Liberty Star (LBSR): Capitalizing on Rising Copper Prices

By Justin Kuepper · Monday, October 8th, 2012

Liberty Star Uranium & Metals Corporation (OTCQB: LBSR) is a mineral exploration company engaged in the acquisition of exploration of mineral properties in Arizona and Alaska with properties totaling 160,000 acres of what its management considers to be some of North America’s richest mineralized regions for copper, gold, silver, molybdenum and uranium.

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Copper Prices on the Rise

Copper prices have fallen modestly lower over the past year, thanks to steady copper supply and a decrease in construction and manufacturing activity. But the industry’s fundamentals appear to be shifting with increasing demand from emerging markets and lower capital expenditure (CAPEX) budgets by larger players in the industry, like Rio Tinto plc (NYSE: RIO).

The International Copper Study Group (ICSG) sees long-term copper usage increasing due to the urbanization of China, as well as demand from construction and infrastructure projects in other emerging markets. Meanwhile, ICSG notes that the supply of global copper has already begun to tighten and could get even tighter in 2012 and 2013, according to its 2012 Statistical Yearbook.

As a result, smaller copper exploration and mining companies could see increased interest by larger industry players looking to add capacity without taking on exploration and development risk. Recently, Copper Fox Metals (CVE: CUU) acquired the Sombrero Butte project and Van Dyke Bureau of Land Management claims in Arizona from Bell Resources.

Tombstone’s Big Potential

The Tombstone Super Project (TSP), located in Cochise County, Arizona, represents a large and promising porphyry copper play situated near a large volcanic and intrusive geologic feature known as a caldera. While there are no drilled mineral resources on the property, it’s adjacent to the old historic Tombstone Consolidated mines and the technical work is underway.

In mid-March 2011, Star Liberty contracted SRK Consulting to prepare NI 43-101 style technical reports over three areas within the TSP including Hay Mountain, Tombstone South and Walnut Creek. The resulting technical reports concluded that all three claim blocks were worthy of further exploration work.

After receiving word that its application for Arizona State Mineral Exploration Permits (MEPs) was accepted, the company plans on drilling approximately 10,000 feet of diamond core holes from 500 to 1,000 feet in depth during the winter of 2012. The results of this program will reveal whether economic grade mineralization is present to being commercial operations.

Several Other Promising Projects

Liberty Star’s properties aren’t limited to just its Tombstone Super Project. The company believes that its very promising Big Chunk Super Project, located in Southwestern Alaska next to the Pebble Partnership lands, could contain commercially viable deposits of copper, gold, molybdenum, silver, palladium, rhenium and zinc. After an extensive technical NI 43 101 compliant-report was created, the company completed preliminary drilling in September 2012 and is now evaluating the results in order to determine the mineral grades.

While these other exciting projects are in early-stage development, they do provide investors with additional long-term opportunities when considering Liberty Star.

North Pipes Super Project – A 100% owned Northern Arizona property located on the historically productive Arizona Strip that the company believes may contain multiple viable deposits of uranium in Brecia Pipes.
East Silver Bell Porphyry Copper Project – Located within the already operating Silver Bell Mining District northwest of Tucson, this property includes 26 unpatented lode claims covering a previously unrecognized porphyry copper center.

Great Investment Opportunity

Liberty Star Uranium & Metals Corporation (OTCQB: LBSR) represents an attractive investment opportunity at its current levels. With a market capitalization of just $18 million, the company trades at a fraction of its potential valuation, if it’s successful in commercializing its mining projects. Meanwhile, the winter 2012 TSP proposed drilling results could prove to be a strong catalyst.

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