Liberty Star Uranium and Metals Corp (OTC: LBSR): The ups and downs explained

Liberty Star Uranium and Metals Corp (OTC: LBSR) is an Arizona-based mineral exploration company engaged in the acquisition, exploration, and development of mineral properties in Arizona and the southwest USA. Currently the company controls properties which are located over what management considers some of North America’s richest mineralized regions for commercially important metals, especially copper, gold, silver, molybdenum (moly), and uranium. Liberty Star’s premiere property is the Hay Mountain Project in Cochise County, Arizona.

KEY FACTORS – HAY MOUNTAIN PROJECT

  1. Potential for discovery of a high grade and large sediment and porphyry hosted copper, gold, and moly ore body of the same type as the nearby Bisbee deposit and other commercially important ore bodies throughout southeast Arizona.
  2. Multiple targets over copper- molybdenum-gold –lead anomalies have been plotted using sophisticated ground studies including rock-chip, soil and vegetation geochemical samples assayed for 64 elements by a Certified Assay Laboratory [ALS Chemex] with normal QAQC (Quality Assurance Quality Control) and normal security & record keeping of samples per NI-43-101 requirements, airborne ZTEM geophysical surveys by Certified Geophysicists – Geotech, also 43-101 compliant, producing magnetic and electromagnetic data and 43-101 compliant technical reports from a Certified Geophysicist Geologist. XRF surface analysis is ongoing with interesting results that compare to the vegetation geochemistry previously taken
  3. Recent discovery of surface outcrops suggests near surface targets, significantly lowering development time and costs
  4. Multiple drill targets selected for diamond core drilling
  5. Drilling permits in hand

The up sides:

  • Good geology there is definitely something there. (how good is the question)
  • The location is in the middle of a bunch of other mines and the area has good mining infrastructure in place.
  • The company has been expanding their mining rights in the area.
  • They have executed several NDAs for DD this year with prospective partners who would fund the exploratory drilling.
  • SEC filings are up to date and show insider buying.

The down sides:

  • They are currently barely hanging on financially.
  • Even if they do find a partner to finance the exploratory drilling, they may not find anything worth mining.
  • Per their research papers – the most promising target is relatively deep ~300m.
  • When Liberty star first went public they owned the Big Chunk mine in AK, adjacent to the Pebble Mine. They defaulted on loans and were forced to sell/give the property to Northern Dynasty-NAK. They have been searching for capital to develop their Arizona holdings since that time.

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Tim Rolle
Investor of 6 years and Managing Editor of Money Midnight, a news outlet focused on highly profitable investment ideas and bold underground research.
Articles: 110