July 31, 2008.

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date.

193,946,706 shares of Common Stock issued and outstanding as of May 7, 2009.

DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference, briefly describe them and identify the part of the Form 10-K (e.g., Part I,
Part II, etc.) into which the document is incorporated: (1) any annual report to security holders; (2) any proxy or information
statement; and (3) any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933 (“Securities Act”).
The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for the fiscal
years ended December 24, 1990).


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TABLE OF CONTENTS

   
PART I     Page
       
Item 1. Description of Business   4
Item 1A. Risk Factors   6
Item 2. Description of Property   11
Item 3. Legal Proceedings   17
Item 4. Submissions of Matters to a Vote of Security Holders   17
       
 PART II     
       
Item 5. Market for Common Equity and Related Stockholder Matters   17
Item 6. Selected Financial Data   21
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations   21
Item 7A. Quantitative and Qualitative Disclosures About Market Risk   24
Item 8. Financial Statements   25
Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure   49
Item 9A. Controls and Procedures   49
Item 9B. Other Information   49
       
 PART III     
Item 10. Directors, Executive Officers and Corporate Governance   50
Item 11. Executive Compensation   53
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters   57
Item 13. Certain Relationships and Related Transactions, and Director Independence   58
Item 14. Principal Accountant Fees and Services   58
  Exhibits   59
  Signatures   61

FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our consolidated financial statements are stated in United States Dollars (US$) and are prepared in conformity with accounting principles generally accepted in the United States of America. The following discussion should be read in conjunction with our consolidated financial statements and the related notes that appear elsewhere in this annual report.

As used in this annual report, the terms "we", "us", "Company", and "Liberty Star" mean Liberty Star Uranium & Metals Corp. and our subsidiaries Big Chunk Corp. and Redwall Drilling Inc., unless otherwise indicated. All dollar amounts refer to U.S. dollars unless otherwise indicated.


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PART I

Item 1.               Description of Business.

Business development

Liberty Star Uranium & Metals Corp. (the “Company” or “We” or “Liberty Star”) was formerly Liberty Star Gold Corp. and formerly Titanium Intelligence, Inc. (“Titanium”). Titanium was incorporated on August 20, 2001 under the laws of the State of Nevada. On February 5, 2004 we commenced operations in the acquisition and exploration of mineral properties business. Big Chunk Corp. is our wholly owned subsidiary and was incorporated on December 14, 2003 in the State of Alaska. Big Chunk Corp. is engaged in the acquisition and exploration of mineral properties business in the State of Alaska. Redwall Drilling Inc. (“Redwall”) is our wholly owned subsidiary and was incorporated on August 31, 2007 in the State of Arizona. Redwall is a drilling contractor. On December 1, 2007 Redwall began performing drilling services on the Company’s mineral properties. In April 2007, the Company changed its name to Liberty Star Uranium & Metals Corp. to reflect the Company’s current concentrated efforts on uranium exploration. The Company is considered to be an exploration stage company, as it has not generated any revenues from operations.

In December 2006, the Company entered into a joint venture agreement (“Elle Venture”) with XState Resources Limited (“XState”). The Company holds a 50% interest in the Elle Venture, a general partnership with XState that was formed to explore and, if warranted, develop certain mineral target within the joint venture area.

Our current business

We are an exploration stage company engaged in the acquisition and exploration of mineral properties in the States of Arizona and Alaska. Claims in the State of Alaska are held in the name of our wholly-owned subsidiary, Big Chunk Corp. Claims in the State of Arizona are held in the name of Liberty Star. The Company uses the term “Super Project” to indicate a project in which numerous mineral targets have been identified, any one or more of which could potentially contain commercially viable quantities of minerals. The Company’s significant projects are described below.

North Pipes Super Project (“NPSP”): Located in Northern Arizona on the Arizona Strip, we plan to ascertain whether the North Pipes Super Project claims possess commercially viable deposits of uranium. We have approximately 300 potential breccia pipe targets. We have not identified any ore reserves to date.

Big Chunk Super Project (“Big Chunk”): Located in the Iliamna region of Southwestern Alaska, we plan to ascertain whether the Big Chunk claims possess commercially viable deposits of copper, gold, molybdenum, silver and zinc. We have not identified any ore reserves to date.

Bonanza Hills Project (“Bonanza Hills”): Located in the Iliamna region of Southwestern Alaska, we plan to ascertain whether the Bonanza Hills claims possess commercially viable deposits of gold and silver. We have not identified any ore reserves to date.

On September 11, 2008, we announced that we and XState Resources have agreed that XState will maintain a 50% interest in three uranium exploration targets at North Pipes. The three areas can be chosen from all the targets over which exploration has been conducted by the joint venture in the last 18 months.

Both parties agree to enter into a formal 50/50 contributing joint venture in relation to the three targets chosen by XState. The previous "earn-in" agreement is terminated. The Company retains former JV funds to complete minor rehabilitation on exploration sites and conclude administrative tasks.

Title to mineral claims involves certain inherent risks due to difficulties of determining the validity of certain claims as well as potential for problems arising from the frequently ambiguous conveyancing history characteristic of many mineral properties. The company has investigated title to all its mineral properties and, to the best of its knowledge, title to all properties are in good standing.

The mineral resource business generally consists of three stages: exploration, development and production. Mineral resource companies that are in the exploration stage have not yet found mineral resources in commercially exploitable quantities, and are engaged in exploring land in an effort to discover them. Mineral resource companies that have located a mineral resource in commercially exploitable quantities and are preparing to extract that resource are in the development stage, while those


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engaged in the extraction of a known mineral resource are in the production stage. Our company is in the exploration stage – we have not found any mineral resources in commercially exploitable quantities.

Mineral resource exploration can consist of several stages. The earliest stage usually consists of the identification of a potential prospect through either the discovery of a mineralized showing on that property or as the result of a property being in proximity to another property on which exploitable resources have been identified, whether or not they are or have in the past been extracted.

After the identification of a property as a potential prospect, the next stage would usually be the acquisition of a right to explore the area for mineral resources. This can consist of the outright acquisition of the land or the acquisition of specific, but limited, rights to the land (e.g., a federal or state mining claim, state prospecting permit or lease). After acquisition, exploration would probably begin with a surface examination by a professional geologist with the aim of identifying areas of potential mineralization, followed by detailed geological sampling and mapping of this showing with possible geophysical and geochemical grid surveys to establish whether a known trend of mineralization continues through un-exposed portions of the property (i.e., underground). Exploration also commonly includes systematic regularly spaced drilling in order to determine the extent and grade of the mineralized system at depth and over a given area, as well as gaining underground access by ramping or shafting in order to obtain bulk samples that would allow one to determine the ability to recover various commodities from the rock. Exploration would conclude with a feasibility study to determine whether mining the minerals would make economic sense. A feasibility study is a study that reaches a conclusion with respect to the economics of bringing a mineral resource to the production stage.

There is no assurance that a commercially viable mineral deposit exists on any of our properties, and further exploration is required before we can evaluate whether any exist and, if so, whether it would be economically feasible to develop or exploit those resources. Even if we complete our current exploration program and we are successful in identifying a mineral deposit, we would be required to spend substantial funds on further drilling and engineering studies before we could know whether that mineral deposit will constitute an ore reserve (an ore reserve is a commercially viable mineral deposit). Please refer to the section entitled "Risk Factors" for additional information about the risks of mineral exploration.

To date, we have not generated any revenues and we remain in the exploration stage. Our ability to pursue our business plan and generate revenues is subject to our ability to obtain additional financing, and we cannot give any assurance that we will be able to do so.

Competition

We are a mineral resource exploration stage company engaged in the business of mineral exploration. We compete with other mineral resource exploration stage companies for financing from a limited number of investors that are prepared to make investments in mineral resource exploration stage companies. The presence of competing mineral resource exploration stage companies may impact our ability to raise additional capital in order to fund our property acquisitions and exploration programs if investors are of the view that investments in competitors are more attractive based on the merit of the mineral properties under investigation and the price of the investment offered to investors.

We also compete for mineral properties of merit with other exploration stage companies. Competition could reduce the availability of properties of merit or increase the cost of acquiring additional mineral properties.

Many of the resource exploration stage companies with whom we compete may have greater financial and technical resources than we do. Accordingly, these competitors may be able to spend greater amounts on acquisitions of properties of merit and on exploration of their properties. In addition, they may be able to afford greater geological expertise in the targeting and exploration of resource properties. This competition could result in our competitors having resource properties of greater quality and interest to prospective investors who may finance additional exploration and to senior exploration stage companies that may purchase resource properties or enter into joint venture agreements with junior exploration stage companies. This competition could adversely impact our ability to finance property acquisitions and further exploration.

Compliance with Government Regulation

We will be required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to the exploration of minerals in the States of Arizona and Alaska.

The Company is required to perform annual assessment work in order to maintain the Big Chunk and Bonanza Hills Alaska State mining claims. If annual assessment work is not performed the Company must pay the assessment amount in cash in


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order to maintain the claims. Completion of annual assessment work in the amount of $400 per ¼ section (160 acre) claim or $100 per ¼ -¼ section (40 acre) claim extends the claims for a one year period. Assessment work performed in excess of the required amount may be carried forward for up to 4 years to reduce future obligations for assessment work. The Company estimates that the required annual assessments to maintain the claims for 2009, less available carry forwards, will be approximately $298,600.

The annual state rentals for the Big Chunk and Bonanza Hills Alaska State mining claims vary from $25 to $200 per mineral claim. The rental period begins at noon September 1st through the following September 1st and annual rental payments are due on November 30th of each year. Annual rent is due in full within 45 days of staking a new claim and covers the period from staking until the next September 1st. Claims that are staked in accordance with AS 38.05.195(b)(1) meridian, township, range, section and claim system location “MTRSC” receive a one-time only credit of 50% of the second year’s rent payment. Our Alaska claims are all MTRSC claims eligible for the 50% rental credit in the second rental year. Rentals for the period from September 1, 2008 through September 1, 2009 of $133,750 have been paid. The estimated state rentals due by November 30, 2009 for the period from September 1, 2009 through September 1, 2010 are $133,750. Alaska State production royalty is three percent of net income. State law prescribes that after a 3.5 -year exemption from state taxes a metal mine is liable for a 15% state licensing tax on net income from the mine.

Our North Pipes Super Project claims are Federal lode mining claims located on U.S. Federal Lands and administered by the Department of Interior, Bureau of Land Management. The Company is required to pay annual rentals to maintain its Federal lode mining claims in good standing. The rental period begins at noon on September 1st through the following September 1st and rental payments are due by the first day of the rental period. The annual rental is $125 per claim. Additional fees of $45 per claim are due in the first year of filing a Federal lode mining claim along with the first year’s rent. The annual rentals required to maintain the NPSP claims are $219,625. There is no requirement for annual assessment or exploration work on the Federal lode mining claims. There are no royalties associated with the Federal lode mining claims.

In order to perform a drilling program on our Arizona claims, we have to apply for various permits with the State of Arizona and the Federal Bureau of Land Management (“USBLM”). The permitting process takes several weeks. The drilling permit fees are anticipated to be approximately $5,000 per pipe and also require a reclamation bond of up to $50,000 per pipe. We do not currently have any drilling permits for our Arizona claims.

In order to proceed with mining operations on our Arizona claims, we will have to apply for various permits with the State of Arizona and various Federal agencies. The cost of mine permitting, including cost of contractors assisting with the permitting process, is estimated to be $350,000 per mine location. The mining permitting process has not begun as there is no assurance that a commercially viable mineral deposit exists on any of our properties, and further exploration is required before we can evaluate whether any exist and, if so, whether it would be economically feasible to develop or exploit those resources.

Additional approvals and authorizations may be required from other government agencies, depending upon the nature and scope of the proposed exploration program. The amount of these costs is not known at this time as we do not know the size, quality of any resource or reserve at this time, it is impossible to assess the impact of any capital expenditures on earnings or our competitive position.

Personnel

We have two full time employees and four part-time employees. Currently we employ one full time geologist who is also our President and CEO, James Briscoe, and one full-time assistant to our President and CEO. We employ one part-time geologist Erik Murdock M.Sc. who also specializes in computer mapping. We have one part-time information technology staff and two part-time accounting staff. Additionally, we have geoscience consultants specializing in exploration geology, geophysics, geochemistry, and geocomputer data applications, of whom our Technical Advisory Board is comprised. These individuals are contracted for 140 days of consulting services over each calendar year.

Item 1A.            RISK FACTORS

Much of the information included in this annual report includes or is based upon estimates, projections or other "forward looking statements". Such forward looking statements include any projections or estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.


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Such estimates, projections or other "forward looking statements" involve various risks and uncertainties as outlined below. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other "forward looking statements".

Risks related to our business

Because of the speculative nature of the exploration of natural resource properties, there is substantial risk that this business will fail.

There is no assurance that any of the claims we explore or acquire will contain commercially exploitable reserves of minerals. Exploration for natural resources is a speculative venture involving substantial risk. Hazards such as unusual or unexpected geological formations and other conditions often result in unsuccessful exploration efforts. We may also become subject to significant liability for pollution, cave-ins or hazards, which we cannot insure or which we may elect not to insure. There is substantial risk that our business will fail.

If we cannot compete successfully for financing and for qualified managerial and technical employees, our exploration program may suffer.

Our competition in the mining industry includes large established mining companies with substantial capabilities and with greater financial and technical resources than we have. As a result of this competition, we may be unable to acquire additional financing on terms we consider acceptable because investors may choose to invest in our competitors instead of investing in us. We also compete with other mining companies in the recruitment and retention of qualified managerial and technical employees. Our success will be largely dependent on our ability to hire and retain highly qualified personnel. These individuals are in high demand and we may not be able to attract the personnel we need. We may not be able to afford the high salaries and fees demanded by qualified personnel, or may lose such employees after they are hired. If we are unable to successfully compete for financing or for qualified employees, our exploration program may be slowed down or suspended.

Exploration and exploitation activities are subject to comprehensive regulation which may cause substantial delays or require capital outlays in excess of those anticipated causing an adverse effect on our company.

Exploration and exploitation activities are subject to federal, state, and local laws, regulations and policies, including laws regulating the removal of natural resources from the ground and the discharge of materials into the environment. Exploration and exploitation activities are also subject to federal, state, and local laws and regulations which seek to maintain health and safety standards by regulating the design and use of drilling methods and equipment.

Various permits from government bodies are required for drilling operations to be conducted; no assurance can be given that such permits will be received. Environmental and other legal standards imposed by federal, state, or local authorities may be changed and any such changes may prevent us from conducting planned activities or increase our costs of doing so, which would have material adverse effects on our business. Moreover, compliance with such laws may cause substantial delays or require capital outlays in excess of those anticipated, thus causing an adverse effect on us. Additionally, we may be subject to liability for pollution or other environmental damages which we may not be able to or elect not to insure against due to prohibitive premium costs and other reasons. Any laws, regulations or policies of any government body or regulatory agency may be changed, applied or interpreted in a manner which will alter and negatively affect our ability to carry on our business.

There are no known reserves of minerals on our mineral claims and we cannot guarantee that we will find any commercial quantities of minerals.

We have not found any mineral reserves on our claims and there can be no assurance that any of our mineral claims contain commercial quantities of any minerals. Even if we identify commercial quantities of minerals in any of our claims, there can be no assurance that we will be able to exploit the reserves or, if we are able to exploit them, that we will do so on a profitable basis.

Because the probability of an individual prospect ever having reserves is extremely remote, any funds spent on exploration will probably be lost.

The probability of an individual prospect ever having reserves is extremely remote. In all probability our properties do not contain any reserves. As such, any funds spent on exploration will probably be lost which would most likely result in a loss of your investment.


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Risks related to our company

The recent weakening of economic conditions in the U.S. and around the world could have harmful effects on our ability to sell shares of our common stock. If so, we will likely have to scale down or stop our exploration program and our share price will likely decrease. If these harmful effects cause us to cease our exploration program, then our shareholders will likely lose their entire investment in our company.

The recent weakening of economic conditions in the U.S. and around the world as well as the decrease in uranium and other mineral processing could have harmful effects on our business. Competition for limited funds from investors will likely become more intense. If investors choose not to invest in our company, we will not be able to fund our exploration program.

We will require additional funds to maintain our current mineral properties. These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. However, many investors have recently seen large decreases in the value of various investments due to declining share prices across many economic sectors. Because of this and other market factors, if we choose to raise funds through the sale of our equity securities, potential investors may be less likely to buy our equity securities or we may need to sell our equity securities at low prices, resulting in fewer proceeds. This would make it difficult for us to raise adequate amounts to fund our exploration program through the sale of our equity securities.

If we are unable to fund all of our exploration program through the sale of our equity securities, then we may choose to borrow the money we need. A tightening of credit conditions has also been experienced in the economy recently. Because of the recent credit crisis, it is possible that we would not be able to borrow adequate amounts to fund our exploration program on terms and at rates of interest we find acceptable and in the best interests of our company.

If we cannot fund our planned exploration program from the sale of our equity securities or through incurring debt on acceptable terms, then we will likely have to scale down or cease our exploration program. If we scale down our exploration program, our share price would likely decrease and if we cannot fund our exploration program and other expenses, we will likely go out of business and our shareholders will likely lose their entire investment in our company.

We have a limited operating history and as a result there is no assurance we can operate on a profitable basis.

We have a limited operating history and must be considered in the exploration stage. Our company's operations will be subject to all the risks inherent in the establishment of an exploration stage enterprise and the uncertainties arising from the absence of a significant operating history. Potential investors should be aware of the difficulties normally encountered by mineral exploration companies and the high rate of failure of such enterprises, especially those with a limited operating history. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates. The expenditures to be made by us in the exploration of the mineral claim may not result in the discovery of mineral deposits. Problems such as unusual or unexpected formations of rock or land and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. If the results of our exploration do not reveal viable commercial mineralization, we may decide to abandon our claim and acquire new claims for new exploration or cease operations. The acquisition of additional claims will be dependent upon us possessing capital resources at the time in order to purchase such claims. If no funding is available, we may be forced to abandon our operations. No assurance can be given that we will ever operate on a profitable basis.

If we do not obtain additional financing, our business will fail and our investors could lose their investment.

We had cash in the amount of $63,250 and negative working capital of $(2,258,655) as of January 31, 2009. We currently do not generate revenues from our operations. Our business plan calls for substantial investment and cost in connection with the acquisition and exploration of our mineral properties currently under lease and option. Any direct acquisition of any of the claims under lease or option is subject to our ability to obtain the financing necessary for us to fund and carry out exploration programs on the subject properties. The requirements are substantial. We do not currently have any arrangements for financing in addition to the May 2007 Convertible Notes and August 2008 Convertible Notes, further described in Note 7 to the consolidated financial statements included in Item 8 of this form, and we can provide no assurance to investors that we will be able to find such financing if required. The Unsecured Convertible Promissory Notes entered into in May 2007 contain restrictions on raising new capital from the sale of registered stock to other investors. We are also limited to raising up to $7,000,000 in private placement funds during the 2 year term of the Unsecured Convertible Promissory Notes. The August 2008 Convertible Notes contain restrictions that require that the August 2008 and May 2007 convertible notes be repaid in full from the first $3,000,000 of financings completed by the Company. These restrictions may make it difficult for us to raise the


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cash required to proceed with our planned exploration activities. There is no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on their investment in our common stock. Further, we may continue to be unprofitable. In addition to the restrictions placed on us by our various financing agreements, obtaining additional financing would be subject to a number of factors, including market prices for minerals, investor acceptance of our properties, contractual restrictions on our ability to enter into further financing arrangements, and investor sentiment. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us and our business could fail.

