TUCSON, Ariz.–November 28, 2011–Liberty Star Uranium & Metals Corp. (the “Company”) (OTCBB: LBSR) is pleased to announce that our Company and our subsidiary, Big Chunk Corp., entered into a letter agreement with Northern Dynasty Minerals Ltd. (“Northern Dynasty,” “NDM”) (AMEX: NAK) which includes an agreement by Northern Dynasty to pay to the Alaska Department of Natural Resources the annual rental fees relating to the Big Chunk Super Project claims in the amount of $166,740 plus any required filing fees. The 2011 Rental constitutes a loan from Northern Dynasty to the Company and is fully secured, repayable and convertible into shares of the Company’s common stock. The Company further agreed to an amendment of the terms of the Loan and Mining Claims Sale Agreement (the “Agreement”) dated June 29, 2010 due to the delay in concluding the earn-in option and joint venture agreement.

States James Briscoe, Liberty Star’s CEO and Chief Geologist: “We have secured the Big Chunk Super Project claims for another year with the assistance of Northern Dynasty Minerals. Their further participation in the project indicates their full understanding of the possibility of commercially important targets for porphyry copper, gold and moly [Molybdenum] in lands adjacent to their Pebble property. We look forward to exploration activity in the area once substantial funding becomes available.”

The terms of the amended agreement:

1. Northern Dynasty will, on or before November 30, 2011, pay to the Alaska Department of Natural Resources the annual rental relating to the Joint Venture Claims in the amount of $166,740 plus any required filing fees (the “2011 Rental”). The 2011 Rental shall constitute a loan from Northern Dynasty to our company and will be fully secured, repayable and convertible;
2. The 2011 Rental will be deemed with effect from the date of payment thereof by Northern Dynasty, to constitute a further loan of funds by Northern Dynasty to our company and will become part of the advanced amount and will be fully secured, repayable and convertible as contemplated by the Agreement;
3. We will execute and deliver to Northern Dynasty a secured convertible promissory note in respect of the 2011 Rental which note will be effective from the date of payment of the 2011 Rental by Northern Dynasty;
4. For greater certainty, the Joint Venture Agreement was not concluded within the 60 day period specified in Section 3 of Amendment No. 2 and, as a result, the 2010 Costs and 2011 Costs were deemed with effect from September 1, 2011 to constitute further loans of funds by Northern Dynasty to our company pursuant to the terms specified in Amendment No. 2; and
5. Notwithstanding that the 2010 Costs, 2011 Costs and 2011 Rental have been deemed to constitute part of the loan, the $1,000,000 expenditure requirement in Section 3(d) of the Agreement will be deemed to be reduced by the aggregate of the 2010 Costs, 2011 Costs, 2011 Rental and interest on all such amounts. For greater certainty, as of the date of payment of the 2011 Rental, the $1,000,000 requirement in Section 3(d) of the Agreement will have been reduced by the amount of $712,756 plus filing fees payable in 2011 and interest thereon.

Promissory Note

On November 22, 2011, the Company and subsidiary, Big Chunk Corp., executed a secured convertible promissory note (the “Note”) in favor of Northern Dynasty in the amount of US$546,016. The Note bears interest at the rate of 10% per annum, compounded monthly from September 1, 2011. The Note is secured by a security interest pursuant to a General Security Agreement dated July 15, 2010 between our company and Northern Dynasty.

Provided a minimum of $1,000,000 has been expended by Northern Dynasty on earn in expenses, the Note will be convertible until repaid or deemed repaid, into common shares of our company at the 5 day volume weighted average trading price immediately prior to Northern Dynasty giving a notice of conversion less the maximum allowable discount applicable as if our company’s shares were listed on the TSX Venture Exchange.

The Note may be pre-paid by our company without penalty at any time on 10 days prior notice during which time Northern Dynasty’s conversion rights are unaffected.

A Form 8K with details regarding the amended agreement and promissory note was filed with the US Securities And Exchange Commission.

“James A. Briscoe” James A. Briscoe, Professional Geologist, AZ CA
CEO/Chief Geologist
Liberty Star Uranium & Metals Corp.

Contacts

Liberty Star Uranium & Metals Corp.
Tracy Myers, 520-425-1433 or 520-731-8786