Replies to post #87753 on Liberty Star Uranium and Metals Corp (LBSR)

[WillyburgD]

Yes. There will be dilution. It is an equity financing. That's what happens. Fairhills will buy the stock at a 27.5% discount and, at their election, sell it into the market (thus the S-1 reg statement that must be in effect).

The 5% is simply a limit as to ownership at one point in time, but it doesn't mean LBSR could not finance the entire 200M share allotment so long as Fairhills never holds more than 5% at any given point.

I don't know how else to explain this to you.

[scoreoneortwo]

Still 4 months at least until we see the money and can start drilling and thus draw downs to allow drilling can not start as stated below.

ALso will put notice to investor be belated to us the shareholders and since they can buy at a 27.5% discount BEFORE investors are notified will this not bring price down SHARPLY when done?

Liberty Star's CEO, Jim Briscoe, notes, "The financing agreement with Fairhills allows us to obtain the kind of capital required to move Liberty Star to a new phase of exploration activity. We are not compelled to take down any specific amount of money; that decision is entirely at our discretion. The terms of the Agreement are such that we may continue to pursue financial arrangements and partnerships with other entities. We intend to see our exploration plans through, including geochemistry, ZTEM and core drilling, at Hay Mountain and other Tombstone caldera targets, commencing as soon as we can start draw-downs." The terms and conditions of the Financing Agreement (the "Agreement") include:

-- The Open Period is 36 months from after the Effective Date. The Company must register the stock in advance so that it is free trading when issued. That will be done through the filing of a form S-1.

-- The Company may deliver a Put Notice from time to time throughout the Open Period to the Investor that will be less than or equal to 200% of the average daily volume of the Common Stock for the 10 trading days prior to the applicable Put Notice Date.

-- The Common Stock Purchase Price will be 27.5% from the 5 day volume weighted average price (VWAP) - a 27.5% discount - during the 5 trading days immediately prior to receipt by the Investor of the Company's Put Notice. -- Fairhills Capital will not be entitled to a stock ownership position exceeding 4.99% of the number of Common Stock shares outstanding.

-- Fairhills Capital has agreed not sell the Company's stock short, either directly or indirectly through its affiliate, principals or advisors.

-- Liberty Star has reserved 200,000,000 shares for issuance pursuant to the Agreement. Draw-downs can commence after the Company registers with the SEC the stock it intends to sell to Fairhills. It is expected the process could take three to four months or possibly sooner.

[Milo2]

...as others perhaps have already said:

the greater the pps, the greater the Fairhill 5% holding becomes. An analogy:

a snowballing rolling downhill, getting BIGGER AND BIGGER!!

GO LBSR!!