Because there is no assurance that we will generate revenues, we face a high risk of business failure.

We have not earned any revenues as of the date of this filing and have never been profitable. We do not have an interest in any revenue generating properties. We were incorporated on August 20, 2001 and took over our current business on February 5, 2004. To date we have been involved primarily in organizational and exploration activities. We will incur substantial operating and exploration expenditures without realizing any revenues. We therefore expect to incur significant losses into the foreseeable future. We have limited operating history upon which an evaluation of our future success or failure can be made. Our net loss from inception to January 31, 2009 is $(36,294,540). We recognize that if we are unable to generate significant revenues from our activities, we will not be able to earn profits or continue operations. Based upon current plans, we also expect to incur significant operating losses in the future. We cannot guarantee that we will be successful in raising capital to fund these operating losses or generate revenues in the future. We can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail and our investors could lose their investment.

Our independent registered public accounting firm’s report states that there is a substantial doubt that we will be able to continue as a going concern.

Our independent registered public accounting firm, Semple, Marchal & Cooper, LLP, state in their audit report attached to our audited financial statements for the fiscal year ended January 31, 2009 that since we are an exploration stage company, have no established source of revenue and are dependent on our ability to raise capital from shareholders or other sources to sustain operations, there is a substantial doubt that we will be able to continue as a going concern.

Inability of our Secretary to devote sufficient time to the operation of the business may limit our Company's success.

Presently our Secretary, Mr. Gary Musil allocates only a portion of his time to the operation of our business. If the business requires more time for operations than anticipated or the business develops faster than anticipated, the Secretary may not be able to devote sufficient time to the operation of the business to ensure that it continues as a going concern. Even if this lack of sufficient time of our management is not fatal to our existence, it may result in limited growth and success of the business.

Risks related to our common stock

Because we will likely issue additional shares of our common stock, investment in our company could be subject to substantial dilution.

Investors’ interests in our company will be diluted and investors may suffer dilution in their net book value per share when we issue additional shares. Our constating documents authorize the issuance of up to 200,000,000 shares of common stock with a par value of $0.001. As of January 31, 2009, there were 193,946,706 of our common shares issued and outstanding. We anticipate that all or at least some of our future funding will be in the form of equity financing from the sale of our common stock. If we do sell more common stock, investors’ investment in our company will likely be diluted. Dilution is the difference between what you pay for your stock and the net tangible book value per share immediately after the additional shares are sold by us. If dilution occurs, any investment in our company’s common stock could seriously decline in value.

Dilution will likely occur because of the May 2007 Convertible Notes and August 2008 Convertible Notes and related common share purchase warrants that we issued on May 11, 2007. First, the entire amount of money owed under the May 2007 and August 2008 Convertible Notes plus 12% interest per year, may be converted into shares of our common stock at a price that is the lesser of $0.05 per share or 80% of the average closing bid price for the five trading dates prior to the repayment date. The May 2007 Convertible Notes mature on May 11, 2009. The August 2008 Convertible Notes mature on August 27, 2009. In November 2008 we were in default on the May 2007 Convertible Notes as we did not have enough shares remaining in our authorized capital to be able to fulfill the conversion requests received and as such the interest rate was increased to 15%. Our convertible note holders could call the note and request security to be sold for repayment. Second, the 6,769,228 common share purchase warrants that we issued to the holders of the May 2007 Convertible Notes on May 11, 2007 may be exercised at $0.05 per share until they expire on May 11, 2012. Third, the 338,461 common share purchase warrants that we issued to the


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broker of the May 2007 Convertible Notes as a broker fee on May 11, 2007 may be exercised at $0.05 per share until they expire on May 11, 2012. Because additional common shares will be issued as a result of some of or all of these factors, there likely will be significant dilution of investment in our company. This would cause a reduction in the proportionate ownership and voting power of all other shareholders and may result in a change in our control.

The sale of our stock under the May 2007 and August 2008 Convertible Notes and the common share purchase warrants could encourage short sales by third parties, which could contribute to the future decline of our stock price.

In many circumstances, the provision of financing based on the distribution of equity for companies that are traded on the Over-the-Counter Bulletin Board has the potential to cause a significant downward pressure on the price of common stock. This is especially the case if the shares being placed into the market exceed the market’s ability to take up the increased stock or if we have not performed in such a manner to show that the equity funds raised will be used to grow our business. Such an event could place further downward pressure on the price of our common stock. Regardless of our activities, the opportunity exists for short sellers and others to contribute to the future decline of our stock price. If there are significant short sales of our common stock, the price decline that would result from this activity will cause the share price to decline more, which may cause other shareholders of the stock to sell their shares, thereby contributing to sales of common stock in the market. If there are many more shares of our common stock on the market for sale than the market will absorb, the price of our common shares will likely decline.

Trading in our common stock on the OTC Bulletin Board is limited and sporadic making it difficult for our shareholders to sell their shares or liquidate their investments.

Our common stock is currently listed for public trading on the OTC Bulletin Board. The trading price of our common stock has been subject to wide fluctuations. Trading prices of our common stock may fluctuate in response to a number of factors, many of which will be beyond our control. The stock market has generally experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies with no current business operation. There can be no assurance that trading prices and price earnings ratios previously experienced by our common stock will be matched or maintained. These broad market and industry factors may adversely affect the market price of our common stock, regardless of our operating performance. In the past, following periods of volatility in the market price of a company's securities, securities class-action litigation has often been instituted. Such litigation, if instituted, could result in substantial costs for us and a diversion of management's attention and resources.

Our By-laws contain provisions indemnifying our officers and directors against all costs, charges and expenses incurred by them.

Our By-laws contain provisions with respect to the indemnification of our officers and directors against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, actually and reasonably incurred by him, including an amount paid to settle an action or satisfy a judgment in a civil, criminal or administrative action or proceeding to which he is made a party by reason of his being or having been one of our directors or officers.

Our By-laws do not contain anti-takeover provisions which could result in a change of our management and directors if there is a take-over of our company.

We do not currently have a shareholder rights plan or any anti-takeover provisions in our By-laws. Without any anti-takeover provisions, there is no deterrent for a take-over of our company, which may result in a change in our management and directors. This could result in a disruption to the activities of our company, which could have a material adverse effect on our operations.

We do not intend to pay dividends on any investment in the shares of stock of our company and any gain on an investment in our company will need to come through an increase in our stock’s price, which may never happen.

We have never paid any cash dividends and currently do not intend to pay any dividends for the foreseeable future. To the extent that we require additional funding currently not provided for in our financing plan, our funding sources may prohibit the payment of a dividend. Because we do not intend to declare dividends, any gain on an investment in our company will need to come through an increase in the stock’s price. This may never happen and investors may lose all of their investment in our company.


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Because our securities are subject to penny stock rules, you may have difficulty reselling your shares.

Our shares as penny stocks, are covered by Section 15(g) of the Securities Exchange Act of 1934 which imposes additional sales practice requirements on broker/dealers who sell our company's securities including the delivery of a standardized disclosure document; disclosure and confirmation of quotation prices; disclosure of compensation the broker/dealer receives; and, furnishing monthly account statements. These rules apply to companies whose shares are not traded on a national stock exchange or on the Nasdaq system, trade at less than $5.00 per share, or who do not meet certain other financial requirements specified by the Securities and Exchange Commission. These rules require brokers who sell "penny stocks" to persons other than established customers and "accredited investors" to complete certain documentation, make suitability inquiries of investors, and provide investors with certain information concerning the risks of trading in such penny stocks. These rules may discourage or restrict the ability of brokers to sell our shares of common stock and may affect the secondary market for our shares of common stock. These rules could also hamper our ability to raise funds in the primary market for our shares of common stock.

Item 2.               Description of Property.

Our offices

We rent the premises for our principal office located at 5610 E Sutler Lane, Tucson, Arizona 85712. We rent the office space which is located in the home of our President and CEO for $459 per month plus a pro rata share of taxes and maintenance. Our part-time employees work either from our principal office or from offices maintained in their homes.

We believe that our existing office facilities are adequate for our needs through the end of the year ended January 31, 2009. Should we require additional space at that time, or prior thereto, we believe that such space can be secured on commercially reasonable terms.

Our mineral claims

North Pipes Super Project (“NPSP”) see Figure 1:

The Company holds a 100% interest in 1,757 Federal lode mining claims strategically placed over approximately 60 square miles on the Colorado Plateau Province of Northern Arizona. The 1,757 Federal lode mining claims include approximately 300 breccia pipe targets (“Pipes”). Breccia pipes are cylindrical formations in the Earth’s crust, identified by a surface depression, and containing a high concentration of fragmented rock “breccia” cemented by uranium and other minerals. We plan to ascertain whether our North Pipes Super Project claims possess commercially viable deposits of uranium.

Our Arizona claims are on U.S. Federal Lands and are administered by the Department of Interior, Bureau of Land Management (surface and mineral) land. Our claims may be kept in good standing by paying an advance annual maintenance and rental fee before noon, September the 1st, in the amount of $125 per mining claim. To keep our existing property in good standing, we must pay annual maintenance and rental fees of $219,625. The State Mineral Exploration Permits are administered by the Arizona State Land Department located in Phoenix, Arizona.

The only royalties, payments or other encumbrances on the property are those owed to the Bureau of Land Management as mentioned above. No production royalties are due on mineral production. Federal taxes will be owed on profits made from mining on the properties. A royalty of approximately 3% of net mineral production after deducting mining and processing of ore is payable on the State land parcels.

Elle Venture with XState Resources Ltd (“XState”)(previously OCR Limited)

The Company also holds a 50% interest in Federal lode mining claims covering 3 breccia pipe targets at the North Pipes Super Project location through the Elle Venture, a general partnership with XState Resources Limited (“XState”). We plan to ascertain whether the Elle Venture claims possess commercially viable deposits of uranium.

The Company holds a 50% interest in Elle Venture, a general partnership with XState Resources Limited (“XState”) that was formed to explore, develop and, if warranted, mine certain US Federal lode mining claims within the 22 mile joint venture area. The Elle Venture commenced on December 15, 2006 when XState deposited $2,900,000 (“sole funding amount”) into the joint venture bank account. XState has the right of first refusal to buy or joint venture in relation to the other pipes and claims later staked in the Elle Venture area. On July 31, 2008 the Company entered into an agreement to amend the joint venture agreement. The Elle Venture mineral claims will continue to be owned 50% each by the Company and XState and the


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Company may be obligated to contribute funds if exploration activities were to resume on those claims. If the Company or XState is unable to make a proportional contribution then our interest or their interest in the mineral claims will be diluted.

Bonanza Hills Project (“Bonanza Hills”) see Figure 2:

The Company holds 56 mineral claims covering approximately 13.5 square miles in Southwestern Alaska approximately 13.5 miles northeast of the northern boundary of the Big Chunk claims. We plan to ascertain whether the Bonanza Hills claims possess commercially viable deposits of gold and silver.

Big Chunk Super Project (“Big Chunk”) see Figure 2:

The Company holds a 100% interest in 707 mineral claims covering approximately 177 square miles in the Iliamna region of Southwestern Alaska, located on the north side of the Cook Inlet, approximately 265 miles southwest of the city of Anchorage, Alaska. We plan to ascertain whether the Big Chunk claims possess commercially viable deposits of copper, gold, molybdenum, silver and zinc.

East Silver Bell:

The Company holds an option to explore 26 standard Federal lode mining claims located at the East Silver Bell region of Arizona. The mineral claims are owned by FOJ, LLC an Arizona Limited Liability Company in which two of our directors are owners.

Walnut Creek:

The Company holds an option to explore 33 standard Federal lode mining claims located due east and southeast of the town of Tombstone, Arizona. The mineral claims are owned by FOJ, LLC an Arizona Limited Liability Company in which two of our directors are owners.

Present condition of our claims

Both the Alaskan and Arizona properties are undeveloped. There are no open-pit or underground mines, nor is there any mining plant or equipment located on the properties. There is no power supply to the properties. There is not any road access to the Alaskan properties, but there is abundant road access to the Arizona properties. We have not found any mineral resources on any of our claims.


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Figure 1: North Pipes Super Project overview


14

Figure 2: Alaska Properties – Big Chunk and Bonanza Hills- Location Map



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Claim status

The Company has investigated titles to all its mineral properties and, to the best of its knowledge, titles to all properties are in good standing as of January 31, 2009. We estimate that we will be required to perform $298,600 of assessment work in order to maintain the Alaska claims in good standing for 2009. We estimate that we will be required to pay annual rentals of $133,750 by November 30, 2009 to maintain the Alaska claims in good standing. We estimate that we will be required to pay $219,625 by September 1, 2009 to maintain the North Pipes Super Project federal lode mining claims in good standing. We estimate that we will be required to pay $7,375 by September 1, 2009 to maintain the East Silver Bell and Walnut Creek federal lode mining claims in good standing.

Exploration History

Prior History

Except as indicated with respect to our Arizona claims and otherwise as set out below, we are unaware of any previous claim ownership anywhere on the properties, nor any exploration, other than minor surface sampling. No evidence of development work has been found on the properties. No historical mineral resources or reserves are in the published literature.

Our Alaska claims

Our Alaska claims are located in a remote area of Southwestern Alaska where limited exploration and development activity has occurred. The area is largely covered by glacial debris, soil, and tundra. Little geologic, geochemical or geophysical data is available, and that which is available is of a general nature and of low quality.

Our Big Chunk Super Project claims

We are unaware of any previous claim ownership anywhere on our Big Chunk claims in Alaska. No historical mineral resources or reserves are in the published literature concerning the property. Other than minor exploration that was conducted by Cominco Alaska, Anaconda and the United States Geological Survey, we are not aware of any prior exploration that was conducted on our Big Chunk claims in Alaska prior to January 10, 2004, when our aerial survey of the magnetic fields began.

Our Bonanza Hills claims

Anaconda and Cominco Alaska also conducted some minor tests on our Bonanza Hills claims in the past. The work they conducted consisted of surface sampling and a small geophysical survey. We are not aware of any other exploration that occurred there before we began our exploration there.

Our North Pipes Super Project claims

The Arizona Strip, where our North Pipes Super Project claims are located, was an active exploration district in the 1970’s and 1980’s with multiple producing uranium mines and huge tracts of claims held by companies including International Uranium Corp., Energy Fuels Nuclear, Pathfinder as well as others. The work accomplished by these companies included geophysics, geochemistry and drilling. Little to none of this information is available to the public, though many of the drill holes are marked and still visible. No evidence of actual development work has been found on any of our properties. No historical mineral resources or reserves are in the published literature.

Technical Studies and Drilling on the North Pipes Super Project, 2006 to Present.

Geophysics

We have completed several geophysical surveys on our North Pipes Super Project claims, as outlined below:

  1)

CSAMT/NSAMT (Controlled Source-Natural Source Audio MagnetoTellurics). Twenty-two line miles over 7 target areas were completed by our geophysical contractor Zonge Engineering and Research Organization Inc.



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The surveys were conducted from mid-June to mid October 2006. Several audio magneto tellurics anomalies were drill tested (see drilling below). Logging and assay results from these drill holes did not indicate the presence of an ore-bearing breccia pipe. Additional modeling of the audio magneto tellurics dataset and integrating this data with recent drill results is being considered.

     
  2)

NanoTEM (Fast Sampling Transient Electromagnetics). NanoTEM data was collected in select areas to permit better inversion (analysis) of CSAMT/NSAMT data at shallow levels. This geophysical technique identified a shallow resistive layer followed by a weakly conductive layer. This data correlated well with the AMT data but did not aid in the identification of additional targets.

     
  3)

VTEM (Versatile Time-Domain Electromagnetics). A 200 line kilometre airborne VTEM geophysical survey was conducted by Geotech Aribrone Ltd over the Elle Venture area of mutual interest in 2006. Processing and modeling of the data was completed independently by two geophysical consulting firms - Geotech and Condor. Several anomalies were identified in the VTEM survey.

     
  4)

PEM (Pulse Electro-magnetic). Two types of PEM surveys were conducted in 2007: Downhole PEM and In- Loop PEM. These surveys were designed to test the applicability of this geophysical technique. At this time results are not conclusive. Downhole PEM may be used in the future.

Stereoscopic geologic color air photo interpretation (photo-geology)

Stereoscopic geologic interpretation of 1:24,000 (1 inch = 2,000 feet) high resolution color air photographs was contracted and completed by Edward Ulmer, a Registered Professional Geologist who worked on the Arizona Strip in the mid to late 1970s. He has specialized throughout his career in geologic photo interpretation. His work built on the work started by Dr. Karen Wenrich. This air photo interpretative work was useful in defining and rating potential target areas.

Geologic field mapping on the surface

Geological field mapping has been ongoing during 2007 and 2008. Mapping has been performed by the Company’s staff geologists as well as contracted geologists. Approximately 180 of the 300 pipe target areas have been mapped in detail 1:5,000 (1 inch = 417 feet). Geologic mapping has been focused on favourable areas identified by air photo interpretation, geophysics, soil geochemistry and/or field reconnaissance. Several detailed measured stratigraphic sections have also been completed.

Geochemical sampling

A comprehensive soil geochemical survey was completed in 2007. Approximately 14,000 soil samples were collected. Samples were collected by employees and contractors. Strict chain of custody procedures were followed and quality assurance/quality control (QA/QC) samples were inserted regularly into the sample stream. The samples were assayed for 63 elements. Assay analyses were conducted by a Certified Assay Lab, Acme Analytical Laboratories of Vancouver, British Columbia, Canada. A geochemical Summit Meeting was held in Tucson with Technical Advisory Board members and Company geologists on January 23rd, 24th and 25th of 2008. Geochemical analyses developed by members of the Company and the technical board over the past 15 years were the basis for a rigorous and methodical interpretation of the complex geochemical data. Several geochemical signatures over known and suspected mineralized breccia pipe targets (held by others) were identified. These signatures were then compared to signatures in the Company’s target areas. Numerous target areas display favourable signatures.


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Drilling

The following table summarizes completed drilling to date on the North Pipes Super Project:

Target
Area
Dates Drilled
No. Holes
Footage Drilled
(ft)
Comments
Elle 02-03/07 1 2005

Rotary Drilling; negative test of AMT anomaly.

Hada 03/07 1 1504

Rotary Drilling; negative test of AMT anomaly.

Oni 03/07 & 12/07 3 3201

Rotary and Core Drilling; negative test of AMT anomaly; results pending from core drilling

Holda 12/07 3 3067

Core drilling; entered existing drill hole; encountered minor alteration.

Galaxy 12/07 1 575

Core drilling; entered existing drill hole; encountered alteration and pyrite mineralization.

