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

4

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

5

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

6

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

7

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

NOTE 1 – Organization

Liberty Star Uranium & Metals Corp. (the “Company” or “We”) 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. At October 31, 2007 Redwall was in the start-up phase and had not begun operations. 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.

These condensed consolidated financial statements include the results of operations and cash flows of Big Chunk and Redwall from the dates of acquisition/formation. All significant intercompany accounts and transactions were eliminated upon consolidation.

These condensed 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 condensed 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 8.

NOTE 2 – Interim financial statement disclosure

The condensed consolidated financial statements included herein have been prepared by Liberty Star Uranium & Metals Corp. without audit, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”) and should be read in conjunction with our annual report on Form 10-KSB for the year ended January 31, 2007 as filed with the SEC under the Securities and Exchange Act of 1934. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted, as permitted by the SEC, although we believe the disclosures which are made are adequate to make the information presented not misleading. The condensed consolidated financial statements reflect, in the opinion of management, all normal recurring adjustments necessary to present fairly our financial position at October 31, 2007 and the results of our operations and cash flows for the periods presented.

Interim results are subject to significant seasonal variations and the results of operations for the three and nine months ended October 31, 2007 are not necessarily indicative of the results to be expected for the full year.

8

LIBERTY STAR URANIUM & METALS CORP.
(FORMERLY LIBERTY STAR GOLD CORP.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – continued 

NOTE 3 - Summary of significant accounting policies

The summary of significant accounting policies presented below is designed to assist in understanding the Company's condensed consolidated financial statements. Such condensed 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 condensed 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.

The valuation of stock-based compensation, valuation of common stock purchase warrants, value of beneficial conversion feature, and the determination of useful lives 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 condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Big Chunk and Redwall, from the date of acquisition/formation, 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 October 31, 2007 and January 31, 2007, the amount of cash in bank deposit accounts that exceeded federally insured limits was approximately $2,550,000 and $681,000, 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.

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. Property and equipment consists of office furniture and equipment, leasehold improvements, vehicles, computer equipment and field equipment.

9

LIBERTY STAR URANIUM & METALS CORP.
(FORMERLY LIBERTY STAR GOLD CORP.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – continued 

NOTE 3 - Summary of significant accounting policies - continued

Property and equipment - continued

The estimated useful lives range from 2 to 7 years. At October 31, 2007 and January 31, 2007 accumulated depreciation was $191,998 and $100,310, respectively.

Deferred finance charges

The Company capitalizes costs incurred to issue new debt as deferred finance charges. Amortization is calculated using the straight line method over the life of the related debt instrument and is included in interest expense. At October 31, 2007 and January 31, 2007 the Company has capitalized deferred finance charges of $453,851 and $0, respectively and accumulated amortization of debt issuance costs was $103,779 and $0, 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 October 31, 2007 and January 31, 2007 the Company has recorded discounts on convertible promissory notes of $3,163,888 and $0, respectively and accumulated amortization of discounts on convertible promissory notes was $725,058 and $0, 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.

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 October 31, 2007 and January 31, 2007.

10

LIBERTY STAR URANIUM & METALS CORP.
(FORMERLY LIBERTY STAR GOLD CORP.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – continued 

NOTE 3 - 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 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 October 31, 2007 and January 31, 2007, there were 12,345,047 and 5,684,342 potentially dilutive instruments outstanding, respectively, that were not included in the determination of diluted loss per share as their effect was anti-dilutive.

