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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, 2009

[   ] 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 $0.001(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 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. [   ]

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Indicate by check mark 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 (§ 229.405 of this chapter) during the preceeding 12 months (or for such shorter period that the
registrant
was required to submit and post such files).
Yes [X]    No [   ]

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.

40,917,674 shares of Common Stock @ $0.05(1) = $2,045,884(1)Closing price on July 31, 2008.

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

193,946,706 shares of Common Stock issued and outstanding as
of May 7, 2009.

DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference,
briefly describe them and identify the part of the Form 10-K (e.g., Part I,
Part II, etc.) into which the document is incorporated: (1) any annual
report to security holders; (2) any proxy or information statement; and (3)
any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of
1933 (Securities Act). The listed documents should be clearly described
for identification purposes (e.g., annual report to security holders for the
fiscal years ended December 24, 1990).

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TABLE OF CONTENTS

|           |                                                                                                      |      |   
|---------- | ---------------------------------------------------------------------------------------------------- | ---- | --
|**PART I** |                                                                                                      | Page
|           |                                                                                                      |      |   
|Item 1.    | Description of Business                                                                              |      | 4 
|Item 1A.   | Risk Factors                                                                                         |      | 6 
|Item 2.    | Description of Property                                                                              |      | 11
|Item 3.    | Legal Proceedings                                                                                    |      | 17
|Item 4.    | Submissions of Matters to a Vote of Security Holders                                                 |      | 17
|           |                                                                                                      |      |   
|PART II    |                                                                                                      |     
|           |                                                                                                      |      |   
|Item 5.    | Market for Common Equity and Related Stockholder Matters                                             |      | 17
|Item 6.    | Selected Financial Data                                                                              |      | 21
|Item 7.    | Management's Discussion and Analysis of Financial Condition
      and Results of Operations          |      | 21
|Item 7A.   | Quantitative and Qualitative Disclosures About Market Risk                                           |      | 24
|Item 8.    | Financial Statements                                                                                 |      | 25
|Item 9.    | Changes In and Disagreements With Accountants on Accounting
      and Financial Disclosure           |      | 49
|Item 9A.   | Controls and Procedures                                                                              |      | 49
|Item 9B.   | Other Information                                                                                    |      | 49
|           |                                                                                                      |      |   
|PART III   |                                                                                                      |     
|Item 10.   | Directors, Executive Officers and Corporate Governance                                               |      | 50
|Item 11.   | Executive Compensation                                                                               |      | 53
|Item 12.   | Security Ownership of Certain Beneficial Owners and Management
      and Related Stockholder Matters |      | 57
|Item 13.   | Certain Relationships and Related Transactions, and Director
      Independence                      |      | 58
|Item 14.   | Principal Accountant Fees and Services                                                               |      | 58
|           | Exhibits                                                                                             |      | 59
|           | Signatures                                                                                           |      | 61

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", "Company",
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. (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. 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 the Companys
mineral properties. 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 mineral target 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. The Company uses 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. The
Companys 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.

On September 11, 2008, we announced that we and XState
Resources have agreed that XState will maintain a 50% interest in three uranium
exploration targets at North Pipes. The three areas can be chosen from all the
targets over which exploration has been conducted by the joint venture in the
last 18 months.

Both parties agree to enter into a formal 50/50 contributing
joint venture in relation to the three targets chosen by XState. The previous
"earn-in" agreement is terminated. The Company retains former JV funds to
complete minor rehabilitation on exploration sites and conclude administrative
tasks.

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 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

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engaged in the extraction of a known mineral resource are in
the production stage. Our company is 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.

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.

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

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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. The Company estimates
that the required annual assessments to maintain the claims for 2009, less
available carry forwards, will be approximately $298,600.

The annual state rentals for the Big Chunk and Bonanza Hills
Alaska State mining claims vary from $25 to $200 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, 2008 through September 1, 2009 of $133,750 have been
paid. The estimated state rentals due by November 30, 2009 for the period from
September 1, 2009 through September 1, 2010 are $133,750. 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.

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 Company is 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 is $125 per claim. Additional fees of $45 per
claim are due in the first year of filing a Federal lode mining claim along with
the first years rent. The annual rentals required to maintain the NPSP claims
are $219,625. 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 two full time employees and four part-time employees.
Currently we employ one full time geologist who is also our President and CEO,
James Briscoe, and one full-time assistant to our President and CEO. We employ
one part-time geologist Erik Murdock M.Sc. who also specializes in computer
mapping. We have one part-time information technology staff and two part-time
accounting staff. Additionally, we have geoscience consultants specializing in
exploration geology, geophysics, geochemistry, and geocomputer data
applications, of whom our Technical Advisory Board is comprised. These
individuals are contracted for 140 days of consulting services over each
calendar year.

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.

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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".

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, cave-ins 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

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. If so, we will likely have to scale down or stop our exploration
program and our share price will likely decrease. If these harmful effects cause
us to cease our exploration program, then 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 fund all of our exploration program through
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 fund our exploration program on terms and
at rates of interest we find acceptable and in the best interests of our
company.

If we cannot fund our planned exploration program from the sale
of our equity securities or through incurring debt on acceptable terms, then we
will likely have to scale down or cease our exploration program. If we scale
down our exploration program, our share price would likely decrease and if we
cannot fund our exploration program and other expenses, 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 company's 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.

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 $63,250 and negative working
capital of $(2,258,655) as of January 31, 2009. 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 and
August 2008 Convertible Notes, further described in Note 7 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 if required.
The Unsecured Convertible Promissory Notes entered into in May 2007 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 2 year term of the Unsecured Convertible Promissory Notes. The
August 2008 Convertible Notes contain restrictions that require that the August
2008 and May 2007 convertible notes be repaid in full from the first $3,000,000
of financings completed by the Company. These restrictions may make it difficult
for us to raise the

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9

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, 2009 is $(36,294,540). 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, 2009 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.

Inability of our Secretary to devote sufficient time to the
operation of the business may limit our Company's success.

Presently our Secretary, Mr. Gary Musil allocates only a
portion of his time to the operation of our business. If the business requires
more time for operations than anticipated or the business develops faster than
anticipated, the Secretary may not be able to devote sufficient time to the
operation of the business to ensure that it continues as a going concern. Even
if this lack of sufficient time of our management is not fatal to our existence,
it may result in limited growth and success of the business.

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. As of January 31,
2009, there were 193,946,706 of our common shares issued and outstanding. We
anticipate that all or at least some of our future funding 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.

Dilution will likely occur because of the May 2007 Convertible
Notes and August 2008 Convertible Notes and related common share purchase
warrants that we issued on May 11, 2007. First, the entire amount of money owed
under the May 2007 and August 2008 Convertible Notes plus 12% interest per year,
may be converted into shares of our common stock at a price that is the lesser
of $0.05 per share or 80% of the average closing bid price for the five trading
dates prior to the repayment date. The May 2007 Convertible Notes mature on May
11, 2009. The August 2008 Convertible Notes mature on August 27, 2009. In
November 2008 we were in default on the May 2007 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. 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 $0.05 per share until they expire on May 11, 2012. Third, the
338,461 common share purchase warrants that we issued to the

---

10

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.
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 May 2007 and August 2008
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.

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.

---

11

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, 2009. 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:

The Company holds a 100% interest in 1,757 Federal lode mining
claims strategically placed over approximately 60 square miles on the Colorado
Plateau Province of Northern Arizona. The 1,757 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.

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 $125 per mining claim. To keep our existing property in good standing, we
must pay annual maintenance and rental fees of $219,625. 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)

The Company also holds 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.

The Company holds a 50% interest in Elle Venture, a general
partnership with XState Resources Limited (XState) that was formed to explore,
develop and, if warranted, mine certain US Federal lode mining claims within the
22 mile joint venture area. The Elle Venture commenced on December 15, 2006 when
XState deposited $2,900,000 (sole funding amount) into the joint venture bank
account. XState has the right of first refusal to buy or joint venture in
relation to the other pipes and claims later staked in the Elle Venture area. On
July 31, 2008 the Company entered into an agreement to amend the joint venture
agreement. The Elle Venture mineral claims will continue to be owned 50% each by
the Company and XState and the

---

12

Company may be obligated to contribute funds if exploration
activities were to resume on those claims. If the Company or XState is unable to
make a proportional contribution then our interest or their interest in the
mineral claims will be diluted.

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

The Company holds 56 mineral claims covering approximately 13.5
square miles in Southwestern Alaska approximately 13.5 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:

The Company holds 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:

The Company holds 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:

The Company holds 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 SuperProjectoverview



---

14

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



---

15

Claim status

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, 2009. 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 2009. We estimate that we will be required to pay annual
rentals of $133,750 by November 30, 2009 to maintain the Alaska claims in good
standing. We estimate that we will be required to pay $219,625 by September 1,
2009 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, 2009 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, 2006 to Present.

Geophysics

We have completed several geophysical surveys on our North
Pipes Super Project claims, as outlined below:

| | 1) | CSAMT/NSAMT (Controlled Source-Natural Source Audio
      MagnetoTellurics). Twenty-two line miles over 7 target areas were
      completed by our geophysical contractor Zonge Engineering and Research
      Organization Inc.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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16

| |    | The surveys were conducted from mid-June to mid October
      2006. Several audio magneto tellurics anomalies were drill tested (see
      drilling below). Logging and assay results from these drill holes did not
      indicate the presence of an ore-bearing breccia pipe. Additional modeling
      of the audio magneto tellurics dataset and integrating this data with
      recent drill results is being considered.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | 2) | NanoTEM (Fast Sampling Transient Electromagnetics).
      NanoTEM data was collected in select areas to permit better inversion
      (analysis) of CSAMT/NSAMT data at shallow levels. This geophysical
      technique identified a shallow resistive layer followed by a weakly
      conductive layer. This data correlated well with the AMT data but did not
      aid in the identification of additional targets.       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | 3) | VTEM (Versatile Time-Domain Electromagnetics). A 200 line
      kilometre airborne VTEM geophysical survey was conducted by Geotech
      Aribrone Ltd over the Elle Venture area of mutual interest in 2006.
      Processing and modeling of the data was completed independently by two
      geophysical consulting firms - Geotech and Condor. Several anomalies were
      identified in the VTEM survey.                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | 4) | PEM (Pulse Electro-magnetic). 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.                                                                                                                     

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 the Companys 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 Company geologists on January
23rd, 24th and 25th of 2008. Geochemical
analyses developed by members of the Company and the 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 the Companys target areas.
Numerous target areas display favourable signatures.

---

17

Drilling

The following table summarizes completed drilling to date on
the North Pipes Super Project:

Target Area
      Dates Drilled
      No. Holes
      Footage Drilled (ft)
      CommentsElle
    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 drillingHolda
    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; assays pending.Hafsa
    03/07
    2
    1012
    Core drilling; shallow drilling did not indicate presence
      of down dropped block; assays pending.Helvia
    03/07
    3
    1435
    Core drilling; shallow drilling did not indicate presence
      of down dropped block; assays pending.


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.

Item
3.              
Legal Proceedings.

We know of no material, active or pending legal proceedings
against us, nor are we involved as a plaintiff in any material proceedings or
pending litigation. There are no proceedings in which any of our directors,
officers or affiliates, or any registered or beneficial shareholder are an
adverse party or has a material interest adverse to us.

Item
4.              
Submissions of Matters to a Vote of Security Holders.

None.

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. Since July 15,
2003,

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18

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
      High
      LowJanuary 31, 2009
      $0.0044
      $0.0008October 31, 2008
      $0.046
      $0.001July 31, 2008
      $0.25
      $0.038April 30, 2008
      $0.34
      $0.22January 31, 2008
      $0.371
      $0.20October 31, 2007
      $0.47
      $0.279July 31, 2007
      $0.56
      $0.35April 30, 2007
      $0.98
      $0.53


| | (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.

On January 31, 2009, the shareholders' list for our common
stock showed 75 registered stockholders and 193,946,706 shares issued and
outstanding. The closing sale price for our common stock on May 7, 2009, as
reported on the OTC Bulletin Board, was $0.0028.

Recent Sales of Unregistered Securities

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. Under the original note terms, the May 2007 Convertible Notes bore interest at 8%.  Repayment of the May 2007 Convertible Notes began in February 2008 and consists of sixteen monthly principal payments of $259,375 plus accrued unpaid interest.  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 is in default on the note.  The default interest rate on the note is increased to 15%.  Our convertible note holders could call the note and request security to be sold for repayment.

