US$8 million Phase One

August 2011, Li3 established an US$18 million exploration and development plan for its Maricunga project and initiated the US$8 million Phase One of the plan which Li3 aimed at estimating (According to NI 43-101 compliant standards and practices) in-situ brine resources, and their potential for economic extraction which should enable Li3 to achieve a NI 43-101 Compliant Resource Report on the Project. The program consists of the following key tasks and elements:

• Permits for Drilling Program and Test Facility - Li3 has obtained all necessary permits for the seismic and drilling programs and for construction of the test facility.
  
  
• Seismic Survey and Modeling - Li3 has selected Geophysical Exploration & Consulting S.A. to perform a high resolution p-wave seismic refraction tomography survey. To date, some 8 line kilometers have been collected during October 2011, data processing and interpretation has been initiated. A total of approximately 20 line kilometers are planned to be completed by December 2011. Estimated completion date: 4th Quarter 2011.
  
  
• Core Sample Drilling - Li3 has contracted Boart Longyear, a leading Sonic Drilling Company. Boart Longyear is carrying out sonic drilling for the collection of undisturbed samples from continuous core for porosity determinations and brine samples for laboratory chemical analyses. Six sonic boreholes for a total of 900m are planned; to date, two sonic bores have been completed to a depth of 150m each. Sonic core recovery is above 90% and thus far 54 undisturbed samples have been collected for shipment to Daniel B Stephens & Associates Laboratory for porosity determinations; initial results are expected during December 2011;
  
  
• Well Drilling - Li3 has contracted Rock Drilling S.A., a Chilean company specialized in exploring and constructing water wells in all type of terrains. Rock Drilling is carrying out a Reverse Circulation drilling program including the installation of two production wells to 150m depth and eight observation wells. A pumping test program will be executed during December 2011. To date, Rock Drilling has completed 425m of RC drilling. Preliminary results to date include:
  
  
  • 98 brine samples have been collected for shipment to University of Antofagasta and Alex Stewart Assayers for laboratory chemistry analyses; the first round of analytical results are expected to become available early December 2011;
  • Three boreholes completed to 150m indicate the presence of a halite - clay halite horizon from 0m to approximately 30m depth, which is underlain by a sequence of alternating sand, clay, and gravel layers with a combined thickness of up to 120m. The combined saturated thickness of these units is approximately 150m;
  • Conductivity and specific gravity measurements carried out on the collected brine samples indicate the presence of brine resource to 150m depth;
  • RC drilling airlift flows of up to 10.9 liters per second have been measured, indicating that extraction of brine through production wells is likely feasible; Exploration potential remains open at depth;
    
    
• Pump Test Program - Li3 plans to conduct pump tests to evaluate the hydraulic parameters of the salar and supply large quantities of production well brine for testing, to stress the salar aquifer and to measure hydraulic response. Estimated completion date: 4th Quarter 2011.
  
  
• Laboratory Process Simulation - Li3 has selected the Science and Technology Research Center for Mining ("CICITEM") at the University of Antofagasta in Antofagasta, Chile, for the purpose of simulating two potential process routes and generating laboratory scale quantities of the lithium carbonate product. Estimated completion date: 1st Quarter 2012.
  
  
• Salar Test Facility - Li3 has selected Mr. Peter Ehren, MSc, AusIMM of Ehren-González Limitada, a TSX qualified person, to prepare a development program for the Maricunga project. Li3 plans to construct a test facility near the salar to collect data. Estimated completion date: 1st Quarter 2012.
  
  
• Laboratory Testing of R3 Fusion Technology - Li3 has begun exclusively evaluating a patented technology from R3 Fusion, Inc. This technology is designed to separate and recover pure water from highly concentrated brine solutions using process intensification techniques. Estimated completion date of first evaluation: 1st Quarter 2012.
  
  
• Environmental Impact Study (EIS) - Li3 plans to hire a qualified environmental services firm to assist in the development and preparation of all documents required for the permitting of a commercial production facility utilizing brine from the project. Estimated receipt of permits: 4th Quarter 2012.
  
  
• NI 43-101 Compliant Resource Report - Li3 has retained Mr. Don Hains, P. Geo. of Hains Technology Associates, a TSX qualified person, who developed the NI 43-101 Technical Report on Salar de Maricunga Lithium Project. Mr. Hains will supervise the work program with the objective to upgrade the Maricunga project resource from a Property of Merit to a Measured/Indicated Resource project. Estimated completion date: 1st Quarter 2012.
  
  
• Property Acquisition and Improvement - Li3 Energy is continuously evaluating more properties to acquire adjacent to the Project, as the Company seeks to expand its land package in the area. Li3 will also need to acquire additional properties for its processing site and also plans to improve the Project site infrastructure, camp, and property.

Maricunga Development Timing: