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1

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, 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, 2010

[   ] 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 $0.00001(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 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
during the preceding 12 months. 
Yes [   ] No [X]

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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. [   ]

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.

55,222,579(1)shares
of Common Stock @ $0.002(1)= $110,445

(1) Adjusted for retroactive effect of 1 for 4
reverse stock split on September 1, 2009. Closing price on July 31, 2009 was
$0.008.

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

433,427,556 shares of Common Stock issued and outstanding
  as of May 10, 2010.

DOCUMENTS INCORPORATED BY REFERENCE

Not applicable.

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TABLE OF CONTENTS

|               |                                                                                                            |  | Page
|-------------- | ---------------------------------------------------------------------------------------------------------- |  | ----
|               | **PART I**                                                                                                 |  |     
|               |                                                                                                            |  |     
|Item 1.        | Description of Business                                                                                    |  | 4   
|Item 1A.       | Risk Factors                                                                                               |  | 6   
|Item 2.        | Description of Property                                                                                    |  | 11  
|Item 3.        | Legal
      Proceedings                                                                                    |  | 17  
|Item 4.        | (Removed and Reserved)                                                                                     |  | 17  
|               |                                                                                                            |  |     
|               | **PART II**                                                                                                |  |     
|               |                                                                                                            |  |     
|Item 5.        | Market for Common Equity and Related Stockholder Matters                                                   |  | 17  
|Item 6.        | Selected
      Financial Data                                                                              |  | 20  
|Item 7.        | Management's Discussion and Analysis of Financial
      Condition and Results of Operations                |  | 20  
|Item 7A.       | Quantitative and Qualitative Disclosures About Market Risk                                                 |  | 23  
|Item 8.        | Financial Statements                                                                                       |  | 23  
|Item 9.        | Changes In and
      Disagreements With Accountants on Accounting and Financial Disclosure                 |  | 45  
|Item 9A.       | Controls and Procedures                                                                                    |  | 45  
|Item 9B.       | Other
      Information                                                                                    |  | 45  
|               |                                                                                                            |  |     
|               | **PART
      III**                                                                                         |  |     
|Item
      10. | Directors,
      Executive Officers and Corporate Governance                                               |  | 46  
|Item
      11. | Executive
      Compensation                                                                               |  | 50  
|Item
      12. | Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters |  | 53  
|Item
      13. | Certain
      Relationships and Related Transactions, and Director Independence                            |  | 54  
|Item
      14. | Principal
      Accountant Fees and Services                                                               |  | 54  
|               | Exhibits                                                                                                   |  | 55  
|               | Signatures                                                                                                 |  | 57  

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", 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. was formerly Liberty
Star Gold Corp. and formerly Titanium Intelligence, Inc. 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 our mineral properties and others and ceased operations
when essentially all of its assets were sold in February 2010. In April 2007, we
changed our name to Liberty Star Uranium & Metals Corp. to reflect our
current concentrated efforts on uranium exploration. We are considered to be an
exploration stage company, as we have not generated any revenues from
operations.

In December 2006, we entered into a joint venture agreement
(Elle Venture) with XState Resources Limited (XState). We hold a 50%
interest in the Elle Venture, a general partnership with XState that was formed
to explore and, if warranted, develop certain mineral targets 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. We use 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. Our 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.

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. We have 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 engaged in the
extraction of a known mineral resource are in the production stage. We are 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.

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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.

We are 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 we must pay the assessment amount in cash in
order to maintain the claims. Completion of annual assessment work in the amount
of $400 per 1⁄4 section (160 acre) claim or $100 per 1⁄4 -1⁄4 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. We estimate that the required annual
assessments to maintain the claims will be approximately $298,600.

The annual state rentals for the Big Chunk and Bonanza Hills
Alaska State mining claims vary from $70 to $280 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, 2009 through September 1, 2010 of $202,440 have been
paid. The estimated state rentals due by November 30, 2010 for the period from
September 1, 2010 through September 1, 2011 are $202,440. 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.

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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 Bureau of Land Management is preparing
an environmental impact statement (EIS) addressing potential effects of
withdrawing Federal lands from locatable mineral exploration and mining near the
Grand Canyon in Arizona. Nearly 1 million acres of land managed by the BLM and
the Forest Service were segregated in July 2009 by the Secretary of Interior.
The segregation stops the location of any new mining claims for two years. In
that period, the land will be evaluated for withdrawal for up to 20 additional
years. We are 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 was
$125 per claim and increased to $140 per claim effective September 1, 2009.
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 $250,460. 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 one full time employee, one part-time employee and four
part-time consultants. Currently we employ one full time geologist who is also
our President and CEO, James Briscoe. We have two part-time accounting staff,
one part time public relations consultant, one part time geology consultant and
one part time information technology consultant.

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.

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".

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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 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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8

Risks related to our company

We were in default on the May 2007 Convertible Notes, August
2008 Convertible Notes, May 2009 Convertible Notes and the August 2009
Convertible Notes and as such the note holders may call the notes.

We were in default on the May 2007 Convertible Notes, August
2008 Convertible Notes, May 2009 Convertible Notes, and the August 2009
Convertible Notes and as such the entire obligation is reported as a current
liability. In February 2010 we modified the terms of these notes with three of
the nine note holders to extend their maturity dates to February 28, 2011with
two 180 day extensions exercisable by the holder. The three note holders who
signed the extension and modification agreement hold a majority of the
outstanding balance of all notes. The note holders have a security interest in
all assets and mineral properties and as a result we are unable to sell any
assets without prior approval from the note holders. If the note holders were to
call the notes and we were unable to satisfy the obligation the note holders
could proceed against the assets and mineral claims that collateralize the
notes. These restrictions may make it difficult for us to raise the cash
required to perform exploration activities.

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. These harmful effects have caused us to cease our exploration
program and they may not start up again, as a result we could go out of business
and 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 restart our exploration programs through
funding received from 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 restart our
exploration program on terms and at rates of interest we find acceptable and in
the best interests of our company.

If we cannot restart our exploration programs from the sale of
our equity securities or through incurring debt on acceptable terms, then 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 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.

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9

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 $20,522 and negative working
capital of $(3,625,627) as of January 31, 2010. 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, August 2008 Convertible
Notes, May 2009 Convertible Notes and August 2009 Convertible Notes, further
described in Note 6 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 when required. The Convertible Promissory Notes 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 term of the Convertible Notes, during the Exclusion Period as
defined in the notes, and during the pendency of any Event of Default as defined
in the notes. The August 2008 Convertible Notes, May 2009 Convertible Notes, and
August 2009 Convertible Notes contain restrictions that require that the August
2008, May 2007, May 2009, and August 2009 convertible notes be repaid in full
from the first $3,000,000 of financings we complete. 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. 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, 2010 is $(39,104,383). 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, 2010 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.

The existence of our mining claims depends on our ability to
fund exploratory activity or to pay fees.

Our mining claims, which are the central part of our business,
require that we either pay fees, or incur certain minimum development costs
annually, or the claims will be forfeited. Do to our current financial situation
we may not be able to meet these obligations and we could therefore lose our
claims. This would impair our ability to raise capital and would negatively
impact the value of the Company.

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. At our
shareholder meeting held on May 27, 2009 the shareholders voted to increase the
number of authorized shares to 10,000,000,000 shares of common stock with a par
value of $0.001. We filed a certificate of amendment on June 4, 2009 to increase
the number of authorized shares to 5,000,000,000 shares of common stock with a
par value of $0.001. On September 1, 2009 we completed a one for four reverse
stock split of our authorized and outstanding common stock resulting in a decrease in authorized shares to
1,250,000,000 with a par value of $0.00001. As of January 31, 2010, there were
247,656,979 of our common shares issued and outstanding. We anticipate that all
or at least some of our future funding, if any, 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.

---

10

Dilution will likely occur because of the Convertible Notes and
related common share purchase warrants that we issued on May 11, 2007 and August
14, 2009. First, the entire amount of money owed under the May 2007, August 2008
and May 2009 Convertible Notes plus 12% interest per year, may be converted into
shares of our common stock at a price that is the lesser of $0.005 per share or
80% of the average closing bid price for the five trading dates prior to the
repayment date. The entire amount of money owed under the August 2009
Convertible Notes plus 12% interest per year, may be converted into shares of
our common stock at a price that is the lesser of $0.0025 per share or 75% of
the average closing bid price for the five trading dates prior to the repayment
date. The May 2007 Convertible Notes matured on May 11, 2009 but still remain
unpaid. The August 2008 Convertible Notes matured on August 27, 2009 but still
remain unpaid. The May 2009 Convertible Notes mature on May 21, 2010. The August
2009 Convertible Notes mature on August 14, 2010. In November 2008 we were in
default on the May 2007 and August 2008 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. Three of the nine note holders signed an extension and
modification agreement to extend the maturity date of the May 2007 and August
2008 Convertible Notes to February 28, 2011. The three note holders who signed
the agreement hold a majority of the outstanding principal balances. 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 $0.005 and $0.05
per share until they expire on May 11, 2012. Third, the 338,461 common share
purchase warrants that we issued to the 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. Fourth, the 235,670,800 common share purchase warrants
that we issued to the holders of the August 2009 Convertible Notes may be
exercised at $0.005 until they expire on August 14, 2015. 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 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.

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11

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.

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, Arizona85712. 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, 2011. 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:

We hold a 100% interest in 1,775 Federal lode mining claims
strategically placed over approximately 60 square miles on the Colorado Plateau
Province of Northern Arizona. The 1,775 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.

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12

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 $140 per mining claim. To keep our existing property in good standing, we
must pay annual maintenance and rental fees of $250,460. 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)

We also hold 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.

Bonanza Hills Project (Bonanza Hills) see Figure 2:

We hold 56 mineral claims covering approximately 13.5 square
miles in Southwestern Alaska approximately 40 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:

We hold 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:

We hold 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:

We hold 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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13

Figure 1: North Pipes Super Project overview



---

14

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



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15

Claim status

We have investigated titles to all of our mineral properties
and, to the best of our knowledge, titles to all properties are in good standing
as of January 31, 2010. 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
2010. We estimate that we will be required to pay annual rentals of $202,440 by
November 30, 2010 to maintain the Alaska claims in good standing. We estimate
that we will be required to pay $250,460 by September 1, 2010 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, 2010 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, 2007 to Present.

Geophysics

We have completed PEM (Pulse Electro-magnetic) geophysical
surveys on our North Pipes Super Project claims. 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.

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16

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 our 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 our geologists on January 23rd,
24th and 25th of 2008. Geochemical analyses developed by
our employees and consultants and our 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 our target areas. Numerous target
areas display favourable signatures.

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.
|Hafsa       | 03/07         | 2         | 1012                 | Core drilling; shallow drilling did not indicate presence
      of down dropped block.                                                                                                       
|Helvia      | 03/07         | 3         | 1435                 | Core drilling; shallow drilling did not indicate presence
of down dropped block.                                                                                                             

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.

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17

Technical Studies and Drilling on the Big Chunk Super
Project, 2007 to Present.

We hired Geotech Ltd to perform 1D and 2D ZTEM geophysical
surveys in 2009. The surveys covered 315.2 sq kilometers (121.7 sq miles) and
consisted of north-south lines spaced 250 meters apart on our Big Chunk Super
Project mineral claims. To date, only one line has had 2D inversion performed on
it and 1,256 line kilometers have had 1D inversion performed on them. The 2D
line crosses a circular EM feature consistent with a typical porphyry copper
system defined in original testing of the ZTEM system in SE Arizona. This 2D
model shows a typical low responsive area, which could correspond to an ore
mineral core zone with a surrounding responsive cylinder representing a pyrite
halo typical of porphyry systems.

The remainders of the lines are being processed to yield 2D
models. In addition to the ZTEM data, our CEO and Chief Geologist, Jim Briscoe,
along with other geocontractors, will be analyzing all existing geologic,
geochemical and geophysical data sets. Our geological team will also continue
working with the geophysicists at Geotech Ltd. to identify other circular
features.

Item 3.        Legal
Proceedings.

On January 26, 2010 the we were named in a lawsuit filed with
the clerk of the Superior Court of Arizona in the County of Pima by our former
landlord B&D Ventures LLC. The former landlord is seeking to obtain damages
in the amount of $48,909 related to us terminating our lease obligation before
the end of the lease term. We vacated the premises in January 2009 and the lease
end date was November 30, 2010.

Item
4.        (Removed and Reserved)

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. On September 1,
2009 we effected a one for four reverse stock split of our authorized and issued
and outstanding common stock. As a result our authorized capital decreased to
1,250,000,000 shares of common stock with a par value of $0.00001. Our stock is
traded under a new symbol LBSR as of the opening of trading on September 1,
2009.

Since July 15, 2003, 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         
|January 31, 2010      
|October 31, 2009      
|July 31, 2009         
|April 30, 2009        
|January 31, 2009      
|October 31, 2008      
|July 31, 2008         
|April 30, 2008        

| | (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.

---

18

On January 31, 2010, the shareholders' list for our common
stock showed 74 registered stockholders and 247,656,979 shares issued and
outstanding. The closing sale price for our common stock on April 21, 2010, as
reported on the OTC Bulletin Board, was $0.0018.

Recent Sales of Unregistered Securities

We issued 76,400,000 shares of unregistered shares of common
stock to our directors and consultants on April 23, 2010 as compensation for
services performed.

We issue convertible promissory notes in private placements 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 convertible notes were issued in May 2007, August 2008, May 2009 and
August 2009. In February 2010 we modified the terms of these notes with three of
the nine note holders to extend their maturity dates to February 28, 2011 with
two 180 day extensions exercisable by the holder. The three note holders who
signed the extension and modification agreement hold a majority of the
outstanding balance of all notes. We issued detachable common stock purchase
warrants with the May 2007 and August 2009 convertible notes.

|                                                                                                |   | May 2007 Notes |  |   | August 2008 Notes |  |   | May 2009 Notes |   |   | August 2009 Notes |  
|----------------------------------------------------------------------------------------------- | - | -------------- |  | - | ----------------- |  | - | -------------- | - | - | ----------------- | -
|Principal balance as of January 31, 2010                                                        | $ | 1,873,583      |  | $ | 395,697           |  | $ | 162,344        |   | $ | 778,334           |  
|Unamortized discounts as of January 31, 2010                                                    |   | -              |  |   | -                 |  |   | (12,414        | ) |   | (192,772          | )
|Accrued interest as of January 31, 2010                                                         |   | 185,455        |  |   | 81,545            |  |   | 13,535         |   |   | 35,698            |  
|Common shares issued for conversions during the
           twelve months ended January 31, 2010 |   | 178,787,395    |  |   | 8,826,524         |  |   | 3,606,400      |   |   | 7,949,983         |  
|Common shares issued for conversions during
      the      twelve months ended January 31, 2009 |   | 37,646,325     |  |   | -                 |  |   | -              |   |   | -                 |  

We issued 109,370,577 shares of common stock for conversions of
$127,264 of principal and $24,905 of accrued interest on the Convertible Notes
from February 1, 2010 to May 7, 2010.

On February 25, 2010 we entered into an extension and
modification of the convertible promissory notes with three of the nine note
holders. The three note holders who signed the extension and modification
agreement hold a majority of the outstanding balance of all notes. The maturity
dates for those notes are extended to February 28, 2011 with two 180 day
extensions exercisable at the option of the holder.

May 2007 Convertible Notes:

On May 11, 2007, the we 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. The May 2007
Convertible Notes bear interest at 12% and 15% when in default.

We may elect to make repayments of the May 2007 Convertible
Notes in cash at 110% of the principal amount due and 100% of the other amounts
then due or by the issuance of shares of our common stock. The holders may elect
to convert amounts owed on the notes at a conversion price which is the lesser
of the fixed conversion price of $0.005 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.

August 2008 Convertible Notes:

On August 27, 2008 we 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% and 15% when in default.

We 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 shares of our common stock. The holders may elect
to convert amounts owed on the notes at a conversion price which is the lesser
of the fixed conversion price of $0.005 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.

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19

May 2009 Convertible Notes:

On May 21, 2009, we completed the sale of $170,668 principal
amount of 12% Secured Convertible Promissory Notes (May 2009 Convertible
Notes) in a private placement of its securities to subscribers pursuant to the
exemption from registration under the United States Securities Act of 1933
provided by Section 4(2), Section 4(6) and/or Rule 506 of Regulation D
promulgated under the 1933 Act, each of which represented that they are
accredited investors within the respective meanings ascribed to that term in
Rule 501(a) under the Securities Act of 1933 and pursuant to the terms of a
subscription agreement between the parties dated May 21, 2009. The net proceeds
received were $157,468.

Pursuant to the terms of the convertible secured notes and the
Subscription Agreement, interest accrues on the Notes at a rate of 12% per annum
commencing on the date of the issuance of the May 2009 Convertible Notes. The
May 2009 Convertible Notes principal must be repaid commencing October 15, 2009
in monthly amounts equal to 14.28% of the principal amount of the notes together
with interest, accrued to each monthly payment date on the outstanding note
principal. In the event a registration statement is effective or Common Stock
may be immediately resold by the noteholders without volume or other
restrictions, and an event of default is not pending then we may pay the monthly
amount with registered or unregistered common stock valued at the lesser of the
fixed conversion price of $0.005 (subject to certain adjustments), or 80% of the
average of the closing bid prices of our common stock for the five trading days
prior to the monthly payment date. We may, in any event, elect to pay the
monthly amount in cash at 110% of the principal amount due and 100% of all other
amounts then due. We must provide 10 days notice of whether payment will be made
in cash or with stock. If the notice is not timely given, the noteholders shall
have the option to elect to be paid in cash or common stock. Each monthly
payment in kind will be limited to not more than 33% of the aggregate daily
trading volume of the common stock for the 7 trading days preceding the relevant
monthly payment date. We agreed to reserve for issuance to the subscribers not
less than 175% of the amount of shares of common stock necessary to allow
conversion of all notes at the conversion price in effect from time to time.

Pursuant to the terms of the Subscription Agreement, James Briscoe,
  our CEO, agreed not to sell or otherwise dispose of his shares of our common
  stock owned by him or which he has the right to acquire for a period of two
  years from the date of the Subscription Agreement, unless sold in the open market
  for over $0.90 per share.

August 2009 Convertible Notes:

On August 14, 2009, we completed the sale of $589,177 principal
amount of 12% Secured Convertible Promissory Notes (August 2009 Convertible
Notes) to five subscribers pursuant to the exemption from registration under
the United States Securities Act of 1933 provided by Section 4(2), Section 4(6)
and/or Rule 506 of Regulation D promulgated under the 1933 Act, each of which
represented that they are accredited investors within the respective meanings
ascribed to that term in Rule 501(a) under the Securities Act of 1933 and
pursuant to the terms of a subscription agreement between the parties dated
August 14, 2009. On November 27, 2009, we modified the August 2009 Convertible
Notes so as to increase five such notes by an aggregate total of $206,075. Other
aspects of the August 14, 2009 notes remain unchanged. The net proceeds received
were $766,015. The notes mature on August 14, 2010.

Pursuant to the terms of the convertible secured notes and the
Subscription Agreement, interest accrues on the Notes at a rate of 12% per annum
commencing on the date of the issuance of the August 2009 Convertible Notes. The
August 2009 Convertible Notes principal must be repaid commencing February 15,
2010 in monthly amounts equal to 20% of the principal amount of the notes
together with interest, accrued to each monthly payment date on the outstanding
note principal. In the event a registration statement is effective or Common
Stock may be immediately resold by the noteholders without volume or other
restrictions, and an event of default is not pending then we may pay the monthly
amount with registered or unregistered common stock valued at the lesser of the
fixed conversion price of $0.0025 (subject to certain adjustments), or 75% of
the average of the closing bid prices of our common stock for the five trading
days prior to the monthly payment date. We may, in any event, elect to pay the
monthly amount in cash at 110% of the principal amount due and 100% of all other
amounts then due. We must provide 10 days notice of whether payment will be made
in cash or with stock. If the notice is not timely given, the noteholders shall
have the option to elect to be paid in cash or common stock. Each monthly
payment in kind will be limited to not more than 40% of the aggregate daily
trading volume of the common stock for the 5 trading days preceding the relevant
monthly payment date. We agreed to reserve for issuance to the subscribers not
less than 175% of the amount of our shares of common stock necessary to allow
conversion of all notes at the conversion price in effect from time to time.

---

20

The holders of the August 2009 Convertible Notes were issued
58,917,700 detachable common stock purchase warrants with an exercise price of
$0.00125 and a life of 6 years. The exercise price may be adjusted if we issue
other shares, warrants or stock options before the expiration of the warrants at
a price less than $0.005 per share.

We agreed to include at the option of each noteholder of the
May 2009 and August 2009 notes the number of shares that may be converted
pursuant to any note in any registration statement it files during such period,
ahead of the rights granted to the subscribers in the May 2007 Convertible Notes
and the subscribers in the August 2008 Convertible Notes. Noteholders are
subject to certain limitations on their rights to convert the notes. The
principal limitation is that unless waived, the holder may not, with certain
limited exceptions, convert into a number of our shares that would, together
with other shares held by the holder, exceed 4.99% of the then outstanding
shares of our common stock after such conversion.

Provisions applicable to all convertible notes:

The entire principal and interest of the May 2007, August 2008,
May 2009 and August 2009 notes will be payable upon our receipt of the net
proceeds of a $3,000,000 offering of our debt or equity. Provided an event of
default is not pending, we may prepay unconverted portions of the Note upon 20
days prior notice during which time noteholders may convert the amount of the
note noticed for prepayment at the fixed conversion price. Such payment shall be
equal to 125% of the principal amount being prepaid and the accrued interest. In
the event that commencing on the date that is six months following the closing
date and ending two years thereafter, Rule 144 is unavailable for the
unrestricted resale of the conversion shares under the Notes, then we shall pay
to the investor as liquidated damages for each thirty days (or pro rata for
periods shorter than thirty days) a sum equal to 1.75% of the purchase price of
the outstanding notes.

We granted a senior security interest over all of our assets to
the holders of the May 2007, August 2008, May 2009 and August 2009 Convertible
Notes. In addition, our wholly owned subsidiary, Big Chunk Corp. was required to
provide the subscribers with a guaranty on the repayment of the loans.

Equity Compensation Plan Information

As of January 31, 2010 we had two compensation plans in place,
entitled "2004 Stock Option Plan" and 2007 Stock Option Plan. These plans have
been approved by our security holders. These plans have been given retroactive
effect of the 1 for 4 reverse stock split on September 1, 2009.

|Total number of securities
      authorized | Number of securities to be issued upon exercise of outstanding options
      as at January 31, 2010 | Weighted-average exercise price
      of outstanding options as at January 31, 2010 | Number of securities remaining
      available for further issuance as at January 31,
      2010
|------------------------------------------- | --------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------
|962,500                                     | 636,125                                                                                             | $0.25                                                                               | 326,375                                                                                         
|2,500,000                                   | 443,750                                                                                             | $0.06                                                                               | 2,056,250                                                                                       

On May 21, 2008 we granted 106,250 non-qualified stock options
to non-employee consultants and 762,500 incentive stock options to employees,
officers and directors. The options have an exercise price of $0.055 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.

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.

---

21

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. We use 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 $20,522 as of
January 31, 2010. We had negative working capital of $(3,625,627) as of January
31, 2010. We had cash inflows from financing activities of $886,140 for the year
ended January 31, 2010. During the fiscal year ended January 31, 2010 we sold
additional convertible promissory notes in order to raise funds to meet our
obligations. Over the next twelve months we will need to pay annual rentals on
our North Pipes, Big Chunk and Bonanza Hills claims or we will risk forfeiting
our claims. We do not currently have these funds. We intend to perform only the
minimal exploration work necessary to maintain these claims in good standing for
an estimated cost of $751,500.

In February 2010 we sold substantially all of our drilling
assets owned by Redwall and raised net cash inflows of $266,630 most of which
has been used to pay our accounts payable. We require additional cash inflows in
order to meet our current obligations. We will require additional cash inflows
in order to maintain our mineral claims in good standing during 2010.

