Liberty Star Uranium and Metals Corp (LBSR)

[Dreamchaser]

This is the math I have put together if drilling proves out. This was done six months ago so the figures about Pebble are not up to par. But this will do.


Let's try to place a valuation of Liberty Star Uranium stock and its Big Chunk based on what we think we know about Northern Dynasty and the Pebble Deposit.

Let's also assume that somehow the market knows what the ratio should be in terms of market cap and the value of the mineral resources its stock will produce from a given ore body.

In the case of Northern Dynasty the market appraises with a value of $865 million dollars market cap for 50% of the $400 billion worth of gold, copper and molydenum that the USGS says it will produce in the next years (at today’s prices for the three metals). This results in a ratio of 865 million/.5 X $400 billion (call it thousand million to avoid all of the zeroes) or 4.33 X10 or .00433.

If Liberty Star were to be evaluated in the same way by the market, then .00433 =( 500 million X Price)/400 billion X 6.5 X .4. Now, solving for price Liberty Star would now be selling for: (.00433 X 400 billion X 6.5 X.4)/500 million or $9.006/ share. This assumes that Big Chunk has resources that are 6.5 times larger than Pebble based on ZTEM results and that Liberty Star share holders will only receive 40% instead of Northern Dynasty's 50% joint venture with Anglo American. It doesn't include an estimated value for Liberty Stars Arizona uranium nor for appreciation in the future price for gold, copper or molybdenum. Note that gold and copper have already appreciated at a much higher percentage since the USGS estimation of $400 billion.

Admittedly, this crude approximation is a reasonable way to estimate Liberty Stars market valuation when the stock price reaches $1.00 and sheds the Penny Stock stigma. It can also be assumed that (if everything falls into place) institutions will bid it up aggressively when it begins to be recognized as a solid value with long term growth when institutions come aboard, and may even bid up to $20 as uranium comes into favor (this is already happening because U3O8 has bottomed out at $42 and is now $62.50 in a very few months).

Everybody who owns LBSR should be thinking of whether to take some profits on the way (and how much and at what price - probably a minimum of $5 or $10.00) and maybe keep some as a nest egg for the next 50 years after leaving the work force.


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