Neola 01-03/07 8 3427

Core drilling; shallow drilling to test breccia pipe center; encountered alteration and pyrite mineralization; deep hole drilled – did not intersect ore mineralization at depth; assays pending.

Hafsa 03/07 2 1012

Core drilling; shallow drilling did not indicate presence of down dropped block; assays pending.

Helvia 03/07 3 1435

Core drilling; shallow drilling did not indicate presence of down dropped block; assays pending.

Rotary drilling was contracted by Boyart Longyear. Diamond core drilling was completed by Redwall Drilling Inc., a wholly owned subsidiary of Liberty Star. A total of 16,226 feet of drilling has been completed.

Item 3.               Legal Proceedings.

We know of no material, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder are an adverse party or has a material interest adverse to us.

Item 4.               Submissions of Matters to a Vote of Security Holders.

None.

PART II

Item 5.               Market for Common Equity and Related Stockholder Matters.

Our common stock was listed and commenced trading on the OTC Bulletin Board on July 15, 2003 when our corporate name was Titanium Intelligence Inc. On February 3, 2004, we merged with our subsidiary and changed our name to Liberty Star Gold Corp. and traded under the symbol "LBTS.OB". On April 16, 2007 we again changed our name to Liberty Star Uranium & Metals Corp. and our stock changed its trading symbol to “LBSU.OB”. Since July 15, 2003,


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trading in our common stock has been limited and sporadic. The following table sets forth, for the periods indicated, the high and low bid prices for our common stock on the OTC Bulletin Board:

OTC Bulletin Board (1)
Quarter Ended High Low
January 31, 2009 $0.0044 $0.0008
October 31, 2008 $0.046 $0.001
July 31, 2008 $0.25 $0.038
April 30, 2008 $0.34 $0.22
January 31, 2008 $0.371 $0.20
October 31, 2007 $0.47 $0.279
July 31, 2007 $0.56 $0.35
April 30, 2007 $0.98 $0.53

  (1)

These bid prices were taken from OTC Bulletin Board quarterly trade and quote summary report. Such over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark down or commission and may not necessarily represent actual transactions.

Our common stock is issued in registered form. The Nevada Agency and Trust Company, of Suite 880 Bank of America, 50 West Liberty Street, Reno, Nevada 89501 USA (telephone: 775.322.0626; facsimile 775.322.5632) is the registrar and transfer agent for our common stock.

On January 31, 2009, the shareholders' list for our common stock showed 75 registered stockholders and 193,946,706 shares issued and outstanding. The closing sale price for our common stock on May 7, 2009, as reported on the OTC Bulletin Board, was $0.0028.

Recent Sales of Unregistered Securities

May 2007 Convertible Notes:

On May 11, 2007, the Company issued senior unsecured convertible two year promissory notes (“May 2007 Convertible Notes”) for gross proceeds of $4,400,000 in a private placement of its securities to institutional investors pursuant to exemptions from registration set out in Rule 506 of Regulation D under the Securities Act of 1933. The net proceeds received after placement agent fee, due diligence fee and legal fees was $4,010,238. Under the original note terms, the May 2007 Convertible Notes bore interest at 8%. Repayment of the May 2007 Convertible Notes began in February 2008 and consists of sixteen monthly principal payments of $259,375 plus accrued unpaid interest. On November 17, 2008 the Company did not have enough authorized capital to fulfill the conversion requests received from the holders of the May 2007 Convertible Notes and is in default on the note. The default interest rate on the note is increased to 15%. Our convertible note holders could call the note and r equest security to be sold for repayment.

Under the original note terms holders of the May 2007 Convertible Promissory Notes could have elected to convert all or a portion of their note balance before the scheduled repayment dates at a fixed rate of $0.65 per share. The Company may have elected to make repayments of the May 2007 Convertible Notes in cash or by the issuance of common stock of the Company. The conversion price for the monthly payments was the lesser of the fixed conversion price of $0.65 per share or 85% of the volume weighted average price for 10 trading days prior to the repayment date, but not less than $0.45 per share. Stock payment could not be made if the amount of shares to be issued would have exceed 33% of the aggregate daily trading volume for 7 trading days preceding the repayment date, unless waived by the holders of the May 2007 Convertible Notes. Stock payment could not be made if the holders of the May 2007 Convertible Notes owned more than 4.99% of the then outstanding common stock of the Company. In the event that a delay in delivery of exercised shares occurred, as defined in the subscription agreement, the Company agreed to pay liquidated damages of $100 per business day for each $10,000 of purchase price of shares subject to the delivery default. In the event that the Company failed to deliver the exercised shares within 7 business dates of the Delivery Date and the selling security holder purchases shares of common stock of the Company in an open market, then the Company owed in cash to the


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selling security holder the amount by which the selling security holders’ total purchase price including brokers’ commissions exceeded the aggregate purchase price of the shares issuable together with interest at 15% per annum.

The Company entered into the first modification agreement with the holders of the May 2007 Convertible Notes in February 2008 and then a second modification agreement in May 2008. The modification agreements were effective from February 2008 through July 2008. The modification agreements reduced the conversion prices in order to induce the note holders to convert the note into common stock. During the year ended January 31, 2009 the Company recorded debt conversion expense of $103,437 related to the modification agreements.

On August 27, 2008 the Company entered into the third modification agreement with the holders of the May 2007 Convertible Notes. The modification agreement increased the interest rate on the May 2007 Convertible Notes to 12%. The modification agreement also reduced the fixed conversion price to $0.05 and reduced the exercise price on the detachable common stock purchase warrants issued in connection with the May 2007 Convertible Notes to $0.05 per share. The Company recorded $67,700 of additional discounts on the May 2007 Convertible Notes for the reduction in the exercise price on the detachable common stock purchase warrants. The Company was granted an exemption from making any of the monthly payments in connection with the May Notes in cash until February 2009. The Company may elect to make repayments of the May Notes in cash at 110% of the principal amount due and 100% of the other amounts then due or by the issuance of common stock of the Company. The conversion price is the lesser of the fixed conversion price of $0.05 per share or 80% of the average of the closing bid prices of the common stock for the five trading days prior to the conversion date.

The Company granted a security interest to the holders of the May 2007 Convertible Notes to all now owned and hereafter acquired right, title and interest of the Company in, to and in respect of all: Accounts, interests in goods represented by Accounts, returned, reclaimed or repossessed goods with respect thereto and rights as an unpaid vendor; contract rights; Chattel Paper; investment property; General Intangibles, Documents, Instruments, letters of credit, bankers’ acceptances or guaranties, cash moneys, deposits; securities, bank accounts, deposit accounts, credits and other property now or hereafter owned or held in any capacity by the Company, as well as agreements or property securing or relating to any of the items referred to above.

The holders of the May 2007 Convertible Notes were issued 6,769,228 detachable common stock purchase warrants with an exercise price of $0.05 and a life of 5 years. The broker was issued 338,461 common stock purchase warrants as a broker fee with an exercise price of $0.05 and a life of 5 years.

During the year ended January 31, 2008 one note holder converted $250,000 of the principal balance of their May 2007 Convertible Note and $9,699 of unpaid accrued interest at a conversion price of $0.65 per share pursuant to the original terms of the notes. The Company issued 399,537 shares of common stock related to these conversions. The debt converted was allocated $25,991 of deferred finance charges and $181,624 of discounts, and the unamortized portion of $157,269 was recorded as interest expense.

During the year ended January 31, 2009 the Company issued 150,585,301 shares of common stock and $407,349 of cash for the monthly payments and principal conversions on the May 2007 Convertible Notes. At January 31, 2009 the note holders have a balance of $831,226 of monthly payment amounts that have been deferred that are due on demand by the note holders.

August 2008 Convertible Notes:

On August 27, 2008 the Company issued Secured Convertible Promissory one year notes (“August 2008 Convertible Notes”) for gross proceeds of $414,184 to the holders of the May 2007 Convertible Notes in a private placement of its securities to institutional investors pursuant to exemptions from registration set out in Rule 506 of Regulation D under the Securities Act of 1933. The net proceeds received were $372,434. The August 2008 Convertible Notes bear interest at 12%. In November 2008, the Company did not have enough authorized shares available for issuance to make any stock repayments on this note and is considered in default. The default interest rate is increased to 15%. Repayment of the August 2008 Convertible Notes was to begin in February 2009 with six monthly principal payments of $59,146 plus accrued unpaid interest and one final payment of $59,308 plus accrued unpaid interest. The entire balance of the August 2008 Convertible Notes and May 2007 Convertible Notes b ecomes due immediately upon the Company’s receipt of net proceeds from a sale of debt or equity with a gross amount of up to $3,000,000. The holders of the August 2008 Convertible Notes may elect to convert all or a portion of their note balance before the scheduled repayment dates at a fixed rate of $0.05 per share. The Company may elect to make repayments of the August 2008


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Convertible Notes in cash at 110% of the principal amount due and 100% of the other amounts then due or by the issuance of common stock of the Company. The conversion price for the monthly payments is the lesser of the fixed conversion price of $0.05 per share or 80% of the average of the closing bid prices of the common stock for the five trading days prior to the conversion date. Stock payment cannot be made if the holders of the August 2008 Convertible Notes own more than 4.99% of the then outstanding common stock of the Company. Stock payment cannot be made if the stock is not timely issued, an event of default has occurred, an exemption from registration of the resale of shares of Common Stock to be issued in payment of the Monthly Amount is not available to the Holder, or if the amount of Common Stock that would be issued in satisfaction of the Monthly Amount exceeds for the Holder and Other Holders, in the aggregate, more than 33% of the aggregate daily trading volume of the Common Stock for the seven trading days preceding such Repayment Date, as reported by Bloomberg L.P. for the Principal Market. The Company may use the proceeds for lease payments, offering expenses and other designated purposes.

The August 2008 Convertible Notes are secured by all now owned and hereafter acquired right, title and interest of the Company in, to and in respect of all: Accounts, interests in goods represented by Accounts, returned, reclaimed or repossessed goods with respect thereto and rights as an unpaid vendor; contract rights; Chattel Paper; investment property; General Intangibles, Documents, Instruments, letters of credit, bankers’ acceptances or guaranties, cash moneys, deposits; securities, bank accounts, deposit accounts, credits and other property now or hereafter owned or held in any capacity by the Company, as well as agreements or property securing or relating to any of the items referred to above.

The August 2008 Convertible Notes contain a provision that the note holders be repaid from the first $3,000,000 received if any future financings are completed by the Company. These provisions along with the shortage of unissued authorized capital will make it difficult for the Company to raise any funds through equity financings.

Other sales of unregistered securities:

On May 2, 2007 the Company issued 50,000 shares to Equititrend Advisors LLC pursuant to an agreement to perform public and investor relations services. The shares were issued to an accredited investor pursuant to exemptions from registration set out in Rule 506 of Regulation D under the Securities Act. The transactions were reported at fair value. Fair value of the shares issued was determined by a review of the Company’s stock trading price around the date of issuance and was determined to be $0.57 per share for the shares issued on May 2, 2007. The Company recorded $28,500 of public relations expense related to the stock issuance.

The Company issued 62,000 common shares to three public relations consultants on August 27, 2007 as compensation for public relations services performed. The issuance of common stock is reported at fair value. Fair value was determined to be the closing trading price on August 27, 2007, or $0.42 per common share. The Company recorded $26,040 of public relations expense related to the stock issuances.

During the year ended January 31, 2008, the Company issued 1,718,799 shares to Cornell Capital Partners pursuant to a Standby Equity Distribution Agreement (“SEDA”) in exchange for proceeds of $1,074,417, net of fees of $56,500. Cornell Capital Partners paid us 96%, or a 4% discount, of the lowest volume weighted average per share purchase price of our common stock on our principal trading market for the 5 days following each request for an advance. Shares of common stock issued pursuant to the SEDA are reported as permanent equity pursuant to SFAS No. 150 at the discounted price paid for the shares by Cornell Capital Partner, LP. Expenses of shares issued pursuant to the SEDA are reported as a reduction of additional paid-in capital. In May 2007, pursuant to the May 2007 Convertible Notes subscription agreement, the Company agreed that it would not exercise its rights under the SEDA without written consent from the Unsecured Convertible Promissory Note Holders. The Company has not issued any shares to Cornell Capital Partners after April 2007 and the SEDA expired in March 2008.

All proceeds received have been and will be used for exploration of our mineral properties and working capital.

Equity Compensation Plan Information

As of January 31, 2009 we had two compensation plans in place, entitled "2004 Stock Option Plan" and “2007 Stock Option Plan”. These plans have not been approved by our security holders.


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Total number of
securities authorized
Number of securities to
be issued upon exercise
of outstanding options
as at January 31, 2009
Weighted-average
exercise price of
outstanding options as
at January 31, 2009
Number of securities
remaining available for
further issuance as at
January 31, 2009
3,850,000 2,718,500 $0.97 1,131,500
10,000,000 2,225,000 $0.22 7,775,000

On May 21, 2008 the Company granted 425,000 non-qualified stock options to non-employee consultants and 3,050,000 incentive stock options to employees, officers and directors. The options have an exercise price of $0.22 per option. On June 26, 2008 the board eliminated the vesting period so the options would be fully vested effective on that date. The options have a life of ten years.

On August 15, 2007, the Company granted 250,000 non-qualified stock options pursuant to the 2004 Stock Option Plan to an investor relations consultant in exchange for future services. The Options have an exercise price of $0.45 per share and a term of 3 years. The options vest 25% every three month anniversary of the grant date.

On May 24, 2007, the Company granted 10,000 incentive stock options to an employee in accordance with the 2004 Stock Option Plan. The options have an exercise price of $1.11 per share and a term of 8.875 years. The options vest 50% on the grant date, 25% on October 6, 2007 and 25% on April 6, 2008.

On December 8, 2006, we granted to our employees, consultants, officers and directors stock options to purchase an aggregate of 1,590,000 common shares exercisable at the price of $0.72 per share for a term of ten years. The grant of stock options was made under the terms of our 2004 Stock Option Plan.

Item 6.               Selected Financial Data.

Not applicable.

Item 7.               Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with our consolidated audited financial statements and the related notes that appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. We refer you to the cautionary statement regarding forward-looking statements included at the beginning of this annual report. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this annual report, particularly in the section entitled "Risk Factors" included in this annual report.

Our consolidated audited financial statements are stated in United States Dollars and are prepared in accordance with accounting principles generally accepted in the United States of America.

Overview

We are an exploration stage company engaged in the acquisition and exploration of mineral properties in the States of Arizona and Alaska. Claims in the State of Alaska are held in the name of our wholly-owned subsidiary, Big Chunk Corp. Claims in the State of Arizona are held in the name of Liberty Star. The Company uses the term “Super Project” to indicate a project in which numerous mineral targets have been identified, any one or more of which could potentially contain commercially viable quantities of minerals.

Liquidity and Capital Resources

We had cash and cash equivalents in the amount of $63,250 as of January 31, 2009. We had negative working capital of $(2,258,655) as of January 31, 2009. We had cash inflows from financing activites of $71,384 for the year ended January 31, 2009. The Company is currently in default on the May 2007 Convertible Notes and the August 2008 Convertible Notes and as such the entire obligation is reported as a current liability. The note holders have a security


22

interest in all assets and mineral properties and as a result the Company is unable to sell any assets without prior approval from the note holders. The Convertible Promissory Notes entered into in May 2007 contains restrictions on raising new capital from the sale of registered stock to other investors. We are also limited to raising up to $7,000,000 in private placement funds during the 2 year term of the Unsecured Convertible Promissory Notes. The August 2008 Convertible Notes contain restrictions that require that the August 2008 and May 2007 convertible notes be repaid in full from the first $3,000,000 of financings completed by the Company. These restrictions may make it difficult for us to raise the cash required to proceed with our planned exploration activities. There is no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on their investment in our common stock. Further, we may continue to be unprofitable. The company does not plan to make any capital expenditures for new mineral claims or equipment during the next twelve months.

In addition to the restrictions placed on us by our various financing agreements, the recent weakening of economic conditions in the U.S. and around the world could have harmful effects on our ability to raise money to fund our planned operations. If this happens, we would likely go out of business and our investors will lose their entire investment in our company.

We believe that recent decreases in value of the common shares of many companies worldwide will make selling shares of our common stock increasingly difficult. If we are not able to sell enough of our shares to meet our financial needs, we will have to consider borrowing the money we need. A tightening of credit conditions has also been experienced in the economy recently. Because of the recent credit crisis, it is possible that we would not be able to borrow adequate amounts to fund our operations on terms and at rates of interest we find acceptable and in the best interests of our company. If we are unable to obtain the amount of money that we need to fund our operations, then we will likely go out of business and investors will lose their entire investment in our company.

We do not expect that the difficult economic conditions are likely to improve significantly in the near future. Further deterioration of the economy, and even consumer fear that the economy will deteriorate further could intensify the adverse effects of these difficult market conditions.

Results of Operations for the year ended January 31, 2009

We had a net loss of ($4,176,066) for the twelve-month period ended January 31, 2009 compared to a net loss of ($5,697,935) for the twelve-month period ended January 31, 2008. The decrease in the net loss is the result of the Company freezing its planned drilling program at the North Pipes Super Project due to the lack of cash resources available. In the prior year the Company spent approximately $435,000 on its drilling program. The Company performed a geochemical sampling program and geophysics in the prior year which was not performed in the current year. The cost of the geochemical sampling program and geophysics was approximately $615,000 in the prior year. The Company also reduced overhead costs by cutting back staff, office and storage space and other discretionary spending. The cost reductions in the geology department were approximately $345,000 this year. The cost reductions in the general, administrative and public relations departments were approximately $126,000 this year.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Investment in Elle Venture

The Company holds a 50% interest in Elle Venture, a general partnership with XState Resources Limited (“XState”) that was formed to explore, develop and, if warranted, mine certain US Federal lode mining claims within the 22 mile joint venture area. The Elle Venture commenced on December 15, 2006 when XState deposited $2,900,000 (“sole funding amount”) into the joint venture bank account. On July 31, 2008 the Company entered into an agreement to amend the joint venture agreement and terminate the subcontracting agreement. The Company received a $300,000 liquidating distribution in relation to the termination of the agreement. The Elle Venture mineral claims will continue to be owned 50% each by the Company and XState and the Company may be obligated to contribute funds if exploration activities were to resume on those claims. If the Company or XState is unable to make a proportional contribution then our interest or their interest in the mineral claims will be diluted. The Company does not anticipate that we will make any additional or proportional contributions to the Elle Venture in the next twelve months.


23

Cash Requirements

Over the next twelve months we intend to pay annual rentals on our North Pipes, Big Chunk and Bonanza Hills claims and performing only the minimal exploration work necessary to maintain these claims in good standing for an estimated cost of $652,000. We anticipate that we will incur expenses over the next twelve months for general and administrative overhead, occupancy, accounting and auditing, legal fees and salaries. We will require additional funds to maintain our current mineral properties. These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. The Unsecured Convertible Promissory Notes entered into in May 2007 contains restrictions on raising new capital from the sale of registered stock to other investors. We are also limited to raising up to $7,000,000 in private placement funds during the 2 year term of the Unsecured Convertible Promissory Notes. The August 2008 Convertible Notes contain restrictions that require that the August 2008 and May 2007 convertible notes be repaid in full from the first $3,000,000 of financings completed by the Company. These restrictions may make it difficult for us to raise the cash required to proceed with our planned exploration activities. There is no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on their investment in our common stock. Further, we may continue to be unprofitable.