Recently issued accounting standards

In December 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 160 “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51”. This statement amends ARB 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. An ownership interest in subsidiaries held by parties other than the parent should be clearly identified, labeled, and presented in the consolidated statement of financial position within equity, but separate from the parent’s equity. The amount of consolidated net income attributable to the parent and to the noncontrolling interest should be clearly identified and presented on the face of the consolidated statement of income. Changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary should be accounted for similarly as equity transactions. When a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary should be initially measured at fair value. The gain or loss on the deconsolidation of the subsidiary is measured using the fair value of any noncontrolling equity investment rather than the carrying

11

LIBERTY STAR URANIUM & METALS CORP.
(FORMERLY LIBERTY STAR GOLD CORP.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – continued 

NOTE 3 - Summary of significant accounting policies – continued

Recently issued accounting standards - continued

amount of that retained investment. Entities should provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. This statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited. This statement shall be applied prospectively as of the beginning of the fiscal year in which this statement is initially applied, except for the presentation and disclosure requirement which shall be applied retrospectively for all periods presented. 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.

In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141 Revised “Business Combinations”. This statement retains the fundamental requirements in SFAS No. 141 that the acquisition method of accounting be used for all business combinations and for an acquirer to be identified for each business combination. This statement improves the relevance, representational faithfulness and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. This statement defines the acquirer as the entity that obtains control of one or more business in the business combination and establishes the acquisition date as the date the acquirer achieves control. This statement establishes principles and requirements for how the acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree. This statement also established principles and requirements for recognizing and measuring the goodwill acquired in the business combination or a gain from a bargain purchase. This statement determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This statement applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Early application is not permitted. The Company does not believe that the adoption of SFAS No. 141 Revised will have a material effect on its results of operations or financial position.

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159 “The Fair Value Option for Financial Assets and Financial Liabilities – including an amendment of FASB Statement No. 115”. This statement permits entities to choose to measure many financial instruments and certain other items at fair value at specified election dates. A business entity shall report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. A not-for-profit organization shall report unrealized gains and losses in its statement of activities or similar statement. The fair value measurement may be applied instrument by instrument and is irrevocable. Financial assets and liabilities are eligible for the fair value measurement option established by this statement except: financial assets and liabilities recognized under leases as defined in FASB Statement No. 13; deposit liabilities, withdrawable on demand, of banks, savings and loan associations, credit unions, and other similar depository institutions; financial instruments that are, in whole or in part, classified by the issuer as a component of shareholder’s equity; investments that are required to be consolidated; employers’ and plans’ obligations, postemployment benefits, employee stock options and stock purchase plans, and other forms of deferred compensation. This statement also permits fair value measurement for firm commitments that would otherwise not be recognized at inception and that involve only financial instruments, nonfinancial insurance contract and warranties that the insurer can settle by paying a third party to provide those goods or services, and host financial instruments resulting from separation of an embedded nonfinancial derivative instrument from a nonfinancial hybrid instrument. This statement is effective as of the beginning of the entity’s first fiscal year that begins after November 15, 2007. Earlier application is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007. The Company does not believe that the adoption of SFAS No. 159 will have a material effect on its results of operations or financial position.

NOTE 4 – Mineral claims

On October 31, 2007 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”). On October 31, 2007 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”).

12

LIBERTY STAR URANIUM & METALS CORP.
(FORMERLY LIBERTY STAR GOLD CORP.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – continued

NOTE 4 – Mineral claims - continued

On October 31, 2007 the Company also held a 100% interest in 1,653 standard Federal lode mining claims spanning approximately 60 square miles on the Colorado Plateau Province of Northern Arizona (the “North Pipes 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 October 31, 2007.

On October 31, 2007 the Company had staked but not yet perfected title to 140 potential standard Federal lode mining claims spanning approximately 5 square miles on the Colorado Plateau Province of Northern Arizona (“claims in progress”). The Company has 90 days from staking to make the first year’s rental payment and filing fees of approximately $170 per claim, $23,800 for all 140 claims, and complete the filing of the claims in progress with the U.S. Bureau of Land Management. If the claims in progress are not perfected within 90 days the Company may re-stake the claims otherwise title reverts back to the federal government.