Under the original note terms holders of the May 2007
Convertible Promissory Notes could have elected to convert all or a portion of
their note balance before the scheduled repayment dates at a fixed rate of $0.65
per share. The Company may have elected to make repayments of the May 2007
Convertible Notes in cash or by the issuance of common stock of the Company. The
conversion price for the monthly payments was the lesser of the fixed conversion
price of $0.65 per share or 85% of the volume weighted average price for 10
trading days prior to the repayment date, but not less than $0.45 per share.
Stock payment could not be made if the amount of shares to be issued would have
exceed 33% of the aggregate daily trading volume for 7 trading days preceding
the repayment date, unless waived by the holders of the May 2007 Convertible
Notes. Stock payment could not be made if the holders of the May 2007
Convertible Notes owned more than 4.99% of the then outstanding common stock of
the Company. In the event that a delay in delivery of exercised shares occurred,
as defined in the subscription agreement, the Company agreed to pay liquidated
damages of $100 per business day for each $10,000 of purchase price of shares
subject to the delivery default. In the event that the Company failed to deliver
the exercised shares within 7 business dates of the Delivery Date and the
selling security holder purchases shares of common stock of the Company in an
open market, then the Company owed in cash to the

---

19

selling security holder the amount by which the selling
security holders total purchase price including brokers commissions exceeded
the aggregate purchase price of the shares issuable together with interest at
15% per annum.

The Company entered into the first modification agreement with
the holders of the May 2007 Convertible Notes in February 2008 and then a second
modification agreement in May 2008. The modification agreements were effective
from February 2008 through July 2008. The modification agreements reduced the
conversion prices in order to induce the note holders to convert the note into
common stock. During the year ended January 31, 2009 the Company recorded debt
conversion expense of $103,437 related to the modification agreements.

On August 27, 2008 the Company entered into the third
modification agreement with the holders of the May 2007 Convertible Notes. The
modification agreement increased the interest rate on the May 2007 Convertible
Notes to 12%. The modification agreement also reduced the fixed conversion price
to $0.05 and reduced the exercise price on the detachable common stock purchase
warrants issued in connection with the May 2007 Convertible Notes to $0.05 per
share. The Company recorded $67,700 of additional discounts on the May 2007
Convertible Notes for the reduction in the exercise price on the detachable
common stock purchase warrants. The Company was granted an exemption from making
any of the monthly payments in connection with the May Notes in cash until
February 2009. The Company may elect to make repayments of the May 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 conversion price is the lesser
of the fixed conversion price of $0.05 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.

The Company granted a security interest to the holders of the
May 2007 Convertible Notes to all now owned and hereafter acquired right, title
and interest of the Company in, to and in respect of all: Accounts, interests in
goods represented by Accounts, returned, reclaimed or repossessed goods with
respect thereto and rights as an unpaid vendor; contract rights; Chattel Paper;
investment property; General Intangibles, Documents, Instruments, letters of
credit, bankers acceptances or guaranties, cash moneys, deposits; securities,
bank accounts, deposit accounts, credits and other property now or hereafter
owned or held in any capacity by the Company, as well as agreements or property
securing or relating to any of the items referred to above.

The holders of the May 2007 Convertible Notes were issued
6,769,228 detachable common stock purchase warrants with an exercise price of
$0.05 and a life of 5 years. The broker was issued 338,461 common stock purchase
warrants as a broker fee with an exercise price of $0.05 and a life of 5
years.

During the year ended January 31, 2008 one note holder
converted $250,000 of the principal balance of their May 2007 Convertible Note
and $9,699 of unpaid accrued interest at a conversion price of $0.65 per share
pursuant to the original terms of the notes. The Company issued 399,537 shares
of common stock related to these conversions. The debt converted was allocated
$25,991 of deferred finance charges and $181,624 of discounts, and the
unamortized portion of $157,269 was recorded as interest expense.

During the year ended January 31, 2009 the Company issued
150,585,301 shares of common stock and $407,349 of cash for the monthly payments
and principal conversions on the May 2007 Convertible Notes. At January 31, 2009
the note holders have a balance of $831,226 of monthly payment amounts that have
been deferred that are due on demand by the note holders.

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 is considered in default.  The default interest rate is increased to 15%.  Repayment of the August 2008 Convertible Notes was to begin in February 2009 with six monthly principal payments of $59,146 plus accrued unpaid interest and one final payment of $59,308 plus accrued unpaid interest.  The entire balance of the August 2008 Convertible Notes and May 2007 Convertible Notes becomes due immediately upon the Company’s receipt of net proceeds from a sale of debt or equity with a gross amount of up to $3,000,000. The holders of the August 2008 Convertible Notes may elect to convert all or a portion of their note balance before the scheduled repayment dates at a fixed rate of $0.05 per share.  The Company may elect to make repayments of the August 2008

---

20

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 conversion price for the monthly payments is the lesser of the fixed conversion price of $0.05 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. Stock payment cannot be made if the holders of the August 2008 Convertible Notes own more than 4.99% of the then outstanding common stock of the Company.  Stock payment cannot be made if the stock is not timely issued, an event of default has occurred, an exemption from registration of the resale of shares of Common Stock to be issued in payment of the Monthly Amount is not available to the Holder, or if the amount of Common Stock that would be issued in satisfaction of the Monthly Amount exceeds for the Holder and Other Holders, in the aggregate, more than 33% of the aggregate daily trading volume of the Common Stock for the seven trading days preceding such Repayment Date, as reported by Bloomberg L.P. for the Principal Market.  The Company may use the proceeds for lease payments, offering expenses and other designated purposes.

The August 2008 Convertible Notes are secured by all now owned
and hereafter acquired right, title and interest of the Company in, to and in
respect of all: Accounts, interests in goods represented by Accounts, returned,
reclaimed or repossessed goods with respect thereto and rights as an unpaid
vendor; contract rights; Chattel Paper; investment property; General
Intangibles, Documents, Instruments, letters of credit, bankers acceptances or
guaranties, cash moneys, deposits; securities, bank accounts, deposit accounts,
credits and other property now or hereafter owned or held in any capacity by the
Company, as well as agreements or property securing or relating to any of the
items referred to above.

The August 2008 Convertible Notes contain a provision that the
  note holders be repaid from the first $3,000,000 received if any future financings
  are completed by the Company. These provisions along with the shortage of unissued
  authorized capital will make it difficult for the Company to raise any funds
  through equity financings.

Other sales of unregistered securities:

On May 2, 2007 the Company issued 50,000 shares to Equititrend
Advisors LLC pursuant to an agreement to perform public and investor relations
services. The shares were issued to an accredited investor pursuant to
exemptions from registration set out in Rule 506 of Regulation D under the
Securities Act. The transactions were reported at fair value. Fair value of the
shares issued was determined by a review of the Companys stock trading price
around the date of issuance and was determined to be $0.57 per share for the
shares issued on May 2, 2007. The Company recorded $28,500 of public relations
expense related to the stock issuance.

The Company issued 62,000 common shares to three public
relations consultants on August 27, 2007 as compensation for public relations
services performed. The issuance of common stock is reported at fair value. Fair
value was determined to be the closing trading price on August 27, 2007, or
$0.42 per common share. The Company recorded $26,040 of public relations expense
related to the stock issuances.

During the year ended January 31, 2008, the Company issued
1,718,799 shares to Cornell Capital Partners pursuant to a Standby Equity
Distribution Agreement (SEDA) in exchange for proceeds of $1,074,417, net of
fees of $56,500. Cornell Capital Partners paid us 96%, or a 4% discount, of the
lowest volume weighted average per share purchase price of our common stock on
our principal trading market for the 5 days following each request for an
advance. Shares of common stock issued pursuant to the SEDA are reported as
permanent equity pursuant to SFAS No. 150 at the discounted price paid for the
shares by Cornell Capital Partner, LP. Expenses of shares issued pursuant to the
SEDA are reported as a reduction of additional paid-in capital. In May 2007,
pursuant to the May 2007 Convertible Notes subscription agreement, the Company
agreed that it would not exercise its rights under the SEDA without written
consent from the Unsecured Convertible Promissory Note Holders. The Company has
not issued any shares to Cornell Capital Partners after April 2007 and the SEDA
expired in March 2008.

All proceeds received have been and will be used for
exploration of our mineral properties and working capital.

Equity Compensation Plan Information

As of January 31, 2009 we had two compensation plans in place,
entitled "2004 Stock Option Plan" and 2007 Stock Option Plan. These plans have
not been approved by our security holders.

---

21

Total number of securities
      authorized
      Number of securities to be issued upon
      exercise of outstanding options as at January 31,
      2009
      Weighted-average exercise price of
      outstanding options as at January 31, 2009
      Number of securities remaining available for
      further issuance as at January 31, 20093,850,000
    2,718,500
    $0.97
    1,131,50010,000,000
    2,225,000
    $0.22
    7,775,000


On May 21, 2008 the Company granted 425,000 non-qualified stock
options to non-employee consultants and 3,050,000 incentive stock options to
employees, officers and directors. The options have an exercise price of $0.22
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.

On August 15, 2007, the Company granted 250,000 non-qualified
stock options pursuant to the 2004 Stock Option Plan to an investor relations
consultant in exchange for future services. The Options have an exercise price
of $0.45 per share and a term of 3 years. The options vest 25% every three month
anniversary of the grant date.

On May 24, 2007, the Company granted 10,000 incentive stock
options to an employee in accordance with the 2004 Stock Option Plan. The
options have an exercise price of $1.11 per share and a term of 8.875 years. The
options vest 50% on the grant date, 25% on October 6, 2007 and 25% on April 6,
2008.

On December 8, 2006, we granted to our employees, consultants,
officers and directors stock options to purchase an aggregate of 1,590,000
common shares exercisable at the price of $0.72 per share for a term of ten
years. The grant of stock options was made under the terms of our 2004 Stock
Option Plan.

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.

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. The Company uses 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 $63,250 as of
January 31, 2009. We had negative working capital of $(2,258,655) as of January
31, 2009. We had cash inflows from financing activites of $71,384 for the year
ended January 31, 2009. The Company is currently in default on the May 2007
Convertible Notes and the August 2008 Convertible Notes and as such the entire
obligation is reported as a current liability. The note holders have a security

---

22

interest in all assets and mineral properties and as a result
the Company is unable to sell any assets without prior approval from the note
holders. The Convertible Promissory Notes entered into in May 2007 contains
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 2 year term of the Unsecured Convertible Promissory Notes. The
August 2008 Convertible Notes contain restrictions that require that the August
2008 and May 2007 convertible notes be repaid in full from the first $3,000,000
of financings completed by the Company. 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. 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.

Results of Operations for the year ended January 31, 2009

We had a net loss of ($4,176,066) for the twelve-month period
ended January 31, 2009 compared to a net loss of ($5,697,935) for the
twelve-month period ended January 31, 2008. The decrease in the net loss is the
result of the Company freezing its planned drilling program at the North Pipes
Super Project due to the lack of cash resources available. In the prior year the
Company spent approximately $435,000 on its drilling program. The Company
performed a geochemical sampling program and geophysics in the prior year which
was not performed in the current year. The cost of the geochemical sampling
program and geophysics was approximately $615,000 in the prior year. The Company
also reduced overhead costs by cutting back staff, office and storage space and
other discretionary spending. The cost reductions in the geology department were
approximately $345,000 this year. The cost reductions in the general,
administrative and public relations departments were approximately $126,000 this
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.

Investment in Elle Venture

The Company holds a 50% interest in Elle Venture, a general
partnership with XState Resources Limited (XState) that was formed to explore,
develop and, if warranted, mine certain US Federal lode mining claims within the
22 mile joint venture area. The Elle Venture commenced on December 15, 2006 when
XState deposited $2,900,000 (sole funding amount) into the joint venture bank
account. On July 31, 2008 the Company entered into an agreement to amend the
joint venture agreement and terminate the subcontracting agreement. The Company
received a $300,000 liquidating distribution in relation to the termination of
the agreement. The Elle Venture mineral claims will continue to be owned 50%
each by the Company and XState and the Company may be obligated to contribute
funds if exploration activities were to resume on those claims. If the Company
or XState is unable to make a proportional contribution then our interest or
their interest in the mineral claims will be diluted. The Company does not
anticipate that we will make any additional or proportional contributions to the
Elle Venture in the next twelve months.

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23

Cash Requirements

Over the next twelve months we intend to pay annual rentals on
our North Pipes, Big Chunk and Bonanza Hills claims and performing only the
minimal exploration work necessary to maintain these claims in good standing for
an estimated cost of $652,000. We anticipate that we will incur expenses over
the next twelve months for general and administrative overhead, occupancy,
accounting and auditing, legal fees and salaries. 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. The Unsecured
Convertible Promissory Notes entered into in May 2007 contains 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 2
year term of the Unsecured Convertible Promissory Notes. The August 2008
Convertible Notes contain restrictions that require that the August 2008 and May
2007 convertible notes be repaid in full from the first $3,000,000 of financings
completed by the Company. 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.

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, 2009, included an explanatory paragraph regarding
their concerns about our ability to continue as a going concern.

Presentation of Financial Information

Our consolidated financial statements for the period ended
January 31, 2009 reflect financial information for the twelve month period
ending January 31, 2009, as well as from inception through January 31, 2009 and
for the twelve-month period ended January 31, 2008.

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, 2009 and 2008.
Our accumulated stockholders equity at January 31, 2009, was ($1,372,654) and
the net loss for the twelve-month period ended January 31, 2009 was
($4,176,066). 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.

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. (formerly Liberty Star Gold 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

---

24

statements for the period ended January 31, 2009. Our total
stockholders equity at January 31, 2009 was ($1,372,654). All 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.