There is no assurance that we will be able to raise additional funds in the amounts and at the times we will require them. Please refer to the section of this quarterly report entitled "Risk Factors" for a more detailed description of the risks that we will face, and the risks that any person investing in our company will face, that may arise as the result of our attempt to raise money for the continuation of our exploration program through the sale of equity in our company. Because of these risks and for other reasons, our auditors, in their report on the annual consolidated financial statements for the year ended January 31, 2009, included an explanatory paragraph regarding their concerns about our ability to continue as a going concern.

Presentation of Financial Information

Our consolidated financial statements for the period ended January 31, 2009 reflect financial information for the twelve month period ending January 31, 2009, as well as from inception through January 31, 2009 and for the twelve-month period ended January 31, 2008.

Since we have not generated any revenue, we have included a reference to our ability to continue as a going concern in connection with our consolidated financial statements for the years ended January 31, 2009 and 2008. Our accumulated stockholders’ equity at January 31, 2009, was ($1,372,654) and the net loss for the twelve-month period ended January 31, 2009 was ($4,176,066). All of our exploration costs are expensed as incurred.

These consolidated financial statements have been prepared on the going concern basis, which assumes that adequate sources of financing will be obtained as required and that our assets will be realized, and liabilities settled in the ordinary course of business. Accordingly, these consolidated financial statements do not include any adjustments related to the recoverability of assets and classification of assets and liabilities that might be necessary should we be unable to continue as a going concern.

In order to continue as a going concern, we require additional financing. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to continue as a going concern, we would likely be unable to realize the carrying value of our assets reflected in the balances set out in the preparation of the consolidated financial statements.

Critical Accounting Policies

The consolidated financial statements of Liberty Star Uranium & Metals Corp. (formerly Liberty Star Gold Corp.) have been prepared in conformity with accounting principles generally accepted in the United States of America. Our significant accounting policies are described in Note 2 to the consolidated financial statements included in Item 8 in the Form 10-K. The critical accounting policies adopted by our company are as follows:

Going Concern

Since we have not generated any revenue, we have negative cash flows from operations, and negative working capital we have included a reference to our ability to continue as a going concern in connection with our consolidated financial


24

statements for the period ended January 31, 2009. Our total stockholders’ equity at January 31, 2009 was ($1,372,654). All exploration costs are expensed as incurred.

These consolidated financial statements have been prepared on the going concern basis, which assumes that adequate sources of financing will be obtained as required and that our assets will be realized, and liabilities settled in the ordinary course of business. Accordingly, these consolidated financial statements do not include any adjustments related to the recoverability of assets and classification of assets and liabilities that might be necessary should we be unable to continue as a going concern.

Mineral claims

The Company accounts for costs incurred to acquire, maintain and explore mineral properties as charged to expense in the period incurred until the time that a proven mineral resource is established at which point development of the mineral property would be capitalized. Currently, the company does not have any proven mineral resources on any of its mineral properties.

Convertible promissory notes

The Company accounts for convertible promissory notes in accordance with Statement of Financial Accounting Standards No. 150 (“SFAS 150”). The Company reviewed the convertible promissory notes and the related subscription agreement to determine the appropriate reporting within the financial statements. The notes are reported as liabilities stated at fair value. The Company determined that reporting the notes as equity would not be appropriate as the conversion of the notes into common stock was not guaranteed. No gain or loss is reported when the notes are converted into shares of the Company’s common stock in accordance with the note’s original terms.

New Accounting Pronouncements

In May 2008, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 162 “The Hierarchy of Generally Accepted Accounting Principles”. This statement identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States of America. This statement is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles”. The Company does not believe that the adoption of SFAS No. 162 will have a material effect on its results of operations or financial position.

In March 2008, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 161 “Disclosures about Derivative Instruments and Hedging Activities – an amendment of FASB Statement No. 133”. This statement changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement No. 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. This statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early adoption encouraged. This statement encourages, but does not require, comparative disclosures for earlier periods at initial adoption. The Company does not believe that the adoption of SFAS No. 160 will have a material effect on its results of operations or financial position.

Item 7A.            Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.


25

Item 8.               Financial Statements.

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America.

The following consolidated financial statements are filed as part of this annual report:

 

Report of Independent Registered Public Accounting Firm

 

 

 

Consolidated Balance Sheets as of January 31, 2009 and 2008

 

 

 

Consolidated Statements of Operations for the twelve months ended January 31, 2009, the twelve months ended January 31, 2008 and the period from inception (August 20, 2001) to January 31, 2009

 

 

 

Consolidated Statements of Stockholders' Equity (Deficit) for the period from inception (August 20, 2001) to January 31, 2009

 

 

 

Consolidated Statements of Cash Flows for the twelve months ended January 31, 2009, the twelve months ended January 31, 2008 and for the period from inception (August 20, 2001) to January 31, 2009

 

 

 

Notes to Consolidated Financial Statements



26

Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders of
Liberty Star Uranium & Metals Corp.

We have audited the accompanying consolidated balance sheets of Liberty Star Uranium & Metals Corp. (an exploration stage company) as of January 31, 2009 and 2008, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the years then ended and for the cumulative period from inception (August 20, 2001) through January 31, 2009. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company at January 31, 2009 and 2008, and the results of its operations, changes in stockholders’ equity, and its cash flows for the years then ended, and for the cumulative period from inception (August 20, 2001) through January 31, 2009, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 16 to the consolidated financial statements, the Company is in the exploration stage, has suffered recurring losses from operations, requires additional funds for further exploratory activity prior to attaining a revenue generating status, and is in default on its convertible promissory notes. In addition, the Company may not find sufficient ore reserves to be commercially mined. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 16. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

/s/ Semple, Marchal & Cooper, LLP
Phoenix, Arizona
May 7, 2009


27

LIBERTY STAR URANIUM & METALS CORP.
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS

             
             
    January 31, 2009     January 31, 2008  
 ASSETS  
             
Current:            
   Cash and cash equivalents $ 63,250   $  1,265,187  
   Prepaid expenses and supplies   192,887     183,525  
   Due from related parties   1,888     277,665  
   Deposits   -     6,707  
       Total current assets   258,025     1,733,084  
             
Property and equipment, net   826,523     1,107,275  
Certificates of deposit   3,000     260,906  
Deposits   -     10,000  
Deferred financing charges, net   87,276     279,656  
Investment in Elle Venture   -     -  
Other assets   50,000     -  
             
Total assets $ 1,224,824   $  3,390,921  
             
 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)  
             
Current:            
   Current portion of long-term debt $ 77,064   $  107,866  
   Current portion of capital lease obligation   -     2,760  
   Current portion of convertible promissory notes, net of            
       discounts   2,280,431     1,605,022  
   Accounts payable and accrued liabilities   44,219     283,574  
   Accrued wages to related party   42,500     -  
   Accrued interest   72,466     239,524  
       Total current liabilities   2,516,680     2,238,746  
             
Long-term debt, net of current portion   80,798     337,836  
Convertible promissory notes, net of current portion and            
       discounts   -     597,819  
             
Total liabilities   2,597,478     3,174,401  
             
Stockholders’ equity (deficit)            
   Common stock - $.001 par value; 200,000,000 shares            
           authorized; 193,946,706 and 43,331,405 issued and            
           outstanding   193,947     43,331  
   Additional paid-in capital   23,527,939     21,091,663  
   Deficit accumulated during the exploration stage   (25,094,540 )   (20,918,474 )
       Total stockholders’ equity (deficit)   (1,372,654 )   216,520  
             
Total liabilities and stockholders’ equity (deficit) $ 1,224,824   $ 3,390,921  

The Accompanying Notes are an Integral Part of the Consolidated Financial Statements


28

LIBERTY STAR URANIUM & METALS CORP.
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS

                Cumulative from  
                date of inception  
    For the twelve     For the twelve     (August 20, 2001)  
    months ended     months ended     to  
    January 31, 2009     January 31, 2008     January 31, 2009  
Revenues $  -   $ -   $ -  
                   
Expenses:                  
   Geological and geophysical costs   957,569     2,480,475     10,851,646  
   Salaries and benefits   566,453     579,770     2,006,745  
   Accounting and auditing   153,192     186,579     840,863  
   Public relations   83,111     198,219     673,224  
   Depreciation   277,509     147,534     528,788  
   Legal   124,626     129,008     591,857  
   Professional services   -     -     143,992  
   General and administrative   247,373     348,750     1,437,932  
   Travel   2,672     21,845     137,596  
   Impairment loss   -     -     15,907,500  
Net operating expenses   2,412,505     4,092,180     33,120,143  
                   
Loss from operations   (2,412,505 )   (4,092,180 )   (33,120,143 )
                   
Other income (expense):                  
   Interest income   15,233     92,227     196,938  
   Interest expense   (2,075,885 )   (1,697,982 )   (3,775,891 )
   Loss on sale of assets   (24,862 )   -     (25,268 )
   Debt conversion expense   (103,437 )   -     (103,437 )
   Other income   125,390     -     225,390  
   Income from Elle Venture   300,000     -     300,000  
   Foreign exchange gain   -     -     505  
   Gain on settlement of debt to related party   -     -     7,366  
Total other income (expense)   (1,763,561 )   (1,605,755 )   (3,174,397 )
                   
Loss before income taxes   (4,176,066 )   (5,697,935 )   (36,294,540 )
                   
Income tax expense   -     -     -  
                   
Net loss $  (4,176,066 ) $ (5,697,935 ) $ (36,294,540 )
                   
Basic and diluted net loss per share of                  
   common stock $

 (0.05

) $ (0.13 ) $ (0.91 )
                   
Basic and diluted weighted average number                  
   of shares of common stock outstanding   91,711,511     42,743,758     39,793,089  

The Accompanying Notes are an Integral Part of the Consolidated Financial Statements


29

LIBERTY STAR URANIUM & METALS CORP.
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

                      Deficit     Total  
                Additional     accumulated during     stockholders’  
    Common stock     paid-in     the exploration     equity  
    Shares     Amount     capital     stage     (deficit)  
Balance, August 20, 2001 (Date of inception)   -   $  -   $  -   $ -   $ -  
   Common stock issued for cash   20,000,000     20,000     80,000     -     100,000  
   Net loss for the period from inception, August 20, 2001, to                              
      January 31, 2004   -     -     -     (132,602 )   (132,602 )
Balance, January 31, 2004   20,000,000     20,000     80,000     (132,602 )   (32,602 )
   Acquisition, February 3, 2004   17,500,000     17,500     15,907,500     -     15,925,000  
   Issuance of common stock private placement   1,000,000     1,000     999,000     -     1,000,000  
   Issuance of common stock and warrants private placement   1,600,000     1,600     1,998,400     -     2,000,000  
   Options issued for services   -     -     94,350     -     94,350  
   Return of shares   (7,000,000 )   (7,000 )   (11,193,000 )   11,200,000     -  
   Net loss for the year ended January 31, 2005   -     -     -     (18,392,024 )   (18,392,024 )
Balance, January 31, 2005   33,100,000     33,100     7,886,250     (7,324,626 )   594,724  
   Issuance of common stock and warrants private placement   3,886,717     3,887     5,048,845     -     5,052,732  
   Issuance of common stock and warrants private placement   1,970     2     (2 )   -     -  
   Net loss for the year ended January 31, 2006   -     -     -     (4,627,965 )   (4,627,965 )
Balance, January 31, 2006   36,988,687     36,989     12,935,093     (11,952,591 )   1,019,491  
   Issuance of common stock private placement   256,637     256     289,744     -     290,000  
   Issuance of common stock private placement   8,850     9     9,991     -     10,000  
   Issuance of common stock   3,696,895     3,697     2,242,298     -     2,245,995  
   Issuance of common stock for services   150,000     150     92,850     -     93,000  
   Expenses of common stock issuance   -     -     (320,000 )   -     (320,000 )
   Options granted to consultants   -     -     610,560     -     610,560  
   Options granted to employees   -     -     221,783     -     221,783  
   Net loss for the year ended January 31 2007   -     -     -     (3,267,948 )   (3,267,948 )
Balance, January 31, 2007   41,101,069     41,101     16,082,319     (15,220,539 )   902,881  
   Issuance of common stock   1,718,799     1,719     1,072,698     -     1,074,417  
   Issuance of common stock for services   112,000     112     54,428     -     54,540  
   Issuance of common stock for conversion of promissory note   399,537     399     259,300     -     259,699  
   Options granted to employees and consultants   -     -     358,646     -     358,646  
   Issuance of common stock purchase warrants   -     -     1,421,538     -     1,421,538  
   Beneficial conversion feature of convertible promissory notes   -     -     1,842,734     -     1,842,734  
   Net loss for the year ended January 31, 2008   -     -     -     (5,697,935 )   (5,697,935 )
Balance, January 31, 2008   43,331,405     43,331     21,091,663     (20,918,474 )   216,520  
   Issuance of common stock for conversion or payment of                              
      promissory note   150,585,301     150,586     1,688,925     -     1,839,511  
   Issuance of common stock for inducement to convert                              
      promissory note   30,000     30     8,970     -     9,000  
   Reduction of conversion price for inducement to convert                              
      promissory note   -     -     94,437     -     94,437  
   Stock based compensation   -     -     576,244     -     576,244  
   Common stock purchase warrants exercise price reduction   -     -     67,700     -     67,700  
   Net loss for the year ended January 31, 2009   -     -     -     (4,176,066 )   (4,176,066 )
Balance, January 31, 2009   193,946,706   $  193,947   $  23,527,939   $      (25,094,540 ) $ (1,372,654 )

The Accompanying Notes are an Integral Part of the Consolidated Financial Statements


30

LIBERTY STAR URANIUM & METALS CORP.
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS

                Cumulative from  
                date of inception  
    For the twelve     For the twelve     (August 20, 2001)
    months ended     months ended     to  
    January 31, 2009     January 31, 2008     January 31, 2009  
Net change in cash and cash equivalents                  
Cash flows from operating activities:                  
   Net loss $  (4,176,066 ) $  (5,697,935 ) $  (36,294,540 )
   Adjustments to reconcile net loss to net cash from operating                  
       activities:                  
       Depreciation   277,509     148,545     529,799  
       Amortization of deferred financing charges   234,130     178,873     413,003  
       Amortization of discount on convertible promissory notes   1,537,567     1,249,421     2,786,988  
       Mineral claim costs   -     -     343,085  
       Impairment loss   -     -     15,907,500  
       Loss on sale of fixed assets   24,862     -     25,268  
       Share based compensation   576,244     358,646     1,767,233  
       Share based payments   397,714     64,239     554,953  
       Changes in assets and liabilities:                  
             Prepaid expenses and supplies   (9,362 )   (166,934 )   (105,037 )
             Other current assets   -     6,230     (7,875 )
             Deposits   16,707     (11,000 )   -  
             Certificates of deposit   44,674     (53,109 )   (11,435 )
             Other assets   (25,000 )   -     (25,000 )
             Accounts payable and accrued expenses   (239,355 )   172,259     38,204  
             Accrued wages related party   42,500     -     42,500  
             Accrued interest   (167,058 )   239,524     72,466  
Net cash used in operating activities   (1,464,934 )   (3,511,241 )   (13,962,888 )
                   
Cash flows from investing activities:                  
   Proceeds from the sale of fixed asset   53,081     -     61,086  
   Proceeds from redemption of certificate of deposit   213,232     -     213,232  
   Purchase of certificate of deposit   -     (204,797 )   (204,797 )
   Purchase of equipment   (74,700 )   (663,424 )   (1,098,950 )
Net cash provided by (used in) investing activities   191,613     (868,221 )   (1,029,429 )
                   
Cash flows from financing activities:                  
   Principal activity on long-term debt   (287,840 )   (48,183 )   (338,691 )
   Principal activity on capital lease obligation   (2,760 )   (26,905 )   (39,298 )
   Principal activity on convertible promissory notes   (286,227 )   -     (286,227 )
   Net (advances) repayments from related parties   275,777     (240,152 )   (1,888 )
   Proceeds from the issuance of common stock, net of expenses   -     1,074,417     11,140,074  
   Proceeds from the sale of convertible promissory notes   372,434     4,010,238     4,382,672  
   Proceeds from long-term debt   -     198,925     198,925  
Net cash provided by financing activities   71,384     4,968,340     15,055,567  
                   
Net increase (decrease) in cash and cash equivalents for period   (1,201,937 )   588,878     63,250  
                   
Cash and cash equivalents, beginning of period   1,265,187     676,309     -  
                   
Cash and cash equivalents, end of period $  63,250   $  1,265,187   $  63,250  
                   
Interest paid during the period $  152,971   $  20,465   $ 175,460  

The Accompanying Notes are an Integral Part of the Consolidated Financial Statements


31

LIBERTY STAR URANIUM & METALS CORP.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – Organization

Liberty Star Uranium & Metals Corp. (the “Company” or “We” or “Liberty Star”) was formerly Liberty Star Gold Corp. and formerly Titanium Intelligence, Inc. (“Titanium”). Titanium was incorporated on August 20, 2001 under the laws of the State of Nevada. On February 5, 2004 we commenced operations in the acquisition and exploration of mineral properties business. Big Chunk Corp. (“Big Chunk”) is our wholly owned subsidiary and was incorporated on December 14, 2003 in the State of Alaska. Big Chunk is engaged in the acquisition and exploration of mineral properties business in the State of Alaska. Redwall Drilling Inc. (“Redwall”) is our wholly owned subsidiary and was incorporated on August 31, 2007 in the State of Arizona. Redwall is a drilling contractor. On December 1, 2007 Redwall began performing drilling services on the Company’s mineral properties. In April 2007, the Company changed its name to Liberty Star Uranium & Metals Corp. to reflect the Company’s current concentrated efforts on uranium exploration. The Company is considered to be an exploration stage company, as it has not generated any revenues from operations.

In December 2006, the Company entered into a joint venture agreement (“Elle Venture”) with XState Resources Limited (“XState”). The Company holds a 50% interest in the Elle Venture, a general partnership with XState that was formed to explore and, if warranted, develop certain US Federal lode mining claims within the 22 square mile joint venture area. The Elle Venture ceased exploration activities in 2008.

These consolidated financial statements include the results of operations and cash flows of Liberty Star Uranium & Metals Corp. and its wholly owned subsidiaries, Big Chunk and Redwall, from the date of acquisition. All significant intercompany accounts and transactions were eliminated upon consolidation.

These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America with the on-going assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. However, certain conditions noted below currently exist which raise substantial doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue as a going concern. The operations of the Company have primarily been funded by the issuance of common stock and debt. Continued operations of the Company are dependent on the Company’s ability to complete equity financings or generate profitable operations in the future. Management’s plan in this regard is to secure additional funds through future equity financings or loans. Such financings or loans may not be available, may not be available on reasonable terms, or the Company may be prevented from obtaining further financings because of restrictions that apply to it pursuant to the Unsecured Convertible Promissory Notes discussed in Note 7.