NOTE 5 – 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 and, if warranted, develop certain US Federal lode mining claims within the 22 mile joint venture area. At October 31, 2007 the Elle Venture held a 100% interest in 18 standard Federal lode mining claims located on the Colorado Plateau Province of Northern Arizona (“Elle Venture Claims”). The Elle Venture commenced on December 15, 2006 and Xstate earned a 50% interest in the joint venture when Xstate deposited $2,900,000 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. After the initial $2,900,000 is expended, each party agrees to contribute to the Elle Venture expenditures in proportion to their joint venture interests until the exploration operations are completed. If a partner is unable to make a proportional contribution then that party’s interest will be diluted.

At October 31, 2007 the Company made no capital contributions to the Elle Venture and was not at risk for any of the Elle Venture losses. The investment in Elle Venture at October 31, 2007 is $0. The Elle Venture recognized no revenues from inception through October 31, 2007.

Summary financial information of Elle Venture at:

13

LIBERTY STAR URANIUM & METALS CORP.
(FORMERLY LIBERTY STAR GOLD CORP.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – continued 

NOTE 6 – Long-term debt

Note payable to Chase Bank payable in monthly installments of $471 including interest at a fixed rate of 10% through maturity in April 2011, secured by a lien on a vehicle. Principal balance at October 31, 2007 and January 31, 2007 is $16,531 and $19,407, respectively. Carrying amount of vehicle that serves as collateral is $15,085 and $18,396 at October 31, 2007 and January 31, 2007, respectively.

Note payable to Chase Bank payable in monthly installments of $658 including interest at a fixed rate of 8.9% through maturity in February 2013, secured by a lien on a vehicle. Principal balance at October 31, 2007 and January 31, 2007 is $33,046 and $36,478, respectively. Carrying amount of vehicle that serves as collateral is $32,898 and $38,820 at October 31, 2007 and January 31, 2007, respectively.

Note payable to Chase Bank payable in monthly installments of $644 including interest at a fixed rate of 8.9% through maturity in February 2012, secured by a lien on a vehicle. Principal balance at October 31, 2007 and January 31, 2007 is $27,708 and $0, respectively. Carrying amount of vehicle that serves as collateral is $27,178 and $0 at October 31, 2007 and January 31, 2007, respectively.

Note payable to Chase Bank payable in monthly installments of $669 including interest at a fixed rate of 9.9% through maturity in September 2013, secured by a lien on a vehicle. Principal balance at October 31, 2007 and January 31, 2007 is $35,839 and $0, respectively. Carrying amount of vehicle that serves as collateral is $42,594 and $0 at October 31, 2007 and January 31, 2007, 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 October 31, 2007 and January 31, 2007 is $170,962 and $0, respectively. Carrying amount of equipment that serves as collateral is $389,022 and $0 at October 31, 2007 and January 31, 2007, respectively.

Note payable to Zions First National Bank payable in monthly installments of $4,018 including interest at 7.5% through maturity in September 2012, secured by a certificate of deposit. Principal balance at October 31, 2007 and January 31, 2007 is $200,000 and $0, respectively. Carrying amount of certificate of deposit that serves as collateral is $202,500 and $0 at October 31, 2007 and January 31, 2007, respectively.

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

14

LIBERTY STAR URANIUM & METALS CORP.
(FORMERLY LIBERTY STAR GOLD CORP.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – continued 

NOTE 7– Capital lease obligation

In November 2006, the Company entered into a noncancelable capital lease with Thermo Fisher Financial Services, Inc. for a Niton XLp 532 Industrial Analyzer. The lease calls for an initial down payment of $2,894 payable at lease signing in November 2006, a $7,000 onetime payment in January 2007 and 11 monthly payments of $2,794 beginning in April 2007. The Company has recorded an asset of $39,298 related to this lease. At October 31, 2007 and January 31, 2007 amortization expense of $4,210 and $0, respectively and accumulated amortization of $4,210 and $0, respectively has been recorded in relation to this lease.