Mineral claims

The Company accounts 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

The Company accounts for convertible promissory notes in
accordance with Statement of Financial Accounting Standards No. 150 (SFAS
150). The Company reviewed the convertible promissory notes and the related
subscription agreement to determine the appropriate reporting within the
financial statements. The notes are reported as liabilities stated at fair
value. The Company 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 the
Companys common stock in accordance with the notes original terms.

New Accounting Pronouncements

In May 2008, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards No. 162 The Hierarchy of
Generally Accepted Accounting Principles. This statement identifies the sources
of accounting principles and the framework for selecting the principles used in
the preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles in the
United States of America. This statement is effective 60 days following the
SECs approval of the Public Company Accounting Oversight Board amendments to AU
Section 411, The Meaning of Present Fairly in Conformity With Generally
Accepted Accounting Principles. The Company does not believe that the adoption
of SFAS No. 162 will have a material effect on its results of operations or
financial position.

In March 2008, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting Standards No. 161 Disclosures
about Derivative Instruments and Hedging Activities  an amendment of FASB
Statement No. 133. This statement changes the disclosure requirements for
derivative instruments and hedging activities. Entities are required to provide
enhanced disclosures about (a) how and why an entity uses derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under Statement No. 133 and its related interpretations, and (c)
how derivative instruments and related hedged items affect an entitys financial
position, financial performance, and cash flows. This statement is effective for
financial statements issued for fiscal years and interim periods beginning after
November 15, 2008, with early adoption encouraged. This statement encourages,
but does not require, comparative disclosures for earlier periods at initial
adoption. The Company does not believe that the adoption of SFAS No. 160 will
have a material effect on its results of operations or financial position.

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

Not applicable.

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25

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, 2009 and 2008                                                                                                                                                     
| |                                                                                                                                                                                                                       
| | Consolidated Statements of Operations
      for the twelve months ended January 31, 2009, the twelve months ended
      January 31, 2008 and the period from inception (August 20, 2001) to
      January 31, 2009    
| |                                                                                                                                                                                                                       
| | Consolidated Statements of
      Stockholders' Equity (Deficit) for the period from inception (August 20,
      2001) to January 31, 2009                                                                             
| |                                                                                                                                                                                                                       
| | Consolidated Statements of Cash Flows
      for the twelve months ended January 31, 2009, the twelve months ended
      January 31, 2008 and for the period from inception (August 20, 2001) to
      January 31, 2009
| |                                                                                                                                                                                                                       
| | Notes to Consolidated Financial
      Statements                                                                                                                                                                      

---

26

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, 2009 and 2008, and the related consolidated statements of
  operations, stockholders equity, and cash flows for the years then ended and
  for the cumulative period from inception (August 20, 2001) through January 31,
  2009. These consolidated financial statements are the responsibility of the
  Companys management. Our responsibility is to express an opinion on these
  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 its
  internal control over financial reporting. Our audits included 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 at January 31, 2009 and 2008, and the results of its operations, changes
  in stockholders equity, and its cash flows for the years then ended, and for
  the cumulative period from inception (August 20, 2001) through January 31,
  2009, in conformity with accounting principles generally accepted in the
  United States of America.

The accompanying 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, 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 7, 2009

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27

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

|                                                              |   |                  |   |   |                  |  
|------------------------------------------------------------- | - | ---------------- | - | - | ---------------- | -
|                                                              |   |                  |   |   |                  |  
|                                                              |   | January 31, 2009 |   |   | January 31, 2008 |  
|**ASSETS**                                                    |  
|                                                              |   |                  |   |   |                  |  
|Current:                                                      |   |                  |   |   |                  |  
|Cash and cash equivalents                                     | $ | 63,250           |   | $ | 1,265,187        |  
|Prepaid expenses and supplies                                 |   | 192,887          |   |   | 183,525          |  
|Due from related parties                                      |   | 1,888            |   |   | 277,665          |  
|Deposits                                                      |   | -                |   |   | 6,707            |  
|Total current assets                                          |   | 258,025          |   |   | 1,733,084        |  
|                                                              |   |                  |   |   |                  |  
|Property and equipment, net                                   |   | 826,523          |   |   | 1,107,275        |  
|Certificates of deposit                                       |   | 3,000            |   |   | 260,906          |  
|Deposits                                                      |   | -                |   |   | 10,000           |  
|Deferred financing charges, net                               |   | 87,276           |   |   | 279,656          |  
|Investment in Elle Venture                                    |   | -                |   |   | -                |  
|Other assets                                                  |   | 50,000           |   |   | -                |  
|                                                              |   |                  |   |   |                  |  
|Total assets                                                  | $ | 1,224,824        |   | $ | 3,390,921        |  
|                                                              |   |                  |   |   |                  |  
|LIABILITIES AND STOCKHOLDERS
      EQUITY (DEFICIT)          |  
|                                                              |   |                  |   |   |                  |  
|Current:                                                      |   |                  |   |   |                  |  
|Current portion of long-term debt                             | $ | 77,064           |   | $ | 107,866          |  
|Current portion of capital lease
      obligation             |   | -                |   |   | 2,760            |  
|Current portion of convertible promissory notes,
      net of |   |                  |   |   |                  |  
|discounts                                                     |   | 2,280,431        |   |   | 1,605,022        |  
|Accounts payable and accrued liabilities                      |   | 44,219           |   |   | 283,574          |  
|Accrued wages to related party                                |   | 42,500           |   |   | -                |  
|Accrued interest                                              |   | 72,466           |   |   | 239,524          |  
|Total current liabilities                                     |   | 2,516,680        |   |   | 2,238,746        |  
|                                                              |   |                  |   |   |                  |  
|Long-term debt, net of current portion                        |   | 80,798           |   |   | 337,836          |  
|Convertible promissory notes, net of current portion and      |   |                  |   |   |                  |  
|discounts                                                     |   | -                |   |   | 597,819          |  
|                                                              |   |                  |   |   |                  |  
|Total liabilities                                             |   | 2,597,478        |   |   | 3,174,401        |  
|                                                              |   |                  |   |   |                  |  
|Stockholders equity (deficit)                                |   |                  |   |   |                  |  
|Common stock - $.001 par value; 200,000,000 shares            |   |                  |   |   |                  |  
|authorized;
      193,946,706 and 43,331,405 issued and       |   |                  |   |   |                  |  
|outstanding                                                   |   | 193,947          |   |   | 43,331           |  
|Additional paid-in capital                                    |   | 23,527,939       |   |   | 21,091,663       |  
|Deficit accumulated during the exploration stage              |   | (25,094,540      | ) |   | (20,918,474      | )
|Total stockholders
      equity (deficit)                    |   | (1,372,654       | ) |   | 216,520          |  
|                                                              |   |                  |   |   |                  |  
|Total liabilities and stockholders equity
      (deficit)    | $ | 1,224,824        |   | $ | 3,390,921        |  

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

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28

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, 2009 |   |   | January 31, 2008 |   |   | January 31, 2009  |  
|Revenues                                          | $ | -                |   | $ | -                |   | $ | -                 |  
|                                                  |   |                  |   |   |                  |   |   |                   |  
|Expenses:                                         |   |                  |   |   |                  |   |   |                   |  
|Geological and geophysical costs                  |   | 957,569          |   |   | 2,480,475        |   |   | 10,851,646        |  
|Salaries and
      benefits                       |   | 566,453          |   |   | 579,770          |   |   | 2,006,745         |  
|Accounting and auditing                           |   | 153,192          |   |   | 186,579          |   |   | 840,863           |  
|Public relations                                  |   | 83,111           |   |   | 198,219          |   |   | 673,224           |  
|Depreciation                                      |   | 277,509          |   |   | 147,534          |   |   | 528,788           |  
|Legal                                             |   | 124,626          |   |   | 129,008          |   |   | 591,857           |  
|Professional services                             |   | -                |   |   | -                |   |   | 143,992           |  
|General and
      administrative                  |   | 247,373          |   |   | 348,750          |   |   | 1,437,932         |  
|Travel                                            |   | 2,672            |   |   | 21,845           |   |   | 137,596           |  
|Impairment loss                                   |   | -                |   |   | -                |   |   | 15,907,500        |  
|Net operating expenses                            |   | 2,412,505        |   |   | 4,092,180        |   |   | 33,120,143        |  
|                                                  |   |                  |   |   |                  |   |   |                   |  
|Loss from operations                              |   | (2,412,505       | ) |   | (4,092,180       | ) |   | (33,120,143       | )
|                                                  |   |                  |   |   |                  |   |   |                   |  
|Other income (expense):                           |   |                  |   |   |                  |   |   |                   |  
|Interest income                                   |   | 15,233           |   |   | 92,227           |   |   | 196,938           |  
|Interest expense                                  |   | (2,075,885       | ) |   | (1,697,982       | ) |   | (3,775,891        | )
|Loss on sale of
      assets                      |   | (24,862          | ) |   | -                |   |   | (25,268           | )
|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)                      |   | (1,763,561       | ) |   | (1,605,755       | ) |   | (3,174,397        | )
|                                                  |   |                  |   |   |                  |   |   |                   |  
|Loss before income taxes                          |   | (4,176,066       | ) |   | (5,697,935       | ) |   | (36,294,540       | )
|                                                  |   |                  |   |   |                  |   |   |                   |  
|Income tax expense                                |   | -                |   |   | -                |   |   | -                 |  
|                                                  |   |                  |   |   |                  |   |   |                   |  
|Net loss                                          | $ | (4,176,066       | ) | $ | (5,697,935       | ) | $ | (36,294,540       | )
|                                                  |   |                  |   |   |                  |   |   |                   |  
|Basic and diluted net loss
      per share of     |   |                  |   |   |                  |   |   |                   |  
|common stock                                      | $ | (0.05            | ) | $ | (0.13            | ) | $ | (0.91             | )
|                                                  |   |                  |   |   |                  |   |   |                   |  
|Basic and diluted weighted average number         |   |                  |   |   |                  |   |   |                   |  
|of shares of
      common stock outstanding       |   | 91,711,511       |   |   | 42,743,758       |   |   | 39,793,089        |  

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 STOCKHOLDERS EQUITY
(DEFICIT)

Deficit
      
      
      TotalAdditional
      
      
      accumulated during
      
      
      stockholdersCommon
        stock
      
      
      paid-in
      
      
      the exploration
      
      
      equityShares
      
      
      Amount
      
      
      capital
      
      
      stage
      
      
      (deficit)Balance, August 20, 2001 (Date of inception)
      
      -
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -Common stock issued for cash
      
      20,000,000
      
      
      20,000
      
      
      80,000
      
      
      -
      
      
      100,000Net loss for the period from
        inception, August 20, 2001, toJanuary 31, 2004
      
      -
      
      
      -
      
      
      -
      
      
      (132,602
      )
      
      (132,602
      )Balance, January 31, 2004
      
      20,000,000
      
      
      20,000
      
      
      80,000
      
      
      (132,602
      )
      
      (32,602
      )Acquisition, February 3, 2004
      
      17,500,000
      
      
      17,500
      
      
      15,907,500
      
      
      -
      
      
      15,925,000Issuance of common stock private
        placement
      
      1,000,000
      
      
      1,000
      
      
      999,000
      
      
      -
      
      
      1,000,000Issuance of common stock and warrants private
        placement
      
      1,600,000
      
      
      1,600
      
      
      1,998,400
      
      
      -
      
      
      2,000,000Options issued for services
      
      -
      
      
      -
      
      
      94,350
      
      
      -
      
      
      94,350Return of shares
      
      (7,000,000
      )
      
      (7,000
      )
      
      (11,193,000
      )
      
      11,200,000
      
      
      -Net loss for the year ended
        January 31, 2005
      
      -
      
      
      -
      
      
      -
      
      
      (18,392,024
      )
      
      (18,392,024
      )Balance, January 31, 2005
      
      33,100,000
      
      
      33,100
      
      
      7,886,250
      
      
      (7,324,626
      )
      
      594,724Issuance of common stock and
        warrants private placement
      
      3,886,717
      
      
      3,887
      
      
      5,048,845
      
      
      -
      
      
      5,052,732Issuance of common stock and warrants private
        placement
      
      1,970
      
      
      2
      
      
      (2
      )
      
      -
      
      
      -Net loss for the year ended
        January 31, 2006
      
      -
      
      
      -
      
      
      -
      
      
      (4,627,965
      )
      
      (4,627,965
      )Balance, January 31, 2006
      
      36,988,687
      
      
      36,989
      
      
      12,935,093
      
      
      (11,952,591
      )
      
      1,019,491Issuance of common stock private
        placement
      
      256,637
      
      
      256
      
      
      289,744
      
      
      -
      
      
      290,000Issuance of common stock private placement
      
      8,850
      
      
      9
      
      
      9,991
      
      
      -
      
      
      10,000Issuance of common stock
      
      3,696,895
      
      
      3,697
      
      
      2,242,298
      
      
      -
      
      
      2,245,995Issuance of common stock for services
      
      150,000
      
      
      150
      
      
      92,850
      
      
      -
      
      
      93,000Expenses of common stock issuance
      
      -
      
      
      -
      
      
      (320,000
      )
      