The convertible note holders have a security interest in all
assets and mineral properties. The convertible promissory notes 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 while the convertible promissory notes are outstanding. The convertible
promissory notes contain restrictions that require that the convertible notes be
repaid in full from the first $3,000,000 of financings we complete. These
restrictions may make it difficult for us to raise the cash required to maintain
our mineral properties. 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.

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, 2010, included an explanatory paragraph regarding their concerns
about our ability to continue as a going concern.

---

22

At January 31, 2010 we had $3,209,958 of outstanding principal
and $316,233 of accrued interest on our Convertible Notes. We are currently in
default on these notes as we have failed to reserve an adequate number of shares
to be issued upon conversion. If the note holders were to call the notes and we
are unable to satisfy the obligation the note holders could proceed against the
assets and mineral properties that collateralize the notes.

Results of Operations for the year ended January 31, 2010

We had a net loss of ($2,809,843) for the twelve-month period
ended January 31, 2010 compared to a net loss of ($4,176,066) for the
twelve-month period ended January 31, 2009. The reduction in net loss of
approximately $1.36 million is mainly due to the following factors:

| | 1) | Salaries and benefits costs are down approximately
      $400,000 compared to last year due to the reduction in work force as a
      result of the cash flow constraints. The reduced salaries and benefits
      expenses result from the elimination of a full time bookkeeper position,
      elimination of a full time investor relations position, the resignation
      without replacement of the CFO position, the elimination of health care
      benefits for our staff, as well as a reduction of compensation expense
      reported for stock option grants as a result of all outstanding options
      being fully vested.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | 2) | Other income and income from Elle Venture of
      approximately $425,000 earned in the prior year were not recurring sources
      of revenue and no such income was earned in the current year. This change
      would have the affect of increasing the current year net loss compared to
      the prior year.                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | 3) | Interest expense and debt conversion expense are down
      approximately $965,000. The reduction of interest costs is mostly due to
      the discounts on the May 2007 Convertible Notes being fully amortized in
      May 2009 resulting in approximately 8 months less amortization compared to
      the prior year. The reduction of debt conversion expense is because there
      were no inducements to convert the convertible promissory notes.                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | 4) | The remaining differences of approx $420,000 are due to
      the overall reduction in staff size, office space and limited operations
      that were performed in the current 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.

Presentation of Financial Information

Our consolidated financial statements for the period ended
January 31, 2010 reflect financial information for the twelve month period
ending January 31, 2010, as well as from inception through January 31, 2010 and
for the twelve-month period ended January 31, 2009.

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, 2010 and 2009.
Our accumulated stockholders equity (deficit) at January 31, 2010, was
($3,246,478) and the net loss for the twelve-month period ended January 31, 2010
was ($2,809,843). 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.

---

23

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. 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 statements for the period ended January 31, 2010. Our
total stockholders equity (deficit) at January 31, 2010 was $(3,246,478).

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

We account 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

We reviewed the convertible promissory notes and the related
subscription agreements to determine the appropriate reporting within the
financial statements. We report convertible promissory notes as liabilities at
their carrying value less unamortized discounts in accordance with the
applicable accounting guidance. We bifurcates conversion options and detachable
common stock purchase warrants and reports them as liabilities at fair value at
each reporting period when required in accordance with the applicable accounting
guidance. We 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 our
common stock in accordance with the notes terms.

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.

Certain drilling equipment, vehicles and prepaid drilling
supplies have been impaired and an impairment loss of $185,370 was recognized at
January 31, 2010. The fair value of the drill rig, vehicles and prepaid drilling
supplies was determined using the sales price of this equipment that was sold in
a bulk sale in February 2010.

---

24

New Accounting Pronouncements

With the exception of those discussed below, there have been no
recent accounting pronouncements or changes in accounting pronouncements during
the twelve months ended January 31, 2010, that are of significance, or potential
significance, to us.

In August 2009, the FASB issued guidance clarifying the
measurement of liabilities at fair value. This guidance is effective for the
first reporting period (including interim periods) beginning after issuance. We
do not believe this guidance will have a material impact on its financial
position and results of operations.

In January 2010, the FASB issued guidance on improving
disclosure of fair value measurements. This guidance is effective for fiscal
years beginning after December 15, 2010. We do not believe this guidance will
have a material impact on its financial position and results of operations.

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

Not applicable.

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, 2010 and 2009                                                                                                                                                     
| |                                                                                                                                                                                                                 
| | Consolidated Statements of Operations for the twelve months
        ended January 31, 2010, the twelve months ended January 31, 2009 and the
    period from inception (August 20, 2001) to January 31, 2010    
| |                                                                                                                                                                                                                 
| | Consolidated Statements of Stockholders' Equity (Deficit)
    for the period from inception (August 20, 2001) to January 31, 2010                                                                               
| |                                                                                                                                                                                                                 
| | Consolidated Statements of Cash Flows for the twelve months
        ended January 31, 2010, the twelve months ended January 31, 2009 and for
    the period from inception (August 20, 2001) to January 31, 2010
| |                                                                                                                                                                                                                 
| | Notes to Consolidated Financial Statements                                                                                                                                                                      

---

25



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, 2010 and 2009, and the related consolidated statements of
operations, stockholders equity (deficit), and cash flows for the years then
ended and for the cumulative period from inception (August 20, 2001) through
January 31, 2010. These consolidated financial statements are the responsibility
of the Companys management. Our responsibility is to express an opinion on
these consolidated 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 internal
control over financial reporting. Our audits include 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 as of January 31, 2010 and 2009, and the results of its operations,
changes in stockholders equity (deficit), and its cash flows for the years then
ended, and for the cumulative period from inception (August 20, 2001) through
January 31, 2010, in conformity with accounting principles generally accepted in
the United States of America.

The accompanying consolidated 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, and
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 11, 2010



INDEPENDENT MEMBER OF THE BDO SEIDMAN ALLIANCE

---

26

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

|ASSETS                                                                                                                                                                                    |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -
|                                                                                                                                                                                          |  
|                                                                                                                                                                                          |  
|Current:                                                                                                                                                                                  |  
|Cash and cash equivalents                                                                                                                                                                 | $
|Prepaid expenses and supplies                                                                                                                                                             |  
|Due from related parties                                                                                                                                                                  |  
|Total current assets                                                                                                                                                                      |  
|                                                                                                                                                                                          |  
|Property and equipment, net                                                                                                                                                               |  
|Certificates of deposit                                                                                                                                                                   |  
|Deferred financing charges, net                                                                                                                                                           |  
|Investment in Elle Venture                                                                                                                                                                |  
|Other assets                                                                                                                                                                              |  
|                                                                                                                                                                                          |  
|Total assets                                                                                                                                                                              | $
|                                                                                                                                                                                          |  
|LIABILITIES AND STOCKHOLDERS EQUITY
      (DEFICIT)                                                                                                                                      |  
|                                                                                                                                                                                          |  
|Current:                                                                                                                                                                                  |  
|Current portion of long-term debt                                                                                                                                                         | $
|Current portion of convertible promissory notes,
      net of discounts                                                                                                                   |  
|Accounts payable and accrued liabilities                                                                                                                                                  |  
|Accrued wages to related party                                                                                                                                                            |  
|Accrued interest                                                                                                                                                                          |  
|Total current liabilities                                                                                                                                                                 |  
|                                                                                                                                                                                          |  
|Long-term debt, net of current portion                                                                                                                                                    |  
|Warrant liability                                                                                                                                                                         |  
|                                                                                                                                                                                          |  
|Total liabilities                                                                                                                                                                         |  
|                                                                                                                                                                                          |  
|Stockholders equity (deficit)                                                                                                                                                            |  
|Common stock - $.00001 par value; 1,250,000,000
      and 
                 50,000,000
      shares authorized; 247,656,979 and 
                 48,486,677 issued
      and outstanding |  
|Additional paid-in capital                                                                                                                                                                |  
|Deficit accumulated during the exploration stage                                                                                                                                          |  
|Total stockholders
      equity (deficit)                                                                                                                                                |  
|                                                                                                                                                                                          |  
|Total liabilities and stockholders equity
      (deficit)                                                                                                                                | $

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

---

27

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, 2010 |   |   | January 31, 2009 |   |   | January 31, 2010  |  
|Revenues                                                                                 | $ | -                |   | $ | -                |   | $ | -                 |  
|                                                                                         |   |                  |   |   |                  |   |   |                   |  
|Expenses:                                                                                |   |                  |   |   |                  |   |   |                   |  
|Geological and geophysical costs                                                         |   | 773,802          |   |   | 957,569          |   |   | 11,625,448        |  
|Salaries and benefits                                                                    |   | 160,730          |   |   | 566,453          |   |   | 2,167,475         |  
|Accounting and auditing                                                                  |   | 108,687          |   |   | 153,192          |   |   | 949,550           |  
|Public relations                                                                         |   | 14,937           |   |   | 83,111           |   |   | 688,161           |  
|Depreciation                                                                             |   | 225,305          |   |   | 277,509          |   |   | 754,093           |  
|Legal                                                                                    |   | 45,239           |   |   | 124,626          |   |   | 637,096           |  
|Professional services                                                                    |   | -                |   |   | -                |   |   | 143,992           |  
|General and administrative                                                               |   | 167,972          |   |   | 247,373          |   |   | 1,605,904         |  
|Travel                                                                                   |   | 613              |   |   | 2,672            |   |   | 138,209           |  
|Impairment loss                                                                          |   | 185,370          |   |   | -                |   |   | 16,092,870        |  
|Net operating expenses                                                                   |   | 1,682,655        |   |   | 2,412,505        |   |   | 34,802,798        |  
|                                                                                         |   |                  |   |   |                  |   |   |                   |  
|Loss from operations                                                                     |   | ( 1,682,655      | ) |   | ( 2,412,505      | ) |   | ( 34,802,798      | )
|                                                                                         |   |                  |   |   |                  |   |   |                   |  
|Other income (expense):                                                                  |   |                  |   |   |                  |   |   |                   |  
|Interest income                                                                          |   | 41               |   |   | 15,233           |   |   | 196,979           |  
|Interest expense                                                                         |   | ( 1,110,176      | ) |   | ( 2,075,885      | ) |   | ( 4,886,067       | )
|Loss on sale of assets                                                                   |   | ( 24,980         | ) |   | ( 24,862         | ) |   | ( 50,248          | )
|Gain on change in fair value of warrant
      liability                                  |   | 7,927            |   |   | -                |   |   | 7,927             |  
|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)                                                             |   | ( 1,127,188      | ) |   | ( 1,763,561      | ) |   | ( 4,301,585       | )
|                                                                                         |   |                  |   |   |                  |   |   |                   |  
|Loss before income taxes                                                                 |   | ( 2,809,843      | ) |   | ( 4,176,066      | ) |   | ( 39,104,383      | )
|                                                                                         |   |                  |   |   |                  |   |   |                   |  
|Income tax expense                                                                       |   | -                |   |   | -                |   |   | -                 |  
|                                                                                         |   |                  |   |   |                  |   |   |                   |  
|Net loss                                                                                 | $ | ( 2,809,843      | ) | $ | ( 4,176,066      | ) | $ | ( 39,104,383      | )
|                                                                                         |   |                  |   |   |                  |   |   |                   |  
|Basic and diluted net loss per share of 
        
      common stock                     | $ | ( 0.03           | ) | $ | ( 0.18           | ) | $ | ( 2.10            | )
|                                                                                         |   |                  |   |   |                  |   |   |                   |  
|                                                                                         |   |                  |   |   |                  |   |   |                   |  
|Basic and diluted weighted average number
         of shares of common stock outstanding |   | 82,937,096       |   |   | 22,961,019       |   |   | 18,581,106        |  

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 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                                                                                                                                          |  | 5,000,000          |   |   | 50      |   |   | 99,950          |   |   | -                  |   |   | 100,000       |  
|Net loss for the period from
      inception, August 
                  20, 2001,
      to January 31, 2004                                                           |  | -                  |   |   | -       |   |   | -               |   |   | ( 132,602          | ) |   | ( 132,602     | )
|Balance, January 31, 2004                                                                                                                                             |  | 5,000,000          |   |   | 50      |   |   | 99,950          |   |   | ( 132,602          | ) |   | ( 32,602      | )
|Acquisition, February 3, 2004                                                                                                                                         |  | 4,375,000          |   |   | 44      |   |   | 15,924,956      |   |   | -                  |   |   | 15,925,000    |  
|Issuance of common stock private placement                                                                                                                            |  | 250,000            |   |   | 3       |   |   | 999,997         |   |   | -                  |   |   | 1,000,000     |  
|Issuance of common stock and
      warrants private placement                                                                                                         |  | 400,000            |   |   | 4       |   |   | 1,999,996       |   |   | -                  |   |   | 2,000,000     |  
|Options issued for services                                                                                                                                           |  | -                  |   |   | -       |   |   | 94,350          |   |   | -                  |   |   | 94,350        |  
|Return of shares                                                                                                                                                      |  | ( 1,750,000        | ) |   | ( 18    | ) |   | ( 11,199,982    | ) |   | 11,200,000         |   |   | -             |  
|Net loss for the year ended January 31, 2005                                                                                                                          |  | -                  |   |   | -       |   |   | -               |   |   | ( 18,392,024       | ) |   | ( 18,392,024  | )
|Balance, January 31, 2005                                                                                                                                             |  | 8,275,000          |   |   | 83      |   |   | 7,919,267       |   |   | ( 7,324,626        | ) |   | 594,724       |  
|Issuance of common stock and warrants private
               placement                                                                                                |  | 971,679            |   |   | 10      |   |   | 5,052,722       |   |   | -                  |   |   | 5,052,732     |  
|Issuance of common stock and
      warrants private 
                placement                                                                                        |  | 493                |   |   | -       |   |   | -               |   |   | -                  |   |   | -             |  
|Net loss for the year ended January 31, 2006                                                                                                                          |  | -                  |   |   | -       |   |   | -               |   |   | ( 4,627,965        | ) |   | ( 4,627,965   | )
|Balance, January 31, 2006                                                                                                                                             |  | 9,247,172          |   |   | 93      |   |   | 12,971,989      |   |   | ( 11,952,591       | ) |   | 1,019,491     |  
|Issuance of common stock private placement                                                                                                                            |  | 66,372             |   |   | 1       |   |   | 299,999         |   |   | -                  |   |   | 300,000       |  
|Issuance of common stock                                                                                                                                              |  | 924,224            |   |   | 9       |   |   | 2,245,986       |   |   | -                  |   |   | 2,245,995     |  
|Issuance of common stock for services                                                                                                                                 |  | 37,500             |   |   | -       |   |   | 93,000          |   |   | -                  |   |   | 93,000        |  
|Expenses of common stock issuance                                                                                                                                     |  | -                  |   |   | -       |   |   | ( 320,000       | ) |   | -                  |   |   | ( 320,000     | )
|Options granted to consultants and employees                                                                                                                          |  | -                  |   |   | -       |   |   | 832,343         |   |   | -                  |   |   | 832,343       |  
|Net loss for the year ended January
      31 2007                                                                                                                     |  | -                  |   |   | -       |   |   | -               |   |   | ( 3,267,948        | ) |   | ( 3,267,948   | )
|Balance, January 31, 2007                                                                                                                                             |  | 10,275,268         |   |   | 103     |   |   | 16,123,317      |   |   | ( 15,220,539       | ) |   | 902,881       |  
|Issuance of common stock                                                                                                                                              |  | 429,700            |   |   | 4       |   |   | 1,074,413       |   |   | -                  |   |   | 1,074,417     |  
|Issuance of common stock for services                                                                                                                                 |  | 28,000             |   |   | -       |   |   | 54,540          |   |   | -                  |   |   | 54,540        |  
|Issuance of common stock for
      conversion of 
              promissory note                                                                                       |  | 99,884             |   |   | 1       |   |   | 259,698         |   |   | -                  |   |   | 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                                                                                                                                             |  | 10,832,852         |   |   | 108     |   |   | 21,134,886      |   |   | ( 20,918,474       | ) |   | 216,520       |  
|Issuance of common stock for
      conversion or 
                  payment
      of  promissory note                                                                 |  | 37,646,325         |   |   | 376     |   |   | 1,839,135       |   |   | -                  |   |   | 1,839,511     |  
|Issuance of common stock for inducement to convert 
                 promissory
      note                                                                            |  | 7,500              |   |   | -       |   |   | 9,000           |   |   | -                  |   |   | 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                                                                                                                                             |  | 48,486,677         |   |   | 484     |   |   | 23,721,402      |   |   | ( 25,094,540       | ) |   | (1,372,654    | )
|Issuance of common stock for conversion or
                 payment of  promissory
      note                                                                         |  | 199,170,302        |   |   | 1,992   |   |   | 603,661         |   |   | -                  |   |   | 605,653       |  
|Discounts on convertible promissory
      notes 
                  for beneficial 
      conversion feature and 
                  detachable
      purchase warrants |  | -                  |   |   | -       |   |   | 330,366         |   |   | -                  |   |   | 330,366       |  
|Net loss for the twelve months ended January
                  31, 2010                                                                                               |  | -                  |   |   | -       |   |   | -               |   |   | ( 2,809,843        | ) |   | ( 2,809,843   | )
|Balance, January 31, 2010                                                                                                                                             |  | 247,656,979        |   | $ | 2,476   |   | $ | 24,655,429      |   | $ | ( 27,904,383       | ) | $ | (3,246,478    | )

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 CASH FLOWS

|                                                                                    |   |                   |   |   |                   |   |   | Cumulative from    |  
|----------------------------------------------------------------------------------- | - | ----------------- | - | - | ----------------- | - | - | ------------------ | -
|                                                                                    |   |                   |   |   |                   |   |   | date of inception  |  
|                                                                                    |   | For the twelve    |   |   | For the twelve    |   |   | (August 20, 2001)  |  
|                                                                                    |   | months ended      |   |   | months ended      |   |   | to                 |  
|                                                                                    |   | January 31, 2010  |   |   | January 31, 2009  |   |   | January 31, 2010   |  
|Net change in cash and cash equivalents                                             |   |                   |   |   |                   |   |   |                    |  
|Cash flows from operating activities:                                               |   |                   |   |   |                   |   |   |                    |  
|Net loss                                                                            | $ | ( 2,809,843       | ) | $ | ( 4,176,066       | ) | $ | ( 39,104,383       | )
|Adjustments to reconcile net
      loss to net cash from operating      activities: |   |                   |   |   |                   |   |   |                    |  
|Depreciation                                                                        |   | 225,305           |   |   | 277,509           |   |   | 755,104            |  
|Amortization of
      deferred financing charges                                    |   | 110,023           |   |   | 234,130           |   |   | 523,026            |  
|Amortization of discount on
      convertible promissory notes                      |   | 640,821           |   |   | 1,537,567         |   |   | 3,427,810          |  
|Mineral claim
      costs                                                           |   | -                 |   |   | -                 |   |   | 343,085            |  
|Impairment loss                                                                     |   | 185,370           |   |   | -                 |   |   | 16,092,870         |  
|Loss on sale of
      fixed assets                                                  |   | 24,980            |   |   | 24,862            |   |   | 50,248             |  
|Gain on change in fair value of
      warrant liability                             |   | (7,927            | ) |   |                   |   |   | (7,927             | )
|Share based
      compensation                                                      |   | -                 |   |   | 576,244           |   |   | 1,767,233          |  
|Share based payments                                                                |   | -                 |   |   | 397,714           |   |   | 554,953            |  
|Changes in
      assets and liabilities:                                            |   |                   |   |   |                   |   |   |                    |  
|Prepaid
      expenses and supplies                                                 |   | 10,769            |   |   | ( 9,362           | ) |   | ( 94,268           | )
|Other current assets                                                                |   | -                 |   |   | -                 |   |   | ( 7,875            | )
|Deposits                                                                            |   | -                 |   |   | 16,707            |   |   | -                  |  
|Certificates of deposit                                                             |   | -                 |   |   | 44,674            |   |   | ( 11,435           | )
|Other
      assets                                                                  |   | -                 |   |   | ( 25,000          | ) |   | ( 25,000           | )
|Accounts payable and accrued expenses                                               |   | 222,259           |   |   | ( 239,355         | ) |   | 260,463            |  
|Accrued
      wages related party                                                   |   | 57,000            |   |   | 42,500            |   |   | 99,500             |  
|Accrued interest                                                                    |   | 335,735           |   |   | ( 167,058         | ) |   | 408,201            |  
|Net cash used in operating activities                                               |   | (
      1,005,508 | ) |   | (
      1,464,934 | ) |   | (
      14,968,395 | )
|                                                                                    |   |                   |   |   |                   |   |   |                    |  
|Cash flows from investing activities:                                               |   |                   |   |   |                   |   |   |                    |  
|Proceeds from the sale of
      fixed asset                                         |   | 76,640            |   |   | 53,081            |   |   | 137,726            |  
|Proceeds from redemption of certificate of
      deposit                            |   | -                 |   |   | 213,232           |   |   | 213,232            |  
|Purchase of certificate of
      deposit                                            |   | -                 |   |   | -                 |   |   | ( 204,797          | )
|Purchase of equipment                                                               |   | -                 |   |   | (
      74,700    | ) |   | (
      1,098,950  | )
|Net cash provided by (used in) investing
      activities                           |   | 76,640            |   |   | 191,613           |   |   | ( 952,789          | )
|                                                                                    |   |                   |   |   |                   |   |   |                    |  
|Cash flows from financing activities:                                               |   |                   |   |   |                   |   |   |                    |  
|Principal activity on long-term debt                                                |   | ( 39,231          | ) |   | ( 287,840         | ) |   | ( 377,922          | )
|Principal activity on capital
      lease obligation                                |   | -                 |   |   | ( 2,760           | ) |   | ( 39,298           | )
|Principal activity on convertible promissory
      notes                            |   | -                 |   |   | ( 286,227         | ) |   | ( 286,227          | )
|Net repayments from related
      parties                                           |   | 1,888             |   |   | 275,777           |   |   | -                  |  
|Proceeds from the issuance of common stock,
      net of expenses                   |   | -                 |   |   | -                 |   |   | 11,140,074         |  
|Proceeds from the sale of
      convertible promissory notes                        |   | 923,483           |   |   | 372,434           |   |   | 5,306,154          |  
|Proceeds from long-term debt                                                        |   | -                 |   |   | -                 |   |   | 198,925            |  
|Net cash provided by financing activities                                           |   | 886,140           |   |   | 71,384            |   |   | 15,941,706         |  
|                                                                                    |   |                   |   |   |                   |   |   |                    |  
|Net increase (decrease) in cash and cash
      equivalents for period               |   | ( 42,728          | ) |   | ( 1,201,937       | ) |   | 20,522             |  
|                                                                                    |   |                   |   |   |                   |   |   |                    |  
|Cash and cash equivalents, beginning of
      period                                |   | 63,250            |   |   | 1,265,187         |   |   | -                  |  
|                                                                                    |   |                   |   |   |                   |   |   |                    |  
|Cash and cash equivalents, end of period                                            | $ | 20,522            |   | $ | 63,250            |   | $ | 20,522             |  
|                                                                                    |   |                   |   |   |                   |   |   |                    |  
|Interest paid during the period                                                     | $ | 23,596            |   | $ | 152,971           |   | $ | 199,056            |  
|                                                                                    |   |                   |   |   |                   |   |   |                    |  
|Income taxes paid                                                                   | $ | -                 |   | $ | -                 |   | $ | -                  |  

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

---

30

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. Redwall ceased drilling activities
in July 2008. 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 North Pipes Super Project area on the Arizona strip, Northern
Arizona. 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 6.

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.

---

31

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 embedded conversion options, value of
beneficial conversion features, valuation allowance on deferred tax assets, 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, 2010 and
2009, the Company did not hold cash in bank deposit accounts that exceeded
federally insured limits.

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.

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.

