10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2016

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 000-54303

 

LI3 ENERGY, INC.

(Exact name of registrant as specified in its charter)

Nevada	20-3061907
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

Matias Cousiño 82, Of 806

Santiago de Chile, 8320269, Chile

(Address of principal executive offices) (Zip Code)

+ (56) 2 2206 5252

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x   No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x   No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer     ¨	Accelerated filer     ¨
Non-accelerated filer      ¨	Smaller reporting company  x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨    No x

As of May 16, 2016, there were 487,308,313 shares of the registrant’s common stock outstanding.

LI3 ENERGY, INC.

TABLE OF CONTENTS 

		Page
Part I - Financial Information
Item 1	Financial Statements	4
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4	Controls and Procedures	27
Part II - Other Information
Item 1	Legal Proceedings	28
Item 1A	Risk Factors	28
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3	Defaults Upon Senior Securities	28
Item 4	Mine Safety Disclosures	28
Item 5	Other Information	28
Item 6	Exhibits	29
Signatures		29

2

Statement Regarding Forward-Looking Information

This Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this report. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.

All statements other than statements of historical facts included in this Report including, without limitation, statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations section of this Report, regarding our financial condition, estimated working capital, business strategy, the plans and objectives of our management for future operations and those statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “estimates,” “projects,” “target,” “goal,” “plans,” “objective,” “should” or similar expressions or variations on such expressions are forward-looking statements. We 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 our actual results to differ materially from the forward-looking statements including, but not limited to, our ability to identify appropriate corporate acquisition and/or joint venture opportunities in the lithium mining sector, our ability to establish technical and managerial infrastructure, our ability to raise the required capital to take advantage of and successfully participate in such opportunities, and future economic conditions, political stability and lithium prices. Descriptions of certain risks and uncertainties that could cause our actual results to differ materially from those described by the forward-looking statements in this Quarterly Report on Form 10-Q appear in the section captioned “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2015, filed with the Securities and Exchange Commission (the “SEC”) on November 6, 2015.

Except as otherwise required by the federal securities laws, we disclaim any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained in this Report to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

3

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

LI3 ENERGY, INC.

Consolidated Balance Sheets

(Unaudited)

	March 31, 2016			June 30, 2015
Assets
Current assets:
Cash	$	9,607		$	6,217
Prepaid expenses and advances		17,971			51,760
Receivable from MSB for sale of controlling interest in Minera Li		-			997,796
Total current assets		27,578			1,055,773
Equity investment in Minera Li		6,774,147			7,336,375
Total non-current assets		6,774,147			7,336,375
Total assets	$	6,801,725		$	8,392,148
Liabilities & Stockholders´ Equity
Current liabilities:
Accounts payable	$	447,176		$	358,045
Accrued expenses		296,506			278,477
Common stock payable		236,678			276,678
Note payable		50,000			-
Current portion of long-term notes payable to MSB		-			1,020,000
Convertible debt, net of discount of $38,333 and $0, respectively		19,167			-
Current portion of derivative liabilities		132,364			4,040
Total current liabilities		1,181,891			1,937,240
Long-term liabilities
Long-term notes payable to MSB		454,901			200,000
Total non-current liabilities		454,901			200,000
Total liabilities		1,636,792			2,137,240
Commitments and contingencies
Common stock subject to rescission, 65,000 shares issued and outstanding		3,041			3,041
Stockholders’ Equity:
Preferred stock, $0.001 par value, 10,000,000 shares authorized; no shares issued and outstanding		-			-
Common stock, $0.001 par value, 990,000,000 shares authorized 487,308,313 and 477,119,526 shares issued and outstanding, respectively		487,308			477,120
Additional paid-in capital		71,956,071			71,808,625
Accumulated deficit		(67,281,487	)		(66,033,878	)
Total stockholders' equity		5,161,892			6,251,867
Total liabilities and stockholders´ equity	$	6,801,725		$	8,392,148

See accompanying notes to unaudited consolidated financial statements.

4

LI3 ENERGY, INC.

Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

	Three Months Ended March 31,						Nine Months Ended March 31,
	2016			2015			2016			2015
Operating expenses:
Loss from Minera Li equity investment		(186,996	)		(74,679	)		(562,228	)		(180,786	)
General and administrative expenses		(161,195	)		(337,446	)		(532,193	)		(1,054,540	)
Total operating expenses		(348,191	)		(412,125	)		(1,094,421	)		(1,235,326	)
Other income (expense):
Gain on debt extinguishment		-			333,769			-			333,769
Change in fair value of derivative liability instruments		(20,146	)		308,221			(75,824	)		1,785,059
Gain on foreign currency transactions		113			929			6,377			1,436
Interest expense, net		(27,918	)		(42,898	)		(83,741	)		(116,003	)
Total other income (expense)		(47,951	)		600,021			(153,188	)		2,004,261
Net income (loss) attributable to Li3 Energy, Inc.	$	(396,142	)	$	187,896		$	(1,247,609	)	$	768,935
Net income (loss) per common share - basic	$	(0.00	)	$	0.00		$	(0.00	)	$	0.00
Net income (loss) per common share - diluted	$	(0.00	)	$	0.00		$	(0.00	)	$	0.00
Weighted average number of common shares outstanding - basic		485,672,173			443,452,181			482,983,853			439,480,100
Weighted average number of common shares outstanding - diluted		485,672,173			444,252,181			482,983,853			440,280,100

See accompanying notes to unaudited consolidated financial statements.

5

LI3 ENERGY, INC.

Consolidated Statements of Changes in Stockholders’ Equity

From July 1, 2014 through March 31, 2016

(Unaudited)

					Additional					Total
	Common Stock				Paid-in		Accumulated			Stockholders’
	Shares		Par Value		Capital		Deficit			Equity
Balance, June 30, 2014		435,006,181	$	435,006	$	70,610,958	$	(66,446,753	)	$	4,599,211
Stock-based compensation:
Amortization of stock-based compensation		-		-		7,843		-			7,843
Stock issued to settle liabilities:
Stock issued to directors and employees for services		27,143,285		27,144		396,356		-			423,500
Stock issued in settlement of registration rights penalties		14,970,060		14,970		793,468		-			808,438
Net income		-		-		-		412,875			412,875
Balance, June 30, 2015		477,119,526	$	477,120	$	71,808,625	$	(66,033,878	)	$	6,251,867
Stock-based compensation:
Amortization of stock-based compensation		-		-		176		-			176
Stock issued to settle liabilities:
Stock issued to directors and employees for services		6,680,016		6,679		110,779		-			117,458
Stock issued to third parties		3,508,771		3,509		36,491		-			40,000
Net loss		-		-		-		(1,247,609	)		(1,247,609	)
Balance, March 31, 2016		487,308,313	$	487,308	$	71,956,071	$	(67,281,487	)	$	5,161,892

See accompanying notes to unaudited consolidated financial statements.

6

LI3 ENERGY, INC.

Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended			Nine Months Ended
	March 31, 2016			March 31, 2015
Cash flows from operating activities
Net income (loss)	$	(1,247,609	)	$	768,935
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		-			322
Amortization of convertible debt discount		19,167			-
Loss from Minera Li equity investment		562,228			180,786
Stock-based compensation		45,408			154,605
Gain on debt extinguishment		-			(333,769	)
Change in fair value of derivative liabilities		75,824			(1,785,059	)
Gain on foreign currency transactions		(6,377	)		(1,436	)
Changes in operating assets and liabilities:
Decrease in prepaid expenses and advances		34,017			15,722
Accretion of interest income on MSB receivable		(2,204	)		(2,834	)
Increase in accounts payable		90,309			8,028
Increase in accrued expenses		215,127			111,888
Net cash used in operating activities		(214,110	)		(882,812	)
Cash flows from financing activities
Proceeds from notes payable - Directors		40,000			-
Payments on notes payable - Directors		(25,000	)		-
Proceeds from convertible debt		52,500			-
Proceeds from note payable		50,000			-
Proceeds from notes payable – MSB		100,000			980,000
Net cash provided by financing activities		217,500			980,000
Net increase in cash		3,390			97,188
Cash at beginning of the period		6,217			38,490
Cash at end of the period	$	9,607		$	135,678
Supplemental disclosure of cash flow information:
Cash paid for:
Income taxes	$	-		$	-
Interest	$	-		$	2,649
Non-cash financing transactions:
Original issue debt discount	$	5,000		$	-
Debt discount due to derivative conversion feature on convertible notes	$	52,500		$	-
Settlement of accrued liabilities through issuance of stock	$	97,000		$	43,563
Settlement of notes payable and interest to directors through issuance of stock	$	15,226		$	-
Common stock payable to shareholders due to registration rights penalty settlement	$	-		$	250,000
Settlement of registration rights penalty and interest	$	-		$	808,438

See accompanying notes to unaudited consolidated financial statements.

7

LI3 ENERGY, INC.

Notes to the Consolidated Financial Statements

For the quarterly period ended March 31, 2016

(Unaudited)

NOTE 1. NATURE OF BUSINESS AND BASIS OF PRESENTATION

Li3 Energy, Inc. (“Li3 Energy” or the “Company”) was incorporated under the laws of the State of Nevada on June 24, 2005. In 2009, the Company established its business focus and strategy toward identifying and pursuing business opportunities in lithium and industrial minerals mining in the Americas.

