On August 24th, 2011 Li3 executed a Securities Purchase Agreement with POSCO, Canada Ltd., a wholly-owned subsidiary of POSCO, (NYSE: PKX), a Republic of South Korea multinational global leader. POSCO is a diversified company, with operations in energy, chemicals and materials. POSCO is one of the largest steel manufacturers in the world with over $60 billion in annual revenues and invests in numerous global resource development projects and has been actively evaluating, pursuing and partnering leading lithium projects globally. POSCO engages in the manufacture and sale of various steel products in South Korea and internationally. It offers steel for general structures and welded structures used in steel structures, bridges, ships and automobiles; atmospheric corrosion resistant steel for use in the production of containers, special vehicles and buildings, hot rolled steel used in automobile frames and wheels; and hot rolled steel for special applications. The company was founded in 1968 and is based in Seoul, South Korea. The key terms of the Securities Purchase Agreement include:

• An initial investment to purchase $8MM of Units (each Unit consists of one share of common stock and a three-year warrant to purchase one share of common stock at an exercise price of $0.40) at a price of $0.21 per Unit;
• A follow-on investment of $10MM of additional Units at $0.21 per Unit upon satisfaction of certain conditions, including (i) an NI 43-101 report concluding that proceeding to the Feasibility Study phase for the Maricunga project is warranted, (ii) completion of Li3's proposed work program and (iii) having the necessary permits and approvals in place for building and operating a brine test facility on the Maricunga property;
• The common shares purchased by POSCO, Canada Ltd., shall be locked up and may not be sold until the earlier of: (i) 9 months after their issuance date or (ii) November 20, 2012;
• Li3 shall appoint a director nominated by POSCO, Canada Ltd., to its Board of Directors and shall continue to nominate a POSCO, Canada Ltd., designee at each annual meeting for as long as POSCAN owns not less than 10% of the issued and outstanding shares of Li3;
• After the initial investment, POSCO, Canada Ltd., and Li3 shall discuss and evaluate the development, financing and construction of a test facility on the Maricunga property – in such event, Li3 shall (i) supply POSCO, Canada Ltd., brine and other materials and utilities and (ii) assist POSCO, Canada Ltd., in obtaining any rights, licenses and permits required to build this facility;
• Li3 is also providing POSCO, Canada Ltd., with registration rights, pro-rata preemptive rights with respect to future financings, and certain negative covenants in connection with the transaction.

Additional information can be found at www.posco.com

January 2012:
Li3 Energy and R3 Fusion signed agreement for Pilot – Demonstration System with global lithium exclusivity.

June 29th, 2011:
Li3 executed an exploratory Memorandum of Understanding with R3 Fusion Inc., (R3) of Troy, New York.  R3 Fusion is a leading technology company focused on applying a new, proprietary technology to address global challenges in environmental and water issues including desalination, industrial and municipal wastewater treatment, water recovery and reuse, bio-fuel processes and fine chemical synthesis. R3 is a company dedicated to the development and commercial deployment of energy efficient processes addressing significant challenges in the water, bio-fuels, energy, minerals and mining, and environmental markets. The R3 approach is an intensified, exceptionally cost-effective platform technology offering cleaner, greener and more energy efficient approaches to these challenges.  R3 has developed, demonstrated and is currently commercializing its Short Path Condensate Recovery (SPaCeR) technology in three distinct markets; ethanol and bio-fuels production, oil & gas fluid treatment (including frac water and completion fluids), and industrial wastewater.  These patent-approved approaches to water purification, bio-fuel synthesis, green chemical synthesis, micro-desalination, and a wide range of related applications work.  R3 Fusions’ patented SPaCeR technology utilizes waste process heat and exceptional engineering designed to achieve a highly cost effective means to carry out a wide range of fluid processing in an environmentally friendly manner.

Li3 believes that R3’s technology could radically improve the methods and approaches used in lithium brine mining.  Li3 and R3 believe that the SPaCeR Technology could significantly shorten the current natural (Solar) evaporation cycle at Maricunga from its estimated duration of approximately 18 months.

The key terms of the MOU include:

• R3 will attempt to demonstrate and Li3 will measure the efficacy of its SPaCeR technology for the concentration of lithium chloride solutions;
• R3 and Li3 will seek to identify an appropriate commercial agreement to deploy the technology exclusively for lithium brine processing within six months of completion of a successful demonstration program;
• If successful, R3 will design and construct systems appropriate for the volumes and economics associated with Li3’s requirements;

Additional information can be found at www.r3fusion.com