The future minimum lease payments related to this lease are as follows:

NOTE 8 – Convertible promissory notes

On May 11, 2007, the Company issued senior unsecured convertible two year promissory notes (“Unsecured Convertible Promissory 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. The Unsecured Convertible Promissory Notes bear interest at 8%. Following the occurrence of an event of default that is not cured within 20 days, the Unsecured Convertible Promissory Notes will bear an interest rate of 15% per annum beginning from the date of such occurrence through the maturity date. Repayment of the Unsecured Convertible Promissory Notes begins in November 2007 with sixteen monthly principal payments of $275,000 plus accrued unpaid interest. Holders of the Unsecured Convertible Promissory Notes may elect to convert all or a portion of their note balance before the schedule repayment dates at a fixed rate of $0.65 per share.

The Company may elect to make repayments of the Unsecured Convertible Promissory Notes in cash or by the issuance of common stock of the Company. The stock will be issued at the lesser of the fixed conversion price of $0.65 per share or 85% of the volume weighted average price for 10 days preceding the repayment date, but not less than $0.45 per share. Stock payment cannot be made if the amount of shares to be issued would exceed 33% of the aggregate daily trading volume for 7 trading days preceding the repayment date, unless waived by the holders of the Unsecured Convertible Promissory Notes. Stock payment cannot be made if the holders of the Unsecured Convertible Promissory Notes own more than 4.99% of the then outstanding common stock of the Company.

In the event that a delay in delivery of conversion shares occurs, as defined in the subscription agreement and Unsecured Convertible Promissory Note, the Company agrees 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 fails to deliver shares issuable under the Unsecured Convertible Promissory Notes 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 shall pay in cash to the selling security holder the amount by which the selling security holders’ total purchase price including brokers commissions exceeds the aggregate purchase price of the shares issuable together with interest at 15% per annum.

The Company was required to file and have declared effective a registration statement with the SEC within 140 days of the sale of the Unsecured Convertible Promissory Notes. The Company filed the registration statement and it was declared effective on September 28, 2007. The Company is required to maintain the effectiveness of the registration statement for up to two years, or until all shares have been traded by the holders of the Unsecured Convertible Promissory Notes. The proceeds of the private placement have been and will be used for working capital, exploration of mineral properties and/or acquiring additional mineral properties.

15

LIBERTY STAR URANIUM & METALS CORP.
(FORMERLY LIBERTY STAR GOLD CORP.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – continued

NOTE 8 – Convertible promissory notes - continued

The Company incurred deferred financing costs of $457,454 in connection with the issuance of the Unsecured Convertible Promissory Notes. The deferred financing costs consist of $389,762 paid for broker fees, legal fees and due diligence fee. The deferred financing costs also consist of 338,461 of common stock purchase warrants issued as a broker fee to Hunter Wise Securities. The warrants have an exercise price of $0.75 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 warrants were assigned a value of $67,692 estimated using the Black-Scholes valuation model. 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 Company reported $108,457 and $0 of interest expense for the amortization of deferred financing costs during the nine months ended October 31, 2007 and 2006, respectively.

The holders of the Unsecured Convertible Promissory Notes were issued 6,769,228 detachable common stock purchase warrants with an exercise price of $0.75 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. In the event that a delay in delivery of exercised shares occurs, as defined in the subscription agreement, the Company agrees 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 fails 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 shall pay in cash to the selling security holder the amount by which the selling security holders’ total purchase price including brokers commissions exceeds the aggregate purchase price of the shares issuable together with interest at 15% per annum.

The Unsecured Convertible Promissory Notes contain a beneficial conversion feature recorded of $1,842,734 which represents the difference between the conversion price and the fair market value of the common stock on the commitment date (May 11, 2007). The 6,769,228 detachable common stock purchase warrants were assigned a value of $1,353,846, estimated using the Black-Scholes valuation model. 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 Unsecured Convertible Promissory 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 Unsecured Convertible Promissory Notes. The Company reported $757,750 and $0 of interest expense relating to the beneficial conversion feature and the warrants discount during the nine months ended October 31, 2007 and 2006, respectively.