NOTE 2 – Summary of significant accounting policies

The summary of significant accounting policies presented below is designed to assist in understanding the Company's consolidated financial statements. Such consolidated financial statements and accompanying notes are the representations of the Company’s management, who is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP") in all material respects, and have been consistently applied in preparing the accompanying consolidated financial statements. The significant accounting policies adopted by the Company are as follows:

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.


32

LIBERTY STAR URANIUM & METALS CORP.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
- continued

NOTE 2 – Summary of significant accounting policies - continued

Use of estimates - continued

The valuation of stock-based compensation, valuation of common stock purchase warrants, value of beneficial conversion feature, and the determination of useful lives and recoverability of depreciable assets are significant estimates made by management. It is at least reasonably possible that a change in these estimates may occur in the near term.

Principles of consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Big Chunk and Redwall, from the date of acquisition, February 5, 2004 and August 31, 2007, respectively. All significant intercompany accounts and transactions have been eliminated upon consolidation.

Cash and cash equivalents

The Company considers cash held at banks and all highly liquid investments with original maturities of three months or less to be cash and cash equivalents. The Company maintains its cash in bank deposit accounts which, for periods of time, may exceed federally insured limits. At January 31, 2009 and 2008, the amount of cash in bank deposit accounts that exceeded federally insured limits of $250,000 and $100,000, respectively, was approximately $0 and $1,202,000, respectively.

Mineral claim costs

Mineral claim costs of carrying, retaining and developing properties are charged to expense in the period incurred in our geological and geophysical costs.

Investment in Elle Venture

Investment in Elle Venture, a general partnership in which the Company is a 50% partner, is accounted for by the equity method as effective control of the venture rests with XState Resources Limited, our joint venture partner.

Other assets

Other assets include investments in common stock of privately owned corporations in which the Company is a less than 10% owner and does not exercise any control or influence over the corporation. The Company accounts for these investments using the cost method.

Property and equipment

Property and equipment is stated at cost. The Company capitalizes all purchased equipment over $500 with a useful life of more than one year. Depreciation is calculated using the straight line method over the estimated useful lives of the assets. Leasehold improvements are stated at cost and are amortized over their estimated useful lives or the lease term, whichever is shorter. Maintenance and repairs are expensed as incurred while betterments or renewals are capitalized. Property and equipment is reviewed periodically for impairment. The estimated useful lives range from 2 to 7 years.


33

LIBERTY STAR URANIUM & METALS CORP.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
- continued 

NOTE 2 – Summary of significant accounting policies - continued

Deferred finance charges

The Company capitalizes costs incurred to issue new debt as deferred finance charges. Amortization is calculated using the straight line method, which approximates the effective interest method, over the life of the related debt instrument and is included in interest expense. At January 31, 2009 and 2008 the Company has capitalized deferred finance charges of $474,288 and $432,538, respectively, and accumulated amortization of debt issuance costs was $387,012 and $152,882, respectively.

Discount on convertible promissory notes

Discounts on convertible promissory notes include the fair value of detachable common stock purchase warrants issued with convertible promissory notes and the intrinsic value of the embedded beneficial conversion feature of the convertible promissory notes. These amounts are being amortized to interest expense using the effective interest method over the term of the convertible promissory notes. At January 31, 2009 and 2008 the Company has recorded discounts on convertible promissory notes of $3,082,656 and $3,014,956, respectively and accumulated amortization of discounts on convertible promissory notes was $2,605,364 and $1,067,797, respectively.

Accounting for the impairment of long-lived assets and long-lived assets to be disposed of

The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

Accounting for lease obligations

The Company records rent expense from noncancelable operating leases on the straight-line basis over the life of the lease. The Company records an asset and a related capital lease obligation for property and equipment acquired by capital lease. The asset is amortized and amortization expense is included in depreciation.

Convertible promissory notes

The Company accounts for convertible promissory notes in accordance with Statement of Financial Accounting Standards No. 150 (“SFAS 150”) requiring the convertible promissory notes to be reported as liabilities at fair value. When convertible promissory notes are converted into shares of the Company’s common stock in accordance with the debt’s original terms, no gain or loss is recognized. The Company accounts for inducements to convert as an expense in the period incurred, which is included in debt conversion expense in the accompanying financial statements.

Environmental expenditures

The operations of the Company have been and may in the future be affected from time to time in varying degree by changes in environmental regulations, including those for future removal and site restoration costs. The likelihood of new regulations and their overall effect upon the Company are not predictable. The Company will provide for any reclamation costs in accordance with Financial Accounting Standard No. 143 “Accounting for Asset Retirement Obligations”. It is management’s opinion that the Company is not currently exposed to significant environmental and reclamation liabilities and has recorded no reserve for environmental and reclamation expenditures at January 31, 2009 and 2008.


34

LIBERTY STAR URANIUM & METALS CORP.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
- continued 

NOTE 2 – Summary of significant accounting policies – continued

Stock-based compensation

The Company’s stock-based compensation arrangements are designed to attract and retain employees and non-employee consultants. The amount, frequency, and terms of stock-based awards may vary based on competitive practices, company operating results, and government regulations. The Company may grant non-qualified and incentive stock options to employees and non-qualified stock options to non-employee consultants. New shares are issued upon option exercises.

On February 1, 2006 the Company adopted the provisions of Statement of Financial Accounting Standards No. 123R (“SFAS 123R”) requiring the measurement and recognition of all stock-based compensation under the fair value method. The Company charges stock-based compensation expense for options granted to employees to earnings using the straight-line method over the option’s requisite service period. The Company implemented SFAS 123R using the modified prospective transition method. Prior to February 1, 2006 the Company accounted for stock options granted to employees under Accounting Principles Board Opinion 25 (“APB 25”) intrinsic value method. Under APB 25, there was generally no charge to earnings for employee stock option awards because the options granted had an exercise price at least equal to the market value of the underlying common stock on the grant date. The fair value of options granted to employees prior to February 1, 2006 had been determined to be $0, based on the Black-Scholes Valuation method. The Company determines the measurement date for stock options granted to non-employee consultants using EITF 96-18. Periods prior to February 1, 2006 in the consolidated financial statements have not been adjusted to reflect fair value stock-based compensation expense under SFAS 123R for options issued to employees as there is no effect.

Income taxes

Income taxes are recorded using the asset and liability method. Under the asset and liability method, tax assets and liabilities are recognized for the tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using the enacted tax rates expected to apply when the asset is realized or the liability settled. The effect on future tax assets and liabilities of a change in tax rates is recognized in income in the period that enactment occurs. To the extent that the Company does not consider it more likely than not that a future tax asset will be recovered, it provides a valuation allowance against the excess.

Net loss per share

Basic net loss per share is computed by dividing net loss attributable to common shareholders by the weighted average number of shares of common stock outstanding during the period. The calculation of basic loss per share gives retroactive effect to an eight for one forward stock split on January 6, 2004 which resulted in 20,000,000 common shares outstanding. Diluted net loss per share takes into consideration shares of common stock outstanding (computed under basic loss per share) and potentially dilutive shares of common stock that are not anti-dilutive. At January 31, 2009 and 2008, there were 13,994,547 and 12,345,047, respectively, potentially dilutive instruments outstanding. Additionally at January 31, 2009 and 2008 if settlement of the Convertible Promissory Notes were completed by the issuance of common shares there would be 1,886,792,667 and 9,754,498 shares, respectively required to convert the notes. At January 31, 2009 and 2008 there are only 200,000,000 shares authorized. These instruments were not included in the determination of diluted loss per share as their effect was anti-dilutive.


35

LIBERTY STAR URANIUM & METALS CORP.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
- continued

NOTE 2 - Summary of significant accounting policies – continued

Recently issued accounting standards

In May 2008, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 162 “The Hierarchy of Generally Accepted Accounting Principles”. This statement identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statement of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States of America. This statement is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles”. The Company does not believe that the adoption of SFAS No. 162 will have a material effect on its results of operations or financial position.

In March 2008, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 161 “Disclosures about Derivative Instruments and Hedging Activities – an amendment of FASB Statement No. 133”. This statement changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement No. 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. This statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early adoption encouraged. This statement encourages, but does not require, comparative disclosures for earlier periods at initial adoption. The Company does not believe that the adoption of SFAS No. 160 will have a material effect on its results of operations or financial position.

NOTE 3– Mineral claims

At January 31, 2009 the Company held a 100% interest in 1,757 standard Federal lode mining claims spanning approximately 60 square miles on the Colorado Plateau Province of Northern Arizona (the “North Pipes Claims”).

At January 31, 2009 the Company held a 50% interest in standard Federal lode mining claims covering 3 breccia pipe targets on the Colorado Plateau Province of Northern Arizona. These claims are owned through the Elle Venture, a general partnership in which the Company is a 50% partner.

At January 31, 2009 the Company held an option to explore 59 standard Federal lode mining claims located at the East Silver Bell and Walnut Creek region of Arizona. The mineral claims are owned by JABA US Inc, an Arizona Corporation in which two directors of the Company are owners.

At January 31, 2009 the Company held a 100% interest in 707 Alaska State mining claims spanning approximately 177 square miles in the Iliamna region of Southwestern Alaska, located on the north side of the Cook Inlet, approximately 200 miles southwest of the city of Anchorage, Alaska (the “Big Chunk Claims”). At January 31, 2009 the Company held a 100% interest in 56 Alaska State mining claims spanning approximately 13.5 square miles in the Iliamna region of Southwestern Alaska, located on the north side of the Cook Inlet approximately 60 miles north of Lake Iliamna (the “Bonanza Hills Claims”).

Title to mineral claims involves certain inherent risks due to difficulties of determining the validity of certain claims as well as potential for problems arising from the frequently ambiguous conveyancing history characteristic of many mineral properties. The Company has investigated titles to all its mineral properties and, to the best of its knowledge, titles to all properties are in good standing as of January 31, 2009.


36

LIBERTY STAR URANIUM & METALS CORP.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued 

NOTE 4 – Investment in Elle Venture

The Company holds a 50% interest in Elle Venture, a general partnership with XState Resources Limited (“XState”) that was formed to explore, develop and, if warranted, mine certain US Federal lode mining claims within the 22 mile joint venture area. The Elle Venture commenced on December 15, 2006 when XState deposited $2,900,000 (“sole funding amount”) into the joint venture bank account. On July 31, 2008 the Company entered into an agreement to amend the joint venture agreement and terminate the subcontracting agreement. The Company received a $300,000 liquidating distribution in relation to the termination of the agreement. The Elle Venture mineral claims will continue to be owned 50% each by the Company and XState and the Company may be obligated to contribute funds if exploration activities were to resume on those claims. If the Company or XState is unable to make a proportional contribution then our interest or their interest in the mineral claims will be diluted.

Summary financial information of Elle Venture at:

    January 31, 2009     January 31, 2008  
Current assets $  338,122   $  2,054,884  
Other assets   -     102,858  
Total assets $  338,122   $  2,157,742  
             
Current liabilities $  -   $  277,665  
Total liabilities   -     277,665  
Partners’ capital   338,122     1,880,077  
Total liabilities and partners’ capital $  338,122   $  2,157,742  
Net loss from inception (December 15, 2006) to the period ended $  (1,625,878 ) $  (1,019,923 )

NOTE 5 – Property and equipment

The balances of our major classes of depreciable assets are:

    January 31, 2009     January 31, 2008  
Geology equipment $  418,802   $  418,802  
Drilling equipment   538,400     463,700  
Vehicles and transportation equipment   254,859     355,950  
Office furniture and equipment   68,425     93,375  
Leasehold improvements   -     24,302  
    1,280,486     1,356,129  
Less accumulated depreciation and amortization   (453,963 )   (248,854 )
             
  $  826,523   $  1,107,275  

NOTE 6 – Long-term debt

Notes payable to Chase Bank payable in aggregate monthly installments of $1,971 including interest at fixed rates of 8.9% to 9.9% maturing at various dates through September 2013, secured by liens on vehicles. Principal balances at January 31, 2009 and 2008 are $61,925 and $108,412, respectively. Carrying amount of vehicles that serve as collateral is $73,793 and $110,876 at January 31, 2009 and 2008, respectively.

Note payable to Atlas Copco payable in monthly installments of $5,436 including interest at a fixed rate of 9% through maturity in September 2010, secured by a lien on equipment. Principal balance at January 31, 2009 and 2008 is $95,937 and $145,564, respectively. Carrying amount of equipment that serves as collateral is $298,250 and $376,055 at January 31, 2009 and 2008, respectively.


37

LIBERTY STAR URANIUM & METALS CORP.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE 6 – Long-term debt - continued

Note payable to Zions First National Bank payable in monthly installments of $4,018 including interest at 7.5% through maturity in October 2012, secured by a certificate of deposit. In December 2008 the certificate of deposit was used to pay off the note balance. Principal balance at January 31, 2009 and 2008 is $0 and $191,726, respectively. Carrying amount of certificate of deposit that serves as collateral is $0 and $204,797 at January 31, 2009 and 2008, respectively.

The following is a summary of the principal maturities of long-term debt during the next five years:

For the twelve months ended January 31,      
               2010 $  77,064  
               2011   54,096  
               2012   13,775  
               2013   7,771  
               2014   5,156  
       
    157,862  
Less current maturities   (77,064 )
       
  $  80,798  

NOTE 7 – Convertible promissory notes

May 2007 Convertible Notes:

On May 11, 2007, the Company issued senior unsecured convertible two year promissory notes (“May 2007 Convertible Notes”) for gross proceeds of $4,400,000 in a private placement of its securities to institutional investors pursuant to exemptions from registration set out in Rule 506 of Regulation D under the Securities Act of 1933. The net proceeds received after placement agent fee, due diligence fee and legal fees was $4,010,238. Under the original note terms, the May 2007 Convertible Notes bore interest at 8%. Repayment of the May 2007 Convertible Notes began in February 2008 and consists of sixteen monthly principal payments of $259,375 plus accrued unpaid interest. On November 17, 2008 the Company did not have enough authorized capital to fulfill the conversion requests received from the holders of the May 2007 Convertible Notes and is in default on the note. The default interest rate on the note is increased to 15%.

Under the original note terms holders of the May 2007 Convertible Promissory Notes could have elected to convert all or a portion of their note balance before the scheduled repayment dates at a fixed rate of $0.65 per share. The Company may have elected to make repayments of the May 2007 Convertible Notes in cash or by the issuance of common stock of the Company. The conversion price for the monthly payments was the lesser of the fixed conversion price of $0.65 per share or 85% of the volume weighted average price for 10 trading days prior to the repayment date, but not less than $0.45 per share. Stock payment could not be made if the amount of shares to be issued would have exceed 33% of the aggregate daily trading volume for 7 trading days preceding the repayment date, unless waived by the holders of the May 2007 Convertible Notes. Stock payment could not be made if the holders of the May 2007 Convertible Notes owned more than 4.99% of the then outstanding common stock of the Company. In the event that a delay in delivery of exercised shares occurred, as defined in the subscription agreement, the Company agreed to pay liquidated damages of $100 per business day for each $10,000 of purchase price of shares subject to the delivery default. In the event that the Company failed to deliver the exercised shares within 7 business dates of the Delivery Date and the selling security holder purchases shares of common stock of the Company in an open market, then the Company owed in cash to the selling security holder the amount by which the selling security holders’ total purchase price including brokers’ commissions exceeded the aggregate purchase price of the shares issuable together with interest at 15% per annum.

The Company entered into the first modification agreement with the holders of the May 2007 Convertible Notes in February 2008 and then a second modification agreement in May 2008. The modification agreements were effective


38

LIBERTY STAR URANIUM & METALS CORP.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE 7 – Convertible promissory notes - continued

May 2007 Convertible Notes - continued:

from February 2008 through July 2008. The modification agreements reduced the conversion prices in order to induce the note holders to convert the note into common stock. During the year ended January 31, 2009 the Company recorded debt conversion expense of $103,437 related to the modification agreements.

On August 27, 2008 the Company entered into the third modification agreement with the holders of the May 2007 Convertible Notes. The modification agreement increased the interest rate on the May 2007 Convertible Notes to 12%. The modification agreement also reduced the fixed conversion price to $0.05 and reduced the exercise price on the detachable common stock purchase warrants issued in connection with the May 2007 Convertible Notes to $0.05 per share. The Company recorded $67,700 of additional discounts on the May 2007 Convertible Notes for the reduction in the exercise price on the detachable common stock purchase warrants. The Company was granted an exemption from making any of the monthly payments in connection with the May Notes in cash until February 2009. The Company may elect to make repayments of the May Notes in cash at 110% of the principal amount due and 100% of the other amounts then due or by the issuance of common stock of the Company. The conversion price is the lesser of the fixed conversion price of $0.05 per share or 80% of the average of the closing bid prices of the common stock for the five trading days prior to the conversion date.

The Company granted a security interest to the holders of the May 2007 Convertible Notes to all now owned and hereafter acquired right, title and interest of the Company in, to and in respect of all: Accounts, interests in goods represented by Accounts, returned, reclaimed or repossessed goods with respect thereto and rights as an unpaid vendor; contract rights; Chattel Paper; investment property; General Intangibles, Documents, Instruments, letters of credit, bankers’ acceptances or guaranties, cash moneys, deposits; securities, bank accounts, deposit accounts, credits and other property now or hereafter owned or held in any capacity by the Company, as well as agreements or property securing or relating to any of the items referred to above.

The Company incurred deferred financing costs of $457,454 in connection with the issuance of the May 2007 Convertible Notes. The deferred financing costs consist of $389,762 paid for broker fees, legal fees, due diligence fee and $67,692 for the fair value of 338,461 common stock purchase warrants issued as a broker fee. The warrants have the same terms as the detachable common stock purchase warrants issued to the holders of the May 2007 Convertible Notes and there fair value was determine using the same assumptions. The Company reported $233,127 and $178,802 of interest expense relating to the deferred financing costs during the years ended January 31, 2009 and 2008, respectively.

The May 2007 Convertible Notes are reported net of discounts. Discounts were recorded for the detachable common stock purchase warrants as well as the beneficial conversion feature. The beneficial conversion feature recorded of $1,842,734 represents the difference between the conversion price and the fair market value of the common stock on the commitment date (May 11, 2007). The holders of the May 2007 Convertible Notes were issued 6,769,228 detachable common stock purchase warrants with an exercise price of $0.05 and a life of 5 years. The exercise price may be adjusted if the Company issues other shares, warrants or stock options before the expiration of the warrants at a price less than $0.45 per share. The 6,769,228 detachable common stock purchase warrants were assigned a value of $1,421,538, estimated using the Black-Scholes valuation model. An additional $67,700 discount was recorded upon the reduction of the exercise prices of the detachable common stock purchase warrants in August 2008. The following assumptions were used to determine the fair value of the warrants using the Black-Scholes valuation model: a term of 5 years, risk-free rate of 4.56%, volatility of 60%, and dividend yield of zero. The discounts on the May 2007 Convertible Notes for the beneficial conversion feature and the detachable common stock purchase warrants are being amortized to interest expense, using the effective interest method, over the term of the May 2007 Convertible Notes. The Company reported $1,520,172 and $1,249,421 of interest expense relating to the beneficial conversion feature and the warrants discount during the years ended January 31, 2009 and 2008, respectively.