Part of our strategic plan is to ensure that Minera Li (of which the Company owns a non-controlling interest) explores and develops the existing Maricunga Project in Chile while simultaneously identifying other synergistic opportunities with new projects with production potential that could also be advanced in an accelerated manner, with the goal of becoming a company with valuable lithium, potassium, nitrates and other industrial minerals properties.

The Company’s three wholly owned subsidiaries include: Li3 Energy Peru SRL (“Li3 Peru”), a subsidiary formed in Peru to explore mining opportunities in Peru and in South America; Alfredo Holdings, Ltd. (“Alfredo”), an exempted limited company incorporated under the laws of the Cayman Islands; and Li3 Energy Copiapó, SA (“Li3 Copiapó”), a Chilean corporation, which is a subsidiary of Alfredo.

Since October 22, 2014, the Company holds 40% of the shares in Noto Energy SA (“Noto”, an Argentinean corporation and a previously 100% owned subsidiary).

On January 27, 2014, the Company entered into a transaction with a third party, Minera Salar Blanco SpA (“MSB”, previously BBL SpA), subsequent to which MSB became the majority holder of Minera Li, holding 51% of the ownership interest. The Company retains a 49% ownership of Minera Li. Minera Li holds 60% ownership of Sociedades Legales Mineras Litio1 a 6 de la Sierra Hoyada de Maricunga (“SLM Litio 1-6”), a group of six private companies (the “Maricunga Companies”), and the Cocina Mining Concessions (together with SLM Litio 1-6, the “Maricunga Project”).

We have generated no revenues to date and do not anticipate generating any revenues in the near term. Our activities have been limited to capital formation, organization, acquisition of interests in mining properties and limited exploration on the Maricunga Project, of which we currently hold a minority interest. The Company´s operations will be subject to all the risks inherent in the establishment of a developing enterprise and the uncertainties arising from the absence of a significant operating history. We may be unable to locate exploitable quantities of mineral resources or operate on a profitable basis, or we may fail to secure additional funding to support our operations.

The accompanying unaudited interim consolidated financial statements of Li3 Energy, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s latest Annual Report on Form 10-K filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year ended June 30, 2015, as reported in Form 10-K, have been omitted.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Li3 Peru, Alfredo and Li3 Copiapó. As a result of the Company disposing of its controlling interest in Minera Li on January 27, 2014, the Company deconsolidated Minera Li from its consolidated financial statements and now accounts for its remaining 49% investment in Minera Li under the equity method. On October 22, 2014, the Company sold 60% of its shares in Noto Energy SA and now accounts for its remaining 40% investment under the equity method. All intercompany amounts have been eliminated in consolidation.

8

b. Use of Estimates and Assumptions

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management has made significant estimates related to the fair value of its mineral assets; the fair value of derivative liabilities; stock-based payments; and contingencies.

c. Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company had no cash equivalents at March 31, 2016 and June 30, 2015. The Company has not experienced any losses on its deposits of cash and cash equivalents.

d. Investment in Minera Li

As of January 27, 2014, the Company’s investment in Minera Li is accounted for under the equity method in accordance with ASC 323 –Equity Investments and Joint Ventures. Under the equity method, the carrying value of the investment is adjusted for the Company’s share of Minera Li earnings and losses, as well as any capital contributions to and distributions from associates. Distributions in excess of equity method earnings are recognized as a return of investment and recorded as investing cash inflows in the accompanying consolidated statements of cash flows. We classify operating income and losses as well as gains and impairments related to our equity investees as a component of operating income or loss, as the Company’s equity investees is an extension of our core business.

We evaluate equity investments for impairment whenever events or changes in circumstances indicate that the carrying value of the investment may have experienced an ‘‘other-than-temporary’’ decline in value. If such conditions exist, we compare the estimated fair value of the investment to its carrying value to determine if an impairment is indicated and determines whether the impairment is ‘‘other-than-temporary’’ based on an assessment of all relevant factors, including consideration of our intent and ability to retain the investment.

e. Foreign Currency

The Company has determined that the functional currency of the parent company and each of its foreign subsidiaries is U.S. Dollars.

Foreign currency transaction gains and losses are included in the statement of operations as other income (expense).

f. Income Taxes

A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and for net operating loss carry-forwards. Deferred tax expense (benefit) results from the net change during the period of deferred tax assets and liabilities.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

For financial statement purposes, we recognize the impact of an uncertain income tax position on the income tax return at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained.

9

The Company recognizes interest related to income tax matters in income tax expense and penalties related to income tax matters in general and administrative expenses. The Company did not have any uncertain income tax positions or accrued interest included in our consolidated balance sheets at March 31, 2016, or June 30, 2015, and did not recognize any interest in its consolidated statements of operations during the nine months ended March 31, 2016 or 2015.

g. Fair Value Measurements

As defined in FASB ASC Topic No. 820 - 10, fair value is the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC Topic No. 820 - 10 requires disclosure that establishes a framework for measuring fair value and expands disclosure about fair value measurements. The statement requires fair value measurements be classified and disclosed in one of the following categories:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that the Company values using observable market data. Substantially all of these inputs are observable in the marketplace throughout the term of the derivative instruments, can be derived from observable data, or supported by observable levels at which transactions are executed in the marketplace.

Level 3: Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity). The Company’s valuation models are primarily industry standard models.  Level 3 instruments include derivative warrant instruments.  The Company does not have sufficient corroborating evidence to support classifying these assets and liabilities as Level 1 or Level 2.

As required by FASB ASC Topic No. 820 - 10, financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The fair value of the Company’s derivative liabilities are estimated using a modified lattice valuation model.

h. Earnings per Share

Basic net earnings per share amounts are computed by dividing the net income available to Li3 Energy, Inc.’s shareholders by the weighted average number of common shares outstanding over the reporting period. In periods in which the Company reports a net loss, dilutive securities are excluded from the calculation of diluted earnings per share as the effect would be anti-dilutive.

For the three and nine months ended March 31, 2016 and 2015, the following convertible debt, stock options and warrants to purchase shares of common stock were excluded from the computation of diluted net loss per share, as the inclusion of such shares would be anti-dilutive:

	Three Months Ended March 31,
	2016		2015
Stock options		916,666		1,450,000
Restricted stock units		800,000		-
Convertible debt		5,808,081		-
Stock warrants		3,955,950		98,590,015
		11,480,697		100,040,015

10

	Nine Months Ended March 31,
	2016		2015
Stock options		916,666		1,450,000
Restricted stock units		800,000		-
Convertible debt		5,808,081		-
Stock warrants		3,955,950		98,590,015
		11,480,697		100,040,015

i. Recent Accounting Pronouncements

There were various accounting standards and interpretations issued recently, none of which are expected to a have a material impact on the Company´s consolidated financial position, results of operations or cash flows.

j. Subsequent Events

The Company evaluated material events occurring between March 31, 2016, and through the date when the consolidated financial statements were available to be issued for disclosure consideration.

NOTE 3. GOING CONCERN

As of March 31, 2016, the Company had no source of current revenue, a cash balance of $9,607 and negative working capital of $1,154,313.

11

The Company’s current negative working capital position is not sufficient to maintain its basic operations for at least the next 12 months.

In the course of its development activities, the Company has sustained and continues to sustain losses. The Company cannot predict if and when the Company may generate profits.  In the event we identify commercial reserves of lithium or other minerals, we will require substantial additional capital to develop those reserves and certain governmental permits to exploit such resources.  The Company expects to finance its future operations primarily through future equity or debt financing. However, there exists substantial doubt about the Company’s ability to continue as a going concern because there is no assurance that it will be able to obtain such capital, through equity or debt financing, or any combination thereof, on satisfactory terms or at all. Additionally, no assurance can be given that any such financing, if obtained, will be adequate to meet the Company’s ultimate capital needs and to support its growth. If adequate capital cannot be obtained on a timely basis and on satisfactory terms, then the Company’s operations would be materially negatively impacted.

The Company’s ability to complete additional offerings is dependent on the state of the debt and/or equity markets at the time of any proposed offering, and such market’s reception of the Company and the offering terms. In addition, the Company’s ability to complete an offering may be dependent on the status of its exploration activities, which cannot be predicted. There is no assurance that capital in any form would be available to the Company, and if available, on terms and conditions that are acceptable.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s continuation as a going concern is dependent on its ability to obtain the necessary rights to exploit its mineral rights; meet its financial and operational obligations, to obtain additional financing as may be required until such time as it can generate sources of recurring revenues and to ultimately attain profitability. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

NOTE 4. INVESTMENT IN MINERA LI

The Company´s equity investment at March 31, 2016 and June 30, 2015 relates to its 49% investment in Minera Li. The activity of the investment for the nine months ended March 31, 2016 and 2015 is as follows:

	March 31, 2016			March 31, 2015
Opening balance -  July 1, 2015 and 2014	$	7,336,375		$	7,572,425
Less: Equity in loss of Minera Li		(562,228	)		(180,786	)
Closing balance – March 31, 2016 and 2015	$	6,774,147		$	7,391,639

Summarized Financial Information of Minera Li

Set out below is the summarized financial information of Minera Li, which is accounted for using the equity method. The information reflects the amounts presented in the financial statements of Minera Li adjusted for differences in accounting policies between the Company and Minera Li. Our share of income and losses from our equity method investment in Minera Li is included in loss from Minera Li equity investment in the consolidated statements of operations.

