Li3 Energy, Inc. Announces the Acquisition of a Nitrate-Iodine Project

LIMA, Peru, Aug. 11 /PRNewswire-FirstCall/ -- Li3 Energy, Inc. (OTC Bulletin Board: LIEG; "Li3" or the "Company") is pleased to announce it has executed a Stock Purchase Agreement ("SPA") with mining private equity funds ("Sellers") managed or advised by Pacific Road Capital Management ("PRCM") to acquire a Cayman based company which has a 100% interest in a nitrate-iodine project in northern Chile.

The property, known as the Alfredo Project ("Alfredo"), covers approximately 6,670 acres (2,700 hectares), comprising six concessions, and is located southeast of the city of Iquique near the mining community of Pozo Almonte.  Alfredo is situated in the proximity of the caliche mines, nitrate and iodine manufacturing facilities of SQM and ACF Minera. Caliche deposits in northern Chile contain the largest known iodine and nitrate deposits in the world.

An independent drilling, sampling and geophysical evaluation of Alfredo estimated an inferred resource of 63.5 million tonnes of caliche ore containing 4 million metric tons of nitrate and 12,000 metric tons of iodine with an average grade of 6.3% nitrate using a 4% cut off grade. These results were based on a 400 x 400 meter drill grid at an average depth of 6 meters on 93% of the property.

The drilling, sampling and the analytical programs were carried out according to protocols that conform to NI 43-101 standards and were based on protocols used by other mining companies for caliche deposits. In addition, an independent technical report conforming to NI 43-101 standards for Alfredo has been commissioned by Li3.

In exchange for the Alfredo property and pursuant to the SPA, the Company has issued an aggregate of 10,000,000 shares ("Purchase Price Shares") of Li3 common stock to the Sellers and their designees. There were 8,800,000 Purchase Price Shares issued to the Sellers that are subject to an 18-month lock up period pursuant to the SPA. In addition, the Company is required to make cash payments totaling $5.5 million, if, as and when certain milestones relating to Alfredo's development are reached; provided, that the Sellers may elect to receive shares of the Company's common stock (valued, for such purpose, based on market prices at such time) in lieu of cash for all or any portion of such milestone payments.

The SPA also grants the Sellers options to purchase additional shares of Li3 common stock. First, within 60 days of closing under the SPA, Sellers may purchase between $2,500,000 and $10,000,000 of Units (as defined below) at a price of $25,000 per Unit.  Each "Unit" consists of (i) 100,000 shares of the Company's common stock; and (ii) five-year warrants to purchase 100,000 shares of the Company's common stock at an exercise price of $0.50 per share.  Second, upon the Company's completion of a NI 43-101 Inferred Resource Report on Alfredo and on at least one lithium property in Argentina, the Sellers would have the right to purchase, at a market-based price, shares of the Company's common stock having an aggregate purchase price of up to $10,000,000 less the dollar amount of any Units subscribed for pursuant to the first option.

Luis Saenz, Chief Executive Officer, stated: "We believe the Alfredo acquisition is a great addition to our portfolio and will create significant chemical manufacturing synergies with our lithium properties. Revenue from the potassium nitrate and iodine produced at Alfredo and the sodium sulfate byproduct will contribute to making Li3 a low cost lithium producer as the Company goes forward. Finally, we welcome Pacific Road as a significant shareholder and potential strategic partner."

About Li3 Energy, Inc.

Li3 Energy, Inc. is an early stage, U.S. public company pursuing a strategy in the lithium mining and energy sector in the Americas, with a focus on identifying and acquiring opportunities in Peru, Argentina and Chile. Li3 Energy's goal is to acquire a significant portfolio of lithium brine deposits in the Americas for the purpose of development and production in order to meet growing market demand and to support the clean energy and green energy initiatives.

About Pacific Road Capital Management

PRCM is a Sydney-based private equity manager investing in the global mining industry. The private equity funds managed or advised by PRCM provide expansion and buyout capital for mining projects, mining related infrastructure and mining services businesses located throughout resource rich regions of the world. PCRM's business strategy is grounded on establishing a partnership between investees and investors. PRCM strives to be a real partner with its portfolio investment entities, providing not only capital, but business expertise and access to networks and resources enhancing prospects for long-term success.

Forward-Looking Statements

Certain statements in this news release are forward-looking. All statements other than statements of historical facts included in this news release including, without limitation, statements preceded by, followed by or that otherwise include the words "believes," "expects," "anticipates," "intends," "estimates," "projects," "potential," "target," "goal," "plans," "objective," "should" or similar expressions or variations on such expressions are forward-looking statements. The Company can give no assurances that the assumptions upon which the forward-looking statements are based will prove to be correct.  Because forward-looking statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements.  There are a number of risks, uncertainties and other important factors that could cause the Company's actual results to differ materially from the forward-looking statements including, but not limited to, the Company's ability to identify appropriate corporate acquisition and/or joint venture opportunities in the lithium mining sector, the Company's ability to establish technical and managerial infrastructure, the Company's ability to raise the required capital to take advantage of and successfully participate in any such opportunities, and future economic conditions, political stability and lithium prices.  Descriptions of some of the risks and uncertainties that could cause the Company's actual results to differ materially from those described by the forward-looking statements in this news release appear in the Company's filings with the U.S. Securities and Exchange Commission (the "SEC") including, without limitation, in the section captioned "Risk Factors" in the Company's Current Report on Form 8-K filed with the SEC on May 14, 2010.

The Company disclaims any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained in this news release to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

SOURCE Li3 Energy, Inc.