Sept 6, 2016

Answer to a LBSR Shareholder

Recently a LBSR shareholder sent our IR representative an email asking about Liberty Star’s future. Here is a summary of that communication.

Shareholder question: After days and weeks of research, I am trying to understand what makes a company like LBSR turn into a high value stock. What conditions need to be met for this to happen or scenario(s)? What do you expect the stock price to do if your Hay Mountain Project nets solid results? After drilling, if solid ore deposits are found, do you anticipate opening a mine and producing the metals that are found?

Our Answer: Mining exploration is a process. CEO/Chief Geologist James A. Briscoe has known about the Hay Mountain area for decades and yet has only recently been able to devote adequate attention to the project over the last 5 years.  This timing allowed Briscoe to use recently developed, technically advanced exploration tools, more specifically combined magnetics and electromagnetics (helicopter borne ZTEM). He was also able to take advantage of multi-element vegetation geochemistry for copper-gold-moly systems that he personally tested along with Geochemist Clark Smith and Dr. John Guilbert where two major porphyry copper districts with existing mines were able to act as control groups. Having that data at hand allowed Briscoe and his team to make assumptions about thickness of the Hay Mountain mineral body of about 6,000 feet from surface and covered areas in a way previously not available to mineral explorers.

The State of Arizona’s rigorous permitting process has added more time to the process of uncovering Hay Mountain’s true potential. We are finished with the permitting process and have the lands we need to start. We are ready for the next crucial step: exploratory drilling to determine if there is a substantial commercial ore body within the Hay Mountain Project area.

While we cannot predict accurately what our share price will go to because we do not know the grade and metallurgical recovery percent, nor the volume of mineralization, nor the price of the metals produced during the time of production.  Until me we measure the shape and average grade of the mineral deposit we cannot design the mining method.  All of these elements of the process will factor into the share price.

Our drilling program is  designed to tell us all of these things – without, of course, the predictability of the metals prices for copper, gold, molybdenum, lead, zinc, silver, uranium, thorium, rare earth metals (REEs) and numerous other elements that may be important elements used in solar cell and other specialty technologies.  However, the majority of the profit will come from base and precious metals (copper, molybdenum, gold, lead and zinc).  These elements are necessary for the existence of modern society as we know it today.  They will never go out of “style” and the needs will increase with population growth and increasing mechanism.  So, we will always have a market for our primary production and secondary (byproduct) metals such as REEs, uranium & thorium, manganese and others.

What we do know is that the geochemical and geophysical footprint of the anomalies is very large and suggests great size and thickness of mineralization.  We have compared this footprint with similar operating and dormant mines throughout the southwest and Hay Mountain may prove to be the largest, or among the largest, in North America.   All of the major elements are those that the world’s society must have for survival.  Thus, we believe highly profitable prices will endure during the decades that the mine(s) will be productive.

We believe the net present value after drilling will show an extremely large mineable body of poly-metallic mineralization (by definition an ore body).  If this definition of such “ore” is developed, and is indicated even by initial Phase 1a drilling  we do expect a substantial increase in shareholder value immediately and over time because of the activities we plan to carry out at the Hay Mountain Project.

The scenario we have right now is in the presentation titled “Near Surface Phase 1 Plan: Liberty Star’s Exploration Plan.” https://www.libertystaruranium.com/wp-content/uploads/2016/06/REVISED-SHALLOW-PHASE1-20151021revised-11162015.pdf. Our key presentations are below the “Investors” tab on our website, Libertystaruranium.com

The presentation states:

• Goal: Immediate Drilling to identify near-surface oxide minerals (particularly

copper) that are commonly associated with underlying sulfide bearing porphyry systems

• Purpose: to determine the feasibility of an open pit copper or gold heap leach, solvent

extraction and electro winning operation and/or in-situ extraction process OR possibly high-grade massive copper sulfide mine shipped directly to smelter, without or even with slight further treatment.

• Reason: timetable to this type of a small near surface mining operation is much shorter and at a substantially lower cost OR possibly shallow underground mine exploiting copper sulfide. Also at a much lower cost

[Or perhaps a heap leachable gold mineral zone as indicated by our veggie geochemistry.  We will target our first holes in this central area, which also has potential for molybdenum, some copper and other metals.  If gold is intersected and if it is recoverable by heap leaching that would be very positive to our stock price.]

• Funding: given the current economic realities in the commodities industry, Liberty Star has re-directed efforts to identify mineral development opportunities that may be brought to market more quickly and at reduced capital expenditure. The potential for near surface oxide deposits at Hay Mountain presents such a possibility, thus creating more attractive, near term, investor opportunities: and, in the longer term, may open the door for future development of much larger and deeper sulfide deposits. Other smaller higher grade mineral deposits continues with encouragement.

RISK FACTORS FOR OUR COMPANY ARE SET OUT IN OUR 10-K AND OTHER PERIODIC FILINGS FILED WITH THE SEC ON EDGAR.

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Contact:
Agoracom Investor Relations
lbsr@agoracom.com
http://agoracom.com/ir/libertystar
or
Liberty Star Uranium & Metals Corp.
Tracy Myers

520-425-1433
Investor Relations
info@libertystaruranium.com