While I do not know why this language was included in the 10k, I have to think that this is due to a legal requirement since these reserves are not proven by exploration.  I also have to think that this is because it is based on a historical formula that does not take into account the very modern forms of pre-exploration that have been done by LBSR to narrow down the targets.  This is frequently how bureacratic entities work.  They are usually behind the times as far as technology go, but the regulations are based on an outdated way of doing things.  So, I suspect that in this case this gloom and doom is due to a regulatory requirement that doesn't really reflect reality.

Secondly, think about this.  If it was as hopeless as you believe, would management keep putting their own money into it to keep it going?  I think not.  I think they would close up shop and cut their losses rather than put more money into wishing upon a star.  Again, this leads me to think that this has to be "boiler plate" as stated above.

While you are clearly in the negative camp, thank you for bringing up a worthwhile point for discussion.  We should all be very careful and understand the risks associated with this and any other penny stock, and that means not just listening to positive statements.