Convertible promissory notes

The Company reports convertible promissory notes as liabilities
at their carrying value less unamortized discounts, which approximates fair
value. The Company bifurcates conversion options and detachable common stock
purchase warrants and reports them as liabilities at fair value at each
reporting period when required in accordance with the applicable accounting
guidance. When convertible promissory notes are converted into shares of the
Companys common stock in accordance with the debts terms, no gain or loss is
recognized. The Company accounts for inducements to convert as an expense in the
period incurred, included in debt conversion expense.

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.

---

32

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

NOTE 2  Summary of significant accounting policies -
continued

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 the accounting standards codification section 360-35. 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, 2010 and 2009.

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. Interest and
penalties associated with unrecognized tax benefits, if any, are classified as
additional income taxes in the statement of operations. With few exceptions, the
Company is no longer subject to U.S. federal, state and local examinations by
tax authorities for years before 2008.

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. The
calculation of basic loss per share gives retroactive effect to a one for four
reverse stock split on September 1, 2009 which resulted in 67,261,764 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, 2010 and 2009, there were 62,260,338 and 3,498,638, respectively,
potentially dilutive instruments outstanding. Additionally, at January 31, 2010
and 2009 if settlement of the Convertible Promissory Notes were completed by the
issuance of common shares there would be 2,021,513,000 and 1,886,792,667 shares,
respectively, required to convert the notes which is in excess of our authorized
shares. At January 31, 2010 and 2009 there are 1,250,000,000 and 50,000,000
shares authorized, respectively. These instruments were not included in the
determination of diluted loss per share as their effect was anti-dilutive.

Recently issued accounting standards

With the exception of those discussed below, there have been no
recent accounting pronouncements or changes in accounting pronouncements during
the twelve months ended January 31, 2010, that are of significance, or potential
significance, to us.

In August 2009, the FASB issued guidance clarifying the
measurement of liabilities at fair value. This guidance is effective for the
first reporting period (including interim periods) beginning after issuance. The
Company does not believe this guidance will have a material impact on its
financial position and results of operations.

In January 2010, the FASB issued guidance on improving
disclosure of fair value measurements. This guidance is effective for fiscal
years beginning after December 15, 2010. The Company does not believe this
guidance will have a material impact on its financial position and results of
operations.

---

33

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

NOTE 3 Mineral claims

At January 31, 2010 the Company held a 100% interest in 1,775
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, 2010 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, 2010 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, 2010 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, 2010 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, 2010.

NOTE 4  Property and equipment

The balances of our major classes of depreciable assets are:

|                                                     |   | January 31, 2010 |   |   | January 31, 2009 |  
|---------------------------------------------------- | - | ---------------- | - | - | ---------------- | -
|Geology equipment                                    | $ | 315,805          |   | $ | 418,802          |  
|Drilling equipment                                   |   | 459,297          |   |   | 538,400          |  
|Vehicles and transportation
      equipment          |   | 122,655          |   |   | 254,859          |  
|Office furniture and equipment                       |   | 68,425           |   |   | 68,425           |  
|                                                     |   | 966,182          |   |   | 1,280,486        |  
|Less accumulated depreciation and
      amortization |   | (556,551         | ) |   | (453,963         | )
|                                                     |   |                  |   |   |                  |  
|                                                     | $ | 409,631          |   | $ | 826,523          |  

Certain drilling equipment, vehicles and prepaid drilling
supplies have been impaired and an impairment loss of $185,370 was recognized at
January 31, 2010. The fair value of the drill rig, vehicles and prepaid drilling
supplies was determined using the sales price of this equipment that was sold in
a bulk sale in February 2010.

NOTE 5  Long-term debt

Notes payable to Chase Bank payable in aggregate monthly
installments of $1,302 including interest at fixed rates of 8.9% maturing at
various dates through February 2013, secured by liens on vehicles. Principal
balances at January 31, 2010 and 2009 are $37,742 and $61,925, respectively.
Carrying amount of vehicles that serve as collateral is $27,923 and $73,793 at
January 31, 2010 and 2009, respectively.

---

34

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

NOTE 5  Long-term debt - continued

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, 2010 and
2009 is $80,889 and $95,937, respectively. Carrying amount of equipment that
serves as collateral is $220,445 and $298,250 at January 31, 2010 and 2009,
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, |   |         |  
|--------------------------------------- | - | ------- | -
|2011                                    | $ | 95,881  |  
|2012                                    |   | 13,986  |  
|2013                                    |   | 8,127   |  
|2014                                    |   | 637     |  
|                                        |   | 118,631 |  
|Less current maturities                 |   | (95,881 | )
|                                        | $ | 22,750  |  

NOTE 6  Convertible promissory notes

The Company issues convertible promissory notes in private
placements 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 convertible notes were issued in May 2007, August 2008, May 2009
and August 2009. The Company issued detachable common stock purchase warrants
with the May 2007 and August 2009 convertible notes. Detachable common stock
purchase warrants were reported at fair value as discounts on the convertible
notes. Discounts on the convertible notes were also recorded for the beneficial
conversion features. At January 31, 2010 there were 5.3 months of amortization
remaining on the discounts.

|                                                                                                             |   | May 2007 Notes |  |   | August 2008 Notes |  |   | May 2009 Notes |   |   | August 2009 Notes |  
|------------------------------------------------------------------------------------------------------------ | - | -------------- |  | - | ----------------- |  | - | -------------- | - | - | ----------------- | -
|Issue date                                                                                                   |   | May 11, 2007   |  |   | August 27, 2008   |  |   | May 21, 2009   |   |   | August 14, 2009   |  
|Maturity date                                                                                                |   | May 11, 2009   |  |   | August 27, 2009   |  |   | May 21, 2010   |   |   | August 14, 2010   |  
|Interest rate                                                                                                |   | 15%            |  |   | 15%               |  |   | 15%            |   |   | 15%               |  
|Principal balance as of January 31, 2010                                                                     | $ | 1,873,583      |  | $ | 395,697           |  | $ | 162,344        |   | $ | 778,334           |  
|Unamortized discounts as of January 31,
      2010                                                           |   | -              |  |   | -                 |  |   | (12,414        | ) |   | (192,772          | )
|Accrued interest as of January 31, 2010                                                                      |   | 185,455        |  |   | 81,545            |  |   | 13,535         |   |   | 35,698            |  
|Common shares issued for conversions 
         during the twelve months ended 
         January 31, 2010     |   | 178,787,395    |  |   | 8,826,524         |  |   | 3,606,400      |   |   | 7,949,983         |  
|Principal balance as of January 31, 2009                                                                     | $ | 2,343,539      |  | $ | 414,184           |  | $ | -              |   | $ | -                 |  
|Accrued interest as of January 31, 2009                                                                      |   | 48,977         |  |   | 23,489            |  |   | -              |   |   | -                 |  
|Common shares issued for conversions 
           during the twelve months ended 
           January 31, 2009 |   | 37,646,325     |  |   | -                 |  |   | -              |   |   | -                 |  

If settlement of all of the Convertible Notes occurred on
January 31, 2010 the Company would have been obligated to pay $3,209,958
principal payments and $316,233 accrued interest for a total of $3,526,191 in
cash plus an additional 10% of the principal balance of $320,996 required for
cash payments. If the settlement were completed by the issuance of common shares
the additional 10% of the principal balance is not due. The conversion price at
January 31, 2010 for the May 2007, August 2008 and May 2009 notes would have
been $0.0018 per share and the conversion price at January 31, 2010 for the
August 2009 notes would have been $0.0017 for a total of 2,021,513,000 shares
required to convert the 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. 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 became in default on the notes. The default interest
rate on the notes increased to 15%. The notes matured on May 11, 2009 and have
not been paid in full. The entire obligation is due on demand and included as a
current liability.

---

35

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

NOTE 6  Convertible promissory notes - continued

May 2007 Convertible Notes - continued:
  The Company may elect to make repayments of the May 2007
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
holders may elect to convert amounts owed on the notes at a conversion price
which is the lesser of the fixed conversion price of $0.005 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.

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 was considered in default. The
default interest rate increased to 15%. The notes matured on August 27, 2009 and
have not been paid in full. The entire obligation is due on demand and included
as a current liability.

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
holders may elect to convert amounts owed on the notes at a conversion price
which is the lesser of the fixed conversion price of $0.005 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.

May 2009 Convertible Notes:On May 21, 2009, the
Company completed the sale of $170,668 principal amount of 12% Secured
Convertible Promissory Notes (May 2009 Convertible Notes) in a private
placement of its securities to subscribers pursuant to the exemption from
registration under the United States Securities Act of 1933 provided by Section
4(2), Section 4(6) and/or Rule 506 of Regulation D promulgated under the 1933
Act, each of which represented that they are accredited investors within the
respective meanings ascribed to that term in Rule 501(a) under the Securities
Act of 1933 and pursuant to the terms of a subscription agreement between the
parties dated May 21, 2009. The net proceeds received were $157,468. The notes
mature on May 21, 2010. The Company does not have enough authorized shares
available for issuance to make full stock repayment on this note and is
considered in default.

Pursuant to the terms of the convertible secured notes and the
Subscription Agreement, interest accrues on the Notes at a rate of 12% per annum
commencing on the date of the issuance of the May 2009 Convertible Notes. The
May 2009 Convertible Notes principal must be repaid commencing October 15, 2009
in monthly amounts equal to 14.28% of the principal amount of the notes together
with interest, accrued to each monthly payment date on the outstanding note
principal. As required payments have not been made as of October 31, 2009 the
note currently accrues interest at the default rate of 15%. In the event a
registration statement is effective or Common Stock may be immediately resold by
the noteholders without volume or other restrictions, and an event of default is
not pending then the Company may pay the monthly amount with registered or
unregistered common stock valued at the lesser of the fixed conversion price of
$0.005 (subject to certain adjustments), or 80% of the average of the closing
bid prices of the Companys common stock for the five trading days prior to the
monthly payment date. The Company may, in any event, elect to pay the monthly
amount in cash at 110% of the principal amount due and 100% of all other amounts
then due. The Company must provide 10
days notice of whether payment will be made in cash or with stock. If the notice
is not timely given, the noteholders shall have the option to elect to be paid
in cash or common stock. Each monthly payment in kind will be limited to not
more than 33% of the aggregate daily trading volume of the common stock for the
7 trading days preceding the relevant monthly payment date. The Company agreed
to reserve for issuance to the subscribers not less than 175% of the amount of
shares of common stock necessary to allow conversion of all notes at the
conversion price in effect from time to time.

---

36

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

NOTE 6  Convertible promissory notes  continued

May 2009 Convertible Notes - continued:Pursuant to the terms of the Subscription Agreement, James Briscoe,
  the CEO of the Company, agreed not to sell or otherwise dispose of his shares
  of common stock of the Company owned by him or which he has the right to acquire
  for a period of two years from the date of the Subscription Agreement, unless
  sold in the open market for over $0.90 per share.

August 2009 Convertible Notes:On August 14, 2009,
the Company completed the sale of $589,177 principal amount of 12% Secured
Convertible Promissory Notes (August 2009 Convertible Notes) to five
subscribers pursuant to the exemption from registration under the United States
Securities Act of 1933 provided by Section 4(2), Section 4(6) and/or Rule 506 of
Regulation D promulgated under the 1933 Act, each of which represented that they
are accredited investors within the respective meanings ascribed to that term
in Rule 501(a) under the Securities Act of 1933 and pursuant to the terms of a
subscription agreement between the parties dated August 14, 2009. On November
27, 2009, we modified the August 2009 Convertible Notes so as to increase five
such notes by an aggregate total of $206,075. Other aspects of the August 14,
2009 notes remain unchanged. The net proceeds received were $766,015. The notes
mature on August 14, 2010. The Company does not have enough authorized shares
available for issuance to make full stock repayment on this note and is
considered in default.

Pursuant to the terms of the convertible secured notes and the
Subscription Agreement, interest accrues on the Notes at a rate of 12% per annum
commencing on the date of the issuance of the August 2009 Convertible Notes. The
August 2009 Convertible Notes principal must be repaid commencing February 15,
2010 in monthly amounts equal to 20% of the principal amount of the notes
together with interest, accrued to each monthly payment date on the outstanding
note principal. In the event a registration statement is effective or Common
Stock may be immediately resold by the noteholders without volume or other
restrictions, and an event of default is not pending then the Company may pay
the monthly amount with registered or unregistered common stock valued at the
lesser of the fixed conversion price of $0.0025 (subject to certain
adjustments), or 75% of the average of the closing bid prices of the Companys
common stock for the five trading days prior to the monthly payment date. The
Company may, in any event, elect to pay the monthly amount in cash at 110% of
the principal amount due and 100% of all other amounts then due. The Company
must provide 10 days notice of whether payment will be made in cash or with
stock. If the notice is not timely given, the noteholders shall have the option
to elect to be paid in cash or common stock. Each monthly payment in kind will
be limited to not more than 40% of the aggregate daily trading volume of the
common stock for the 5 trading days preceding the relevant monthly payment date.
The Company agreed to reserve for issuance to the subscribers not less than 175%
of the amount of shares of common stock necessary to allow conversion of all
notes at the conversion price in effect from time to time.

The holders of the August 2009 Convertible Notes were issued
58,917,700 detachable common stock purchase warrants with an exercise price of
$0.00125 and a life of 6 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 $0.005 per share. The detachable common stock
purchase warrants are reported as a liability at fair value. The Company
estimates the fair value of warrants using the Black-Scholes valuation model, a
level three fair value hierarchy. To estimate the fair value of the warrants,
the Company used the following assumptions: 90% expected volatility; 0% expected
dividend yield; 1 year expected term; and 0.40% risk-free interest rate. The
balance of warrant liability was $30,422 and $0 at January 31, 2010 and 2009,
respectively.

---

37

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

NOTE 6  Convertible promissory notes  continued

August 2009 Convertible Notes - continued:The
Company agreed to include at the option of each noteholder of the May 2009 and
August 2009 notes the number of shares that may be converted pursuant to any
note in any registration statement it files during such period, ahead of the
rights granted to the subscribers in the May 2007 Convertible Notes and the
subscribers in the August 2008 Convertible Notes. Noteholders are subject to
certain limitations on their rights to convert the notes. The principal
limitation is that unless waived, the holder may not, with certain limited
exceptions, convert into a number of shares that would, together with other
shares held by the holder, exceed 4.99% of the then outstanding shares of the
Company after such conversion.

Provisions applicable to all convertible notes:The
entire principal and interest of the May 2007, August 2008, May 2009 and August
2009 notes will be payable upon the Companys receipt of the net proceeds of a
$3,000,000 offering of the Companys debt or equity. Provided an event of
default is not pending, the Company may prepay unconverted portions of the Note
upon 20 days prior notice during which time noteholders may convert the amount
of the note noticed for prepayment at the fixed conversion price. Such payment
shall be equal to 125% of the principal amount being prepaid and the accrued
interest. In the event that commencing on the date that is six months following
the closing date and ending two years thereafter, Rule 144 is unavailable for
the unrestricted resale of the conversion shares under the Notes, then the
Company shall pay to the investor as liquidated damages for each thirty days (or
pro rata for periods shorter than thirty days) a sum equal to 1.75% of the
purchase price of the outstanding notes.

The Company granted a senior security interest over all of the
assets of the Company to the holders of the May 2007, August 2008, May 2009 and
August 2009 Convertible Notes. In addition, the Companys wholly owned
subsidiary, Big Chunk Corp. was required to provide the subscribers with a
guaranty on the repayment of the loans.

NOTE 7  Common stock

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.

The Companys shareholders approved the increase in authorized
capital of the Company from 200,000,000 to 10,000,000,000 shares of common stock
with $0.001 par value during a vote held at our annual meeting on May 27, 2009.
The Company filed a certificate of amendment on June 4, 2009 with the Nevada
Secretary of State to increase the number of authorized shares to 5,000,000,000
shares of common stock with a par value of $0.001.

On September 1, 2009 the Company effected a one for four
reverse stock split of our authorized and issued and outstanding common stock.
As a result our authorized capital decreased to 1,250,000,000 shares of common
stock with a par value of $0.00001. Our stock is traded under a new symbol LBSR
as of the opening of trading on September 1, 2009.

As of January 31, 2010, there were 61,180,463 whole share
purchase warrants outstanding and exercisable. The warrants have a weighted
average remaining life of 5.4 years and a weighted average exercise price of
$0.005 per whole warrant for one common share.

---

38

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

NOTE 7  Common stock - continued

Whole share purchase warrants outstanding at January 31, 2010
are as follows (adjusted for 1 for 4 reverse stock split):

|                              |  | Number of whole share |  |   | Weighted average         | 
|----------------------------- |  | --------------------- |  | - | ------------------------ | 
|                              |  | purchase warrants     |  |   | exercise price per share | 
|Outstanding, January 31, 2008 |  | 2,262,763             |  | $ | 0.228                    | 
|Issued, forfeited or expired  |  | -                     |  |   | -                        | 
|                              |  |                       |  |   |                          | 
|Outstanding, January 31, 2009 |  | 2,262,763             |  | $ | 0.010                    | 
|Issued                        |  | 58,917,700            |  |   | 0.001                    | 
|                              |  |                       |  |   |                          | 
|Outstanding, January 31, 2010 |  | 61,180,463            |  | $ | 0.005                    | 
|Exercisable, January 31, 2010 |  | 61,180,463            |  | $ | 0.005                    | 

NOTE 8  Stock-based compensation

The stock based compensation disclosures reflect the
retroactive effect of the 1 for 4 reverse stock split effected on September 1,
2009. The 2007 Stock Option Plan was approved and adopted by the Board of
Directors on December 10, 2007. The plan allows for up to 2,500,000 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 962,500 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, 2010 and
2009 are 2,056,250 and 1,943,750, respectively. Options remaining available for
grant under the 2004 Stock Option Plan at January 31, 2010 and 2009 are 326,375
and 282,875, respectively.

On May 21, 2008 the Company granted 106,250 non-qualified stock
options to non-employee consultants and 762,500 incentive stock options to
employees, officers and directors. The options have an exercise price of $0.055
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, 2010.

Incentive stock options to employees outstanding at January 31,
2010 are as follows:

|                              |  |           |   |   |                |  |  | Weighted       |  |   |                 | 
|----------------------------- |  | --------- | - | - | -------------- |  |  | -------------- |  | - | --------------- | 
|                              |  |           |   |   | Weighted       |  |  | average        |  |   |                 | 
|                              |  | Number of |   |   | average        |  |  | remaining life |  |   | Aggregate       | 
|                              |  | options   |   |   | exercise price |  |  | (years)        |  |   | intrinsic value | 
|Outstanding, January 31, 2009 |  | 788,625   |   | $ | 0.13           |  |  |                |  |   |                 | 
|                              |  |           |   |   |                |  |  |                |  |   |                 | 
|Granted                       |  | -         |   |   | -              |  |  |                |  |   |                 | 
|Expired                       |  | (156,000  | ) |   | 0.09           |  |  |                |  |   |                 | 
|                              |  |           |   |   |                |  |  |                |  |   |                 | 
|Outstanding, January 31, 2010 |  | 632,625   |   | $ | 0.14           |  |  | 7.41           |  | $ | -               | 
|                              |  |           |   |   |                |  |  |                |  |   |                 | 
|Exercisable, January 31, 2010 |  | 632,625   |   | $ | 0.14           |  |  | 7.41           |  | $ | -               | 

---

39

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

NOTE 8  Stock-based compensation  continued

Non-qualified stock options to non-employee consultants
outstanding at January 31, 2010 are as follows:

|                              |  |           |  |   |                |  |  | Weighted           |  |   |                 | 
|----------------------------- |  | --------- |  | - | -------------- |  |  | ------------------ |  | - | --------------- | 
|                              |  |           |  |   | Weighted       |  |  | average            |  |   |                 | 
|                              |  | Number of |  |   | average        |  |  | remaining          |  |   | Aggregate       | 
|                              |  | options   |  |   | exercise price |  |  | life
      (years) |  |   | intrinsic value | 
|Outstanding, January 31, 2009 |  | 447,250   |  | $ | 0.21           |  |  |                    |  |   |                 | 
|                              |  |           |  |   |                |  |  |                    |  |   |                 | 
|Granted                       |  | -         |  |   | -              |  |  |                    |  |   |                 | 
|                              |  |           |  |   |                |  |  |                    |  |   |                 | 
|Outstanding, January 31, 2010 |  | 447,250   |  | $ | 0.21           |  |  | 5.84               |  | $ | -               | 
|                              |  |           |  |   |                |  |  |                    |  |   |                 | 
|Exercisable, January 31, 2010 |  | 447,250   |  | $ | 0.21           |  |  | 5.84               |  | $ | -               | 

The aggregate intrinsic value is calculated based on the
January 29, 2010 stock price of $0.00231 per share.

As of January 31, 2010 and 2009 there were no nonvested stock
options. During the year ended January 31, 2010 there were no nonvested stock
options granted, forfeited, vested or cancelled. The weighted average grant date
fair value of options vested during the twelve months ended January 31, 2010 was
$0.

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 21, 2008 |  | 90%        |  | 0%             |  | 5 years       |  | 3.09%         |  | 0%             

The weighted average grant date fair value of the options
granted during the year ended January 31, 2009 was $0.10 per option,
respectively. There were no options exercised during the years ended January 31,
2010 and 2009 and the period from inception (August 20, 2001) to January 31,
2010.

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, 2010 |  |   | January 31, 2009 |  |   | January 31, 2010  | 
|Geological and geophysical
      costs | $ | -                |  | $ | 286,276          |  | $ | 1,146,048         | 
|Salaries and benefits                  |   | -                |  |   | 252,364          |  |   | 663,035           | 
|Investor relations                     |   | -                |  |   | 37,604           |  |   | 52,500            | 
|                                       |   |                  |  |   |                  |  |   |                   | 
|                                       | $ | -                |  | $ | 576,244          |  | $ | 1,861,583         | 

At January 31, 2010 there is no unrecognized share-based
compensation for all share-based awards outstanding.

---

40

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

NOTE 9  Income taxes

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

|                                                           |   | January 31, 2010 |   |   | January 31, 2009 |  
|---------------------------------------------------------- | - | ---------------- | - | - | ---------------- | -
|Net operating loss
      carryforwards                     | $ | 8,560,000        |   | $ | 7,720,000        |  
|Temporary book and tax depreciation
      differences      |   | (15,000          | ) |   | (61,000          | )
|Temporary accrued expense
      differences                |   | 61,000           |   |   | 22,000           |  
|Temporary incentive stock option expense
      differences |   | 332,000          |   |   | 332,000          |  
|Less valuation allowance                                   |   | (8,938,000       | ) |   | (8,013,000       | )
|                                                           | $ | -                |   |   | -                |  

Management has elected to provide a deferred tax asset
valuation allowance equal to the potential benefit due to the Companys history
of losses. If the Company demonstrates the ability to generate taxable income,
management will reevaluate the allowance. The change in the valuation allowance
of $925,000 and $1,579,000 in the years ended January 31, 2010 and 2009
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, 2010 |  |   | January 31, 2009 | 
|----------------------------------------------------- | - | ---------------- |  | - | ---------------- | 
|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                             |   | 5,314,524        |  |   | 5,302,980        | 
|Expiring January 31, 2030                             |   | 3,639,090        |  |   | 3,718,999        | 
|Expiring January 31, 2031                             |   | 2,551,567        |  |   | -                | 
|                                                      |   |                  |  |   |                  | 
|Total Federal net operating
      loss carry-forwards | $ | 22,542,799       |  | $ | 20,059,597       | 
|                                                      |   |                  |  |   |                  | 
|Arizona net operating loss
      carry-forwards:      |   |                  |  |   |                  | 
|Expiring January 31, 2010                             | $ | -                |  | $ | 2,785,529        | 
|Expiring January 31, 2011                             |   | 4,652,642        |  |   | 4,652,642        | 
|Expiring January 31, 2012                             |   | 3,047,057        |  |   | 3,047,057        | 
|Expiring January 31, 2013                             |   | 5,510,233        |  |   | 5,271,738        | 
|Expiring January 31, 2014                             |   | 3,639,611        |  |   | 3,718,999        | 
|Expiring January 31, 2015                             |   | 2,551,517        |  |   | -                | 
|                                                      |   |                  |  |   |                  | 
|Total Arizona net operating
      loss carry-forwards | $ | 19,401,060       |  | $ | 19,475,965       | 

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, 2010 and 2009 is as follows:

|                                                               |   | January 31, 2010 |   |   | January 31, 2009 |  
|-------------------------------------------------------------- | - | ---------------- | - | - | ---------------- | -
|                                                               |   |                  |   |   |                  |  
|Income tax benefit at federal
      statutory rate             | $ | (878,000         | ) | $ | (1,323,000       | )
|State income tax benefit, net of effect on
      federal taxes |   | (197,000         | ) |   | (292,000         | )
|Permanent differences and
      other (federal)                |   | (37,000          | ) |   | 29,500           |  
|Permanent differences and other (state)                        |   | 187,000          |   |   | 6,500            |  
|Increase in valuation
      allowance                          |   | 925,000          |   |   | 1,579,000        |  
|                                                               |   |                  |   |   |                  |  
|Income tax expenses (benefit)                                  | $ | -                |   | $ | -                |  

---

41

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

NOTE 10  Related party transactions

The Company entered into the following transactions with
related parties during the year ended January 31, 2010:

Paid or accrued $5,512 in rent. We rented an office from an
officer on a month-to-month basis for $459 per month.

Accrued $99,500 of unpaid wages to Jim Briscoe our President
and CEO.

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 year ended January 31, 2009, the Company incurred
$599,566 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. 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 the
investment balance is $25,000 and is reported on the balance sheet as other
assets.

NOTE 11  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 1⁄4 section (160 acre) claim or $100 per 1⁄4 -1⁄4
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 estimates that the required annual assessments to maintain the claims
will be approximately $298,600.

The annual state rentals for the Big Chunk and Bonanza Hills
Alaska State mining claims vary from $70 to $280 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, 2009 through September 1, 2010 of $202,440 have been
paid. The estimated state rentals due by November 30, 2010 for the period from
September 1, 2010 through September 1, 2011 are $202,440. 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.

---

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

NOTE 11  Commitments - continued

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 was $125 per claim and increased to $140 per
claim beginning September 1, 2009. 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 due for the period from September 1, 2009 to September 1, 2010 of
$250,460 have been paid. The estimated rentals due by September 1, 2010 for the
period from September 1, 2010 through September 1, 2011 are $250,460.

In November 2006, the Company began renting its previous office
space. The lease requires monthly payments of $3,825. In September 2008 the
Company exercised its option to renew the lease for an additional two years.
During the year ended January 31, 2010 and 2009 the Company recognized rent
expense of $29,424 and $45,468, 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 and the Company is
responsible for any shortage in rent received from a new tenant and the $3,825
that the Company would have paid per month during the renewal period. Future
minimum lease payments under this noncancelable lease for the twelve months
ended January 31, 2011 are $8,256. At January 31, 2010 the landlord has asserted
a claim against the Company for damages of $48,909 related to this lease. At
January 31, 2010 the Company has a balance of $36,292 in accounts payable
related to this lease.

NOTE 12  Supplemental disclosures with respect to cash
flows

The significant non-cash investing and financing
transactions for the twelve month period ended January 31, 2010 were as follows:

Issued 199,170,302 shares of common stock as repayment of
$513,685 principal portion and $91,968 interest portion of the monthly payments
on the convertible notes.

Issued 58,917,700 detachable common stock purchase warrants to
the investors who purchased the August 2009 convertible notes recorded at fair
value as a discount on convertible promissory notes of $38,349.

Deferred financing charges of $42,437 were deducted from the
proceeds we received on the sale of August 2009 Convertible Notes.

Recorded $330,366 of discounts on convertible promissory notes
for beneficial conversion features.

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

Issued 7,500 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 37,646,325 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.

---

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

NOTE 13  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 14  Fair value of financial instruments

The Company's financial instruments consist of cash and cash
equivalents, accounts payable, accrued liabilities, convertible notes payable,
notes payable, and warrant liability. 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. Gains and losses recognized on changes in
fair value of financial instruments are reported in other income (expense) as
gain (loss) on change in fair value.

The Company estimates the fair value of level 3 inputs 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 warrant liability at January 31, 2010:

|                  |  |                     |  | Expected dividend |  |               |  | Risk-free interest
|----------------- |  | ------------------- |  | ----------------- |  | ------------- |  | ------------------
|Description       |  | Expected volatility |  | yield             |  | Expected term |  | rate              
|Warrant liability |  | 90%                 |  | 0%                |  | 0.5 year      |  | 0.3%              

|                  |   |             |  |  | Fair
      value measurements at reporting date using: | 
|----------------- | - | ----------- |  |  | ------------------------------------------------------ | 
|                  |   |             |  |  | Quoted prices in                                       | 
|                  |   |             |  |  | active markets                                         | 
|                  |   |             |  |  | for identical                                          | 
|                  |   | January 31, |  |  | liabilities                                            | 
|Description       |   | 2010        |  |  | (Level 1)                                              | 
|Warrant liability | $ | 30,422      |  |  | -                                                      | 

|                                     |  |  |  |   | Fair value measurements using significant |  
|------------------------------------ |  |  |  | - | ----------------------------------------- | -
|                                     |  |  |  |   | unobservable inputs (Level 3):            |  
|Description                          |  |  |  |   | Warrant liability                         |  
|Beginning balance                    |  |  |  | $ | -                                         |  
|Total (gains) or losses              |  |  |  |   | (7,927                                    | )
|Purchases, issuances and settlements |  |  |  |   | 38,349                                    |  
|Transfers in or out of
      Level 3 |  |  |  |   | -                                         |  
|Ending balance                       |  |  |  | $ | 30,422                                    |  

NOTE 15  Subsequent Events

The Company issued 109,370,577 shares of common stock for
conversions of $127,264 of principal and $24,905 of accrued interest on the
Convertible Notes.

On February 10, 2010 the Company sold the drill rig and other
drilling equipment and supplies in a bulk sale. The drill rig was pledged as
collateral on the Atlas Copco loan and the convertible promissory notes. The
Atlas Copco loan was paid in full.

On February 25, 2010 the Company entered into an extension and
modification of the convertible promissory notes. The maturity date of each note
is extended to February 28, 2011 with two 180 day extensions exercisable at the
option of the holder.

On April 23, 2010 the Company issued 76,400,000 shares of
common stock to directors and consultants for services rendered.

The company has evaluated subsequent events through May 11,
2010 which is the date the financial statements were issued.

---

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

NOTE 16  Going concern

The Company is in the exploration stage, has incurred losses
from operations, requires additional funds for further exploratory activity and
to maintain its claims 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, 2010.

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.

---

45

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, 2010, 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, our management,
including our chief executive officer and chief financial officer, 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, 2010 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, 2010, 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
independent registered public accounting firm regarding internal control over
financial reporting. Managements report was not subject to attestation by our
companys independent 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.

---

46

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                     
|Keith Brill      | Director                                                                                                    | 32  | December 23, 2009                    
|William Cavalier | Director                                                                                                    | 55  | September 21, 2009                   
|Larry Liang      | Director, Vice
      President of Business Development - China                                              | 30  | December 29, 2009                    

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  

We believe Mr. Briscoe is qualified to serve on our board of
directors because of his knowledge of our companys history and current
operations, which he gained from working for our company as described above, in
addition to his education and business experience as described above.

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.

---

47

We believe Mr. Musil is qualified to serve on our board of
directors because of his knowledge of our companys history and current
operations, which he gained from working for our company as described above, in
addition to his education and business experience as described above.

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.

We believe Mr. Guilbert is qualified to serve on our board of
  directors because of his knowledge of our companys history and current
  operations, which he gained from working for our company as described above,
  in addition to his education and business experience as described above.

Keith Brill  Director

Mr. Brill was appointed as one of our directors on December 23,
2009. Mr. Brill received an International Master of Business Administration
(IMBA) from the Moore School of Business, University of South Carolina in May
2005. He graduated from the South Carolina Honors College, University of South
Carolina in May 2003 with a Bachelor of Science, magna cum laude, major in
Economics and Finance, minor in Spanish. Mr. Brill has been a management
consultant with PA Consulting Group, Inc., a leading global consulting firm,
since 2004. He has provided multinational Fortune 500 companies with consulting
advice on topics including cost reduction, operational efficiency, and IT
strategy. Mr. Brill has extensive experience in conducting ROI analysis,
developing business cases, and providing strategic financial advice on major
business transformation programs.

We believe Mr. Brill is qualified to serve on our board of directors
  because of his knowledge of our companys history and current operations,
  which he gained from working for our company as described above, in addition
  to his education and business experience as described above.

William Cavalier  Director

Mr. Cavalier was appointed as one of our directors on September
21, 2009. Mr. Cavalier received his B.S. Cum Laude from the University of
California-Berkeley in 1976 and received his J.D. from the University of
California-Hastings College of Law in 1979. He was a law clerk for Justices
Robert Kane and Allison Rouse, California Court of Appeal in 1978 and has been
an active member of the California State Bar since 1979. Mr. Cavalier has
extensive experience in management consulting and finance. Recently Mr. Cavalier
has been engaged as General Counsel and syndicate manager to structure
Regulation D 506 private placements for oil and gas royalty property groups and
multi-well drilling partnerships for sale through FINRA broker-dealers. He also
represented a joint venture, which applied an innovative technology to treat
crude oil emulsions in crude production and wastewater remediation.

As a principal for Lone Star Group, Inc., he accepted finance
and analytical engagements where commercial real property was a significant
element of the transaction. Representative assignments included: $2.85 million
permanent financing for Dallas, Texas Walgreens; $3 million acquisition
financing for a Denton, Texas quarter horse breeding facility; $10 million
warehouse line for a hard money lender; $9.5 million sale leaseback of New
Jersey industrial property and a $12 million construction loan for Crowley,
Texas multifamily project.

---

48

As a Senior Real Estate Investment Banker for Lincoln Capital
Group he was responsible for a variety of assignments including product
development for a wholesale warehouse lender, commercial resort development
evaluation and repositioning, analysis of existing business infrastructure and
business processes at a regional commercial mortgage brokerage firm and
developing a capital structure and loan proposal for a 44 acre multi-use
development including two 168 unit multifamily properties, a 40,000 square foot
office, two corner bank pad sites and 15,000 square foot retail building in
Dallas, TX suburbs.

We believe Mr. Cavalier is qualified to serve on our board of
  directors because of his knowledge of our companys history and current
  operations, which he gained from working for our company as described above,
  in addition to his education and business experience as described above.

Larry Liang  Director & Vice President of Business
Development  China

Mr. Liang has a strong background in international business
development both in China and the United States. As a banker and real estate
broker, Mr. Liang has negotiated multi-million dollar transactions for Chinese,
American and other international clients. His current focus is on
entrepreneurial projects that will utilize his expertise in public and private
mergers and acquisitions, joint ventures and strategic alliances. Previously,
Mr. Liang had practiced corporate law for the Tian Lun Law Firm, one of southern
China s largest law firms. He holds law degrees from the Southwest University
of Political Science and Law, Chong Qing, China and from the James E. Rogers
College of Law, University of Arizona, Tucson, Arizona.

We believe Mr. Lang is qualified to serve on our board of directors
  because of his knowledge of our companys history and current operations,
  which he gained from working for our company as described above, in addition
  to his education and business experience as described above.

Family Relationships

There are no family relationships among our directors or
officers.

Board and Committee Meetings

The board of directors of our company held one formal meeting
in the year ended January 31, 2010 and thirteen formal meetings in the year
ended January 31, 2009. 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, 2010. Shareholders may contact our President, Jim
Briscoe, to recommend nominees to our board of directors.

For the year ended January 31, 2010 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, William Cavalier and
Keith Brill. 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, 2010 and January 31,
2009, 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.