Summarized Balance Sheets

	March 31, 2016		June 30, 2015
Current assets	$	42,855	$	122,106
Non-current assets		17,061,936		17,062,020
Total assets	$	17,104,791	$	17,184,126
Current liabilities	$	1,554,398	$	486,329
Equity		15,550,393		16,697,797
Total liabilities and equity	$	17,104,791	$	17,184,126

12

Summarized Statements of Operations

	Nine Months Ended			Nine Months Ended
	March 31, 2016			March 31, 2015
Revenue	$	-		$	-
Operating expenses:
Exploration expenses		(902,849	)		(18,791	)
General & administrative expenses		(244,555	)		(350,160	)
Total operating expenses		(1,147,404	)		(368,951	)
Net loss	$	(1,147,404	)	$	(368,951	)

	Three Months Ended			Three Months Ended
	March 31, 2016			March 31, 2015
Revenue	$	-		$	-
Operating expenses:
Exploration expenses		(300,950	)		(756	)
General & administrative expenses		80,675	)		(9,720	)
Total operating expenses		(381,625	)		(10,476	)
Net loss	$	(381,625	)	$	(10,476	)

NOTE 5. RELATED PARTY TRANSACTIONS

MSB

MSB owns 51% of Minera Li with Li3 retaining a 49% ownership interest. MSB is a private Chilean corporation with an objective to advance a business in the production of lithium. MSB is controlled by a Chilean entrepreneur.

As of June 30, 2015, the Company had received a total of $1,220,000 of loans from MSB, bearing interest of 8.5% per annum and due within 18 months from the date of receipt. On January 19, 2016, the Company entered into an additional agreement with MSB whereby the Company and MSB agreed to offset the $1,000,000 Additional Payment MSB previously agreed to provide to the Company against $1,000,000 of the Company’s notes payable to MSB and $134,901 of accrued interest owed to MSB was rolled into the Company’s existing note payable. In addition, MSB loaned an additional $100,000 to the Company and MSB waived the 13 shares in Minera Li which were pledged by the Company to MSB as security for its notes payable. The resulting $454,901 loan payable and accrued interest is due on January 18, 2018, bears interest at 8.5% per annum, and is secured by 5 of the Company’s shares in Minera Li.

The total interest accrued on the loans from MSB as of March 31, 2016 and June 30, 2015 was $7,627 (with $134,901 of accrued interest to January19, 2016 rolled into the note payable) and $79,355, respectively. For the nine months ended March 31, 2016 and 2015, $64,755 and $50,870, respectively, of interest expense was recognized in our consolidated statements of operations.

On January 19, 2016, the Company entered into an amendment to the Shareholders Agreement with MSB, pursuant to which the total number of directors of Minera Li was reduced from 7 to 5 and the parties agreed to allow MSB, in its capacity as majority shareholder and principal of Minera Li, to lead and carry out negotiations with a third party to decide and execute individually on matters that previously required a special quorum under the initial Shareholders Agreement. The amendments to the Shareholders Agreement were approved at an extraordinary shareholders meeting of Minera Li. 

13

Notes Payable to Directors

On July 31, 2015, the Company issued an unsecured promissory note to Mr. Luis Saenz, the CEO of the Company, bearing an interest rate of 3% per annum, for cash proceeds of $7,500, and due on January 31, 2016. Also on July 31, 2015, the Company issued an unsecured promissory note to Mr. Patrick Cussen, the Company’s Chairman of the Board, bearing an interest rate of 3% per annum, for cash proceeds of $7,500, and due on January 31, 2016. On March 8, 2016, the Company issued 667,807 shares of its common stock to each of Mr. Saenz and Mr. Cussen in repayment of the principal and accrued interest of $226.

On November 4, 2015, the Company issued unsecured non-interest-bearing promissory notes to the following directors:

Director	Amount
Mr. Patrick Cussen	$	10,000
Mr. Patricio Campos	$	15,000

The promissory notes were repaid on February 9, 2016.

NOTE 6. CONVERTIBLE DEBT

On December 8, 2015, the Company issued a $27,500 promissory note to LG Capital Funding, LLC, which is convertible at a price equal to 55% of the lowest daily trading prices of the Company’s common stock for the last 25 trading days prior to conversion, and bears interest at 10% per annum. The note is due and payable on December 8, 2016.

Also on December 8, 2015, the Company issued a $30,000 promissory note to JDF Capital Inc. (together with the promissory note issued to LG Capital Funding, LLC, the “Convertible Notes”), which is convertible at a price equal to the lower of (i) 55% of the lowest reported sale price of the Company’s common stock for the 25 trading days immediately prior to the issuance date, or (ii) 55% of the lowest reported sale price for the 25 days prior to conversion, and bears interest at 10% per annum. The note is due and payable on December 8, 2016.

The Company determined that the Convertible Notes contained embedded derivative instruments as the conversion prices were based on a variable that was not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No. 815 - 40. The fair values of the Convertible Notes were recognized as derivative instruments at issuance and are measured at fair value at each reporting period. The Company determined that the fair value of the derivatives was $131,884 at the issuance date. As the proceeds from the debt at issuance was $52,500, an initial loss of $79,384 was recognized and recorded to change in fair value of derivative liabilities during the nine months ended March 31, 2016.

The Company determined the fair values of the embedded derivatives on the grant dates using the modified lattice valuation model with the following assumptions: stock price on the measurement date of $0.025 per share, term of 1 year, expected volatility of 156%, and a discount rate of 0.15%.

The table below summarizes the carrying value of debt as of March 31, 2016.

Value of convertible debt on issue date of December 8, 2015	$	57,500
Less: Original issue discount		(57,500	)
Carrying value at December 8, 2015		-
Amortization of debt discount (recorded as interest expense)		19,167
Carrying value at March 31, 2016	$	19,167

NOTE 7. DERIVATIVE LIABILITIES

Warrants

The Company has determined that certain warrants that the Company has issued contain provisions that protect holders from future issuances of the Company’s common stock at prices below such warrants’ respective exercise prices and these provisions could result in modification of the warrants exercise price based on a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No. 815 - 40.

14

Activity for derivative warrant instruments during the nine months ended March 31, 2016 was as follows:

			Decrease in
	Balance at		fair value of			Balance at
	June 30,		derivative			March 31,
	2015		liabilities			2016
Lender warrants	$	3,799	$	(3,799	)	$	-
Warrants for advisory services and arranger warrants		241		(241	)		-
	$	4,040	$	(4,040	)	$	-

There were no warrants exercised during the nine months ended March 31, 2016. On July 13, 2015, 5,488,115 of the warrants issued pursuant to the first 2010 unit offering expired unexercised, with the balance of the warrants issued pursuant to the first 2010 unit offering of 671,244 warrants expiring unexercised on September 13, 2015. On August 17, 2015, 62,499,938 of the POSCAN warrants issued on August 17, 2012 expired unexercised. On November 28, 2015, 1,886,716 of the warrants issued pursuant to the second 2010 unit offering expired unexercised and in December 2015, a total of 6,866,798 of the warrants issued pursuant to the third 2010 unit offering expired unexercised. On February 23, 2016, the balance of the warrants issued pursuant to the third 2010 unit offering of 119,634 warrants expired unexercised. On March 23, 2016, 7,879,635 of the incentive warrants issued on March 24, 2011 expired unexercised.

Activity for derivative warrant instruments during the nine months ended March 31, 2015 was as follows:

			Decrease in
	Balance at		fair value of			Balance at
	June 30,		derivative			March 31,
	2014		liabilities			2015
2009 Unit Offering warrants	$	1,499	$	(1,499	)	$	-
First 2010 Unit Offering warrants		305,483		(305,483	)		-
Second 2010 Unit Offering warrants		46,224		(34,287	)		11,937
Third 2010 Unit Offering warrants		108,685		(86,492	)		22,193
Incentive warrants		110,027		(91,613	)		18,414
Lender warrants		41,372		(30,548	)		10,824
Warrants for advisory services and arranger warrants		2,111		(1,531	)		580
POSCAN warrants		1,233,606		(1,233,606	)		-
	$	1,849,007	$	(1,785,059	)	$	63,948

On September 13, 2014, 38,095,300 of the POSCAN warrants issued on September 14, 2011 expired unexercised. During November and December 2014, 14,618,791 of the warrants issued pursuant to the 2009 unit offering expired unexercised.

15

The following is a summary of the assumptions used in the modified lattice valuation model as of March 31, 2016 and 2015, respectively:

	Valuation as of March 31,
	2016			2015
Common stock issuable upon exercise of warrants		3,955,950			98,590,015
Market value of common stock on measurement date (1)	$	0.02		$	0.0129
Adjusted exercise price	$	0.20-$0.23		$	0.04-$0.28
Risk free interest rate (2)		0.39	%		0.14%-0.26	%
Warrant lives in years		0.1-1.4			0.19 – 1.09
Expected volatility (3)		143	%		167%-197%	%
Expected dividend yields (4)		None			None
Assumed stock offerings per year over next two years (5)		1			1
Probability of stock offering in any year over next two years (6)		100	%		100	%
Range of percentage of existing shares offered (7)		14	%		22% - 24	%
Offering price range (8)	$	0.03		$	0.02 - $0.03

(1) The market value of common stock is the stock price at the close of trading on the date of issuance or at period-end, as applicable.