In October 2007 a note holder converted $45,000 of the principal balance of their Unsecured Convertible Promissory Note and $8,333 of unpaid accrued interest at a conversion price of $0.65 per share pursuant to the original terms of the notes. The Company issued 82,050 shares of common stock related to this conversion. The debt converted was allocated $4,678 of deferred finance charges and $32,692 of discounts, the unamortized portion of $29,585 was recorded as interest expense.

The principal balance of the Unsecured Convertible Promissory Notes outstanding was $4,355,000 and $0 at October 31, 2007 and January 31, 2007, respectively. If settlement of the Unsecured Convertible Promissory Notes occurred on October 31, 2007 the Company would be obligated to pay $4,355,000 principal payments and $157,424 accrued interest for a total of $4,512,424 in cash. If the settlement were completed by the issuance of common shares the conversion price at October 31, 2007 was $0.45 per share for a total of 10,027,609 shares required to convert the notes.

16

On January 17, 2007 the Company issued 150,000 shares to Equititrend Advisors LLC upon the execution of an agreement to perform public and investor relations services as an independent contractor for a period of 12 months commencing on January 9, 2007. On May 2, 2007 the Company issued 50,000 shares to Equititrend Advisors LLC. 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 $0.62 per share for the shares issued on January 17, 2007 and $0.57 per share for the shares issued on May 2, 2007. The Company recognized compensation expense of $28,500 during the nine month period ended October 31, 2007. The contract with Equititrend Advisors LLC was terminated on July 27, 2007.

17

LIBERTY STAR URANIUM & METALS CORP.
(FORMERLY LIBERTY STAR GOLD CORP.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – continued

NOTE 9– Common stock - continued

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.

On March 8, 2006, the Company entered into a Standby Equity Distribution Agreement (“SEDA”) with Cornell Capital Partners, LP. Pursuant to the Standby Equity Distribution Agreement, we may, at our discretion, periodically sell to Cornell Capital Partners shares of our common stock for a total purchase price of up to $10,000,000 for a period of up to two years. In May 2007, pursuant to the Unsecured Convertible Promissory 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. For each share of our common stock purchased under the Standby Equity Distribution Agreement, Cornell Capital Partners will pay 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 our request for an advance. If the volume weighted average price of the common stock on any day during such five (5) day period is less than 90% of the closing bid price on the trading day immediately preceding the notice date, then, the volume weighted average price on such date is excluded from the calculation and the number of shares sold and the amount of the advance are reduced by 20%. We may waive this price protection by providing Cornell Capital Partners with notice of the waiver prior to the relevant advance notice date. In addition, 5% of each cash advance will be paid to Cornell Capital Partners as a commitment fee and $500 per advance will be paid to Yorkville Advisors, LLC an affiliate of Cornell Capital Partners as a structuring fee. The amount of each advance is subject to a maximum amount of $300,000, and we may not submit a request for an advance within five trading days of a prior advance. In addition, we may not request cash advances if the shares to be issued in connection with such advances would result in Cornell Capital Partners owning more than 9.9% of our outstanding common stock. On March 8, 2006 Cornell Capital Partners received an initial commitment fee of $290,000, which was paid by the issuance of 256,637 shares of common stock. The transaction was recorded at fair value. The fair value was determined using the closing trading price on March 6, 2006 ($1.13 per share). Yorkville Advisors, LLC an affiliate of Cornell Capital Partners, received a one time structuring fee and due diligence fee totaling $20,000. Proceeds received under the Standby Equity Distribution Agreement will be used for exploration activities and working capital.

On March 8, 2006, the Company engaged Newbridge Securities Corporation, an unaffiliated registered broker-dealer, to advise it in connection with the Standby Equity Distribution Agreement. Newbridge was paid a placement agent fee of $10,000 by the issuance of 8,850 shares of common stock. The transaction was recorded at fair value. Fair value was determined using the closing trading price on March 6, 2006 ($1.13 per share).