39

LIBERTY STAR URANIUM & METALS CORP.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE 7 – Convertible promissory notes - continued

May 2007 Convertible Notes - continued:

During the year ended January 31, 2008 one note holder converted $250,000 of the principal balance of their May 2007 Convertible Note and $9,699 of unpaid accrued interest at a conversion price of $0.65 per share pursuant to the original terms of the notes. The Company issued 399,537 shares of common stock related to these conversions. The debt converted was allocated $25,991 of deferred finance charges and $181,624 of discounts, and the unamortized portion of $157,269 was recorded as interest expense.

During the year ended January 31, 2009 the Company issued 150,585,301 shares of common stock and $407,349 of cash for the monthly payments and principal conversions on the May 2007 Convertible Notes. At January 31, 2009 the note holders have a balance of $831,226 of monthly payment amounts that have been deferred that are due on demand by the note holders.

The principal balance of the May 2007 Convertible Notes outstanding was $1,512,313 and $4,150,000 at January 31, 2009 and 2008, respectively. If settlement of the May 2007 Convertible Notes occurred on January 31, 2009 the Company would have been obligated to pay $1,512,313 principal payments, $48,977 accrued interest, and $831,226 deferred amount for a total of $2,392,516 in cash. If the settlement were completed by the issuance of common shares the conversion price at January 31, 2009 would have been $0.0015 per share for a total of 1,595,010,667 shares required to convert the notes, which is more than our unissued authorized capital at January 31, 2009.

August 2008 Convertible Notes:

On August 27, 2008 the Company issued Secured Convertible Promissory one year notes (“August 2008 Convertible Notes”) for gross proceeds of $414,184 to the holders of the May 2007 Convertible Notes in a private placement of its securities to institutional investors pursuant to exemptions from registration set out in Rule 506 of Regulation D under the Securities Act of 1933. The net proceeds received were $372,434. The August 2008 Convertible Notes bear interest at 12%. In November 2008, the Company did not have enough authorized shares available for issuance to make any stock repayments on this note and is considered in default. The default interest rate is increased to 15%. Repayment of the August 2008 Convertible Notes begins in February 2009 with six monthly principal payments of $59,146 plus accrued unpaid interest and one final payment of $59,308 plus accrued unpaid interest. The entire balance of the August 2008 Convertible Notes and May 2007 Convertible Notes becomes due immediately upon the Company’s receipt of net proceeds from a sale of debt or equity with a gross amount of up to $3,000,000. The holders of the August 2008 Convertible Notes may elect to convert all or a portion of their note balance before the scheduled repayment dates at a fixed rate of $0.05 per share. The Company may elect to make repayments of the August 2008 Convertible Notes in cash at 110% of the principal amount due and 100% of the other amounts then due or by the issuance of common stock of the Company. The conversion price for the monthly payments is the lesser of the fixed conversion price of $0.05 per share or 80% of the average of the closing bid prices of the common stock for the five trading days prior to the conversion date. Stock payment cannot be made if the holders of the August 2008 Convertible Notes own more than 4.99% of the then outstanding common stock of the Company. Stock payment cannot be made if the stock is not timely issued, an event of default has occurred, an exemption from registration of the resale of shares of Common Stock to be issued in payment of the Monthly Amount is not available to the Holder, or if the amount of Common Stock that would be issued in satisfaction of the Monthly Amount exceeds for the Holder and Other Holders, in the aggregate, more than 33% of the aggregate daily trading volume of the Common Stock for the seven trading days preceding such Repayment Date, as reported by Bloomberg L.P. for the Principal Market. The Company may use the proceeds for lease payments, offering expenses and other designated purposes.

The August 2008 Convertible Notes are secured by all now owned and hereafter acquired right, title and interest of the Company in, to and in respect of all: Accounts, interests in goods represented by Accounts, returned, reclaimed or repossessed goods with respect thereto and rights as an unpaid vendor; contract rights; Chattel Paper; investment property; General Intangibles, Documents, Instruments, letters of credit, bankers’ acceptances or guaranties, cash moneys, deposits; securities, bank accounts, deposit accounts, credits and other property now or hereafter owned or held


40

LIBERTY STAR URANIUM & METALS CORP.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE 7 – Convertible promissory notes - continued

August 2008 Convertible Notes - continued:

in any capacity by the Company, as well as agreements or property securing or relating to any of the items referred to above.

The Company incurred deferred financing costs of $41,750 in connection with the issuance of the August 2008 Convertible Notes. The Company reported $17,395 and $0 of interest expense relating to the deferred financing costs during the years ended January 31, 2009 and 2008, respectively.

The principal balance of the August 2008 Convertible Notes outstanding was $414,184 and $0 at January 31, 2009 and 2008, respectively. If settlement of the August 2008 Convertible Notes occurred on January 31, 2009 the Company would have been obligated to pay $414,184 principal payments and $23,489 accrued interest for a total of $437,673 in cash. If the settlement were completed by the issuance of common shares the conversion price at January 31, 2009 would have been $0.0015 per share for a total of 291,782,000 shares required to convert the notes, which is more than our unissued authorized capital at January 31, 2009.

Management considered the impact of Statement of Financial Accounting Standard No. 15 (“SFAS No. 15) and EITF 96-19 on the modification of the May 2007 Convertible Notes and the issuance of the August 2008 Convertible Notes and has determined that there has not been a troubled debt restructuring nor an extinguishment of the old May 2007 Convertible Note.

The following is a summary of the principal maturities of May 2007 Convertible Notes and August 2008 Convertible Notes:

Principal amount in default, due on demand   1,926,497  
Plus deferred amounts due on demand   831,226  
Less discounts for warrants and beneficial conversion feature   (477,292 )
       
Current portion of convertible promissory notes $  2,280,431  

NOTE 8 – Common stock

As of January 31, 2009, there were 9,051,047 whole share purchase warrants outstanding and exercisable. The warrants have a weighted average remaining life of 2.817 years and a weighted average exercise price of $0.417 per whole warrant for one common share.

Whole share purchase warrants outstanding at January 31, 2009 are as follows:

      Number of whole share     Weighted average  
      purchase warrants     exercise price per share  
  Outstanding, January 31, 2007   1,944,342   $  1.50  
  Issued   7,107,689     0.75  
  Forfeited or expired   (984 )   1.50  
               
  Outstanding, January 31, 2008   9,051,047   $  0.91  
  Issued   -     -  
               
  Outstanding, January 31, 2009   9,051,047   $  0.42  
  Exercisable, January 31, 2009   9,051,047   $  0.42  


41

LIBERTY STAR URANIUM & METALS CORP.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE 8 – Common stock - continued

On May 2, 2007 the Company issued 50,000 shares to Equititrend Advisors LLC pursuant to an agreement to perform public and investor relations services. The shares were issued to an accredited investor pursuant to exemptions from registration set out in Rule 506 of Regulation D under the Securities Act. The transactions were reported at fair value. Fair value of the shares issued was determined by a review of the Company’s stock trading price around the date of issuance and was determined to be $0.57 per share for the shares issued on May 2, 2007. The Company recorded $28,500 of public relations expense related to the stock issuance.

The Company issued 62,000 common shares to three public relations consultants on August 27, 2007 as compensation for public relations services performed. The issuance of common stock is reported at fair value. Fair value was determined to be the closing trading price on August 27, 2007, or $0.42 per common share. The Company recorded $26,040 of public relations expense related to the stock issuances.

During the year ended January 31, 2008, the Company issued 1,718,799 shares to Cornell Capital Partners pursuant to a Standby Equity Distribution Agreement (“SEDA”) in exchange for proceeds of $1,074,417, net of fees of $56,500. Cornell Capital Partners paid us 96%, or a 4% discount, of the lowest volume weighted average per share purchase price of our common stock on our principal trading market for the 5 days following each request for an advance. Shares of common stock issued pursuant to the SEDA are reported as permanent equity pursuant to SFAS No. 150 at the discounted price paid for the shares by Cornell Capital Partner, LP. Expenses of shares issued pursuant to the SEDA are reported as a reduction of additional paid-in capital. In May 2007, pursuant to the May 2007 Convertible Notes subscription agreement, the Company agreed that it would not exercise its rights under the SEDA without written consent from the Unsecured Convertible Promissory Note Holders. The Company has not issued any shares to Cornell Capital Partners after April 2007 and the SEDA expired in March 2008.

The common shares of the Company are all of the same class, are voting and entitle stockholders to receive dividends as defined. Upon liquidation or wind-up, stockholders are entitled to participate equally with respect to any distribution of net assets or any dividends that may be declared.

NOTE 9 – Stock-based compensation

The 2007 Stock Option Plan was approved and adopted by the Board of Directors on December 10, 2007. The plan allows for up to 10,000,000 shares to be granted to key employees and non-employee consultants after specific objectives are met. The 2004 Stock Option Plan was approved and adopted by the Board of Directors on December 27, 2004. The plan allows for up to 3,850,000 shares to be granted to key employees and non-employee consultants after specific objectives are met. Employees can receive incentive stock options and non-qualified stock options while non-employee consultants can receive only non-qualified stock options. The options granted vest under various provisions using graded vesting, not to exceed four years. The options granted have a term not to exceed ten years from the date of grant or five years for options granted to more than 10% stockholders. The option price set by the Plan Administration shall not be less than the fair market value per share of the common stock on the grant date or 110% of the fair market value per share of the common stock on the grant date for options granted to greater than 10% stockholders. Options remaining available for grant under the 2007 Stock Option Plan at January 31, 2009 and 2008 are 7,775,000 and 10,000,000, respectively. Options remaining available for grant under the 2004 Stock Option Plan at January 31, 2009 and 2008 are 1,131,500 and 556,000, respectively.

On May 24, 2007, the Company granted 10,000 incentive stock options to an employee. The options have an exercise price of $1.11 per share and a term of 8.875 years. The options vest 50% on the grant date, 25% on October 6, 2007 and 25% on April 6, 2008.

On August 15, 2007, the Company granted 250,000 non-qualified stock options to an investor relations consultant in exchange for future services. The options have an exercise price of $0.45 per share and a term of 3 years. The options vest 25% every three month anniversary of the grant date.


42

LIBERTY STAR URANIUM & METALS CORP.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE 9 - Stock-based compensation – continued

On May 21, 2008 the Company granted 425,000 non-qualified stock options to non-employee consultants and 3,050,000 incentive stock options to employees, officers and directors. The options have an exercise price of $0.22 per option. On June 26, 2008 the board eliminated the vesting period so the options would be fully vested effective on that date. The options have a life of ten years.

The following tables summarize the Company’s stock option activity under the 2007 and 2004 Stock Option Plans during the year ended January 31, 2009.

Incentive stock options to employees outstanding at January 31, 2009 are as follows:

                Weighted        
          Weighted     average        
    Number of     average     remaining     Aggregate  
    options     exercise price     life (years)     intrinsic value  
Outstanding, January 31, 2008   1,930,000   $  0.889              
                         
Granted   3,050,000     0.220              
Forfeited   (126,875 )   0.720              
Expired   (1,698,625 )   0.370              
                         
Outstanding, January 31, 2009   3,154,500   $  0.528     8.50   $  -  
                         
Exercisable, January 31, 2009   3,154,500   $  0.528     8.50   $  -  

Non-qualified stock options to non-employee consultants outstanding at January 31, 2009 are as follows:

                Weighted        
          Weighted     average        
    Number of     average     remaining     Aggregate  
    options     exercise price     life (years)     intrinsic value  
Outstanding, January 31, 2008   1,364,000   $  1.013              
                         
Granted   425,000     0.220              
                         
Outstanding, January 31, 2009   1,789,000   $  0.824     6.84   $  -  
                         
Exercisable, January 31, 2009   1,789,000   $  0.824     6.84   $  -  

The aggregate intrinsic value is calculated based on the January 31, 2009 stock price of $0.00181 per share.

A summary of the status of the Company’s nonvested shares as of January 31, 2009 and changes during the year ended January 31, 2009 is presented below: Incentive stock options granted to employees:

          Weighted average  
    Number of options     grant date fair value  
Nonvested at January 31, 2008   782,250   $  0.438  
Granted   3,050,000     0.100  
Forfeited   (126,875 )   0.420  
Vested   (3,705,375 )   0.160  
             
Nonvested at January 31, 2009   -   $  -  
             
Total fair value of options vested during the period            
             ended January 31, 2009       $  593,952  


43

LIBERTY STAR URANIUM & METALS CORP.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE 9– Stock-based compensation – continued

Non-qualified stock options granted to non-employee consultants:

          Weighted average  
    Number of options     grant date fair value  
Nonvested at January 31, 2008   463,500   $  0.398  
Granted   425,000     0.100  
Vested   (888,500 )   0.256  
             
Nonvested at January 31, 2009   -   $  -  
             
Total fair value of options vested during the period            
              ended January 31, 2009       $  227,015  

The Company estimates the fair value of option awards on the grant date using the Black-Scholes valuation model. The Company uses historical volatility as its method to estimate expected volatility. The Company used the following assumptions to estimate the fair value of stock option grants:

    Expected   Expected       Risk-free    
Grant date   volatility   dividend yield   Expected term   interest rate   Forfeiture rate
May 24, 2007   60%   0%   5 years   4.56%   0%
August 15, 2007   60%   0%   3 years   4.31%   0%
May 21, 2008   90%   0%   5 years   3.09%   0%

The weighted average grant date fair value of the options granted during the years ended January 31, 2009 and 2008 was $0.10 and $0.13 per option, respectively. There were no options exercised during the years ended January 31, 2009 and 2008 and the period from inception (August 20, 2001) to January 31, 2009.

Share-based compensation expense is reported in our statement of operations as follows:

                From inception  
    Twelve months     Twelve months     (August 20, 2001)
    ended     ended     to  
    January 31, 2009     January 31, 2008     January 31, 2009  
Geological and geophysical costs $  286,276   $  154,862   $  1,146,048  
Salaries and benefits   252,364     188,888     663,035  
Investor relations   37,604     14,896     52,500  
                   
  $  576,244   $  358,646   $  1,861,583  

At January 31, 2009 there is no unrecognized share-based compensation for all share-based awards outstanding.


44

LIBERTY STAR URANIUM & METALS CORP.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE 10 – Income taxes

As of January 31 the deferred tax asset is as follows:

    January 31, 2009     January 31, 2008  
             
Net operating loss carryforwards $  7,720,000   $  6,316,000  
Temporary book and tax depreciation differences   (61,000 )   (20,000 )
Temporary accrued expense differences   22,000     6,000  
Temporary incentive stock option expense differences   332,000     132,000  
Less valuation allowance   (8,013,000 )   (6,434,000 )
             
  $  -     -  

Management has elected to provide a deferred tax asset valuation allowance equal to the potential benefit due to the Company’s history of losses. When the Company demonstrates the ability to generate taxable income, management will re-evaluate the allowance. The change in the valuation allowance of $1,579,000 and $2,185,000 in the years ended January 31, 2009 and 2008 primarily represents the benefit of the change in net operating loss carry-forwards during the period.

The Company has federal and state net operating loss carry-forwards that are available to offset future taxable income. The schedule below shows the amounts and expiration dates for the net operating loss carry-forwards.

    January 31, 2009     January 31, 2008  
Federal net operating loss carry-forwards:            
           Expiring January 31, 2025 $  313,895   $  313,895  
           Expiring January 31, 2026   2,785,529     2,785,529  
           Expiring January 31, 2027   4,652,642     4,652,642  
           Expiring January 31, 2028   3,285,552     3,285,552  
           Expiring January 31, 2029   5,302,980     5,316,835  
           Expiring January 31, 2030   3,718,999     -  
             
Total Federal net operating loss carry-forwards $  20,059,597   $  16,354,453  
             
Arizona net operating loss carry-forwards:            
           Expiring January 31, 2009 $  -   $  313,895  
           Expiring January 31, 2010   2,785,529     2,785,529  
           Expiring January 31, 2011   4,652,642     4,652,642  
           Expiring January 31, 2012   3,047,057     3,285,552  
           Expiring January 31, 2013   5,271,738     5,316,835  
           Expiring January 31, 2014   3,718,999     -  
             
Total Arizona net operating loss carry-forwards $  19,475,965   $  16,354,453  


45

LIBERTY STAR URANIUM & METALS CORP.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE 10 – Income taxes - continued

A reconciliation between the provision for income taxes and the expected tax benefit using the federal statutory rate of 34% for the years ended January 31, 2009 and 2008 is as follows:

    January 31, 2009     January 31, 2008  
             
Income tax benefit at federal statutory rate $  (1,323,000 ) $  (1,802,000 )
State income tax benefit, net of effect on federal taxes   (292,000 )   (399,000 )
Permanent differences and other (federal)   29,500     12,500  
Permanent differences and other (state)   6,500     3,500  
Increase in valuation allowance   1,579,000     2,185,000  
             
Income tax expenses (benefit) $  -   $  -  

NOTE 11 – Related party transactions

The Company entered into the following transactions with related parties during the year ended January 31, 2009:

Paid or accrued $5,552 in rent. We rented an office from an officer on a month-to-month basis for $459 per month. Accrued $42,500 of unpaid wages to Jim Briscoe our President and CEO.

Receivable of $1,888 from Jim Briscoe our President and CEO, the receivable is due on demand and is non-interest bearing.

During the years ended January 31, 2009 and 2008, the Company incurred $599,566 and $543,337, respectively for reimbursement of subcontracting costs from the Elle Venture, a general partnership in which the Company is a 50% partner, pursuant to the subcontracting agreement to perform the duties as the Manager of the Elle Venture. Subcontracting costs reimbursed from Elle Venture are reported as a reduction of our geological and geophysical exploration costs.

The Company entered into an option agreement in April 2008 with JABA US Inc, an Arizona Corporation in which two directors of the Company are owners of JABA US Inc. The option agreement grants the Company the exclusive right and option to acquire a 100% undivided interest in 26 Federal lode mining claims in the East Silver Bell area northwest of Tucson, AZ, 33 Federal lode mining claims in the Walnut Creek area near Tombstone, AZ, and 2 private parcels in the Beatty area of Nevada. In the event that there is a commencement of commercial production a royalty ranging from 2% to 10% of net smelter returns will be payable to JABA US Inc. The Company is required to maintain the claims in good standing and pay the annual rentals of up to $8,000 during the option period which ends no later than January 1, 2011. The Company agrees to make $175,000 in exploration expenditures on or before dates to be determined by the Company, but no later than January 1, 2011. In September 2008 the Company assigned their option to explore the Beatty area claims to NPX Metals Inc, a privately owned company, in exchange for $100,000 cash and 100,000 shares of NPX Metals Inc. common stock valued at $25,000. No exploration expenditures have been paid or incurred during the year ended January 31, 2009. During the year ended January 31, 2009 annual rentals of $7,375 were paid to extend the life of the 33 Federal lode mining claims through September 2009.

The Company owns common stock in Mayo Gold Explorations, a privately owned corporation in which our President and CEO is a board member. The investment is recorded on the cost method. At January 31, 2009 and 2008 the investment balance is $25,000 and $0, respectively, and is reported on the balance sheet as other assets.