      -
      
      
      (320,000
      )Options granted to consultants
      
      -
      
      
      -
      
      
      610,560
      
      
      -
      
      
      610,560Options granted to employees
      
      -
      
      
      -
      
      
      221,783
      
      
      -
      
      
      221,783Net loss for the year ended January 31 2007
      
      -
      
      
      -
      
      
      -
      
      
      (3,267,948
      )
      
      (3,267,948
      )Balance, January 31, 2007
      
      41,101,069
      
      
      41,101
      
      
      16,082,319
      
      
      (15,220,539
      )
      
      902,881Issuance of common stock
      
      1,718,799
      
      
      1,719
      
      
      1,072,698
      
      
      -
      
      
      1,074,417Issuance of common stock for
        services
      
      112,000
      
      
      112
      
      
      54,428
      
      
      -
      
      
      54,540Issuance of common stock for conversion of promissory
        note
      
      399,537
      
      
      399
      
      
      259,300
      
      
      -
      
      
      259,699Options granted to employees
        and consultants
      
      -
      
      
      -
      
      
      358,646
      
      
      -
      
      
      358,646Issuance of common stock purchase warrants
      
      -
      
      
      -
      
      
      1,421,538
      
      
      -
      
      
      1,421,538Beneficial conversion feature
        of convertible promissory notes
      
      -
      
      
      -
      
      
      1,842,734
      
      
      -
      
      
      1,842,734Net loss for the year ended January 31, 2008
      
      -
      
      
      -
      
      
      -
      
      
      (5,697,935
      )
      
      (5,697,935
      )Balance, January 31, 2008
      
      43,331,405
      
      
      43,331
      
      
      21,091,663
      
      
      (20,918,474
      )
      
      216,520Issuance of common stock for conversion or payment
        ofpromissory note
      
      150,585,301
      
      
      150,586
      
      
      1,688,925
      
      
      -
      
      
      1,839,511Issuance of common stock for inducement to convertpromissory note
      
      30,000
      
      
      30
      
      
      8,970
      
      
      -
      
      
      9,000Reduction of conversion price for inducement
        to convertpromissory note
      
      -
      
      
      -
      
      
      94,437
      
      
      -
      
      
      94,437Stock based compensation
      
      -
      
      
      -
      
      
      576,244
      
      
      -
      
      
      576,244Common stock purchase warrants
        exercise price reduction
      
      -
      
      
      -
      
      
      67,700
      
      
      -
      
      
      67,700Net loss for the year ended January 31, 2009
      
      -
      
      
      -
      
      
      -
      
      
      (4,176,066
      )
      
      (4,176,066
      )Balance, January 31, 2009
      
      193,946,706
      
      $
      193,947
      
      $
      23,527,939
      
      $
      (25,094,540
      )
      $
      (1,372,654
      )


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

---

30

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, 2009 |   |   | January 31, 2008 |   |   | January 31, 2009  |  
|Net change in cash and cash equivalents                               |   |                  |   |   |                  |   |   |                   |  
|Cash flows from operating activities:                                 |   |                  |   |   |                  |   |   |                   |  
|Net loss                                                              | $ | (4,176,066       | ) | $ | (5,697,935       | ) | $ | (36,294,540       | )
|Adjustments to reconcile net loss to net cash
      from operating    |   |                  |   |   |                  |   |   |                   |  
|activities:                                                           |   |                  |   |   |                  |   |   |                   |  
|Depreciation                                                          |   | 277,509          |   |   | 148,545          |   |   | 529,799           |  
|Amortization of
      deferred financing charges                      |   | 234,130          |   |   | 178,873          |   |   | 413,003           |  
|Amortization of discount on
      convertible promissory notes        |   | 1,537,567        |   |   | 1,249,421        |   |   | 2,786,988         |  
|Mineral claim
      costs                                             |   | -                |   |   | -                |   |   | 343,085           |  
|Impairment loss                                                       |   | -                |   |   | -                |   |   | 15,907,500        |  
|Loss on sale of
      fixed assets                                    |   | 24,862           |   |   | -                |   |   | 25,268            |  
|Share based compensation                                              |   | 576,244          |   |   | 358,646          |   |   | 1,767,233         |  
|Share based
      payments                                            |   | 397,714          |   |   | 64,239           |   |   | 554,953           |  
|Changes in assets and
      liabilities:                              |   |                  |   |   |                  |   |   |                   |  
|Prepaid expenses and supplies                                         |   | (9,362           | ) |   | (166,934         | ) |   | (105,037          | )
|Other
      current assets                                            |   | -                |   |   | 6,230            |   |   | (7,875            | )
|Deposits                                                              |   | 16,707           |   |   | (11,000          | ) |   | -                 |  
|Certificates of deposit                                               |   | 44,674           |   |   | (53,109          | ) |   | (11,435           | )
|Other assets                                                          |   | (25,000          | ) |   | -                |   |   | (25,000           | )
|Accounts
      payable and accrued expenses                           |   | (239,355         | ) |   | 172,259          |   |   | 38,204            |  
|Accrued wages related party                                           |   | 42,500           |   |   | -                |   |   | 42,500            |  
|Accrued
      interest                                                |   | (167,058         | ) |   | 239,524          |   |   | 72,466            |  
|Net cash used in operating activities                                 |   | (1,464,934       | ) |   | (3,511,241       | ) |   | (13,962,888       | )
|                                                                      |   |                  |   |   |                  |   |   |                   |  
|Cash flows from investing activities:                                 |   |                  |   |   |                  |   |   |                   |  
|Proceeds from the sale of fixed asset                                 |   | 53,081           |   |   | -                |   |   | 61,086            |  
|Proceeds from redemption of
      certificate of deposit              |   | 213,232          |   |   | -                |   |   | 213,232           |  
|Purchase of certificate of deposit                                    |   | -                |   |   | (204,797         | ) |   | (204,797          | )
|Purchase of equipment                                                 |   | (74,700          | ) |   | (663,424         | ) |   | (1,098,950        | )
|Net cash provided by (used in) investing activities                   |   | 191,613          |   |   | (868,221         | ) |   | (1,029,429        | )
|                                                                      |   |                  |   |   |                  |   |   |                   |  
|Cash flows from financing activities:                                 |   |                  |   |   |                  |   |   |                   |  
|Principal activity on
      long-term debt                            |   | (287,840         | ) |   | (48,183          | ) |   | (338,691          | )
|Principal activity on capital lease obligation                        |   | (2,760           | ) |   | (26,905          | ) |   | (39,298           | )
|Principal activity on
      convertible promissory notes              |   | (286,227         | ) |   | -                |   |   | (286,227          | )
|Net (advances) repayments from related parties                        |   | 275,777          |   |   | (240,152         | ) |   | (1,888            | )
|Proceeds from the issuance of
      common stock, net of expenses     |   | -                |   |   | 1,074,417        |   |   | 11,140,074        |  
|Proceeds from the sale of convertible
      promissory notes          |   | 372,434          |   |   | 4,010,238        |   |   | 4,382,672         |  
|Proceeds from long-term debt                                          |   | -                |   |   | 198,925          |   |   | 198,925           |  
|Net cash provided by financing activities                             |   | 71,384           |   |   | 4,968,340        |   |   | 15,055,567        |  
|                                                                      |   |                  |   |   |                  |   |   |                   |  
|Net increase (decrease) in cash and cash equivalents for
      period |   | (1,201,937       | ) |   | 588,878          |   |   | 63,250            |  
|                                                                      |   |                  |   |   |                  |   |   |                   |  
|Cash and cash equivalents, beginning of period                        |   | 1,265,187        |   |   | 676,309          |   |   | -                 |  
|                                                                      |   |                  |   |   |                  |   |   |                   |  
|Cash and cash equivalents, end of period                              | $ | 63,250           |   | $ | 1,265,187        |   | $ | 63,250            |  
|                                                                      |   |                  |   |   |                  |   |   |                   |  
|Interest paid during the period                                       | $ | 152,971          |   | $ | 20,465           |   | $ | 175,460           |  

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

---

31

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. In April 2007, the Company changed
its name to Liberty Star Uranium & Metals Corp. to reflect the Companys
current concentrated efforts on uranium exploration. The Company is considered
to be an exploration stage company, as it has not generated any revenues from
operations.

In December 2006, the Company entered into a joint venture
agreement (Elle Venture) with XState Resources Limited (XState). The Company
holds a 50% interest in the Elle Venture, a general partnership with XState that
was formed to explore and, if warranted, develop certain US Federal lode mining
claims within the 22 square mile joint venture area. 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 7.

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.

---

32

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 beneficial conversion feature, 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, 2009 and
2008, the amount of cash in bank deposit accounts that exceeded federally
insured limits of $250,000 and $100,000, respectively, was approximately $0 and
$1,202,000, respectively.

Mineral claim costs

Mineral claim costs of carrying, retaining and developing
properties are charged to expense in the period incurred in our geological and
geophysical costs.

Investment in Elle Venture

Investment in Elle Venture, a general partnership in which the
Company is a 50% partner, is accounted for by the equity method as effective
control of the venture rests with XState Resources Limited, our joint venture
partner.

Other assets

Other assets include investments in common stock of privately
owned corporations in which the Company is a less than 10% owner and does not
exercise any control or influence over the corporation. The Company accounts for
these investments using the cost method.

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.

---

33

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

NOTE 2  Summary of significant accounting policies -
continued

Deferred finance charges

The Company capitalizes costs incurred to issue new debt as
deferred finance charges. Amortization is calculated using the straight line
method, which approximates the effective interest method, over the life of the
related debt instrument and is included in interest expense. At January 31, 2009
and 2008 the Company has capitalized deferred finance charges of $474,288 and
$432,538, respectively, and accumulated amortization of debt issuance costs was
$387,012 and $152,882, respectively.

Discount on convertible promissory notes

Discounts on convertible promissory notes include the fair
value of detachable common stock purchase warrants issued with convertible
promissory notes and the intrinsic value of the embedded beneficial conversion
feature of the convertible promissory notes. These amounts are being amortized
to interest expense using the effective interest method over the term of the
convertible promissory notes. At January 31, 2009 and 2008 the Company has
recorded discounts on convertible promissory notes of $3,082,656 and $3,014,956,
respectively and accumulated amortization of discounts on convertible promissory
notes was $2,605,364 and $1,067,797, respectively.

Accounting for the impairment of long-lived assets and
long-lived assets to be disposed of

The Company reviews property and equipment for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. Recoverability of assets to be held and used is
measured by a comparison of the carrying amount of an asset to future net cash
flows expected to be generated by the asset. If such assets are considered to be
impaired, the impairment recognized is measured by the amount by which the
carrying amount of the assets exceeds the fair value of the assets. Assets to be
disposed of are reported at the lower of the carrying amount or fair value less
costs to sell.

Accounting for lease obligations

The Company records rent expense from noncancelable operating
leases on the straight-line basis over the life of the lease. The Company
records an asset and a related capital lease obligation for property and
equipment acquired by capital lease. The asset is amortized and amortization
expense is included in depreciation.

Convertible promissory notes

The Company accounts for convertible promissory notes in
accordance with Statement of Financial Accounting Standards No. 150 (SFAS 150)
requiring the convertible promissory notes to be reported as liabilities at fair
value. When convertible promissory notes are converted into shares of the
Companys common stock in accordance with the debts original terms, no gain or
loss is recognized. The Company accounts for inducements to convert as an
expense in the period incurred, which is included in debt conversion expense in
the accompanying financial statements.

Environmental expenditures

The operations of the Company have been and may in the future
be affected from time to time in varying degree by changes in environmental
regulations, including those for future removal and site restoration costs. The
likelihood of new regulations and their overall effect upon the Company are not
predictable. The Company will provide for any reclamation costs in accordance
with Financial Accounting Standard No. 143 Accounting for Asset Retirement
Obligations. It is managements opinion that the Company is not currently
exposed to significant environmental and reclamation liabilities and has
recorded no reserve for environmental and reclamation expenditures at January
31, 2009 and 2008.

---

34

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

NOTE 2  Summary of significant accounting policies 
continued

Stock-based compensation

The Companys stock-based compensation arrangements are
designed to attract and retain employees and non-employee consultants. The
amount, frequency, and terms of stock-based awards may vary based on competitive
practices, company operating results, and government regulations. The Company
may grant non-qualified and incentive stock options to employees and
non-qualified stock options to non-employee consultants. New shares are issued
upon option exercises.

On February 1, 2006 the Company adopted the provisions of
Statement of Financial Accounting Standards No. 123R (SFAS 123R) requiring the
measurement and recognition of all stock-based compensation under the fair value
method. The Company charges stock-based compensation expense for options granted
to employees to earnings using the straight-line method over the options
requisite service period. The Company implemented SFAS 123R using the modified
prospective transition method. Prior to February 1, 2006 the Company accounted
for stock options granted to employees under Accounting Principles Board Opinion
25 (APB 25) intrinsic value method. Under APB 25, there was generally no
charge to earnings for employee stock option awards because the options granted
had an exercise price at least equal to the market value of the underlying
common stock on the grant date. The fair value of options granted to employees
prior to February 1, 2006 had been determined to be $0, based on the
Black-Scholes Valuation method. The Company determines the measurement date for
stock options granted to non-employee consultants using EITF 96-18. Periods
prior to February 1, 2006 in the consolidated financial statements have not been
adjusted to reflect fair value stock-based compensation expense under SFAS 123R
for options issued to employees as there is no effect.

Income taxes

Income taxes are recorded using the asset and liability method.
Under the asset and liability method, tax assets and liabilities are recognized
for the tax consequences attributable to differences between financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Future tax assets and liabilities are measured using the enacted tax
rates expected to apply when the asset is realized or the liability settled. The
effect on future tax assets and liabilities of a change in tax rates is
recognized in income in the period that enactment occurs. To the extent that the
Company does not consider it more likely than not that a future tax asset will
be recovered, it provides a valuation allowance against the excess.

Net loss per share

Basic net loss per share is computed by dividing net loss
attributable to common shareholders by the weighted average number of shares of
common stock outstanding during the period. The calculation of basic loss per
share gives retroactive effect to an eight for one forward stock split on
January 6, 2004 which resulted in 20,000,000 common shares outstanding. Diluted
net loss per share takes into consideration shares of common stock outstanding
(computed under basic loss per share) and potentially dilutive shares of common
stock that are not anti-dilutive. At January 31, 2009 and 2008, there were
13,994,547 and 12,345,047, respectively, potentially dilutive instruments
outstanding. Additionally at January 31, 2009 and 2008 if settlement of the
Convertible Promissory Notes were completed by the issuance of common shares
there would be 1,886,792,667 and 9,754,498 shares, respectively required to
convert the notes. At January 31, 2009 and 2008 there are only 200,000,000
shares authorized. These instruments were not included in the determination of
diluted loss per share as their effect was anti-dilutive.

---

35

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

NOTE 2 - Summary of significant accounting policies 
continued

Recently issued accounting standards

In May 2008, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards No. 162 The Hierarchy of
Generally Accepted Accounting Principles. This statement identifies the sources
of accounting principles and the framework for selecting the principles used in
the preparation of financial statement of nongovernmental entities that are
presented in conformity with generally accepted accounting principles in the
United States of America. This statement is effective 60 days following the
SECs approval of the Public Company Accounting Oversight Board amendments to AU
Section 411, The Meaning of Present Fairly in Conformity With Generally
Accepted Accounting Principles. The Company does not believe that the adoption
of SFAS No. 162 will have a material effect on its results of operations or
financial position.

In March 2008, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting Standards No. 161 Disclosures
about Derivative Instruments and Hedging Activities  an amendment of FASB
Statement No. 133. This statement changes the disclosure requirements for
derivative instruments and hedging activities. Entities are required to provide
enhanced disclosures about (a) how and why an entity uses derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under Statement No. 133 and its related interpretations, and (c)
how derivative instruments and related hedged items affect an entitys financial
position, financial performance, and cash flows. This statement is effective for
financial statements issued for fiscal years and interim periods beginning after
November 15, 2008, with early adoption encouraged. This statement encourages,
but does not require, comparative disclosures for earlier periods at initial
adoption. The Company does not believe that the adoption of SFAS No. 160 will
have a material effect on its results of operations or financial position.

NOTE 3 Mineral claims

At January 31, 2009 the Company held a 100% interest in 1,757
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, 2009 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, 2009 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, 2009 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, 2009 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, 2009.

---

36

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

NOTE 4  Investment in Elle Venture

The Company holds a 50% interest in Elle Venture, a general
partnership with XState Resources Limited (XState) that was formed to explore,
develop and, if warranted, mine certain US Federal lode mining claims within the
22 mile joint venture area. The Elle Venture commenced on December 15, 2006 when
XState deposited $2,900,000 (sole funding amount) into the joint venture bank
account. On July 31, 2008 the Company entered into an agreement to amend the
joint venture agreement and terminate the subcontracting agreement. The Company
received a $300,000 liquidating distribution in relation to the termination of
the agreement. The Elle Venture mineral claims will continue to be owned 50%
each by the Company and XState and the Company may be obligated to contribute
funds if exploration activities were to resume on those claims. If the Company
or XState is unable to make a proportional contribution then our interest or
their interest in the mineral claims will be diluted.

Summary financial information of Elle Venture at:

|                                                                      |   | January 31, 2009 |   |   | January 31, 2008 |  
|--------------------------------------------------------------------- | - | ---------------- | - | - | ---------------- | -
|Current assets                                                        | $ | 338,122          |   | $ | 2,054,884        |  
|Other assets                                                          |   | -                |   |   | 102,858          |  
|Total assets                                                          | $ | 338,122          |   | $ | 2,157,742        |  
|                                                                      |   |                  |   |   |                  |  
|Current liabilities                                                   | $ | -                |   | $ | 277,665          |  
|Total liabilities                                                     |   | -                |   |   | 277,665          |  
|Partners capital                                                     |   | 338,122          |   |   | 1,880,077        |  
|Total liabilities and partners capital                               | $ | 338,122          |   | $ | 2,157,742        |  
|Net loss from inception (December 15, 2006)
      to the period ended | $ | (1,625,878       | ) | $ | (1,019,923       | )

NOTE 5  Property and equipment

The balances of our major classes of depreciable assets are:

|                                                     |   | January 31, 2009 |   |   | January 31, 2008 |  
|---------------------------------------------------- | - | ---------------- | - | - | ---------------- | -
|Geology equipment                                    | $ | 418,802          |   | $ | 418,802          |  
|Drilling equipment                                   |   | 538,400          |   |   | 463,700          |  
|Vehicles and transportation equipment                |   | 254,859          |   |   | 355,950          |  
|Office furniture and equipment                       |   | 68,425           |   |   | 93,375           |  
|Leasehold improvements                               |   | -                |   |   | 24,302           |  
|                                                     |   | 1,280,486        |   |   | 1,356,129        |  
|Less accumulated depreciation and
      amortization |   | (453,963         | ) |   | (248,854         | )
|                                                     |   |                  |   |   |                  |  
|                                                     | $ | 826,523          |   | $ | 1,107,275        |  

NOTE 6  Long-term debt

Notes payable to Chase Bank payable in aggregate monthly
installments of $1,971 including interest at fixed rates of 8.9% to 9.9%
maturing at various dates through September 2013, secured by liens on vehicles.
Principal balances at January 31, 2009 and 2008 are $61,925 and $108,412,
respectively. Carrying amount of vehicles that serve as collateral is $73,793
and $110,876 at January 31, 2009 and 2008, respectively.

Note payable to Atlas Copco payable in monthly installments of
$5,436 including interest at a fixed rate of 9% through maturity in September
2010, secured by a lien on equipment. Principal balance at January 31, 2009 and
2008 is $95,937 and $145,564, respectively. Carrying amount of equipment that
serves as collateral is $298,250 and $376,055 at January 31, 2009 and 2008,
respectively.

---

37

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

NOTE 6  Long-term debt - continued

Note payable to Zions First National Bank payable in monthly
installments of $4,018 including interest at 7.5% through maturity in October
2012, secured by a certificate of deposit. In December 2008 the certificate of
deposit was used to pay off the note balance. Principal balance at January 31,
2009 and 2008 is $0 and $191,726, respectively. Carrying amount of certificate
of deposit that serves as collateral is $0 and $204,797 at January 31, 2009 and
2008, 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 31,2010
    $
    77,0642011
    
    54,0962012
    
    13,7752013
    
    7,7712014
    
    5,156157,862Less current maturities
    
    (77,064
    )$
    80,798


NOTE 7  Convertible promissory 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. Under the
original note terms, the May 2007 Convertible Notes bore interest at 8%.
Repayment of the May 2007 Convertible Notes began in February 2008 and consists
of sixteen monthly principal payments of $259,375 plus accrued unpaid interest.
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 is in default on the note. The default interest rate on
the note is increased to 15%.

Under the original note terms holders of the May 2007
Convertible Promissory Notes could have elected to convert all or a portion of
their note balance before the scheduled repayment dates at a fixed rate of $0.65
per share. The Company may have elected to make repayments of the May 2007
Convertible Notes in cash or by the issuance of common stock of the Company. The
conversion price for the monthly payments was the lesser of the fixed conversion
price of $0.65 per share or 85% of the volume weighted average price for 10
trading days prior to the repayment date, but not less than $0.45 per share.
Stock payment could not be made if the amount of shares to be issued would have
exceed 33% of the aggregate daily trading volume for 7 trading days preceding
the repayment date, unless waived by the holders of the May 2007 Convertible
Notes. Stock payment could not be made if the holders of the May 2007
Convertible Notes owned more than 4.99% of the then outstanding common stock of
the Company. In the event that a delay in delivery of exercised shares occurred,
as defined in the subscription agreement, the Company agreed to pay liquidated
damages of $100 per business day for each $10,000 of purchase price of shares
subject to the delivery default. In the event that the Company failed to deliver
the exercised shares within 7 business dates of the Delivery Date and the
selling security holder purchases shares of common stock of the Company in an
open market, then the Company owed in cash to the selling security holder the
amount by which the selling security holders total purchase price including
brokers commissions exceeded the aggregate purchase price of the shares
issuable together with interest at 15% per annum.

The Company entered into the first modification agreement with
the holders of the May 2007 Convertible Notes in February 2008 and then a second
modification agreement in May 2008. The modification agreements were effective

---

38

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

NOTE 7  Convertible promissory notes - continued

May 2007 Convertible Notes - continued:

from February 2008 through July 2008. The modification
agreements reduced the conversion prices in order to induce the note holders to
convert the note into common stock. During the year ended January 31, 2009 the
Company recorded debt conversion expense of $103,437 related to the modification
agreements.

On August 27, 2008 the Company entered into the third
modification agreement with the holders of the May 2007 Convertible Notes. The
modification agreement increased the interest rate on the May 2007 Convertible
Notes to 12%. The modification agreement also reduced the fixed conversion price
to $0.05 and reduced the exercise price on the detachable common stock purchase
warrants issued in connection with the May 2007 Convertible Notes to $0.05 per
share. The Company recorded $67,700 of additional discounts on the May 2007
Convertible Notes for the reduction in the exercise price on the detachable
common stock purchase warrants. The Company was granted an exemption from making
any of the monthly payments in connection with the May Notes in cash until
February 2009. The Company may elect to make repayments of the May 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 conversion price is the lesser
of the fixed conversion price of $0.05 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.

The Company granted a security interest to the holders of the
May 2007 Convertible Notes to all now owned and hereafter acquired right, title
and interest of the Company in, to and in respect of all: Accounts, interests in
goods represented by Accounts, returned, reclaimed or repossessed goods with
respect thereto and rights as an unpaid vendor; contract rights; Chattel Paper;
investment property; General Intangibles, Documents, Instruments, letters of
credit, bankers acceptances or guaranties, cash moneys, deposits; securities,
bank accounts, deposit accounts, credits and other property now or hereafter
owned or held in any capacity by the Company, as well as agreements or property
securing or relating to any of the items referred to above.

The Company incurred deferred financing costs of $457,454 in
connection with the issuance of the May 2007 Convertible Notes. The deferred
financing costs consist of $389,762 paid for broker fees, legal fees, due
diligence fee and $67,692 for the fair value of 338,461 common stock purchase
warrants issued as a broker fee. The warrants have the same terms as the
detachable common stock purchase warrants issued to the holders of the May 2007
Convertible Notes and there fair value was determine using the same assumptions.
The Company reported $233,127 and $178,802 of interest expense relating to the
deferred financing costs during the years ended January 31, 2009 and 2008,
respectively.

The May 2007 Convertible Notes are reported net of discounts.
Discounts were recorded for the detachable common stock purchase warrants as
well as the beneficial conversion feature. The beneficial conversion feature
recorded of $1,842,734 represents the difference between the conversion price
and the fair market value of the common stock on the commitment date (May 11,
2007). The holders of the May 2007 Convertible Notes were issued 6,769,228
detachable common stock purchase warrants with an exercise price of $0.05 and a
life of 5 years. The exercise price may be adjusted if the Company issues other
shares, warrants or stock options before the expiration of the warrants at a
price less than $0.45 per share. The 6,769,228 detachable common stock purchase
warrants were assigned a value of $1,421,538, estimated using the Black-Scholes
valuation model. An additional $67,700 discount was recorded upon the reduction
of the exercise prices of the detachable common stock purchase warrants in
August 2008. The following assumptions were used to determine the fair value of
the warrants using the Black-Scholes valuation model: a term of 5 years,
risk-free rate of 4.56%, volatility of 60%, and dividend yield of zero. The
discounts on the May 2007 Convertible Notes for the beneficial conversion
feature and the detachable common stock purchase warrants are being amortized to
interest expense, using the effective interest method, over the term of the May
2007 Convertible Notes. The Company reported $1,520,172 and $1,249,421 of
interest expense relating to the beneficial conversion feature and the warrants
discount during the years ended January 31, 2009 and 2008, respectively.

---

39

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

NOTE 7  Convertible promissory notes - continued

May 2007 Convertible Notes - continued:

During the year ended January 31, 2008 one note holder
converted $250,000 of the principal balance of their May 2007 Convertible Note
and $9,699 of unpaid accrued interest at a conversion price of $0.65 per share
pursuant to the original terms of the notes. The Company issued 399,537 shares
of common stock related to these conversions. The debt converted was allocated
$25,991 of deferred finance charges and $181,624 of discounts, and the
unamortized portion of $157,269 was recorded as interest expense.

During the year ended January 31, 2009 the Company issued
150,585,301 shares of common stock and $407,349 of cash for the monthly payments
and principal conversions on the May 2007 Convertible Notes. At January 31, 2009
the note holders have a balance of $831,226 of monthly payment amounts that have
been deferred that are due on demand by the note holders.

The principal balance of the May 2007 Convertible Notes
outstanding was $1,512,313 and $4,150,000 at January 31, 2009 and 2008,
respectively. If settlement of the May 2007 Convertible Notes occurred on
January 31, 2009 the Company would have been obligated to pay $1,512,313
principal payments, $48,977 accrued interest, and $831,226 deferred amount for a
total of $2,392,516 in cash. If the settlement were completed by the issuance of
common shares the conversion price at January 31, 2009 would have been $0.0015
per share for a total of 1,595,010,667 shares required to convert the notes,
which is more than our unissued authorized capital at January 31, 2009.

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 is considered in default. The default interest rate is increased to
15%. Repayment of the August 2008 Convertible Notes begins in February 2009 with
six monthly principal payments of $59,146 plus accrued unpaid interest and one
final payment of $59,308 plus accrued unpaid interest. The entire balance of the
August 2008 Convertible Notes and May 2007 Convertible Notes becomes due
immediately upon the Companys receipt of net proceeds from a sale of debt or
equity with a gross amount of up to $3,000,000. The holders of the August 2008
Convertible Notes may elect to convert all or a portion of their note balance
before the scheduled repayment dates at a fixed rate of $0.05 per share. 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 conversion price for the
monthly payments is the lesser of the fixed conversion price of $0.05 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. Stock payment cannot be made if the
holders of the August 2008 Convertible Notes own more than 4.99% of the then
outstanding common stock of the Company. Stock payment cannot be made if the
stock is not timely issued, an event of default has occurred, an exemption from
registration of the resale of shares of Common Stock to be issued in payment of
the Monthly Amount is not available to the Holder, or if the amount of Common
Stock that would be issued in satisfaction of the Monthly Amount exceeds for the
Holder and Other Holders, in the aggregate, more than 33% of the aggregate daily
trading volume of the Common Stock for the seven trading days preceding such
Repayment Date, as reported by Bloomberg L.P. for the Principal Market. The
Company may use the proceeds for lease payments, offering expenses and other
designated purposes.

The August 2008 Convertible Notes are secured by all now owned
and hereafter acquired right, title and interest of the Company in, to and in
respect of all: Accounts, interests in goods represented by Accounts, returned,
reclaimed or repossessed goods with respect thereto and rights as an unpaid
vendor; contract rights; Chattel Paper; investment property; General
Intangibles, Documents, Instruments, letters of credit, bankers acceptances or
guaranties, cash moneys, deposits; securities, bank accounts, deposit accounts,
credits and other property now or hereafter owned or held

---

40

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

NOTE 7  Convertible promissory notes - continued

August 2008 Convertible Notes - continued:

in any capacity by the Company, as well as agreements or
property securing or relating to any of the items referred to above.

The Company incurred deferred financing costs of $41,750 in
connection with the issuance of the August 2008 Convertible Notes. The Company
reported $17,395 and $0 of interest expense relating to the deferred financing
costs during the years ended January 31, 2009 and 2008, respectively.

The principal balance of the August 2008 Convertible Notes
outstanding was $414,184 and $0 at January 31, 2009 and 2008, respectively. If
settlement of the August 2008 Convertible Notes occurred on January 31, 2009 the
Company would have been obligated to pay $414,184 principal payments and $23,489
accrued interest for a total of $437,673 in cash. If the settlement were
completed by the issuance of common shares the conversion price at January 31,
2009 would have been $0.0015 per share for a total of 291,782,000 shares
required to convert the notes, which is more than our unissued authorized
capital at January 31, 2009.

Management considered the impact of Statement of Financial
Accounting Standard No. 15 (SFAS No. 15) and EITF 96-19 on the modification of
the May 2007 Convertible Notes and the issuance of the August 2008 Convertible
Notes and has determined that there has not been a troubled debt restructuring
nor an extinguishment of the old May 2007 Convertible Note.

The following is a summary of the principal maturities of May
2007 Convertible Notes and August 2008 Convertible Notes:

Principal amount in default, due on demand
    
    1,926,497Plus deferred amounts due on demand
    
    831,226Less discounts for warrants and beneficial
      conversion feature
    
    (477,292
    )Current portion of convertible promissory
      notes
    $
    2,280,431


NOTE 8  Common stock

As of January 31, 2009, there were 9,051,047 whole share
purchase warrants outstanding and exercisable. The warrants have a weighted
average remaining life of 2.817 years and a weighted average exercise price of
$0.417 per whole warrant for one common share.

Whole share purchase warrants outstanding at January 31, 2009
are as follows:

| |                               |  | Number of whole share |   |   | Weighted average         | 
| | ----------------------------- |  | --------------------- | - | - | ------------------------ | 
| |                               |  | purchase warrants     |   |   | exercise price per share | 
| | Outstanding, January 31, 2007 |  | 1,944,342             |   | $ | 1.50                     | 
| | Issued                        |  | 7,107,689             |   |   | 0.75                     | 
| | Forfeited or expired          |  | (984                  | ) |   | 1.50                     | 
| |                               |  |                       |   |   |                          | 
| | Outstanding, January 31, 2008 |  | 9,051,047             |   | $ | 0.91                     | 
| | Issued                        |  | -                     |   |   | -                        | 
| |                               |  |                       |   |   |                          | 
| | Outstanding, January 31, 2009 |  | 9,051,047             |   | $ | 0.42                     | 
| | Exercisable, January 31, 2009 |  | 9,051,047             |   | $ | 0.42                     | 

---

41

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

NOTE 8  Common stock - continued

On May 2, 2007 the Company issued 50,000 shares to Equititrend
Advisors LLC pursuant to an agreement to perform public and investor relations
services. The shares were issued to an accredited investor pursuant to
exemptions from registration set out in Rule 506 of Regulation D under the
Securities Act. The transactions were reported at fair value. Fair value of the
shares issued was determined by a review of the Companys stock trading price
around the date of issuance and was determined to be $0.57 per share for the
shares issued on May 2, 2007. The Company recorded $28,500 of public relations
expense related to the stock issuance.

The Company issued 62,000 common shares to three public
relations consultants on August 27, 2007 as compensation for public relations
services performed. The issuance of common stock is reported at fair value. Fair
value was determined to be the closing trading price on August 27, 2007, or
$0.42 per common share. The Company recorded $26,040 of public relations expense
related to the stock issuances.

During the year ended January 31, 2008, the Company issued
1,718,799 shares to Cornell Capital Partners pursuant to a Standby Equity
Distribution Agreement (SEDA) in exchange for proceeds of $1,074,417, net of
fees of $56,500. Cornell Capital Partners paid us 96%, or a 4% discount, of the
lowest volume weighted average per share purchase price of our common stock on
our principal trading market for the 5 days following each request for an
advance. Shares of common stock issued pursuant to the SEDA are reported as
permanent equity pursuant to SFAS No. 150 at the discounted price paid for the
shares by Cornell Capital Partner, LP. Expenses of shares issued pursuant to the
SEDA are reported as a reduction of additional paid-in capital. In May 2007,
pursuant to the May 2007 Convertible Notes subscription agreement, the Company
agreed that it would not exercise its rights under the SEDA without written
consent from the Unsecured Convertible Promissory Note Holders. The Company has
not issued any shares to Cornell Capital Partners after April 2007 and the SEDA
expired in March 2008.

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.

NOTE 9  Stock-based compensation

The 2007 Stock Option Plan was approved and adopted by the Board
  of Directors on December 10, 2007. The plan allows for up to 10,000,000 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 3,850,000 shares to
  be granted to key employees and non-employee consultants after specific objectives
  are met. Employees can receive incentive stock options and non-qualified stock
  options while non-employee consultants can receive only non-qualified stock
  options. The options granted vest under various provisions using graded vesting,
  not to exceed 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, 2009 and
  2008 are 7,775,000 and 10,000,000, respectively. Options remaining available
  for grant under the 2004 Stock Option Plan at January 31, 2009 and 2008 are
  1,131,500 and 556,000, respectively.

On May 24, 2007, the Company granted 10,000 incentive stock
options to an employee. The options have an exercise price of $1.11 per share
and a term of 8.875 years. The options vest 50% on the grant date, 25% on
October 6, 2007 and 25% on April 6, 2008.

On August 15, 2007, the Company granted 250,000 non-qualified
stock options to an investor relations consultant in exchange for future
services. The options have an exercise price of $0.45 per share and a term of 3
years. The options vest 25% every three month anniversary of the grant date.

---

42

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

NOTE 9 - Stock-based compensation  continued

On May 21, 2008 the Company granted 425,000 non-qualified stock
options to non-employee consultants and 3,050,000 incentive stock options to
employees, officers and directors. The options have an exercise price of $0.22
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, 2009.

Incentive stock options to employees outstanding at January 31,
2009 are as follows:

|                              |  |            |   |   |                |  |  | Weighted           |  |   |                 | 
|----------------------------- |  | ---------- | - | - | -------------- |  |  | ------------------ |  | - | --------------- | 
|                              |  |            |   |   | Weighted       |  |  | average            |  |   |                 | 
|                              |  | Number of  |   |   | average        |  |  | remaining          |  |   | Aggregate       | 
|                              |  | options    |   |   | exercise price |  |  | life
      (years) |  |   | intrinsic value | 
|Outstanding, January 31, 2008 |  | 1,930,000  |   | $ | 0.889          |  |  |                    |  |   |                 | 
|                              |  |            |   |   |                |  |  |                    |  |   |                 | 
|Granted                       |  | 3,050,000  |   |   | 0.220          |  |  |                    |  |   |                 | 
|Forfeited                     |  | (126,875   | ) |   | 0.720          |  |  |                    |  |   |                 | 
|Expired                       |  | (1,698,625 | ) |   | 0.370          |  |  |                    |  |   |                 | 
|                              |  |            |   |   |                |  |  |                    |  |   |                 | 
|Outstanding, January 31, 2009 |  | 3,154,500  |   | $ | 0.528          |  |  | 8.50               |  | $ | -               | 
|                              |  |            |   |   |                |  |  |                    |  |   |                 | 
|Exercisable, January 31, 2009 |  | 3,154,500  |   | $ | 0.528          |  |  | 8.50               |  | $ | -               | 

Non-qualified stock options to non-employee consultants
outstanding at January 31, 2009 are as follows:

|                              |  |           |  |   |                |  |  | Weighted           |  |   |                 | 
|----------------------------- |  | --------- |  | - | -------------- |  |  | ------------------ |  | - | --------------- | 
|                              |  |           |  |   | Weighted       |  |  | average            |  |   |                 | 
|                              |  | Number of |  |   | average        |  |  | remaining          |  |   | Aggregate       | 
|                              |  | options   |  |   | exercise price |  |  | life
      (years) |  |   | intrinsic value | 
|Outstanding, January 31, 2008 |  | 1,364,000 |  | $ | 1.013          |  |  |                    |  |   |                 | 
|                              |  |           |  |   |                |  |  |                    |  |   |                 | 
|Granted                       |  | 425,000   |  |   | 0.220          |  |  |                    |  |   |                 | 
|                              |  |           |  |   |                |  |  |                    |  |   |                 | 
|Outstanding, January 31, 2009 |  | 1,789,000 |  | $ | 0.824          |  |  | 6.84               |  | $ | -               | 
|                              |  |           |  |   |                |  |  |                    |  |   |                 | 
|Exercisable, January 31, 2009 |  | 1,789,000 |  | $ | 0.824          |  |  | 6.84               |  | $ | -               | 

The aggregate intrinsic value is calculated based on the
January 31, 2009 stock price of $0.00181 per share.