During the year ended January 31, 2007, the Company issued 3,696,895 shares to Cornell Capital Partners pursuant to the SEDA in exchange for proceeds of $2,245,995, net of fees of $126,105.

During the nine months ended October 31, 2007, the Company issued 1,718,799 shares to Cornell Capital Partners pursuant to the SEDA in exchange for proceeds of $1,074,417, net of fees of $56,500.

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.

18

LIBERTY STAR URANIUM & METALS CORP.
(FORMERLY LIBERTY STAR GOLD CORP.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – continued

NOTE 10– Stock-based compensation

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 two 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 2004 Stock Option Plan at October 31, 2007 and January 31, 2007, are 556,000 and 110,000, respectively.

On April 6, 2006, the Company granted 950,000 non-qualified stock options to non-employee consultants and 644,000 incentive stock options to employees in accordance with the 2004 Stock Option Plan. The options have an exercise price of $1.11 per share and a term of ten years from the date of grant. The options vest 25% on each six month anniversary of the grant date.

On December 8, 2006, the Company granted 160,000 non-qualified stock options to non-employee consultants and 1,430,000 incentive stock options to employees in accordance with the 2004 Stock Option Plan. The options have an exercise price of $0.72 per share and a term of ten years from the date of grant. The options vest 25% on each six 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 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.

The following tables summarize the Company’s stock option activity under the 2004 Stock Option Plan during the period ended October 31, 2007.

Incentive stock options to employees outstanding at October 31, 2007 are as follows:

19

The aggregate intrinsic value is calculated based on the October 31, 2007 stock price of $0.351 per share.

A summary of the status of the Company’s nonvested shares as of October 31, 2007 and changes during the nine month period ended October 31, 2007 is presented below: Incentive stock options granted to employees:

20

LIBERTY STAR URANIUM & METALS CORP.
(FORMERLY LIBERTY STAR GOLD CORP.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – continued

NOTE 10– Stock-based compensation – continued

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. To estimate the fair value of the April 6, 2006 stock option grant, the Company used the following assumptions: 64% expected volatility; 0% expected dividend yield; 5 years expected term; and 4.84% risk-free interest rate. To estimate the fair value of the December 8, 2006 stock option grant, the Company used the following assumptions: 65% expected volatility; 0% expected dividend yield; 5 years expected term; and 4.53% risk-free interest rate. To estimate the fair value of the May 24, 2007 stock option grant, the Company used the following assumptions: 60% expected volatility; 0% expected dividend yield; 5 years expected term; and 4.79% risk-free interest rate. To estimate the fair value of the August 15, 2007 stock option grant, the Company used the following assumptions: 60% expected volatility; 0% expected dividend yield; 3 years expected term; and 4.31% risk-free interest rate.

The weighted average grant date fair value of the options granted during the nine month period ended October 31, 2006 was $0.64 per option. The weighted average grant date fair value of the options granted during the nine month period ended October 31, 2007 was $0.13 per option. There were no options exercised during the nine month period ended October 31, 2007 and the nine month period ended October 31, 2006 and the period from inception (August 20, 2001) to October 31, 2007. We recognized share-based compensation expense of $254,180 during the nine months ended October 31, 2007, $663,573 during the nine months ended October 31, 2006 and $1,180,874 for the period from inception (August 20, 2001) to October 31, 2007. Unrecognized share-based compensation for all share-based awards outstanding as of October 31, 2007 totaled $324,897 and is expected to be recognized over a weighted average remaining period of 0.95 years using the straight-line method.

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

NOTE 11 – Related party transactions

The Company entered into the following transactions with related parties during the period ended October 31, 2007:

Paid or accrued $4,494 in rent. We rented an office from an officer on a month-to-month basis for $499 per month.