The Company entered into the following transactions with related parties during the year ended January 31, 2008:

Paid or accrued $5,991 in rent. We rented an office from an officer on a month-to-month basis for $499 per month.


46

LIBERTY STAR URANIUM & METALS CORP.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE 11 – Related party transactions - continued

The Company has a receivable balance due from Elle Venture, a general partnership in which the Company is a 50% partner, for subcontracting and drilling costs incurred by the Company in December 2007 and January 2008. The receivable is unsecured, non-interest bearing and due on demand. Balance at January 31, 2008 is $277,665.

The Company entered into an option agreement with JABA US Inc, an Arizona Corporation in which two directors of the Company are owners of JABA US Inc. The option agreement grants the Company the exclusive right and option to acquire a 100% undivided interest in 26 Federal lode mining claims in the East Silver Bell area northwest of Tucson, AZ and 33 Federal lode mining claims in the Walnut Creek area near Tombstone, AZ for $7,375 paid at the execution of the agreement in December 2007 and a royalty payable ranging from 2% to 10% of net smelter returns in the event that there is a commencement of commercial production. The Company is required to maintain the claims in good standing and pay the annual rentals of $7,375 during the option period which ends no later than January 1, 2011. The Company agrees to make $175,000 in exploration expenditures on or before dates to be determined by the Company, but no later than January 1, 2011. No exploration expenditures have been paid or incurred during the year ended January 31, 2008.

NOTE 12 – Commitments

The Company is required to perform annual assessment work in order to maintain the Big Chunk and Bonanza Hills Alaska State mining claims. If annual assessment work is not performed the Company must pay the assessment amount in cash in order to maintain the claims. Completion of annual assessment work in the amount of $400 per ¼ section (160 acre) claim or $100 per ¼ -¼ section (40 acre) claim extends the claims for a one-year period from the staking of claims. Assessment work performed in excess of the required amount may be carried forward for up to four years to satisfy future obligations. The Company paid $27,950 and utilized labor carryforwards from prior assessment work to pay the 2008 liability. The Company estimates that the required annual assessments to maintain the claims for 2009 will be approximately $298,600.

The annual state rentals for the Big Chunk and Bonanza Hills Alaska State mining claims vary from $25 to $200 per mineral claim. The rental period begins at noon September 1st through the following September 1st and annual rental payments are due on November 30th of each year. Annual rent is due in full within 45 days of staking a new claim and covers the period from staking until the next September 1st. Claims that are staked in accordance with AS 38.05.195(b)(1) meridian, township, range, section and claim system location “MTRSC” receive a one-time only credit of 50% of the second year’s rent payment. Our Alaska claims are all MTRSC claims eligible for the 50% rental credit in the second rental year. Rentals for the period from September 1, 2008 through September 1, 2009 of $133,750 have been paid. The estimated state rentals due by November 30, 2009 for the period from September 1, 2009 through September 1, 2010 are $133,750. Alaska State production royalty is three percent of net income. State law prescribes that after a 3.5 -year exemption from state taxes a metal mine is liable for a 15% state licensing tax on net income from the mine.

The Company is required to pay annual rentals for its Federal lode mining claims for the North Pipes project in the State of Arizona. The rental period begins at noon on September 1st through the following September 1st and rental payments are due by the first day of the rental period. The annual rental is $125 per claim. Additional fees of $45 per claim are due in the first year of filing a Federal lode mining claim along with the first year’s rent. Rentals for the period from September 1, 2008 to September 1, 2009 of $219,625 have been paid. The estimated rentals due for the period from September 1, 2009 to September 1, 2010 due by the first day of the rental period are $219,625.


47

LIBERTY STAR URANIUM & METALS CORP.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE 12 – Commitments - continued

In November 2006, the Company began renting its previous office space. The lease requires monthly payments of $3,789. In September 2008 the Company exercised its option to renew the lease for an additional two year term at an increase of 3.5% in rent per year. During the year ended January 31, 2009 and 2008 the Company recognized rent expense of $45,468 and $44,188, respectively, related to this lease. In January 2009 the Company vacated the premises. The landlord has not released the Company from its obligations related to the two year renewal. Future minimum lease payments under this noncancelable lease for the twelve months ended January 31, 2010 are $45,907 and the twelve months ended January 31, 2011 are $38,256.

The Company entered into a vehicle lease in October 2005. The lease requires a down payment of $5,458 and monthly payments of $392 through March 2009. For the years ended January 31, 2009 and 2008 the Company recognized rent expense of $4,700 for each year related to this lease. Future minimum lease payments under this noncancelable lease for the twelve months ended January 31, 2010 are $1,175.

NOTE 13 – Supplemental disclosures with respect to cash flows

The significant non-cash investing and financing transactions for the twelve month period ended January 31, 2009 were as follows:

Issued 30,000 shares of common stock valued at $9,000 of debt conversion expense to investors who participated in the first modification agreement to the May 2007 Convertible Notes.

Issued 150,585,301 shares of common stock as repayment of $1,520,234 principal portion and $319,277 interest portion of the monthly payments on the May 2007 Convertible Notes.

Recorded $94,437 of debt conversion expense for additional discount to original conversion price extended to the holders of the May 2007 Convertible Notes as an inducement to convert.

Recorded $67,700 additional discount on the May 2007 Convertible Notes for the reduction in the exercise price of the detachable stock purchase warrants.

Stock option compensation recorded at $576,244 for options issued to employees and consultants.

Reported $25,000 of other income from the receipt of 100,000 shares of common stock included in “Other assets” in the accompanying financial statements from NPX Metals Inc. for assignment of our rights to the exploration of the Beatty claims pursuant to our option agreement with JABA US, Inc.

Deferred financing charges of $41,750 were deducted from the proceeds we received on the sale of August 2008 Convertible Notes.

The significant non-cash investing and financing transactions for the twelve month period ended January 31, 2008 were as follows:

Purchased vehicles and equipment in exchange for long-term financing of $238,000.

Purchased equipment in exchange for a receivable due in the amount of $7,875.

Stock option compensation recorded at $358,646 for options issued to employees and consultants.

Issued 112,000 shares of common stock in exchange for public relations consulting services reported at fair value of $54,540.


48

LIBERTY STAR URANIUM & METALS CORP.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE 13 – Supplemental disclosures with respect to cash flows - continued

The significant non-cash investing and financing transactions for the twelve month period ended January 31, 2008 – continued:

Issued 338,461 whole share common stock purchase warrants valued at $67,692 for a broker fee paid in connection with the sale of the Unsecured Convertible Promissory Notes.

Issued 6,769,228 whole share common stock purchase warrants valued at $1,353,846 in connection with the sale of the Unsecured Convertible Promissory Notes.

The Company recorded $389,762 of deferred financing charges that was net against the proceeds from the sale of Unsecured Convertible Promissory Notes.

The Company recorded a beneficial conversion feature in the amount of $1,842,734 in relation to the sale of Unsecured Convertible Promissory Notes.

Issued 399,537 shares of common stock for conversion of $250,000 principal amount of Unsecured Convertible Promissory Notes plus accrued interest of $9,699. The company recorded interest expense of $157,269 for the unamortized discounts and unamortized deferred financing charges related to the conversion.

NOTE 14 – Segment information

The Company's operations were conducted in one reportable segment, being the acquisition and exploration of mineral claims, in the United States of America.

NOTE 15 – Financial instruments

The Company's financial instruments consist of cash and cash equivalents, accounts payable, accrued liabilities, convertible notes payable, notes payable and a capital lease obligation. It is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. The fair value of these financial instruments approximates their carrying values based on their short-term maturities or respective interest rates.

NOTE 16 – Going concern

The Company is in the exploration stage, has incurred losses from operations, requires additional funds for further exploratory activity prior to attaining a revenue generating status, and is in default on its convertible promissory notes. There are no assurances that a commercially viable mineral deposit exists on any of our properties. In addition, the Company may not find sufficient ore reserves to be commercially mined. As such, the Company's auditors have expressed an uncertainty about the Company's ability to continue as a going concern in their opinion attached to our audited financial statements for the fiscal year ended January 31, 2009.

Management is working to secure additional funds through the exercise of stock warrants already outstanding, equity financings or joint venture agreements. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.


49

Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.

During the two most recent fiscal years, and in the subsequent interim periods, there were no disagreements with Semple, Marchal & Cooper, LLP on any matters of accounting principles or practices, financial statement disclosure, or auditing scope and procedures which, if not resolved to the satisfaction of Semple, Marchal & Cooper, LLP would have caused Semple, Marchal & Cooper, LLP to make reference to the matter in their report.

Item 9A(T). Controls and Procedures.

As required by Rule 13a-15 under the Exchange Act, our management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures at January 31, 2009, which is the end of the period covered by this report. This evaluation was carried out by our management with the participation of our principal executive officer and principal financial officer, Mr. James Briscoe. Based on this evaluation, Mr. Briscoe has concluded that the design and operation of our disclosure controls and procedures were effective as of the end of the period covered by this report.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by our company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Management's Report on Internal Control over Financial Reporting

Management of our company is responsible for establishing and maintaining adequate internal control over financial reporting for the company, as such term is defined in the Securities Exchange Act Rule 13a-15(f). Our principal financial officer and principal executive officer, Mr. James Briscoe conducted an evaluation of the effectiveness of our internal control over financial reporting as of January 31, 2009 as required by the Securities Exchange Act of 1934 Rule 13a-15(c). In making this assessment, our principal financial officer and principal executive officer used the criteria set forth in the framework in “Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the evaluation conducted under the framework in “Internal Control – Integrated Framework.” Our principal financial officer and principal executive officer concluded that our company’s internal control over financial reporting was effective, as of January 31, 2009, in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

This report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our company’s registered public accounting firm pursuant to temporary rules of the SEC that permit our Company to provide only management’s report in this Annual Report on Form 10-K.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting or in other factors that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting in our most recent fiscal quarter.

Item 9B. Other Information.

None.


50

PART III

Item 10.           Directors, Executive Officers and Corporate Governance.

All directors of our company hold office until the next annual meeting of the stockholders or until their successors have been elected and qualified. The officers of our company are appointed by our board of directors and hold office until their death, resignation or removal from office. Our directors, executive officers and significant employees, their ages, positions held, and duration as such, are as follows:


Name
Position Held with the
Company

Age
Date First Elected
or Appointed
James Briscoe President, Chief Executive Officer, Chief Financial Officer, Chairman of the Board and Director 67 February 3, 2004
Gary Musil Secretary and Director 58 October 23, 2003
John Guilbert Director 77 February 5, 2004

James Briscoe - Chief Executive Officer, Chief Financial Officer, President, Chairman of the Board and Director

Mr. Briscoe was appointed as our Chief Executive Officer, President, Chairman and a director on February 3, 2004. Mr. Briscoe became the interim Chief Financial Officer on July 31, 2008. Mr. Briscoe is a Registered Professional Geologist in the states of Arizona and California. From 1996 to April 2005, Mr. Briscoe was the Vice President of Exploration, and Chairman of the Board of JABA Exploration Inc., a TSX Venture Exchange Canadian public company. Mr. Briscoe was also the President, Chief Executive Officer and a Geologist of JABA (US) Inc. and President of Compania Minera JABA, S.A. de C.V. in Mexico. Compania Minera JABA, S.A. de C.V. is no longer active and is in the process of dissolution. During the periods of time indicated below, Mr. Briscoe served in the positions listed for the following two Canadian public companies:

Company Title From To
       
1. Excellon VP Exploration April 1994 January 1996
2. JABA Inc. CEO January 1980 April 2005

Gary Musil – Secretary and Director

Mr. Gary Musil was appointed as one our directors on October 23, 2003 and is presently our corporate Secretary. Mr. Musil was our Chief Executive Officer and Chief Financial Officer from October 23, 2003 to February 3, 2004. Mr. Musil has more than 30 years of management and financial consulting experience. Mr. Musil has served as an officer and director on numerous public mining companies since 1988. This experience has resulted in his overseeing exploration projects in Peru, Chile, Eastern Europe (Slovak Republic), British Columbia, Ontario, Quebec and New Brunswick (Canada). Prior to this, he was employed for 15 years with Dickenson Mines Ltd. and Kam-Kotia Mines Ltd. as a controller for the producing silver/lead/zinc mine in the interior of British Columbia, Canada. Mr. Musil currently serves as an officer/director of four TSX Venture Exchange public companies in Canada. Mr. Musil has been the President, Chief Executive Officer, Chief Financial Officer and a director of International Montoro Resources Inc., a TSX Venture company and a reporting issuer in Canada, since February 1999. Mr. Musil has been the chief financial officer and secretary and a director of Belmont Resources Inc., a TSX Venture company and a reporting issuer in Canada, since August 1992. Mr. Musil has been the chief financial officer and a director of Megastar Development Corp, a TSX Venture company and a reporting issuer in Canada, since July 2006. Mr. Musil has been the Chief Financial Officer and secretary of Highbank Resources Ltd., a TSX Venture company and a reporting issuer in Canada, since December 1988.


51

John Guilbert – Director

Dr. Guilbert was appointed as one of our directors on February 5, 2004. Dr. Guilbert is a Professor Emeritus at the University of Arizona and is a world-renowned geologist and author and a co-developer of the Lowell-Guilbert porphyry copper model and recipient of two mining awards, the R.A.F. Penrose Medal and the D.C. Jackling Award. Dr. Guilbert has served as a director of Excellon Inc. a Vancouver Stock Exchange listed company from 1992 – 1996. Dr. Guilbert has served as a Board Chairman and director for JABA Inc., an Alberta Stock Exchange (later CDNX then TSX) listed company from 1996 – 2002.

Family Relationships

There are no family relationships among our directors or officers.

Board and Committee Meetings

The board of directors of our company held thirteen formal meetings in the year ended January 31, 2009 and seven formal meetings in the year ended January 31, 2008. All proceedings of the board of directors were conducted by resolutions consented to in writing by all the directors and filed with the minutes of the proceedings of the directors. Such resolutions consented to in writing by the directors entitled to vote on that resolution at a meeting of the directors are, according to the Nevada General Corporate Law and the By-laws of our company, as valid and effective as if they had been passed at a meeting of the directors duly called and held.

There have been no material changes to the procedures by which our shareholders may recommend nominees to our board of directors during the year ended January 31, 2009. Shareholders may contact our President, Jim Briscoe, to recommend nominees to our board of directors.

For the year ended January 31, 2009 our only standing committee of the board of directors was our audit committee. We do not have a nominating committee or a compensation committee.

Audit Committee

Currently our audit committee consists of our entire board of directors, James Briscoe, Gary Musil, and John Guilbert. We do not have a separately-designated standing audit committee established in accordance with section 3(a)(58)(A) of the Exchange Act.

During fiscal years ended January 31, 2009 and January 31, 2008, there were no special meetings held by this committee. The business of the Audit Committee was conducted by resolutions consented to in writing by all the members of the board and filed with the minutes of the proceedings of the board.

Audit Committee Financial Expert

Our board of directors has determined that it does not have a member of its board of directors or audit committee that qualifies as an "audit committee financial expert" as defined in Item 407(d)(5)(ii) of Regulation S-K, or who is "independent" as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act of 1934, as amended.

We believe that the members of our board of directors are collectively capable of analyzing and evaluating our consolidated financial statements and understanding internal controls and procedures for financial reporting. In addition, we believe that retaining an independent director who would qualify as an "audit committee financial expert" would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development and the fact that we have not generated any material revenues to date.

Involvement in Certain Legal Proceedings

Our directors, executive officers and control persons have not been involved in any of the following events during


52

the past five years:

1.

any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

   
2.

any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offences);

   
3.

being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

   
4.

being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

Section 16(a) Beneficial Ownership Compliance

Section 16(a) of the Securities Exchange Act requires our executive officers and directors, and persons who own more than 10% of our common stock, to file reports regarding ownership of, and transactions in, our securities with the Securities and Exchange Commission and to provide us with copies of those filings. Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that during the year ended January 31, 2009, all filing requirements applicable to its officers, directors and greater than 10% percent beneficial owners were complied with, with the exception of the following:


Name
Number of Late
Reports
Number of Transactions Not
Reported on a Timely Basis
Failure to File
Requested Forms
James Briscoe 1(1) 1(1) Nil
Gary Musil 2(1)(2) 2(1)(2) Nil
John Guilbert 2(1)(2) 2(1)(2) Nil
Alaska Star Minerals LLC 2(1)(2) 2(1)(2) Nil

(1)

The named officer, director or greater than 10% stockholder, as applicable, filed a late Form 3 - Initial Statement of Beneficial Ownership of Securities.

   
(2)

The named officer, director or greater than 10% stockholder, as applicable, filed a late Form 4 - Statement of Changes in Beneficial Ownership of Securities.

Code of Ethics

Effective March 15, 2004, our company's board of directors adopted a Code of Business Conduct and Ethics that applies to, among other persons, our company's president and secretary (being our principal executive officer, principal financial officer and principal accounting officer), as well as persons performing similar functions. As adopted, our Code of Business Conduct and Ethics sets forth written standards that are designed to deter wrongdoing and to promote:

1.

honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

   
2.

full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to, the Securities and Exchange Commission and in other public communications made by us;

   
3.

compliance with applicable governmental laws, rules and regulations;



53

4.

the prompt internal reporting of violations of the Code of Business Conduct and Ethics to an appropriate person or persons identified in the Code of Business Conduct and Ethics; and

   
5.

accountability for adherence to the Code of Business Conduct and Ethics. Our Code of Business Conduct and Ethics requires, among other things, that all of our company's Senior Officers commit to timely, accurate and consistent disclosure of information; that they maintain confidential information; and that they act with honesty and integrity.

In addition, our Code of Business Conduct and Ethics emphasizes that all employees, and particularly Senior Officers, have a responsibility for maintaining financial integrity within our company, consistent with generally accepted accounting principles, and federal and state securities laws. Any Senior Officer who becomes aware of any incidents involving financial or accounting manipulation or other irregularities, whether by witnessing the incident or being told of it, must report it to our company. Any failure to report such inappropriate or irregular conduct of others is to be treated as a severe disciplinary matter. It is against our company policy to retaliate against any individual who reports in good faith the violation or potential violation of our company's Code of Business Conduct and Ethics by another.

Our Code of Business Conduct and Ethics was filed with the Securities and Exchange Commission on March 13, 2004 as Exhibit 14.1 to our annual report. We will provide a copy of the Code of Business Conduct and Ethics to any person without charge, upon request. Requests can be sent to: Liberty Star Uranium & Metals Corp., 5610 E Sutler Ln, Tucson, Arizona 85712.

Item 11.           EXECUTIVE COMPENSATION.

Following are the particulars of all compensation paid or accruing to our named executive officers for the last two fiscal years ended.

