On December 9, 2016, Li3 Energy, Inc. (the “ Company ”) entered into a binding letter of intent (the “ LOI ”) with Bearing Resources Ltd., a company incorporated under the laws of British Columbia (“ Bearing ”). Pursuant to the LOI, the Company agreed to sell its 49% equity interest in Minera Li Energy S.p.A. (“ Minera Li ”), which represents a 17.7% interest in Minera Salar Blanco S.A., in exchange for 16,000,000 common shares of Bearing and Bearing’s assumption of up to $2.2 million of the debts and liabilities of the Company (the “ Transaction ”). The consummation of the Transaction is subject to certain terms and conditions, including satisfactory completion of a definitive agreement between the parties, the satisfactory completion of customary due diligence by the parties and receipt of applicable regulatory and shareholder approvals by the parties.

The LOI will terminate upon certain events, including if the parties fail to enter into a definitive agreement for the Transaction by March 31, 2017, material breaches of the LOI and the discovery of material adverse information during the parties’ respective due diligence investigations. The parties agreed to work exclusively with each other on a definitive agreement until the earlier of (i) the time the LOI is superseded by a definitive agreement and (ii) the termination of the LOI.

The foregoing description of the LOI is qualified in its entirety by reference to the full text of the LOI, which will be filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ending December 31, 2016.