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 two-year period from the staking of claims. The Company estimates that the required annual assessments to maintain the claims will be approximately $298,600. At October 31, 2007 approximately $276,200 of prior assessment work has been performed on the Big Chunk claims that can be applied toward the current year liability.

21

LIBERTY STAR URANIUM & METALS CORP.
(FORMERLY LIBERTY STAR GOLD CORP.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – continued

NOTE 12 – Commitments - continued

At October 31, 2007 no assessment work has been performed on the Bonanza Hills claims and approximately $22,400 of assessment work is still required to be performed or cash payment of assessments will be due.

The annual state rentals for the Big Chunk and Bonanza Hills Alaska State mining claims are $100 for each ¼ section (160 acres) claim and $25 for each ¼ -¼ section (40 acres) claim. The rental period begins at noon September 1 ^st through the following September 1 ^st and annual rental payments are due on November 30 ^th 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 1 ^st . 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, 2006 through September 1, 2007 of $72,300 have been paid. The estimated state rentals due by November 30, 2007 for the period from September 1, 2007 through September 1, 2008 are $74,650. 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 1 ^st through the following September 1 ^st 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, 2006 through September 1, 2007 for new claims perfected during the nine months ended October 31, 2007 was $77,690. The rentals paid in August 2007 for the period from September 1, 2007 through September 1, 2008 are $206,625. The estimated rentals and filing fees payable to perfect the 140 claims in progress at October 31, 2007 is $23,800.

The Company rents a warehouse on a month-to-month basis for $1,500 per month. For the nine months ended October 31, 2007 the Company recognized rent expense of $13,500 related to this lease.

In November 2006, the Company began renting its current office space. The lease requires monthly payments of $3,571 for twelve months and then monthly payments of $3,697 for twelve months. The Company has the option to renew the lease for an additional two year term at an increase of 3.5% in rent per year. During the nine months ended October 31, 2007 the Company recognized rent expense of $32,139 related to this lease. Future minimum lease payments under this noncancelable lease are as follows:

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 nine months ended October 31, 2007 the Company recognized rent expense of $3,525 related to this lease.

22

LIBERTY STAR URANIUM & METALS CORP.
(FORMERLY LIBERTY STAR GOLD CORP.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – continued 

NOTE 12 – Commitments - continued

The Company entered into a lease for lodging with Coral Cliffs Townhomes in Kanab, Utah in order to supply temporary housing for certain field personnel of the North Pipes project. The lease required monthly payments of $1,750 from May 15, 2006 through May 31, 2007. The lease was terminated on May 31, 2007. For the nine months ended October 31, 2007 the Company recognized rent expense of $7,000 related to this lease.

In May 2007, the Company entered into a lease for lodging in Fredonia, Arizona in order to supply temporary housing for certain field personnel of the North Pipes project. The lease requires monthly payments of $800 from May 2007 through June 2007 and monthly payments of $1,800 from July 2007 through June 2008. For the nine months ended October 31, 2007 the Company recognized rent expense of $8,800 related to this lease. Future minimum lease payments under this noncancelable lease for the twelve months ended October 31, 2007 are $14,400.

In October 2006, the Company entered into a Subcontracting Agreement with Xstate to perform the duties as the Manager of the Elle Venture including maintaining the joint venture bank account, pay joint venture expenses, perform the duties necessary to execute the approved work program for the joint venture claims, and prepare quarterly reports to the Elle Venture Management Committee. The Company will be compensated at agreed upon rates by the Elle Venture for the use of the Company’s personnel and resources in performing its duties under the Subcontracting Agreement.