Summary Compensation Table


Name and
Principal
Position



Year


Salary
(US$)


Bonus
(US$)

Stock
Awards
(US$)

Option
Awards
(US$)(2)
Nonequity
Incentive Plan
Compensation
(US$)
Non-qualified
Deferred
Compensation
Earnings (US$)

All Other
Compensation
(US$)(1)


Total
(US$)
James Briscoe
Principal
Executive Officer,
President, CEO,
Chairman and
Director




2009
2008




85,000
120,000




Nil
28,385




Nil
Nil




30,000(3)
Nil




Nil
Nil




Nil
Nil




42,500(8)
Nil




$157,500
$148,385
Jon Young
Former Principal
Financial Officer,
CFO, Director,
and Treasurer



2009
2008



18,000
36,000



Nil
Nil



Nil
Nil



10,000(4)
Nil



Nil
Nil



Nil
Nil



10,200(9)
Nil



$38,200
$36,000
Gary Musil
Secretary and
Director

2009
2008

Nil
Nil

Nil
Nil

Nil
Nil

15,000(5)
Nil

Nil
Nil

Nil
Nil

Nil
Nil

$15,000
Nil
David Boyer
Former Manager
Arizona
Exploration


2009
2008


52,500
91,667


Nil
1,461


Nil
Nil


50,000(6)
Nil


Nil
Nil


Nil
Nil


Nil
Nil


$102,500
$93,128


54


Name and
Principal
Position



Year


Salary
(US$)


Bonus
(US$)

Stock
Awards
(US$)

Option
Awards
(US$)(2)
Nonequity
Incentive Plan
Compensation
(US$)
Non-qualified
Deferred
Compensation
Earnings (US$)

All Other
Compensation
(US$)(1)


Total
(US$)
Erik Murdock
Geologist and GIS
Specialist

2009
2008

59,625
77,450

Nil
Nil

Nil
Nil

35,000(7)
2,000(7)

Nil
Nil

Nil
Nil

Nil
Nil

$94,625
$79,450

(1)

The value of perquisites and other personal benefits, securities and property for the officers that do not exceed the lesser of $10,000 or 10% of the total of the annual salary and bonus and is not reported herein.

   
(2)

The Company granted options on April 6, 2006 that are exercisable at a price of $1.11 per share until April 6, 2016, and vest on the basis of 25% of the options on each of the 6 month anniversaries from the date of granting. The Company also granted options on December 8, 2006, and are exercisable at a price of $0.72 per share until December 8, 2016, and vest on the basis of 25% of the options on each of the 6 month anniversaries from the date of granting. The Company granted options on May 24, 2007 that are exercisable at a price of $1.11 per share until April 6, 2006, and vest on the basis of 50% on the grant date, 25% on October 6, 2007 and another 25% on April 6, 2008. The Company granted options on May 21, 2008 that are exercisable at a price of $0.22 per share until May 21, 2018, and vested 100% on June 26, 2008.

   
(3)

Mr. Briscoe was awarded 300,000 incentive stock options on May 21, 2008 with a grant date fair value of $0.10 per share. The assumptions used to determine the grant date fair value can be found in Note 9 to our audited consolidated financial statements.

   
(4)

Mr. Young was awarded 100,000 incentive stock options on May 21, 2008 with a grant date fair value of $0.10 per share. The assumptions used to determine the grant date fair value can be found in Note 9 to our audited consolidated financial statements.

   
(5)

Mr. Musil was awarded 150,000 incentive stock options on May 21, 2008 with a grant date fair value of $0.10 per share. The assumptions used to determine the grant date fair value can be found in Note 9 to our audited consolidated financial statements.

   
(6)

Mr. Boyer was awarded 500,000 incentive stock options on May 21, 2008 with a grant date fair value of $0.10 per share. The assumptions used to determine the grant date fair value can be found in Note 9 to our audited consolidated financial statements. All of Mr. Boyer’s options were forfeited or cancelled after his termination of employment.

   
(7)

Mr. Murdock was awarded 350,000 incentive stock options on May 21, 2008 with a grant date fair value of $0.10 per share and 10,000 incentive stock options on May 24, 2007 with a grant date fair value of $0.20 per share. The assumptions used to determine the grant date fair value can be found in Note 9 to our audited consolidated financial statements.

   
(8)

Mr. Briscoe’s other compensation represents accrued and unpaid wages at January 31, 2009.

   
(9)

Mr. Young’s other compensation represents consulting fees paid to Mr. Young after he terminated his position as Chief Financial Officer and Director.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth for each named executive officer certain information concerning the outstanding equity awards as of January 31, 2009.


55

  Option Awards  Stock Awards










Name





Number of
Securities
Underlying
Unexercised
Options
Exercisable





Number of
Securities
Underlying
Unexercised
Options
Unexercisable

Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options








Option
Exercise
Price








Option
Expiration
Date





Number of
Shares or
Units of
Stock that
Have Not
Vested






Market Value
of Shares or
Units of Stock
that Have Not
Vested

Equity
Incentive Plan
Awards :
Number of
Unearned
Shares, Units
or Other
Rights that
Have Not
Vested
Equity
Incentive Plan
Awards :
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights that
Have Not
Vested
James Briscoe 300,000 Nil Nil $0.22 5/21/2018 Nil Nil Nil Nil
Jon Young 100,000 Nil Nil $0.22 5/21/2018 Nil Nil Nil Nil
Jon Young 120,000 Nil Nil $1.678 12/27/2014 Nil Nil Nil Nil
Jon Young 75,000 Nil Nil $1.11 4/6/2016 Nil Nil Nil Nil
Jon Young 215,000 Nil Nil $0.72 12/8/2016 Nil Nil Nil Nil
Gary Musil 150,000 Nil Nil $0.22 5/21/2018 Nil Nil Nil Nil
Gary Musil 17,000 Nil Nil $1.678 12/27/2014 Nil Nil Nil Nil
Gary Musil 21,000 Nil Nil $1.11 4/6/2016 Nil Nil Nil Nil
David Boyer Nil Nil Nil Nil Nil Nil Nil Nil Nil
Erik Murdock 350,000 Nil Nil $0.22 5/21/2018 Nil Nil Nil Nil
Erik Murdock 275,000 Nil Nil $0.72 12/8/2016 Nil Nil Nil Nil
Erik Murdock 10,000 Nil Nil $1.11 4/6/2016 Nil Nil Nil Nil

COMPENSATION PLANS

As of January 31, 2009 we had two compensation plans in place, entitled "2004 Stock Option Plan" and “2007 Stock Option Plan”. These plans have not been approved by our security holders.



Total number of
securities authorized
Number of securities to
be issued upon exercise
of outstanding options
as at January 31, 2009
Weighted-average
exercise price of
outstanding options as
at January 31, 2009
Number of securities
remaining available for
further issuance as at
January 31, 2009
3,850,000 2,718,500 $0.97 1,131,500
10,000,000 2,225,000 $0.22 7,775,000

On May 21, 2008 the Company granted 425,000 non-qualified stock options to non-employee consultants and 3,050,000 incentive stock options to employees, officers and directors. The options have an exercise price of $0.22 per option. On June 26, 2008 the board eliminated the vesting period so the options would be fully vested effective on that date. The options have a life of ten years.

On August 15, 2007, the Company granted 250,000 non-qualified stock options pursuant to the 2004 Stock Option Plan to an investor relations consultant in exchange for future services. The Options have an exercise price of $0.45 per share and a term of 3 years. The options vest 25% every three month anniversary of the grant date.


56

On May 24, 2007, the Company granted 10,000 incentive stock options to an employee in accordance with the 2004 Stock Option Plan. The options have an exercise price of $1.11 per share and a term of 8.875 years. The options vest 50% on the grant date, 25% on October 6, 2007 and 25% on April 6, 2008.

On December 8, 2006, we granted to our employees, consultants, officers and directors stock options to purchase an aggregate of 1,590,000 common shares exercisable at the price of $0.72 per share for a term of ten years. The grant of stock options was made under the terms of our 2004 Stock Option Plan.

Long-Term Incentive Plans

There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers, except that our directors and executive officers receive stock options at the discretion of our Board. We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of our Board.

We have no plans or arrangements in respect of remuneration received or that may be received by our executive officers to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control, where the value of such compensation exceeds $60,000 per executive officer.

Employment Contracts

We have not entered into any employment agreements or compensation arrangements with any of our named executive officers.

Compensation of Directors

We have no formal plan for compensating our directors for their service in their capacity as directors, although such directors are expected in the future to receive stock options to purchase common stock as awarded by our board of directors or (as to future stock options) a compensation committee which may be established. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our board of directors. Our board of directors may award special remuneration to any director undertaking any special services on our behalf other than services ordinarily required of a director. No director received and/or accrued any compensation for their services as a director, including committee participation and/or special assignments.

The following table sets forth for each director, unless such director is also a named executive officer, the particulars of all compensation paid or accruing for the last fiscal year ended.





Name
Fees
Earned or
Paid in
Cash
(US$)


Stock
Awards
(US$)


Option
Awards
(US$)(2)
Nonequity
Incentive
Plan
Compensation
(US$)
Non-qualified
Deferred
Compensation
Earnings
(US$)


All Other
Compensation
(US$)(1)



Total
(US$)
John Guilbert
Nil

Nil

10,000

Nil

Nil

Nil

$10,000

(1)

The value of perquisites and other personal benefits, securities and property for the officers that do not exceed the lesser of $10,000 or 10% of the total of the annual salary and bonus and is not reported herein.



57

(2)

Mr. Guilbert was awarded 100,000 options on May 21, 2008 with a grant date fair value of $0.10 per share. The assumptions used to determine the grant date fair value can be found in Note 9 to our audited consolidated financial statements.

Item 12.           Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

We have set forth in the following table certain information regarding our common stock beneficially owned on January 31, 2009 for (i) each shareholder we know to be the beneficial owner of 5% or more of our outstanding common stock, (ii) each of our executive officers and directors, and (iii) all executive officers and directors as a group. In general, a person is deemed to be a "beneficial owner" of a security if that person has or shares the power to vote or direct the voting of such security, or the power to dispose or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which the person has the right to acquire beneficial ownership within 60 days. As of January 31, 2009, we had outstanding 193,946,706 shares of common stock issues and outstanding.


Name and Address of Beneficial Owner
Amount and Nature of
Beneficial Ownership
Percentage
of Class(1)
James Briscoe
5610 E Sutler Lane
Tucson AZ 85712
USA
8,750,000 (2)


4.5%


Jon Young
1985 E River Road
Tucson AZ 85718
USA
Nil


0%


Gary Musil
3577 Marshall Street
Vancouver BC V5N 4S2
Canada
Nil


0%


John Guilbert
961 E Linda Vista Blvd.
Tucson AZ 85727
USA
Nil


0%


Cede & Company
PO Box 20
Bowling Green Station
New York, NY 10274
183,538,934


94.6%


Directors and Executive Officers as a Group 8,750,000 4.5%

(1)

Based on 193,946,706 shares of common stock issued and outstanding as of January 31, 2009. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Except as otherwise indicated, we believe that the beneficial owners of the common stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable.

   
(2)

These shares are held by Alaska Star Minerals LLC. James Briscoe beneficially owns 100% of the membership interest in Alaska Star Minerals LLC.

Changes in Control

We are unaware of any contract or other arrangement the operation of which may at a subsequent date result in a change in control of our company.


58

Item 13.           Certain Relationships and Related Transactions, and Director Independence.

Certain Relationships and Related Transactions

Other than as listed below, we have not been a party to any transaction, proposed transaction, or series of transactions in which the amount involved exceeds $60,000, and in which, to our knowledge, any of our directors, officers, five percent beneficial security holder, or any member of the immediate family of the foregoing persons has had or will have a direct or indirect material interest.

Director Independence

We have no directors who meet the definition set forth in Rule 4200(a)(15) of the Marketplace Rules of the NASDAQ, which defines an “independent director” generally as a personal other than an executive officer or employee of the company, or any other individual having a relationship which, in the opinion of the company’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Item 14.           Principal Accountants Fees and Services.

Audit Fees

For the fiscal year ended January 31, 2009, the aggregate fees billed by Semple, Marchal & Cooper, LLP for professional services rendered for the audit of our annual consolidated financial statements included in our annual report on Form 10-K and for the reviews of our consolidated financial statements included in Forms 10-Q were $80,086. For the fiscal year ended January 31, 2008, the aggregate fees billed by Semple, Marchal & Cooper, LLP for professional services rendered for the audit of our annual consolidated financial statements included in our annual report on Form 10-KSB and for the reviews of our consolidated financial statements included on Forms 10-QSB were $103,358.

Audit Related Fees

For the fiscal year ended January 31, 2009, the aggregate fees billed for assurance and related services by Semple, Marchal & Cooper LLP relating to the performance of the audit of our consolidated financial statements which are not reported under the caption "Audit Fees" above, was $0. For the fiscal year ended January 31, 2008, the aggregate fees billed for assurance and related services by Semple, Marchal & Cooper LLP relating to the performance of the audit of our consolidated financial statements which are not reported under the caption "Audit Fees" above, was $3,414.

Tax Fees

For the fiscal years ended January 31, 2009 and 2008, the aggregate fees billed by Semple, Marchal & Cooper, LLP for other non-audit professional services, other than those services listed above, totalled $0 in both years.

All Other Fees

We do not use Semple, Marchal & Cooper, LLP for financial information system design and implementation. These services, which include designing or implementing a system that aggregates source data underlying the financial statements or generates information that is significant to our consolidated financial statements, are provided internally or by other service providers. We do not engage Semple, Marchal & Cooper, LLP to provide compliance outsourcing services.

Effective May 6, 2003, the Securities and Exchange Commission adopted rules that require that before Semple, Marchal & Cooper, LLP is engaged by us to render any auditing or permitted non-audit related service, the engagement be:


59

  • approved by our audit committee (which consists of our entire board of directors); or

  • entered into pursuant to pre-approval policies and procedures established by the board of directors, provided the policies and procedures are detailed as to the particular service, the board of directors is informed of each service, and such policies and procedures do not include delegation of the board of directors' responsibilities to management.

The board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the board of directors either before or after the respective services were rendered.

The board of directors has considered the nature and amount of fees billed by Semple, Marchal & Cooper, LLP and believes that the provision of services for activities unrelated to the audit is compatible with maintaining Semple, Marchal & Cooper, LLP's independence.

Exhibits.

Exhibit
Number

Description of Exhibit
3.1 Articles of Incorporation(1)
3.2 Bylaws(3)
3.3 Certificate of Change to Authorized Capital(2)
3.4 Articles of Merger(2)
10.10 Joint Venture Agreement dated October 6, 2006, by and between Liberty Star and XState Resources Limited (4)
10.11 Subcontracting Agreement dated October 24, 2006, by and between Liberty Star and XState Resources Limited (5)
10.12 Form of Securities Purchase Agreement for May 11, 2007 Senior Unsecured Convertible Promissory Notes (6)
10.13 Form of Convertible Promissory Note for May 11, 2007 Senior Unsecured Convertible Promissory Notes (6)
10.14 Form of Common Stock Purchase Warrant for May 11, 2007 Senior Unsecured Convertible Promissory Notes (6)
10.15 List of Subscribers for May 11, 2007 Senior Unsecured Convertible Promissory Notes (6)
10.16 Modification Agreement to the Senior Unsecured Convertible Promissory Notes (7)
10.17 Form of Second Modification and Amendment Agreement to the Senior May 2007 Convertible Notes on May 11, 2008 (8)
10.18 Form of Third Modification and Amendment Agreement to the Senior May 2007 Convertible Notes (9)
10.19 Form of Subscription Agreement for August 28, 2008 Secured Convertible Promissory Notes (10)
10.20 Form of Secured Convertible Promissory Notes dated August 28, 2008 (10)
10.21 Form of Security Agreement for August 28, 2008 Secured Convertible Promissory Notes (10)
10.22 Form of Third Modification and Amendment Agreement to the Senior May 2007 Convertible Notes (10)
14.1 Code of Ethics(2)
21.1 Subsidiaries: Big Chunk Corp.


60


(1)

Filed as an exhibit to our Registration Statement on Form SB-2, filed with the SEC on May 14, 2002.

   
(2)

Filed as an exhibit to our Annual Report on Form 10-KSB, filed with the SEC on March 31, 2004.

   
(3)

Filed as an exhibit to our Quarterly Report on Form 10-QSB, filed with the SEC on December 14, 2007.

   
(4)

Filed as an exhibit to our Current Report on Form 8-K, filed with the SEC on October 16, 2006.

   
(5)

Filed as an exhibit to our Current Report on Form 8-K, filed with the SEC on October 27, 2006.

   
(6)

Filed as an exhibit to our Current Report on Form 8-K, filed with the SEC on May 15, 2007.

   
(7)

Filed as an exhibit to our Current Report on Form 8-K, filed with the SEC on April 23, 2008.

   
(8)

Filed as an exhibit to our Current Report on Form 8-K, filed with the SEC on April 23, 2008.

   
(9)

Filed as an exhibit to our Current Report on Form 8-K, filed with the SEC on July 31, 2008.

   
(10)

Filed as an exhibit to our Current Report on Form 8-K, filed with the SEC on September 3, 2008.

*           Filed herewith.


61

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

LIBERTY STAR URANIUM & METALS CORP.

By: /s/ James Briscoe
James A. Briscoe
Chief Executive Officer, President and Director
Chief Financial Officer
(Principal Executive Officer)
(Principal Financial Officer and Principal Accounting Officer)
Dated: May 15, 2009

Pursuant to the requirements of the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By: /s/ James Briscoe
James A. Briscoe
Chief Executive Officer, President and Director
Chief Financial Officer (Principal Executive Officer)
(Principal Financial Officer and Principal Accounting Officer)
Dated: May 15, 2009


By: /s/ Gary Musil
Gary Musil
Secretary and Director
Dated: May 15, 2009


By: /s/ John Guilbert
Dr. John Guilbert
Director
Dated: May 15, 2009


EX-31.1 2 exhibit31-1.htm CERTIFICATION Filed by sedaredgar.com - Liberty Star Uranium & Metals Corp. - Exhibit 31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, James Briscoe, of Liberty Star Uranium & Metals Corp. certify that:

1.

I have reviewed this Form 10-K of Liberty Star Uranium & Metals Corp.

   
2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

   
3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

   
4.

I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:


  (a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

     
  (b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financials statements for external purposes in accordance with generally accepted accounting principles;

     
  (c)

evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     
  (d)

disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and


5.

I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant 's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):


  (a)

all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

     
  (b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

Date: May 15, 2009

/s/ James Briscoe
James Briscoe, President, Chairman,
Chief Executive Officer, Chief Financial Officer, and Director
(Principal Executive Officer) and (Principal Financial Officer)


EX-32.1 3 exhibit32-1.htm CERTIFICATION Filed by sedaredgar.com - Liberty Star Uranium & Metals Corp. - Exhibit 32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, James Briscoe, President, Chief Executive Officer and Chief Financial Officer of Liberty Star Uranium & Metals Corp, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

the annual report on Form 10-K of Liberty Star Uranium & Metals Corp. for the period ended January 31, 2009 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

   
(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Liberty Star Uranium & Metals Corp.

Dated: May 15, 2009

/s/ James Briscoe
James Briscoe
President, Chairman, Chief Executive Officer,
Chief Financial Officer, and Director
(Principal Executive Officer) and (Principal Financial Officer)

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Liberty Star Uranium & Metals Corp. and will be retained by Liberty Star Uranium & Metals Corp. and furnished to the Securities and Exchange Commission or its staff upon request.


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