Li3 Energy, Inc.

On September 7, 2016, the Maricunga JV entity, Minera Salar Blanco SA (“MSB SA”), a Chilean company, was incorporated and Minera Li has transferred all of its Maricunga Project assets to MSB SA as consideration for 36.05% of the shares in MSB SA. MSB also transferred its 36% interest in SLM Litio 1-6, resulting in MSB SA owning 96% of SLM Litio 1-6 and 100% of the Cocina Mining concessions. The remaining 4% interest in SLM Litio 1-6 is held by private individuals in Chile. MSB and LPI also contributed several adjacent properties owned by them to MSB SA, which are also included in the Maricunga Project. MSB and LPI currently hold 13.95% and 50%, respectively, of the shares in MSB SA. Following the planned dissolution of Minera Li, Li3 will receive 49% share of Minera Li’s shares in MSB SA (being 17.67%), with MSB receiving 51%.

The Maricunga basin comprises a large drainage basin with an area of approximating 2,200 km2. It is structurally controlled to the west by mountains which have been raised by inverse faults that expose a basement sequence ranging in age from Upper Paleozoic to Lower Tertiary. To the southeast, the basin limit coincides with the Chilean-Argentine frontier, which is defined by a line of volcanic complexes with elevations up to 6,749 m (Nevada Tres Cruces) and a range of ages between 26 Ma and 6 Ma. Some of the volcanic complexes are associated with the characteristically auriferous mineralization of the Maricunga Belt. The eastern limit of the basin is marked by the Cordillera Claudio Gay, a North-South trending mountain chain resting on a basement of Middle to Upper Paleozoic rocks and exposing deformed volcanoclastic sequences of Upper Oligocene to Lower Miocene rocks which represent remnants of the volcanic arc preserved on the margins of the Maricunga basin.

The Salar de Maricunga is located in the northern part of the Maricunga basin and covers some 140 km2. The Salar is surrounded by alluvial deposits on the north, east and south, and by volcanic deposits on the west. Salar de Maricunga is classified as a mixed type salar of the Na-Cl-Ca/SO4 system. The brines from Maricunga are solutions saturated in sodium chloride with total dissolved solids (TDS) of 26% (316 g/L) as an average, although in most areas exceeding 27%. The average density is 1.200 g/cm3. The lithium content in the brine typically exceeds 1,200 mg/L. The other components present in these brines, which constitute an aqueous complex system and exist also in other natural brines in Argentina, Bolivia and Chile are the following: K, Li, Mg, Ca, SO4, HCO3 and B, which below pH 7 exists predominantly as un-dissociated H3BO3. Interesting values of strontium (mean of 290 mg/L) also have been detected by ICP analysis in the Maricunga brine.

Applications for exploitation and exploration concessions begin with a request filed by any person interested in undertaking a mining activity before the court in whose jurisdiction the concession will be located, providing the exact geographical location of the area to be explored or exploited. Requests must be registered in the Registry of Mining and published in the Mining Gazette, and the applicant must then pay the application fees. After this, the file is sent to the National Geology and Mining Service for it to issue a report either in favour or against the grant of the mining concession. If the report is favourable, the court grants the concession by a final judgement that must also be registered in the Registry of Mining and published in the Mining Gazette.