(2) The risk-free interest rate was determined by management using the 0.5-year Treasury Bill as of the respective offering or measurement date.

(3) The historical trading volatility was determined by the Company’s trading history.

(4) Management determined the dividend yield to be -0-% based upon its expectation that it will not pay dividends for the foreseeable future.

(5) Management estimates the Company will have at least one stock offering in the next year.

(6) Management estimates that the probability of a stock offering is 100% during the next year.

(7) Management estimates that the range of percentages of existing shares offered in each stock offering will be 14% of the shares outstanding.

(8) Represents the estimated offering price range in future offerings as determined by management.

Embedded Derivative Instruments

The Company determined that the Convertible Notes, issued during December 2015, contain an embedded derivative instrument as the conversion price is based on a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No. 815 – 40. The fair value of the derivatives was recognized as a derivative instrument at issuance and is measured at fair value at each reporting period.

The following is a summary of the assumptions used in the modified lattice valuation model as of December 8, 2015 and March 31, 2016, respectively:

	Valuation as of
	December 8, 2015			March 31, 2016
Common stock issuable upon conversion of debt		5,227,273			6,575,186
Market value of common stock on measurement date (1)	$	0.025		$	0.02
Adjusted exercise price	$	0.011		$	0.020
Risk free interest rate (2)		0.15	%		0.39	%
Life in years		1.0			0.7
Expected volatility (3)		156	%		143	%
Expected dividend yields (4)		None			None
Assumed stock offerings per year over next two years (5)		1			1
Probability of stock offering in any year over next two years (6)		100	%		100	%
Range of percentage of existing shares offered (7)		14	%		15% - 20	%
Offering price range (8)	$	0.03		$	0.03 - $0.04

(1) The market value of common stock is the stock price at the close of trading on the date of issuance or at period-end, as applicable.

(2) The risk-free interest rate was determined by management using the 1 year Treasury Bill as of the respective offering or measurement date.

16

(3) The historical trading volatility was determined by the Company’s trading history.

(4) Management determined the dividend yield to be -0-% based upon its expectation that it will not pay dividends for the foreseeable future.

(5) Management estimates the Company will have at least one stock offering in the next year.

(6) Management estimates that the probability of a stock offering is 100% during the next year.

(7) Management estimates that the range of percentages of existing shares offered in each stock offering will be 14% of the shares outstanding.

(8) Represents the estimated offering price range in future offerings as determined by management.

Activity for embedded derivative instruments during the nine months ended March 31, 2016 was as follows:

			Initial valuation
			of embedded		Increase
			derivative		in
	Balance at		instruments		fair value of		Balance at
	June 30,		issued during		derivative		March 31,
	2015		the period		liabilities		2016
Convertible Notes	$	-	$	52,500	$	79,864	$	132,364
	$	-	$	52,500	$	79,864	$	132,364

NOTE 8. STOCKHOLDERS’ EQUITY

Common Stock Issued for Services and Repayment of Loans

On August 19, 2015, the Company issued 3,508,771 shares of common stock to Mr. Marc Lubow, a former officer of the Company, valued at $40,000 and recorded as common stock payable at June 30, 2015.

On March 8, 2016, the Company issued 667,807 shares of its common stock to each of Mr. Saenz and Mr. Cussen in repayment of loans from each of the directors, including both principal and accrued interest, of $7,613.

During the nine months ended March 31, 2016, the Company issued an aggregate of 5,344,402 shares of common stock as consideration in lieu of $102,232 of accrued directors fees. The Company recorded stock-compensation of $26,531 for the difference between the fair value of the common stock on the measurement dates and the fees accrued by the Company.

Restricted Stock Units

The Company committed to grant restricted stock units with respect to an aggregate of 800,000 shares to members of its Board of Directors, with such restricted stock units to vest over a period of three years starting from the later of July 1, 2011 and the initial date of the applicable director’s substantial involvement with the Board’s activities. However, the Company does not currently have enough shares authorized for issuance under our 2009 Plan to satisfy all of these obligations. The Company recorded compensation expense of $176 and $5,185 during the nine months ended March 31, 2016 and 2015, respectively, in relation to the restricted stock units to be granted to its directors.

17

Stock Option Awards

There were no stock options issued during the nine months ended March 31, 2016. A summary of stock option activity is presented in the table below:

						Weighted-
				Weighted-		average
				average		Remaining		Aggregate
	Number of			Exercise		Contractual		Intrinsic
	Shares			Price		Term (years)		Value
Outstanding at June 30, 2015		1,250,000		$	0.21		1.2	$	-
Granted		-			-		-		-
Exercised		-			-		-		-
Expired/Forfeited		(333,334	)		-		-		-
Outstanding at March 31, 2016		916,666		$	0.23		0.9	$	-
Exercisable at March 31, 2016		916,666		$	0.23		0.9	$	-

Warrants

Summary information regarding common stock warrants outstanding is as follows:

				Weighted- average
	Number of			Exercise
	Warrants			Price
Outstanding at June 30, 2015		89,125,976		$	0.15
Issued		-
Additional shares issuable upon exercise of warrants as a result of adjustments pursuant to anti-dilution provisions		242,053			n/a
Expired		(85,412,079	)		-
Outstanding at March 31, 2016		3,955,950		$	0.22

Warrants outstanding as of March 31, 2016 are as follows:

			Outstanding			Exercisable
	Exercise		number		Remaining	number
	price		of shares		life	of shares
Lender warrants	$	0.23		1,500,000	0.08 years		1,500,000
Warrants for advisory services	$	0.20		75,000	0.08 years		75,000
Arranger warrants	$	0.21		2,380,950	1.38 years		2,380,950
				3,955,950			3,955,950

The warrants outstanding at March 31, 2016 had no intrinsic value.

During the nine months ended March 31, 2016, 85,412,079 warrants expired unexercised.

NOTE 9. FAIR VALUE MEASUREMENTS

The following table sets forth, by level within the fair value hierarchy, the Company’s derivative liabilities that were accounted for at fair value on a recurring basis:

	Quoted Prices
	In Active		Significant
	Markets for		Other		Significant
	Identical		Observable		Unobservable		Total
	Assets		Inputs		Inputs		Carrying
Description	(Level 1)		(Level 2)		(Level 3)		Value
As of March 31, 2016	$	-	$	-	$	132,364	$	132,364
As of June 30, 2015	$	-	$	-	$	4,040	$	4,040

18

The following table sets forth a reconciliation of changes in the fair value of financial liabilities classified as level 3 in the fair value hierarchy:

	Significant Unobservable Inputs (Level 3)
	Nine months Ended March 31,
	2016			2015
Beginning balance as of June 30	$	4,040		$	1,849,007
Change in fair value		49,380			290,432
Additions		-			-
Balance as of September 30	$	53,420		$	2,139,439
Change in fair value		6,298			(1,767,270	)
Additions		52,500			-
Balance as of December 31	$	112,218		$	372,169
Change in fair value		20,146			(308,221	)
Additions		-			-
Ending balance as of March 31		132,364			63,948
Change in unrealized gains (losses) included in earnings for the three months ended March 31, 2016 and 2015	$	(20,146	)	$	308,221
Change in unrealized gains (losses) included in earnings for the nine months ended March 31, 2016 and 2015	$	(75,824	)	$	1,785,059

NOTE 10. COMMITMENTS AND CONTINGENCIES

On January 29, 2016, the Company executed a non-binding letter of intent (“LOI”) with Wealth Minerals Ltd ("Wealth") (TSX.V: WML) for a transaction between the companies under the following terms: 

• Wealth will undertake an equity financing of CAD$3 million.

• Post-financing, Wealth and Li3 shareholders will each hold 50% of the new company.

• The use of proceeds of the financing will be to advance Li3's Maricunga lithium project in Chile and pursue other corporate initiatives.

• The new company will have seven Board seats, with Wealth holding four and Li3 holding the remaining three seats.  The management of Wealth will largely remain intact and Li3's current management team will support the new company as necessary.

• Wealth will have a 60-day exclusivity period to complete its due diligence and financing.

On signing the non-binding letter of intent with Wealth, the Company received a payment of $50,000 from Wealth recorded as Notes Payable in the Consolidated Balance Sheets. If the transaction is completed, the payment will remain a non-interest bearing shareholder loan. If the transaction is terminated by Li3, the Company is required to repay the amount within 30 days. If the transaction is terminated by Wealth, the payment will be converted into common shares of Li3 at a price equal to $0.02 per share or the 10-day volume weighted average price of the common shares of Li3 as quoted on the OTCBB.

On March 22, 2016, the parties extended the LOI for an additional 60 days.

NOTE 11. SUBSEQUENT EVENTS

On May 2, 2016, 1,500,000 of the lender warrants and 75,000 of the warrants for advisory services expired unexercised.

On May 12, 2016, the Company entered into unsecured convertible promissory notes with third parties for total cash proceeds of $275,000 bearing interest at 10% per annum and payable on May 11, 2017. The notes and accrued interest are convertible at the option of the note holders any time prior to the maturity date into common stock of the Company at a conversion price of $0.0125 per share. In addition, the notes and accrued interest automatically convert into common stock of the Company upon the Company entering into either a definitive merger or a sale of the Company to Wealth, at a conversion rate of $0.0125. In the event the transaction with Wealth is cancelled, Li3 must seek the noteholders’ permission to execute any other debt. The conversion feature of the notes has down round protection. In the event the proposed transaction with Wealth is changed to reduce the Company’s ownership of Wealth to below 40%, the conversion rate of the notes will change to $0.0100.

19

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation

This discussion contains forward-looking statements. Please see “Statement Regarding Forward-Looking Information” above and “Risk Factors” included in the Annual Report on Form 10-K for the fiscal year ended June 30, 2015, filed with the SEC, for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements.

You should read this discussion and analysis together with our consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q.

Overview

We are a South America based exploration company in the lithium and potassium mining sector. We aim to acquire and develop a unique portfolio of lithium and potassium brine projects in the Americas.

All of our mineral rights in SLM Litio 1-6 and the Cocina Mining Concessions (the “Maricunga Project”) are held by Minera Li, of which the Company retains a 49% ownership interest. The controlling interest in Minera Li (51%) is held by a private Chilean company, Minera Salar Blanco SpA (“MSB”, previously BBL SpA).

As of March 31, 2016, Minera Li owned (a) a 60% interest in SLM Litio 1-6, which consists of mining concessions covering an area of approximately 1,438 hectares in the Salar de Maricunga in northern Chile; and (b) the Cocina Mining Concessions, covering 450 hectares located adjacent to SLM Litio 1-6.

The Company is currently evaluating additional exploration and production opportunities.

Going Concern

As of March 31, 2016, the Company had no source of current revenue, a cash balance on hand of $9,607 and negative working capital of $1,154,313.

On January 27, 2014, the Company entered into a transaction with MSB, pursuant to which MSB acquired 11 of our 60 shares of Minera Li for a cash payment of $1,500,000 and Minera Li issued 40 Additional Shares to MSB in exchange for a cash payment of $5,500,000 (the “MSB Transaction”). As a result of the MSB Transaction, MSB became the majority shareholder of Minera Li with a 51% interest, and the Company retains a 49% interest in Minera Li.

Concurrent with the execution of the MSB Transaction, the Company and MSB also entered into a Shareholders Agreement regarding their joint ownership interest of Minera Li (the “Shareholders Agreement”).

Pursuant to the terms of the MSB Transaction and the Shareholders Agreement with MSB, the Company was to receive $1,000,000 (the “Additional Payment”) upon the earlier of completion of certain Maricunga Project milestones or January 27, 2016.

MSB also provided the Company with a credit facility of $1,800,000 for working capital, pursuant to which loans of $1,220,000 were provided to the Company by MSB. The loans were due for repayment 18 months from each drawdown date at an interest rate of 8.5%, and the Company pledged 13 of its shares in Minera Li as security for the loans.

MSB also agreed to finance the Company´s share of exploration expenses on the Maricunga Project to the stage of full permitting including environmental, social, and construction, and all studies related to the Maricunga Project to internationally recognized standards. The loans would be due 24 months from receipt and interest would be charged at 12% per annum. Specific limits for these loans were to be negotiated in good faith between the Company and MSB. 

On January 19, 2016, the Company entered into an additional agreement with MSB whereby the Company and MSB agreed to offset the $1,000,000 Additional Payment MSB previously agreed to provide to the Company against $1,000,000 of the Company’s notes payable to MSB and $134,901 of accrued interest owed to MSB was rolled into the Company’s existing note payable. In addition, MSB loaned an additional $100,000 to the Company and MSB waived the 13 shares in Minera Li which were pledged by the Company to MSB as security for its notes payable. The resulting $454,901 loan payable is due on January 18, 2018, bears interest at 8.5% per annum, and is secured by 5 of the Company’s shares in Minera Li.

20

The Company’s current negative working capital position is not sufficient to maintain its basic operations for at least the next 12 months.

In the course of its development activities, the Company has sustained and continues to sustain losses. The Company cannot predict if and when the Company may generate profits.  In the event we identify commercial reserves of lithium or other minerals, we will require substantial additional capital to develop those reserves and certain governmental permits to exploit such resources.  The Company expects to finance its future operations primarily through future equity or debt financing. However, there exists substantial doubt about the Company’s ability to continue as a going concern because there is no assurance that it will be able to obtain such capital, through equity or debt financing, or any combination thereof, on satisfactory terms or at all. Additionally, no assurance can be given that any such financing, if obtained, will be adequate to meet the Company’s ultimate capital needs and to support its growth. If adequate capital cannot be obtained on a timely basis and on satisfactory terms, then the Company’s operations would be materially negatively impacted.

The Company’s ability to complete additional offerings is dependent on the state of the debt and/or equity markets at the time of any proposed offering, and such market’s reception of the Company and the offering terms. In addition, the Company’s ability to complete an offering may be dependent on the status of its exploration activities, which cannot be predicted. There is no assurance that capital in any form would be available to the Company, and if available, on terms and conditions that are acceptable.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s continuation as a going concern is dependent on its ability to obtain the necessary rights to exploit its mineral rights; meet its financial and operational obligations, to obtain additional financing as may be required until such time as it can generate sources of recurring revenues and to ultimately attain profitability. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

Operational Update

The MSB Transaction

On January 27, 2014, the Company entered into the MSB Sale Agreement with MSB, pursuant to which MSB acquired from the Company eleven of its sixty shares of Minera Li (the “Share Purchase”) for a cash payment of $1,500,000. In connection with the Share Purchase, Minera Li held a shareholders’ meeting, pursuant to which Minera Li issued forty additional shares (the “Additional Shares”) to MSB in exchange for a cash payment of $5,500,000 (the “Issuance”, and together with the “Share Purchase”, the “MSB Transaction”). As a result of the MSB Transaction, MSB became the majority shareholder of Minera Li holding 51% ownership, with the Company retaining a 49% interest in Minera Li.

Concurrent with the execution of the Agreement, the Company and MSB also entered into a Shareholders Agreement regarding their joint ownership interest of Minera Li (the “Shareholders Agreement”). Under the Shareholders Agreement, MSB agreed to pay $1,000,000 (the “Additional Payment”) to the Company upon the earlier of its completion of certain milestones (the “Milestones”) relating to the permitting and development of the Maricunga Project and January 27, 2016. 

MSB agreed to finance the Company’s exploration and development expenses until the Maricunga Project reaches full permitting and is ready for construction by providing loans due 24 months from receipt at an interest rate of 12% per annum. The loans will be secured by the Company’s ownership interest in Minera Li. Specific limits for these loans were to be negotiated in good faith between MSB and Li3 Energy.

21

In addition to the foregoing financing, MSB also committed to provide the Company with a line of credit (the “MSB Credit Facility”) in the amount of $1,800,000 (the “Maximum Amount”) for working capital purposes, pursuant to which loans of $1,220,000 were provided to the Company by MSB.

MSB also provided the Company with a credit facility of $1,800,000 for working capital, pursuant to which loans of $1,220,000 were provided to the Company by MSB. The loans were due for repayment 18 months from each drawdown date at an interest rate of 8.5%, and the Company pledged 13 of its shares in Minera Li as security for the loans.

The Company´s remaining 49% interest in Minera Li has been treated as an equity investment in accordance with ASC 323 - Investments – Equity Method and Joint Ventures. 

On January 19, 2016, the Company entered into an additional agreement with MSB whereby the Company and MSB agreed to offset the $1,000,000 Additional Payment MSB previously agreed to provide to the Company against $1,000,000 of the Company’s notes payable to MSB and $134,901 of accrued interest owed to MSB was rolled into the Company’s existing note payable. In addition, MSB loaned an additional $100,000 to the Company and MSB waived the 13 shares in Minera Li which were pledged by the Company to MSB as security for its notes payable. The resulting $454,901 loan payable is due on January 18, 2018, bears interest at 8.5% per annum, and is secured by 5 of the Company’s shares in Minera Li.

In June 2012, the Chilean Government’s Ministry of Mining established its first ever auction for the award of lithium, production quotas and licenses (Special Lithium Operations Contracts, or “CEOL”) which would permit the exploitation of an aggregate of 100,000 tons of lithium metal (approximately 530,000 tons of lithium carbonate equivalent) over a 20-year period, subject to a seven percent royalty. In September 2012, we formed a consortium consisting of us, POSCO, Daewoo International Corp, and Mitsui & Co. (the “Consortium”) for the purpose of participating in such CEOL auction. The Consortium submitted its bid for the CEOLs and in September 2012, the Company was informed that the Consortium’s bid was not the winning bid.

The Chilean government subsequently decided to invalidate the CEOL process due to an administrative error, as well as rescinding the CEOL Basis, which defined the regulations of the CEOL process. The Company submitted several appeals to the Chilean government requesting it to reconsider the invalidation and award the CEOL to the second highest bidder - the Consortium. The appeals have been rejected by the Chilean government. In June 2014, Chile´s President and Minister of Mining signed a decree for the establishment of the National Lithium Commission, tasked with recommending a new state policy for the exploitation of lithium in Chile. The recommendation was issued in January 2015, following which the Chilean government is to consider working alongside private companies in the lithium sector to develop the country’s lithium reserves, increase production and secure the long term sustainability of Chile’s lithium industry. We believe this is a positive step forward in Minera Li´s continued efforts of seeking a permit to exploit lithium from SLM Litio 1-6. 

While Minera Li´s current plan for the Maricunga Project is to exploit lithium and potash from both SLM Litio 1-6 and the Cocina Mining Concessions, if no permit for lithium exploitation is obtained for SLM Litio 1-6, Minera Li plans to produce lithium carbonate and potash from the Cocina Mining Concessions in conjunction with producing potash only from SLM Litio 1-6. The technical report shows that potassium resources are available in these properties. The majority of the past and current technical work performed on the project is applicable to the production of lithium and/or potassium. Potassium exploitation does not require special permits and it is exploitable via regular mining concessions, according to the CMC. Initial estimations suggest that a potash project is economically feasible. However, there can be no assurance that Minera Li will be able to obtain the permits necessary to exploit any minerals that our exploration activities discover in a timely manner or at all.

During the nine months ended March 31, 2016, we continued work on a preliminary work program for the Maricunga Project including preparation of a closure plan and relevant approvals, preparation and permitting of a new Declaration de Impacto Ambiental, geophysical surveys, initiation of baseline monitoring programs and pumping test program on existing production wells. The results of the testing are expected during the third quarter of 2016.

The Company continues to pursue further opportunities within the Salar de Maricunga for additional property or joint venture opportunities and MSB has recently acquired options to buy other mining properties within the Salar in order to consolidate its property holdings within the Salar de Maricunga. We also continue to monitor the Chilean government progress regarding permitting for exploitation of lithium.

22

In March 2013, POSCO announced the development of a chemical lithium extraction technology that reduces recovery time from around 12 months to less than a few days. Testing of this technology showed that it increases the lithium recovery rate from a maximum of 50% using traditional evaporation ponds to more than 80%, and the lithium carbonate produced is more than 99.9% pure. Minera Li plans to assess the use of this technology to gain efficiencies in exploiting lithium from the Maricunga Project.

In January 2015, initial test results from POSCO´s demonstration plant located in the Cauchari-Olaroz salar in Argentina indicated that the Direct Lithium Extraction Process achieved or exceeded all performance targets and that the lithium products subsequently processed were of very high quality. During a one-month period, over 20 tonnes of lithium phosphate was produced from the demonstration plant and subsequently exported to POSCO’s facility in Pohang, Korea where it was further processed into battery grade lithium carbonate and lithium hydroxide.

Minera Li’s board of directors has formed an Operations and Finance Committee to oversee the technical work required to advance the Maricunga Project along with the financial aspects of Minera Li. The committee is currently assessing the best alternatives to advance the project, taking careful consideration of the progress of the legislation in Chile regarding permitting for exploitation of lithium. The developments have been positive with the recommendations of the National Lithium Commission in January 2015 calling for a joint effort between the state and private companies to develop a lithium project within Chile. Since then, the Chilean government has continued to announce upcoming changes to the legislation in favor of advancing new lithium projects. Minera Li have continued monitoring the progress made by the Chilean government to advance the promotion of lithium projects and we believe we are getting closer to making a decision to move ahead with the final exploration and permitting on the Maricunga Project. 

Strategic Plan

Our objective is to become an integrated chemical company through the strategic acquisition and development of lithium and potassium assets, as well as other assets that have by-product synergies. Part of our strategic plan is to ensure Minera Li explores and develops the existing Maricunga Project while simultaneously identifying other synergistic opportunities with new projects with production potential that could also be advanced in an accelerated manner, with the goal of becoming a company with valuable lithium, potassium and other industrial minerals properties. Our primary objective is to become a low cost lithium and potash producer utilizing improved technologies for the extraction of lithium and potash from brines.

Along with our strategic partner MSB, we are fully committed to advancing the Maricunga Project to the stage of full permitting, including environmental, social, and construction permits, and all other studies required on the project.

We recently announced that we had entered into a letter of intent for a transaction with Wealth Minerals Ltd. We believe this transaction will allow us to further advance our strategy and open new opportunities for the Company.

23

Results of Operations

Three Months Ended March 31, 2016 Compared with Three Months Ended March 31, 2015

Revenues

We had no revenues during the three months ended March 31, 2016 and 2015. 

Loss from Minera Li equity investment

During the three months ended March 31, 2016 and 2015, we incurred a loss from equity method investments of $186,996 and $74,679, respectively, which reflects our share of the losses incurred by Minera Li for each period.

General and administrative expenses

Our general and administrative expenses for the three months ended March 31, 2016 and 2015 consisted of the following:

	Three Months Ended			Three Months Ended		Increase
	March 31, 2016			March 31, 2015		(Decrease)
Rent	$	216		$	7,166	$	(6,900	)
Office expenses		-			2,517		(2,517	)
Communications		1,350			5,210		(3,860	)
Travel expenses		4,527			16,978		(12,451	)
Legal fees		56,939			30,822		26,117
Accounting & finance fees		14,559			21,932		(7,373	)
Audit fees		7,970			9,400		(1,430	)
Other professional fees		25,547			57,111		(31,564	)
Marketing & investor relations		469			13,849		(13,380	)
Directors fees		25,500			48,959		(23,459	)
Bank fees		1,178			1,182		(4	)
Salaries & wages		29,409			121,649		(92,240	)
Stock-based compensation		(6,469	)		721		(7,190	)
	$	161,195		$	337,446	$	(176,251	)

We incurred general and administrative expenses of $161,195 for the three months ended March 31, 2016 compared to general and administrative expenses of $337,446 for the three months ended March 31, 2015, a $176,251 decrease. The reduction in general and administrative expenses is mainly a result of:

• A decrease in other professional fees of $31,564 mainly due to fees for due diligence on a potential transaction in the prior period ($17,700) and the OTCQB registration fee paid in the three months ended March 31, 2015 ($12,500) which was paid in the three months ended December 31, 2015 for the current year;

• A decrease in directors’ fees of $23,459 following a 25% reduction of fees payable to directors in order to reduce costs and the resignation of two directors; and

• A decrease in salaries and wages of $92,240, due to a significant reduction in the salary paid to the CEO and the CFO from April 2015 in order to preserve cash ($82,369), and the termination of staff in Peru and Chile due to closure of offices ($9,871).

Other income (expense)

Other expense for the three months ended March 31, 2016 was $47,951 compared to other income of $600,021 for the three months ended March 31, 2015. The variance is mainly a result of a gain on change in fair value of derivative liabilities of $308,221 recorded during the three months ended March 31, 2015 compared to a loss of $20,146 recorded during the three months ended March 31, 2016, and a one – time gain on debt extinguishment of $333,769 incurred during the three months ended March 31, 2015. The change in fair value of our derivative liability has no impact on our cash flows from operations.

24

We recorded a loss on foreign currency transactions of $113 and $929, respectively, during the three months ended March 31, 2016 and 2015. The activity during both periods was related to our operations in Chile and Peru.

Net interest expense amounted to $27,918 and $42,898 during the three months ended March 31, 2016 and 2015, respectively. The decrease is mainly due to non-recurring interest in the prior period on accrued registration rights penalties of $15,546 and a reduction in interest on loans from MSB of $14,008, partially offset by interest and amortization of debt discount on convertible notes of $15,809.

Nine Months Ended March 31, 2016 Compared with Nine Months Ended March 31, 2015

Revenues

We had no revenues during the nine months ended March 31, 2016 and 2015. 

Loss from Minera Li equity investment

During the nine months ended March 31, 2016 and 2015, we incurred a loss from equity method investments of $562,228 and $180,786, respectively, which reflects our share of the losses incurred by Minera Li for each period.

General and administrative expenses

Our general and administrative expenses for the nine months ended March 31, 2016 and 2015 consisted of the following:

	Nine Months Ended			Nine Months Ended			Increase
	March 31, 2016			March 31, 2015			(Decrease)
Rent	$	(1,461	)	$	23,691		$	(25,152	)
Office expenses		899			4,235			(3,336	)
Communications		4,224			14,278			(10,054	)
Travel expenses		7,992			74,541			(66,549	)
Legal fees		139,486			110,271			29,215
Accounting & finance fees		42,998			51,948			(8,950	)
Audit fees		24,000			37,855			(13,855	)
Other professional fees		96,310			118,646			(22,336	)
Marketing & investor relations		1,814			72,358			(70,544	)
Directors fees		87,178			158,958			(71,780	)
Bank fees		2,489			4,974			(2,485	)
Salaries & wages		104,793			378,220			(273,427	)
Stock-based compensation		26,707			7,668			19,039
Depreciation		-			322			(322	)
Other		(5,236	)		(3,425	)		(1,811	)
	$	532,193		$	1,054,540		$	(522,347	)

We incurred general and administrative expenses of $532,193 for the nine months ended March 31, 2016 compared to general and administrative expenses of $1,054,540 for the nine months ended March 31, 2015, a $522,347 decrease. The reduction in general and administrative expenses is mainly a result of:

• A decrease in rent of $25,152 due to moving into a reduced office space in Chile;

• A decrease in travel expenses of $66,549 due to various non-recurring travel incurred in the prior period in relation to potential transactions with third parties;

• A decrease in marketing and investor relations of $70,544 mainly due to the termination of the contract with marketing agents in order to reduce costs;

25

• A decrease in directors’ fees of $71,780 following a 25% reduction of fees payable to directors in order to reduce costs and the resignation of two directors; and

• A decrease in salaries and wages of $273,427, mainly due to a significant reduction in the salary paid to the CEO and the CFO from April 2015 in order to preserve cash ($241,175), the termination of staff in Peru and Chile due to closure of offices ($16,803) and a one-time settlement paid to a former employee in the prior period ($14,000).

Other income (expense)

Other expense for the nine months ended March 31, 2016 was $153,188 compared to other income of $2,004,261 for the nine months ended March 31, 2015. The variance is mainly a result of a gain on change in fair value of derivative liabilities of $1,785,059 recorded during the nine months ended March 31, 2015 compared to a loss of $75,824 recorded during the nine months ended March 31, 2016, and a one-time gain on debt extinguishment of $333,769 incurred during the nine months ended March 31, 2015. The change in fair value of our derivative liability has no impact on our cash flows from operations.

We recorded a gain on foreign currency transactions of $6,377 and $1,436, respectively, during the nine months ended March 31, 2016 and 2015. The activity during both periods was related to our operations in Chile and Peru.

Net interest expense amounted to $83,741 and $116,003 during the nine months ended March 31, 2016 and 2015, respectively. The decrease is mainly due to non-recurring interest in the prior period on accrued registration rights penalties of $62,188 and notes payable to Milestone Enhance Fund of $5,730, offset by an increase in interest on the notes payable to MSB of $13,885 and amortization of debt discount on convertible notes of $19,167 during the nine months ended March 31, 2016.

Liquidity and Capital Resources

We are primarily engaged in exploration and acquisition of new properties and do not generate income from operations currently. As of March 31, 2016, our only source of liquidity had been debt and equity financing.

Under the Shareholders Agreement, MSB agreed to finance the Company’s exploration and development expenses until the Maricunga Project reaches full permitting and is ready for construction, by providing loans due 24 months from receipt at an interest rate of 12% per annum. The loans will be secured by a portion of the Company’s ownership interest in Minera Li. Specific limits on amounts that may be borrowed under these loans were to be negotiated in good faith between MSB and the Company.

The Company’s current negative working capital position is not sufficient to maintain its basic operations for at least the next 12 months.

Although the Company continues to seek investment in certain other mining properties, any such properties that we may acquire will require exploration and development that could take years to complete before they begin to generate revenues. There can be no assurances that we will be successful in acquiring such properties or that if we do complete acquisitions, properties acquired will be successfully developed to the revenue producing stage. If we are not successful in our proposed mining operations, our business, results of operations, liquidity and financial condition will suffer materially.

Various factors outside of our control, including the price of lithium, potassium nitrate and other minerals, overall market and economic conditions, the volatility in equity markets may limit our ability to raise the capital needed to execute our plan of operations. The foregoing factors or other factors could adversely affect our ability to raise additional capital. If we are unable to raise additional capital, our short-term or long-term liquidity and our ability to execute our plan of operations could be significantly impaired. The Company is currently in discussions with a third party regarding a potential merger which, if consummated, would provide additional funding to execute our plan of operations.

26

Common Stock Subject to Rescission

On March 19, 2012, the Securities and Exchange Commission declared effective a registration statement that we had filed to cover the resale of shares previously issued and sold (or to be issued upon the exercise of warrants). On March 1, 2013, we filed a post-effective amendment for that registration statement that included our audited financial statements as of and for the year ended June 30, 2012 as had been filed on our Annual Report on Form 10-K for the year ended June 30, 2012 (the “2012 Annual Report”). We believe that the filing of the post-effective amendment fulfilled our obligation to update the registration with current financial information pursuant to Section 10(a)(3) of the Act. However, there were approximately six months when our registration statement contained financial information that was not current. During that period, 65,000 shares sold pursuant to that prospectus in open market transactions which may have violated Section 5 of the Securities Act of 1933, as amended, and, as a result, the purchasers of those shares may have rescission rights or claims for damages. Accordingly, we have reduced shareholders’ equity at March 31, 2016 by $3,041, the total amount that we would have to refund if all the purchasers of those shares exercised their rescission right. 

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a smaller reporting company, as defined in Rule 12b-2 of the Exchange Act, we are not required to provide disclosure under this Item 3.

Item 4. Controls and Procedures

Evaluation of disclosure of controls and procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2016. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were not effective.

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

Changes in internal controls over financial reporting 

There has been no change in our internal control over financial reporting that occurred during the fiscal quarter ended March 31, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

27

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm business.

We are currently not aware of any pending legal proceedings to which we are a party or of which any of our property is the subject, nor are we aware of any such proceedings that are contemplated by any governmental authority.

Item 1A. Risk Factors

There have been no material changes from the risk factors disclosed in the Form 10-K we filed with the SEC on November 6, 2015, under Part I, Item 1A, “Risk Factors,” therein.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On March 8, 2016, the Company issued 667,807 shares of its common stock to each of Mr. Saenz and Mr. Cussen in repayment of loans from each of the directors, including both principal and accrued interest, of $7,613.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Mine Safety and Health Administration Regulations

We consider health, safety and environmental stewardship to be a core value for the Company.

Our Chilean exploration properties are not subject to regulation by the Federal Mine Safety and Health Administration (“MSHA”) under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”). Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities. During the fiscal quarter ended March 31, 2016, despite the fact Li3 Energy, Inc. is outside the Mine Act jurisdiction, the Company had no such specified health and safety violations, orders or citations, related assessments or legal actions, mining-related fatalities, or similar events in relation to our operations requiring disclosure pursuant to Section 1503(a) of the Dodd-Frank Act and Item 104 of Regulation S-K.

Item 5. Other Information

None.

28

Item 6. Exhibits

Exhibit Number	Exhibit Title
10.1	Compensation, Debt Recognition, Cancelation of Debt and Incorporation of Lien Without Displacement from Minera Salar Blanco SpA to Li3 Energy, Inc, dated January 19, 2016.
10.2	Modification of the Shareholders Agreement Minera Li Energy SpA, dated January 19, 2016.
31.1	Certification of Principal Executive Officer, pursuant to Securities Exchange Act Rules 13a - 14(a) and 15(d) - 14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Principal Financial Officer, pursuant to Securities Exchange Act Rules 13a - 14(a) and 15(d) - 14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Schema
101.CAL	XBRL Taxonomy Calculation Linkbase
101.DEF	XBRL Taxonomy Definition Linkbase
101.LAB	XBRL Taxonomy Label Linkbase
101.PRE	XBRL Taxonomy Presentation Linkbase

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date:  May 16, 2016	LI3 ENERGY, INC.
	By:	/s/ Luis F. Saenz
		Luis F. Saenz
		Chief Executive Officer
		(Principal Executive Officer)
	By:	/s/ Luis Santillana
		Luis Santillana
		Chief Financial Officer
		(Principal Financial Officer)

29

EXHIBIT INDEX

Exhibit Number	Exhibit Title
31.1	Certification of Principal Executive Officer, pursuant to Securities Exchange Act Rules 13a - 14(a) and 15(d) - 14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Principal Financial Officer, pursuant to Securities Exchange Act Rules 13a - 14(a) and 15(d) - 14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101. INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Schema
101.CAL	XBRL Taxonomy Calculation Linkbase
101.DEF	XBRL Taxonomy Definition Linkbase
101.LAB	XBRL Taxonomy Label Linkbase
101.PRE	XBRL Taxonomy Presentation Linkbase

30

EX-31.1

Exhibit 31.1

CERTIFICATION

PURSUANT TO RULE 13A- 14(A) AND 15(D) - 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934,

AS AMENDED, AS ADOPTED

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Luis F. Saenz, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Li3 Energy, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures; and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  May 16, 2016	/s/ Luis F. Saenz
	Luis F. Saenz
	Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

PURSUANT TO RULE 13A - 14(A) AND 15(D) - 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934,

AS AMENDED, AS ADOPTED

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Luis Santillana, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Li3 Energy, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures; and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  May 16, 2016	/s/  Luis Santillana
	Luis Santillana
	Chief Financial Officer
	(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Luis F. Saenz, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of Li3 Energy, Inc. for the period ended March 31, 2016 (the “Quarterly Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in the Quarterly Report fairly presents in all material respects the financial condition and results of operations of Li3 Energy, Inc.

Date:  May 16, 2016	/s/ Luis F. Saenz
	Luis F. Saenz
	Chief Executive Officer
	(Principal Executive Officer)

A signed original of this written statement, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement will be retained by Li3 Energy, Inc., and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Luis Santillana, certify, pursuant to 18 U.S.C. Section, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of Li3 Energy, Inc. for the period ended March 31, 2016 (the “Quarterly Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in the Quarterly Report fairly presents in all material respects the financial condition and results of operations of Li3 Energy, Inc.