A summary of the status of the Companys nonvested shares as of
January 31, 2009 and changes during the year ended January 31, 2009 is presented
below: Incentive stock options granted to employees:

|                                                           |  |                   |   |   | Weighted average      | 
|---------------------------------------------------------- |  | ----------------- | - | - | --------------------- | 
|                                                           |  | Number of options |   |   | grant date fair value | 
|Nonvested at January 31, 2008                              |  | 782,250           |   | $ | 0.438                 | 
|Granted                                                    |  | 3,050,000         |   |   | 0.100                 | 
|Forfeited                                                  |  | (126,875          | ) |   | 0.420                 | 
|Vested                                                     |  | (3,705,375        | ) |   | 0.160                 | 
|                                                           |  |                   |   |   |                       | 
|Nonvested at January 31, 2009                              |  | -                 |   | $ | -                     | 
|                                                           |  |                   |   |   |                       | 
|Total fair value of options vested during the
      period |  |                   |   |   |                       | 
|ended January 31, 2009                                     |  |                   |   | $ | 593,952               | 

---

43

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

NOTE 9 Stock-based compensation  continued

Non-qualified stock options granted to non-employee
consultants:

|                                                           |  |                   |   |   | Weighted average      | 
|---------------------------------------------------------- |  | ----------------- | - | - | --------------------- | 
|                                                           |  | Number of options |   |   | grant date fair value | 
|Nonvested at January 31, 2008                              |  | 463,500           |   | $ | 0.398                 | 
|Granted                                                    |  | 425,000           |   |   | 0.100                 | 
|Vested                                                     |  | (888,500          | ) |   | 0.256                 | 
|                                                           |  |                   |   |   |                       | 
|Nonvested at January 31, 2009                              |  | -                 |   | $ | -                     | 
|                                                           |  |                   |   |   |                       | 
|Total fair value of options
      vested during the period |  |                   |   |   |                       | 
|ended January 31, 2009                                     |  |                   |   | $ | 227,015               | 

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-freeGrant date
    
    volatility
    
    dividend yield
    
    Expected term
    
    interest rate
    
    Forfeiture rateMay 24, 2007
    
    60%
    
    0%
    
    5 years
    
    4.56%
    
    0%August 15, 2007
    
    60%
    
    0%
    
    3 years
    
    4.31%
    
    0%May 21, 2008
    
    90%
    
    0%
    
    5 years
    
    3.09%
    
    0%


The weighted average grant date fair value of the options
granted during the years ended January 31, 2009 and 2008 was $0.10 and $0.13 per
option, respectively. There were no options exercised during the years ended
January 31, 2009 and 2008 and the period from inception (August 20, 2001) to
January 31, 2009.

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, 2009 |  |   | January 31, 2008 |  |   | January 31, 2009  | 
|Geological and geophysical costs | $ | 286,276          |  | $ | 154,862          |  | $ | 1,146,048         | 
|Salaries and benefits            |   | 252,364          |  |   | 188,888          |  |   | 663,035           | 
|Investor relations               |   | 37,604           |  |   | 14,896           |  |   | 52,500            | 
|                                 |   |                  |  |   |                  |  |   |                   | 
|                                 | $ | 576,244          |  | $ | 358,646          |  | $ | 1,861,583         | 

At January 31, 2009 there is no unrecognized share-based
compensation for all share-based awards outstanding.

---

44

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

NOTE 10  Income taxes

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

|                                                     |   | January 31, 2009 |   |   | January 31, 2008 |  
|---------------------------------------------------- | - | ---------------- | - | - | ---------------- | -
|                                                     |   |                  |   |   |                  |  
|Net operating loss carryforwards                     | $ | 7,720,000        |   | $ | 6,316,000        |  
|Temporary book and tax depreciation differences      |   | (61,000          | ) |   | (20,000          | )
|Temporary accrued expense differences                |   | 22,000           |   |   | 6,000            |  
|Temporary incentive stock option expense differences |   | 332,000          |   |   | 132,000          |  
|Less valuation allowance                             |   | (8,013,000       | ) |   | (6,434,000       | )
|                                                     |   |                  |   |   |                  |  
|                                                     | $ | -                |   |   | -                |  

Management has elected to provide a deferred tax asset
valuation allowance equal to the potential benefit due to the Companys history
of losses. When the Company demonstrates the ability to generate taxable income,
management will re-evaluate the allowance. The change in the valuation allowance
of $1,579,000 and $2,185,000 in the years ended January 31, 2009 and 2008
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, 2009 |  |   | January 31, 2008 | 
|----------------------------------------------- | - | ---------------- |  | - | ---------------- | 
|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                       |   | 5,302,980        |  |   | 5,316,835        | 
|Expiring January
      31, 2030                 |   | 3,718,999        |  |   | -                | 
|                                                |   |                  |  |   |                  | 
|Total Federal net operating loss carry-forwards | $ | 20,059,597       |  | $ | 16,354,453       | 
|                                                |   |                  |  |   |                  | 
|Arizona net operating loss carry-forwards:      |   |                  |  |   |                  | 
|Expiring January 31, 2009                       | $ | -                |  | $ | 313,895          | 
|Expiring January
      31, 2010                 |   | 2,785,529        |  |   | 2,785,529        | 
|Expiring January 31, 2011                       |   | 4,652,642        |  |   | 4,652,642        | 
|Expiring January
      31, 2012                 |   | 3,047,057        |  |   | 3,285,552        | 
|Expiring January 31, 2013                       |   | 5,271,738        |  |   | 5,316,835        | 
|Expiring January
      31, 2014                 |   | 3,718,999        |  |   | -                | 
|                                                |   |                  |  |   |                  | 
|Total Arizona net operating loss carry-forwards | $ | 19,475,965       |  | $ | 16,354,453       | 

---

45

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

NOTE 10  Income taxes - continued

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, 2009 and 2008 is as follows:

|                                                         |   | January 31, 2009 |   |   | January 31, 2008 |  
|-------------------------------------------------------- | - | ---------------- | - | - | ---------------- | -
|                                                         |   |                  |   |   |                  |  
|Income tax benefit at federal statutory
      rate       | $ | (1,323,000       | ) | $ | (1,802,000       | )
|State income tax benefit, net of effect on federal taxes |   | (292,000         | ) |   | (399,000         | )
|Permanent differences and other (federal)                |   | 29,500           |   |   | 12,500           |  
|Permanent differences and other (state)                  |   | 6,500            |   |   | 3,500            |  
|Increase in valuation allowance                          |   | 1,579,000        |   |   | 2,185,000        |  
|                                                         |   |                  |   |   |                  |  
|Income tax expenses (benefit)                            | $ | -                |   | $ | -                |  

NOTE 11  Related party transactions

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 years ended January 31, 2009 and 2008, the Company
incurred $599,566 and $543,337, respectively 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. In September 2008 the Company
assigned their option to explore the Beatty area claims to NPX Metals Inc, a
privately owned company, in exchange for $100,000 cash and 100,000 shares of NPX
Metals Inc. common stock valued at $25,000. No exploration expenditures have
been paid or incurred during the year ended January 31, 2009. 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 and 2008 the
investment balance is $25,000 and $0, respectively, and is reported on the
balance sheet as other assets.

The Company entered into the following transactions with
related parties during the year ended January 31, 2008:

Paid or accrued $5,991 in rent. We rented an office from an
officer on a month-to-month basis for $499 per month.

---

46

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

NOTE 11  Related party transactions - continued

The Company has a receivable balance due from Elle Venture, a
general partnership in which the Company is a 50% partner, for subcontracting
and drilling costs incurred by the Company in December 2007 and January 2008.
The receivable is unsecured, non-interest bearing and due on demand. Balance at
January 31, 2008 is $277,665.

The Company entered into an option agreement 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 and 33 Federal lode mining claims
in the Walnut Creek area near Tombstone, AZ for $7,375 paid at the execution of
the agreement in December 2007 and a royalty payable ranging from 2% to 10% of
net smelter returns in the event that there is a commencement of commercial
production. The Company is required to maintain the claims in good standing and
pay the annual rentals of $7,375 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. No exploration expenditures have been paid or incurred
during the year ended January 31, 2008.

NOTE 12  Commitments

The Company is required to perform annual assessment work in
order to maintain the Big Chunk and Bonanza Hills Alaska State mining claims. If
annual assessment work is not performed the Company must pay the assessment
amount in cash in order to maintain the claims. Completion of annual assessment
work in the amount of $400 per 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 paid $27,950 and utilized labor carryforwards from prior assessment work
to pay the 2008 liability. The Company estimates that the required annual
assessments to maintain the claims for 2009 will be approximately $298,600.

The annual state rentals for the Big Chunk and Bonanza Hills
Alaska State mining claims vary from $25 to $200 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, 2008 through September 1, 2009 of $133,750 have been
paid. The estimated state rentals due by November 30, 2009 for the period from
September 1, 2009 through September 1, 2010 are $133,750. Alaska State
production royalty is three percent of net income. State law prescribes that
after a 3.5 -year exemption from state taxes a metal mine is liable for a 15%
state licensing tax on net income from the mine.

The Company is required to pay annual rentals for its Federal
lode mining claims for the North Pipes project in the State of Arizona. The
rental period begins at noon on September 1st through the following
September 1st and rental payments are due by the first day of the
rental period. The annual rental is $125 per claim. Additional fees of $45 per
claim are due in the first year of filing a Federal lode mining claim along with
the first years rent. Rentals for the period from September 1, 2008 to
September 1, 2009 of $219,625 have been paid. The estimated rentals due for the
period from September 1, 2009 to September 1, 2010 due by the first day of the
rental period are $219,625.

---

47

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

NOTE 12  Commitments - continued

In November 2006, the Company began renting its previous office
space. The lease requires monthly payments of $3,789. In September 2008 the
Company exercised its option to renew the lease for an additional two year term
at an increase of 3.5% in rent per year. During the year ended January 31, 2009
and 2008 the Company recognized rent expense of $45,468 and $44,188,
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. Future minimum lease payments under this noncancelable
lease for the twelve months ended January 31, 2010 are $45,907 and the twelve
months ended January 31, 2011 are $38,256.

The Company entered into a vehicle lease in October 2005. The
lease requires a down payment of $5,458 and monthly payments of $392 through
March 2009. For the years ended January 31, 2009 and 2008 the Company recognized
rent expense of $4,700 for each year related to this lease. Future minimum lease
payments under this noncancelable lease for the twelve months ended January 31,
2010 are $1,175.

NOTE 13  Supplemental disclosures with respect to cash
flows

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

Issued 30,000 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 150,585,301 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.

The significant non-cash investing and financing transactions
for the twelve month period ended January 31, 2008 were as follows:

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

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

Stock option compensation recorded at
$358,646 for options issued to employees and consultants.

Issued 112,000 shares of common stock
in exchange for public relations consulting services reported at fair value of
$54,540.

---

48

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

NOTE 13  Supplemental disclosures with respect to cash
flows - continued

The significant non-cash investing and financing transactions
for the twelve month period ended January 31, 2008  continued:

Issued 338,461 whole share common stock
purchase warrants valued at $67,692 for a broker fee paid in connection with the
sale of the Unsecured Convertible Promissory Notes.

Issued 6,769,228 whole share common
stock purchase warrants valued at $1,353,846 in connection with the sale of the
Unsecured Convertible Promissory Notes.

The Company recorded $389,762 of
deferred financing charges that was net against the proceeds from the sale of
Unsecured Convertible Promissory Notes.

The Company recorded a beneficial
conversion feature in the amount of $1,842,734 in relation to the sale of
Unsecured Convertible Promissory Notes.

Issued 399,537 shares of common stock
for conversion of $250,000 principal amount of Unsecured Convertible Promissory
Notes plus accrued interest of $9,699. The company recorded interest expense of
$157,269 for the unamortized discounts and unamortized deferred financing
charges related to the conversion.

NOTE 14  Segment information

The Company's operations were conducted in one reportable
segment, being the acquisition and exploration of mineral claims, in the United
States of America.

NOTE 15  Financial instruments

The Company's financial instruments consist of cash and cash
equivalents, accounts payable, accrued liabilities, convertible notes payable,
notes payable and a capital lease obligation. 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 based on their short-term
maturities or respective interest rates.

NOTE 16  Going concern

The Company is in the exploration stage, has incurred losses
from operations, requires additional funds for further exploratory activity
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, 2009.

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.

---

49

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, 2009, 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, Mr. Briscoe has
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, 2009 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, 2009, 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
registered public accounting firm regarding internal control over financial
reporting. Managements report was not subject to attestation by our companys
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.

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50

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 AppointedJames Briscoe
    President, Chief Executive
      Officer, Chief Financial Officer, Chairman of the Board and Director
    67
    February 3, 2004Gary Musil
    Secretary and Director
    58
    October 23, 2003John Guilbert
    Director
    77
    February 5, 2004


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
    To1. Excellon
    VP Exploration
    April 1994
    January 19962. JABA Inc.
    CEO
    January 1980
    April 2005


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.

---

51

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.

Family Relationships

There are no family relationships among our directors or
officers.

Board and Committee Meetings

The board of directors of our company held thirteen formal
meetings in the year ended January 31, 2009 and seven formal meetings in the
year ended January 31, 2008. 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, 2009. Shareholders may contact our President, Jim
Briscoe, to recommend nominees to our board of directors.

For the year ended January 31, 2009 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. 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, 2009 and January 31,
2008, 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.