In February 2007 the Company entered into a non-exclusive consulting contract with Hunter Wise Financial Group, LLC (“Hunter Wise”) to provide services to the Company in the areas of corporate development, financing, and consulting for a period of twelve months. Hunter Wise will receive compensation ranging from 3% to 8% of aggregate consideration for any sale, merger, acquisition, joint venture, strategic alliance, technology partnership, licensing agreement or similar agreement. For any debt investment or secured debt financing placed for the Company Hunter Wise shall receive a success fee equal to 6% of the gross proceeds received by the Company payable in cash, plus a success fee payable in Company stock equal to 3% of the gross proceeds received by the Company divided by the closing bid price of the common stock of the Company as of the date the Company receives the funds, plus purchase warrants in the Company, with a cashless exercise provision equal to 6% of the gross proceeds received by the Company exercisable at any time within 2 years from issuance at a strike price equal to 100% of the closing bid price of the common stock for the Company as of the date the Company received the funds. For any cash equity investment into the Company Hunter Wise shall receive a success fee payable in cash equal to 8% of the gross proceeds disbursed to the Company, plus a success fee payable in Company stock equal to 2% of the gross proceeds disbursed to the Company divided by the closing bid price of the common stock for the Company as of the date the Company receives the funds, plus purchase warrants in the Company with a cashless exercise provision equal to 5% of the gross proceeds disbursed to the Company divided by the lower of the price per share of the common stock of the Company as valued by the finance source for the purposes of the investment, or the closing bid price of the common stock on the date the Company received the funds exercisable at any time within 2 years from issuance at a strike price equal to the lower of 100% of the price of the common stock of the Company as valued by the finance source for the purposes of the investment or the closing bid price of the common stock on the date the Company receives the funds. At October 31, 2007 the Company paid to Hunter Wise a broker fee of $308,000 and 338,461 whole share purchase warrants, valued at $67,692, with an exercise price of $0.75 through May 11, 2012 in connection with the sale of the Unsecured Convertible Promissory Notes. The broker fee and warrants have been included in deferred financing costs and amortized over the life of the notes.

The Company entered into an investor relations agreement with Agoracom Investor Relations Corp. (“Agoracom”) in August 2007 for the performance of investor relations services for a period of twelve months beginning August 15, 2007. The Company has the option to renew the agreement for an additional twelve months under the same terms. Agoracom will receive monthly compensation of $5,000 during the term of the contract. Agoracom was also granted 250,000 non-qualified stock options pursuant to the 2004 Stock Option Plan, exercisable at $0.45 per share through August 15, 2010. The options vest 25% every three months from the grant date.

23

LIBERTY STAR URANIUM & METALS CORP.
(FORMERLY LIBERTY STAR GOLD CORP.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – continued

NOTE 12 – Commitments - continued

The Company entered into a non-exclusive consulting contract with Balanced Financial Securities (“BFS”) to provide services to the Company in the areas of corporate financing and consulting. BFS’s fees are all contingent upon the closing of debt or equity financings by a funding source referred by BFS during the term of the contract and for a period of 18 months after the termination of the contract. The contract will remain in effect until terminated by either party via written notice by certified mail. BFS will receive compensation of 5% of cash equity financings, plus 3% of incremental debt financings. BFS will also receive common stock purchase warrants to purchase common stock of the Company equal to 5% of the equity funding and exercisable at the negotiated shares price of the transaction. The Company will also pay all of BFS’s out-of-pocket expense incurred on the Company’s behalf. The Company paid $0 to BFS during the nine month period ended October 31, 2007.

NOTE 13 – Supplemental disclosures with respect to cash flows

The significant non-cash investing and financing transactions for the nine month period ended October 31, 2007 were as follows:

Purchased vehicles and equipment in exchange for long-term financing of $238,000 and cash of $219,000.

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

Stock option compensation recorded at $257,826 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.

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 82,050 shares of common stock for partial conversion of $45,000 principal amount of Unsecured Convertible Promissory Notes plus accrued interest of $8,333. The company recorded interest expense of $29,585 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 and accrued liabilities, and Unsecured Convertible Promissory Notes. 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.

24

LIBERTY STAR URANIUM & METALS CORP.
(FORMERLY LIBERTY STAR GOLD CORP.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – continued