Liberty Star Uranium and Metals Corp (LBSR)

[ValuePro]

"A reverse split is an attempt to erase dilution and thus attracting larger investors. However, I am not sure on that either."

It is done because it is a demand of the brokers and/or other participants in a pending financing, the proverbial big hands. In the broader business world, it should be taken as a warning, IF it is done merely to continue a company in normal operations. Usually a reverse split means a lower valuation for the company within weeks or months following the financing.

However, if it is done in the case of an exploration-phase mining company, and largely for work on a known target, this is the way explorers become discovery-phase companies, then development-phase companies, and later producers, if they are not taken out first.

If LBSR is going to be able to attract partners, it may also be able to attract cash as part of these deals. If so, it may never need a major financing ever again. This would mean no further dilution, and no one to care how many shares are outstanding.

Having said that, very small issues of shares may be required to take the company to the point of the next deal, as happened recently.

FWIW

VP in AZ