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, executive officers and control persons have not
been involved in any of the following events during

---

52

the past five 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; or
|   |                                                                                                                                                                                                                                                                                                                                
|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.                                           

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, 2009, all filing requirements
applicable to its officers, directors and greater than 10% percent beneficial
owners were complied with, with the exception of the following:

Name
      Number of Late Reports
      Number of Transactions Not Reported on a Timely
      Basis
      Failure to File Requested FormsJames Briscoe
    1(1)
    1(1)
    NilGary Musil
    2(1)(2)
    2(1)(2)
    NilJohn Guilbert
    2(1)(2)
    2(1)(2)
    NilAlaska Star
      Minerals LLC
    2(1)(2)
    2(1)(2)
    Nil


|(1) | The named officer, director or greater than 10%
      stockholder, as applicable, filed a late Form 3 - Initial Statement of
      Beneficial Ownership of Securities.   
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                          
|(2) | The named officer, director or greater than 10%
      stockholder, as applicable, filed a late Form 4 - Statement of Changes in
      Beneficial Ownership of Securities.

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;                                                                                                                                                   

---

53

|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$)
      Option Awards
      (US$)(2)
      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
    2009 2008
    85,000 120,000
    Nil 28,385
    Nil Nil
    30,000(3)Nil
    Nil Nil
    Nil Nil
    42,500(8)Nil
    $157,500 $148,385Jon Young Former Principal Financial
      Officer, CFO, Director, and Treasurer
    2009 2008
    18,000 36,000
    Nil Nil
    Nil Nil
    10,000(4)Nil
    Nil Nil
    Nil Nil
    10,200(9)Nil
    $38,200 $36,000Gary Musil Secretary and Director
    2009 2008
    Nil Nil
    Nil Nil
    Nil Nil
    15,000(5)Nil
    Nil Nil
    Nil Nil
    Nil Nil
    $15,000 NilDavid Boyer Former Manager Arizona
      Exploration
    2009 2008
    52,500 91,667
    Nil 1,461
    Nil Nil
    50,000(6)Nil
    Nil Nil
    Nil Nil
    Nil Nil
    $102,500 $93,128


---

54

Name and
      Principal Position
    Year
    Salary
      (US$)
    Bonus
      (US$)
    Stock
      Awards (US$)
    Option
      Awards (US$)(2)
    Nonequity Incentive Plan
      Compensation (US$)
    Non-qualified Deferred
      Compensation Earnings (US$)
    All Other
      Compensation (US$)(1)
    Total
      (US$)Erik Murdock Geologist and GIS
      Specialist
    2009 2008
    59,625 77,450
    Nil Nil
    Nil Nil
    35,000(7)2,000(7)
    Nil Nil
    Nil Nil
    Nil Nil
    $94,625 $79,450


|(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) | The Company granted options on April 6, 2006 that are
      exercisable at a price of $1.11 per share until April 6, 2016, and vest on
      the basis of 25% of the options on each of the 6 month anniversaries from
      the date of granting. The Company also granted options on December 8,
      2006, and are exercisable at a price of $0.72 per share until December 8,
      2016, and vest on the basis of 25% of the options on each of the 6 month
      anniversaries from the date of granting. The Company granted options on
      May 24, 2007 that are exercisable at a price of $1.11 per share until
      April 6, 2006, and vest on the basis of 50% on the grant date, 25% on
      October 6, 2007 and another 25% on April 6, 2008. The Company granted
      options on May 21, 2008 that are exercisable at a price of $0.22 per share
      until May 21, 2018, and vested 100% on June 26, 2008.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(3) | Mr. Briscoe was awarded 300,000 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 9 to our audited consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(4) | Mr. Young was awarded 100,000 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 9 to our audited consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(5) | Mr. Musil was awarded 150,000 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 9 to our audited consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(6) | Mr. Boyer was awarded 500,000 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 9 to our audited consolidated financial statements. All of Mr.
      Boyers options were forfeited or cancelled after his termination of
      employment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(7) | Mr. Murdock was awarded 350,000 incentive stock options
      on May 21, 2008 with a grant date fair value of $0.10 per share and 10,000
      incentive stock options on May 24, 2007 with a grant date fair value of
      $0.20 per share. The assumptions used to determine the grant date fair
      value can be found in Note 9 to our audited consolidated financial
      statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(8) | Mr. Briscoes other compensation represents accrued and
      unpaid wages at January 31, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(9) | Mr. Youngs other compensation represents consulting fees
      paid to Mr. Young after he terminated his position as Chief Financial
      Officer and Director.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

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,
2009.

---

55

Option Awards
      Stock
        AwardsName
      Number of Securities Underlying Unexercised Options Exercisable
      Number of Securities Underlying Unexercised Options Unexercisable
      Equity Incentive Plan Awards: Number of Securities
        Underlying Unexercised Unearned Options
      Option
        Exercise Price
      Option
        Expiration Date
      Number of Shares or Units of Stock that Have
        Not Vested
      Market Value
        of Shares or Units of Stock that Have
        Not Vested
      Equity Incentive Plan
        Awards : Number of Unearned Shares,
        Units or Other Rights that Have Not
        Vested
      Equity Incentive Plan Awards :
        Market or Payout Value of Unearned
        Shares, Units or Other Rights that
        Have Not VestedJames Briscoe
      300,000
      Nil
      Nil
      $0.22
      5/21/2018
      Nil
      Nil
      Nil
      NilJon Young
      100,000
      Nil
      Nil
      $0.22
      5/21/2018
      Nil
      Nil
      Nil
      NilJon Young
      120,000
      Nil
      Nil
      $1.678
      12/27/2014
      Nil
      Nil
      Nil
      NilJon Young
      75,000
      Nil
      Nil
      $1.11
      4/6/2016
      Nil
      Nil
      Nil
      NilJon Young
      215,000
      Nil
      Nil
      $0.72
      12/8/2016
      Nil
      Nil
      Nil
      NilGary Musil
      150,000
      Nil
      Nil
      $0.22
      5/21/2018
      Nil
      Nil
      Nil
      NilGary Musil
      17,000
      Nil
      Nil
      $1.678
      12/27/2014
      Nil
      Nil
      Nil
      NilGary Musil
      21,000
      Nil
      Nil
      $1.11
      4/6/2016
      Nil
      Nil
      Nil
      NilDavid Boyer
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      NilErik Murdock
      350,000
      Nil
      Nil
      $0.22
      5/21/2018
      Nil
      Nil
      Nil
      NilErik Murdock
      275,000
      Nil
      Nil
      $0.72
      12/8/2016
      Nil
      Nil
      Nil
      NilErik Murdock
      10,000
      Nil
      Nil
      $1.11
      4/6/2016
      Nil
      Nil
      Nil
      Nil


COMPENSATION PLANS

As of January 31, 2009 we had two compensation plans in place,
entitled "2004 Stock Option Plan" and 2007 Stock Option Plan. These plans have
not been approved by our security holders.

Total number of securities
      authorized
      Number of securities to be issued upon
      exercise of outstanding options as at January 31,
      2009
      Weighted-average exercise price of
      outstanding options as at January 31, 2009
      Number of securities remaining available for
      further issuance as at January 31, 20093,850,000
    2,718,500
    $0.97
    1,131,50010,000,000
    2,225,000
    $0.22
    7,775,000


On May 21, 2008 the Company granted 425,000 non-qualified stock
options to non-employee consultants and 3,050,000 incentive stock options to
employees, officers and directors. The options have an exercise price of $0.22
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.

On August 15, 2007, the Company granted 250,000 non-qualified
stock options pursuant to the 2004 Stock Option Plan to an investor relations
consultant in exchange for future services. The Options have an exercise price
of $0.45 per share and a term of 3 years. The options vest 25% every three month
anniversary of the grant date.

---

56

On May 24, 2007, the Company granted 10,000 incentive stock
options to an employee in accordance with the 2004 Stock Option Plan. The
options have an exercise price of $1.11 per share and a term of 8.875 years. The
options vest 50% on the grant date, 25% on October 6, 2007 and 25% on April 6,
2008.

On December 8, 2006, we granted to our employees, consultants,
officers and directors stock options to purchase an aggregate of 1,590,000
common shares exercisable at the price of $0.72 per share for a term of ten
years. The grant of stock options was made under the terms of our 2004 Stock
Option Plan.

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 employment agreements or
compensation arrangements with any of our named executive officers.

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.

The following table sets forth for each director, unless such
director is also a named executive officer, the particulars of all compensation
paid or accruing for the last fiscal year ended.

Name
    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
    Nil
    Nil
    10,000
    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.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

57

|(2) | Mr. Guilbert was awarded 100,000 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 9 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, 2009 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, 2009, we had outstanding 193,946,706
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
    8,750,000 (2)
    4.5%Jon Young 1985 E River Road Tucson AZ
      85718 USA
    Nil
    0%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%Cede & Company PO Box 20 Bowling
      Green Station New York, NY 10274
    183,538,934
    94.6%Directors and Executive Officers as a Group
    8,750,000
    4.5%


|(1) | Based on 193,946,706 shares of common stock issued and
      outstanding as of January 31, 2009. 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.                                                                                                                                                                                                                                                                                                                                                                                                                                               

Changes in Control

We are unaware of any contract or other arrangement the
operation of which may at a subsequent date result in a change in control of our
company.

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58

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
4200(a)(15) of the Marketplace Rules of the NASDAQ, which defines an
independent director generally as a personal 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, 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. For the fiscal year ended
January 31, 2008, 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-KSB and for the
reviews of our consolidated financial statements included on Forms 10-QSB were
$103,358.

Audit Related Fees

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.
For the fiscal year ended January 31, 2008, 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 $3,414.

Tax Fees

For the fiscal years ended January 31, 2009 and 2008, 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.

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:

---

59

- 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 Exhibit3.1
    Articles of Incorporation(1)3.2
    Bylaws(3)3.3
    Certificate of Change to Authorized Capital(2)3.4
    Articles of Merger(2)10.10
    Joint Venture Agreement dated
      October 6, 2006, by and between Liberty Star and XState Resources Limited
      (4)10.11
    Subcontracting Agreement dated
      October 24, 2006, by and between Liberty Star and XState Resources Limited
      (5)10.12
    Form of Securities Purchase
      Agreement for May 11, 2007 Senior Unsecured Convertible Promissory Notes
      (6)10.13
    Form of Convertible Promissory
      Note for May 11, 2007 Senior Unsecured Convertible Promissory Notes
      (6)10.14
    Form of Common Stock Purchase
      Warrant for May 11, 2007 Senior Unsecured Convertible Promissory Notes
      (6)10.15
    List of Subscribers for May 11, 2007 Senior Unsecured
      Convertible Promissory Notes (6)10.16
    Modification Agreement to the Senior Unsecured Convertible
      Promissory Notes (7)10.17
    Form of Second Modification and
      Amendment Agreement to the Senior May 2007 Convertible Notes on May 11,
      2008 (8)10.18
    Form of Third Modification and Amendment Agreement to the
      Senior May 2007 Convertible Notes (9)10.19
    Form of Subscription Agreement for August 28, 2008 Secured
      Convertible Promissory Notes (10)10.20
    Form of Secured Convertible Promissory Notes dated August
      28, 2008 (10)10.21
    Form of Security Agreement for August 28, 2008 Secured
      Convertible Promissory Notes (10)10.22
    Form of Third Modification and Amendment Agreement to the
      Senior May 2007 Convertible Notes (10)14.1
    Code of Ethics(2)21.1
      Subsidiaries: Big Chunk Corp.


---

60

Exhibit Number
      Description
        of Exhibit31.1*
      Section 302 Certification under Sarbanes-Oxley
        Act of 2002 of James Briscoe32.1*
      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)  | Filed as an exhibit to our Annual Report on Form 10-KSB,
      filed with the SEC on March 31, 2004.      
|     |                                                                                                           
|(3)  | Filed as an exhibit to our Quarterly Report on Form
      10-QSB, filed with the SEC on December 14, 2007.
|     |                                                                                                           
|(4)  | Filed as an exhibit to our Current Report on Form 8-K,
      filed with the SEC on October 16, 2006.      
|     |                                                                                                           
|(5)  | Filed as an exhibit to our Current Report on Form 8-K,
      filed with the SEC on October 27, 2006.      
|     |                                                                                                           
|(6)  | Filed as an exhibit to our Current Report on Form 8-K,
      filed with the SEC on May 15, 2007.          
|     |                                                                                                           
|(7)  | Filed as an exhibit to our Current Report on Form 8-K,
      filed with the SEC on April 23, 2008.        
|     |                                                                                                           
|(8)  | Filed as an exhibit to our Current Report on Form 8-K,
      filed with the SEC on April 23, 2008.        
|     |                                                                                                           
|(9)  | Filed as an exhibit to our Current Report on Form 8-K,
      filed with the SEC on July 31, 2008.         
|     |                                                                                                           
|(10) | Filed as an exhibit to our Current Report on Form 8-K,
      filed with the SEC on September 3, 2008.     

*         
Filed herewith.

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61

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 15, 2009

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 15, 2009

By: /s/ Gary Musil Gary Musil Secretary and
Director 
Dated: May 15, 2009

By: /s/ John Guilbert Dr. John Guilbert Director

Dated: May 15, 2009

---