---

49

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 and executive officers have not been involved in
any of the following events during the past ten 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;                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|5. | being the subject of, or a party to, any federal or state
      judicial or administrative order, judgment, decree, or finding, not
      subsequently reversed, suspended or vacated, relating to an alleged
      violation of: (i) any federal or state securities or commodities law or
      regulation; or (ii) any law or regulation respecting financial
      institutions or insurance companies including, but not limited to, a
      temporary or permanent injunction, order of disgorgement or restitution,
      civil money penalty or temporary or permanent cease- and-desist order, or
      removal or prohibition order; or (iii) any law or regulation prohibiting
      mail or wire fraud or fraud in connection with any business entity;
    or,
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|6. | being the subject of, or a party to, any sanction or
      order, not subsequently reversed, suspended or vacated, of any
      self-regulatory organization (as defined in Section 3(a)(26) of the
      Securities Exchange Act of 1934), any registered entity (as defined in
      Section 1(a)(29) of the Commodity Exchange Act), or any equivalent
      exchange, association, entity or organization that has disciplinary
      authority over its members or persons associated with a
  member.                                                                                                                                                                                                                                                                

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, 2010, all filing requirements
applicable to its officers, directors and greater than 10% percent beneficial
owners were complied with.

---

50

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;                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                       
|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$) | Option Awards (US$)    | 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 | 2010 
        2009 | 63,000
    
    85,000 | Nil 
    Nil     | Nil 
    Nil       | Nil
    
    30,000(3) | Nil 
    Nil                                      | Nil 
    Nil                                             | 68,754(2)
        42,500(4)           | $131,754
    
$157,500
|Gary Musil 
        Secretary and
        Director                                                  | 2010 
        2009 | Nil 
        Nil       | Nil 
        Nil | Nil 
        Nil   | Nil 
        15,000(5) | Nil 
        Nil                                  | Nil 
        Nil                                         | Nil 
        Nil                      | $0 
        $15,000   

---

51

|(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) | Mr. Briscoes other compensation represents accrued and
      unpaid wages during the twelve months ended January 31, 2010 and unused
      paid time off paid out to Mr. Briscoe of $11,754.                                                                                 
|    |                                                                                                                                                                                                                                                                               
|(3) | Mr. Briscoe was awarded 75,000 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 8 to our audited consolidated financial statements.
|    |                                                                                                                                                                                                                                                                               
|(4) | Mr. Briscoes other compensation represents accrued and
      unpaid wages at January 31, 2009.                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                               
|(5) | Mr. Musil was awarded 37,500 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 8 to our audited consolidated financial
statements.  

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,
2010.

|              | Option Awards                                                                 | Stock Awards                                                                   
|------------- | ----------------------------------------------------------------------------- | -------------------------------------------------------------------------------
|Name          | Number
        of Securities Underlying Unexercised
      Options Exercisable | Number
        of Securities Underlying Unexercised
      Options Unexercisable
|James Briscoe | 75,000                                                                        | Nil                                                                            
|Gary Musil    | 37,500                                                                        | Nil                                                                            
|Gary Musil    | 4,250                                                                         | Nil                                                                            
|Gary Musil    | 5,250                                                                         | Nil                                                                            

COMPENSATION PLANS

As of January 31, 2010 we had two compensation plans in place,
entitled "2004 Stock Option Plan" and 2007 Stock Option Plan. These plans have
been approved by our security holders. These plans have been given retroactive
effect of the 1 for 4 reverse stock split on September 1, 2009.

---

52

|Total number of securities
      authorized | Number of securities to be
      issued upon exercise of outstanding options as at
      January 31, 2010 | Weighted-average exercise price
      of outstanding options as at January 31, 2010 | Number of securities remaining
      available for further issuance as at January 31,
      2010
|------------------------------------------- | --------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------
|962,500                                     | 636,125                                                                                                   | $0.25                                                                               | 326,375                                                                                         
|2,500,000                                   | 443,750                                                                                                   | $0.06                                                                               | 2,056,250                                                                                       

On May 21, 2008 we granted 106,250 non-qualified stock options
to non-employee consultants and 762,500 incentive stock options to employees,
officers and directors. The options have an exercise price of $0.055 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.

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 written employment agreements or
compensation arrangements with any of our named executive officers. We have
entered into a verbal agreement with James Briscoe, CEO and Director for annual
salary of $120,000.

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.

There was no compensation paid or accruing to any director,
unless such director is also a named executive officer, during the last fiscal
year ended.

|Name          | Year           | Fees Earned
    or Paid in Cash (US$) | Stock
    Awards (US$) | Option
    Awards (US$)(2) | Nonequity
      Incentive Plan
    Compensation(US$) | Non-qualified
      Deferred CompensationEarnings
    (US$) | All Other
    Compensation (US$)(1) | Total
    (US$)   
|------------- | -------------- | ------------------------------------- | ---------------------- | -------------------------- | ---------------------------------------------------- | ----------------------------------------------------------- | ----------------------------------- | ------------------
|John Guilbert | 2010 
    2009 | Nil 
    Nil                          | Nil 
    Nil           | Nil 
    10,000            | Nil 
    Nil                                         | Nil 
    Nil                                                | 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.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

53

|(2) | Mr. Guilbert was awarded 25,000 options on May 21, 2008
      with a grant date fair value of $0.01 per share. The assumptions used to
      determine the grant date fair value can be found in Note 8 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, 2010 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, 2010, we had outstanding 247,656,979
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              | 2,187,500 (2)                                   | 0.9%                        
|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%                          
|Keith Brill 250 Central Ave Apt B204 New York, NY
      11559 USA       | Nil                                             | 0%                          
|William Cavalier 5517 Channel Isle Dr Plano, TX
      75093 USA         | Nil                                             | 0%                          
|Larry Liang 6651 N Campbell Ave #254 Tucson, AZ
      85718 USA         | Nil                                             | 0%                          
|Cede & Company PO Box 20 Bowling Green Station
      New York, NY 10274 | 228,916,441                                     | 92.4%                       
|Directors and Executive Officers as a Group                             | 2,187,500                                       | 0.9%                        

|(1) | Based on 247,656,979 shares of common stock issued and
      outstanding as of January 31, 2010. 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.                                                                                                                                                                                                                                                                                                                                                                                                                                               

---

54

Changes in Control

At January 31, 2010 we had 247,656,979 shares of common stock
issued and outstanding. At January 31, 2010 if the settlement of the Convertible
Promissory Notes was completed by the issuance of common shares there would be
2,021,513,000 shares required to convert the notes. Therefore, it is possible
that if the holders of our Convertible Promissory Notes were to settle their
debt through the issuance of common shares it would cause a change in
control.

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
5605(a)(2) of the Listing Rules of the NASDAQ, which defines an independent
director generally as a person 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, 2010, 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 $80,823. 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.

Audit Related Fees

For the fiscal year ended January 31, 2010, 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, 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.

Tax Fees

For the fiscal years ended January 31, 2010 and 2009, 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.

---

55

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:

- 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(2)                                                                                                             
|3.3            | Certificate of Change to Authorized
      Capital(3)                                                                  
|3.4            | Articles of Merger(3)                                                                                                 
|10.10          | Form of Securities Purchase Agreement
      for May 11, 2007 Senior May 2007 Convertible Notes (4)                    
|10.11          | Form of Convertible Promissory Note
      for May 11, 2007 Senior May 2007 Convertible Notes (4)                      
|10.12          | Form of Common Stock Purchase Warrant
      for May 11, 2007 Senior May 2007 Convertible Notes (4)                    
|10.13          | List of Subscribers for May 11, 2007
      Senior May 2007 Convertible Notes (4)                                      
|10.14          | Form of Subscription Agreement for
      August 28, 2008 Secured Convertible Promissory Notes (5)                     
|10.15          | Form of Secured Convertible
      Promissory Notes dated August 28, 2008 (5)                                          
|10.16          | Form of Security Agreement for August
      28, 2008 Secured Convertible Promissory Notes (5)                         
|10.17          | Form of Subscription Agreement for
      May 21, 2009 Secured Convertible Promissory Notes (6)                        
|10.18          | Form of Secured Convertible
      Promissory Notes dated May 21, 2009 (6)                                             
|10.19          | Form of Guarantee dated May 21, 2009
      of Big Chunk Corp for May 21, 2009 Secured Convertible Promissory Notes (6)
|10.20          | Form of Lock Up Agreement for May 21,
      2009 Secured Convertible Promissory Notes (6)                             
|10.21          | Form of Escrow Agreement for May 21,
      2009 Secured Convertible Promissory Notes (6)                              
|10.22          | Form of Subscription Agreement for
      August 14, 2009 Secured Convertible Promissory Notes(7)                      

---

56

|Exhibit
      Number | Description of Exhibit                                                                                                      
|-------------------- | ----------------------------------------------------------------------------------------------------------------------------
|10.23                | Form of Secured Convertible Promissory Notes dated
      August 14, 2009(7)                                                 
|10.24                | Form of Escrow Agreement for August 14, 2009 Secured
      Convertible Promissory Notes (7)                                 
|10.25                | Form of Lock Up Agreement for August 14, 2009 Secured
      Convertible Promissory Notes(7)                                 
|10.26                | Form of Warrant dated August 14, 2009(7)                                                                                    
|10.27                | Form of Guarantee dated August 14, 2009 of Big Chunk
      Corp for August 14, 2009 Secured Convertible Promissory Notes (7)
|10.28                | Form of Extension and Modification Agreement of Secured
      Convertible Promissory Notes (8)                              
|10.29                | Code of Ethics(3)                                                                                                           
|10.30                | Subsidiaries: Big Chunk Corp.                                                                                               
|31.1*                | Section 302 Certification
      under Sarbanes-Oxley Act of 2002 of James Briscoe                                           
|32.1*                | Section 906 Certification
      under Sarbanes-Oxley Act of 2002 of James Briscoe                                           

|(1) | Filed as an exhibit to our Registration Statement on Form
      SB-2, filed with the SEC on May 14, 2002. 
|--- | ----------------------------------------------------------------------------------------------------------
|    |                                                                                                           
|(2) | Files as an exhibit to our Quarterly Report on Form
      10-QSB, filed with the SEC on December 14, 2007.
|    |                                                                                                           
|(3) | Filed as an exhibit to our Current Report on Form 8-K,
      filed with the SEC on September 1, 2009.     
|    |                                                                                                           
|(4) | Filed as an exhibit to our Current Report on Form 8-K,
      filed with the SEC on May 15, 2007.          
|    |                                                                                                           
|(5) | Filed as an exhibit to our Current Report on Form 8-K,
      filed with the SEC on September 3, 2008.     
|    |                                                                                                           
|(6) | Filed as an exhibit to our Current Report on Form 8-K,
      filed with the SEC on May 26, 2009.          
|    |                                                                                                           
|(7) | Filed as an exhibit to our Current Report on Form 8-K,
      filed with the SEC on August 14, 2009.       
|    |                                                                                                           
|(8) | Filed as an exhibit to our Current Report on Form 8-K,
      filed with the SEC on March 3, 2010.         
|    |                                                                                                           
|*   | Filed herewith.                                                                                           



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57

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 12, 2010

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 12, 2010

|By: /s/ Gary Musil              |  | By:
      /s/ Keith Brill     
|------------------------------- |  | ------------------------------
|                                |  |                               
|Gary Musil                      |  | Keith Brill                   
|Secretary and Director          |  | Director                      
|Dated: May 12, 2010             |  | Dated: May 12, 2010           
|                                |  |                               
|                                |  |                               
|                                |  |                               
|By: /s/ Dr. John
      Guilbert |  | By:
      /s/ William Cavalier
|                                |  |                               
|Dr. John Guilbert               |  | William Cavalier              
|Director                        |  | Director                      
|Dated: May 12, 2010             |  | Dated: May 12, 2010           
|                                |  |                               
|                                |  |                               
|                                |  |                               
|                                |  |                               
|By: /s/ Larry
      Liang       |  |                               
|                                |  |                               
|Larry Liang                     |  |                               
|Director                        |  |                               
|Dated: May 12, 2010             |  |                               

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