Date:  May 16, 2016	/s/ Luis Santillana
	Luis Santillana
	Chief Financial Officer
	(Principal Financial Officer)

A signed original of this written statement, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement will be retained by Li3 Energy, Inc., and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document And Entity Information - shares	9 Months Ended
	Mar. 31, 2016	May. 16, 2016
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Entity Registrant Name	Li3 Energy, Inc.
Entity Central Index Key	0001334699
Current Fiscal Year End Date	--06-30
Entity Filer Category	Smaller Reporting Company
Trading Symbol	LIEG
Entity Common Stock, Shares Outstanding		487,308,313

XML

Consolidated Balance Sheets - USD ($)	Mar. 31, 2016	Jun. 30, 2015
Current assets:
Cash	$ 9,607	$ 6,217
Prepaid expenses and advances	17,971	51,760
Receivable from MSB for sale of controlling interest in Minera Li	0	997,796
Total current assets	27,578	1,055,773
Equity investment in Minera Li	6,774,147	7,336,375
Total non-current assets	6,774,147	7,336,375
Total assets	6,801,725	8,392,148
Current liabilities:
Accounts payable	447,176	358,045
Accrued expenses	296,506	278,477
Common stock payable	236,678	276,678
Note payable	50,000	0
Current portion of long-term notes payable to MSB	0	1,020,000
Convertible debt, net of discount of $38,333 and $0, respectively	19,167	0
Current portion of derivative liabilities	132,364	4,040
Total current liabilities	1,181,891	1,937,240
Long-term liabilities
Long-term notes payable to MSB	454,901	200,000
Total non-current liabilities	454,901	200,000
Total liabilities	$ 1,636,792	$ 2,137,240
Commitments and contingencies
Common stock subject to rescission, 65,000 shares issued and outstanding	$ 3,041	$ 3,041
Stockholders’ Equity:
Preferred stock, $0.001 par value, 10,000,000 shares authorized; no shares issued and outstanding	0	0
Common stock, $0.001 par value, 990,000,000 shares authorized 487,308,313 and 477,119,526 shares issued and outstanding, respectively	487,308	477,120
Additional paid-in capital	71,956,071	71,808,625
Accumulated deficit	(67,281,487)	(66,033,878)
Total stockholders' equity	5,161,892	6,251,867
Total liabilities and stockholders' equity	$ 6,801,725	$ 8,392,148

XML

Consolidated Balance Sheets (Parenthetical) - USD ($)	Mar. 31, 2016	Jun. 30, 2015
Convertible Debt	$ 38,333	$ 0
Common stock subject to rescission, shares issued	65,000	65,000
Common stock subject to rescission, shares outstanding	65,000	65,000
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	990,000,000	990,000,000
Common stock, shares issued	487,308,313	477,119,526
Common stock, shares outstanding	487,308,313	477,119,526

XML

Consolidated Statements of Operations and Comprehensive Loss - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Operating expenses:
Loss from Minera Li equity investment	$ (186,996)	$ (74,679)	$ (562,228)	$ (180,786)
General and administrative expenses	(161,195)	(337,446)	(532,193)	(1,054,540)
Total operating expenses	(348,191)	(412,125)	(1,094,421)	(1,235,326)
Other income (expense):
Gain on debt extinguishment	0	333,769	0	333,769
Change in fair value of derivative liability instruments	(20,146)	308,221	(75,824)	1,785,059
Gain on foreign currency transactions	113	929	6,377	1,436
Interest expense, net	(27,918)	(42,898)	(83,741)	(116,003)
Total other income (expense)	(47,951)	600,021	(153,188)	2,004,261
Net income (loss) attributable to Li3 Energy, Inc.	$ (396,142)	$ 187,896	$ (1,247,609)	$ 768,935
Net income (loss) per common share - basic (in dollars per share)	$ (0.00)	$ 0.00	$ (0.00)	$ 0.00
Net income (loss) per common share - diluted (in dollars per share)	$ (0.00)	$ 0.00	$ (0.00)	$ 0.00
Weighted average number of common shares outstanding - basic (in share)	485,672,173	443,452,181	482,983,853	439,480,100
Weighted average number of common shares outstanding - diluted (in share)	485,672,173	444,252,181	482,983,853	440,280,100

XML

Consolidated Statements of Changes in Stockholders' Equity - USD ($)	Total	Directors and Employees [Member]	Third Party [Member]	Common Stock [Member]	Common Stock [Member] Directors and Employees [Member]	Common Stock [Member] Third Party [Member]	Additional Paid-in Capital [Member]	Additional Paid-in Capital [Member] Directors and Employees [Member]	Additional Paid-in Capital [Member] Third Party [Member]	Retained Earnings [Member]	Retained Earnings [Member] Directors and Employees [Member]	Retained Earnings [Member] Third Party [Member]
Balance at Jun. 30, 2014	$ 4,599,211			$ 435,006			$ 70,610,958			$ (66,446,753)
Balance (in shares) at Jun. 30, 2014				435,006,181
Amortization of stock-based compensation	7,843			$ 0			7,843			0
Stock issued for services		$ 423,500			$ 27,144			$ 396,356			$ 0
Stock issued for services (in shares)					27,143,285
Stock issued in settlement of registration rights penalties	808,438			$ 14,970			793,468			0
Stock issued in settlement of registration rights penalties (in shares)				14,970,060
Net income (loss)	412,875			$ 0			0			412,875
Balance at Jun. 30, 2015	6,251,867			$ 477,120			71,808,625			(66,033,878)
Balance (in shares) at Jun. 30, 2015				477,119,526
Amortization of stock-based compensation	176			$ 0			176			0
Stock issued for services		$ 117,458	$ 40,000		$ 6,679	$ 3,509		$ 110,779	$ 36,491		$ 0	$ 0
Stock issued for services (in shares)					6,680,016	3,508,771
Net income (loss)	(1,247,609)			0			0			(1,247,609)
Balance at Mar. 31, 2016	$ 5,161,892			$ 487,308			$ 71,956,071			$ (67,281,487)
Balance (in shares) at Mar. 31, 2016				487,308,313

XML

Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flows from operating activities
Net income (loss)	$ (1,247,609)	$ 768,935
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	0	322
Amortization of convertible debt discount	19,167	0
Loss from Minera Li equity investment	562,228	180,786
Stock-based compensation	45,408	154,605
Gain on debt extinguishment	0	(333,769)
Change in fair value of derivative liabilities	75,824	(1,785,059)
Gain on foreign currency transactions	(6,377)	(1,436)
Changes in operating assets and liabilities:
Decrease in prepaid expenses and advances	34,017	15,722
Accretion of interest income on MSB receivable	(2,204)	(2,834)
Increase in accounts payable	90,309	8,028
Increase in accrued expenses	215,127	111,888
Net cash used in operating activities	(214,110)	(882,812)
Cash flows from financing activities
Proceeds from notes payable - Directors	40,000	0
Payments on notes payable - Directors	(25,000)	0
Proceeds from convertible debt	52,500	0
Proceeds from note payable	50,000	0
Proceeds from notes payable - MSB	100,000	980,000
Net cash provided by financing activities	217,500	980,000
Net increase in cash	3,390	97,188
Cash at beginning of the period	6,217	38,490
Cash at end of the period	9,607	135,678
Supplemental disclosure of cash flow information:
Income taxes	0	0
Interest	0	2,649
Non-cash financing transactions:
Original issue debt discount	5,000	0
Debt discount due to derivative conversion feature on convertible notes	52,500	0
Settlement of accrued liabilities through issuance of stock	97,000	43,563
Settlement of notes payable and interest to directors through issuance of stock	15,226	0
Common stock payable to shareholders due to registration rights penalty settlement	0	250,000
Settlement of registration rights penalty and interest	$ 0	$ 808,438

XML

NATURE OF BUSINESS AND BASIS OF PRESENTATION

9 Months Ended

Mar. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business Description and Basis of Presentation [Text Block]

NOTE 1. NATURE OF BUSINESS AND BASIS OF PRESENTATION

Li3 Energy, Inc. (“Li3 Energy” or the “Company”) was incorporated under the laws of the State of Nevada on June 24, 2005. In 2009, the Company established its business focus and strategy toward identifying and pursuing business opportunities in lithium and industrial minerals mining in the Americas.

Part of our strategic plan is to ensure that Minera Li (of which the Company owns a non-controlling interest) explores and develops the existing Maricunga Project in Chile while simultaneously identifying other synergistic opportunities with new projects with production potential that could also be advanced in an accelerated manner, with the goal of becoming a company with valuable lithium, potassium, nitrates and other industrial minerals properties.

The Company’s three wholly owned subsidiaries include: Li3 Energy Peru SRL (“Li3 Peru”), a subsidiary formed in Peru to explore mining opportunities in Peru and in South America; Alfredo Holdings, Ltd. (“Alfredo”), an exempted limited company incorporated under the laws of the Cayman Islands; and Li3 Energy Copiapó, SA (“Li3 Copiapó”), a Chilean corporation, which is a subsidiary of Alfredo.

Since October 22, 2014, the Company holds 40% of the shares in Noto Energy SA (“Noto”, an Argentinean corporation and a previously 100% owned subsidiary).

On January 27, 2014, the Company entered into a transaction with a third party, Minera Salar Blanco SpA (“MSB”, previously BBL SpA), subsequent to which MSB became the majority holder of Minera Li, holding 51% of the ownership interest. The Company retains a 49% ownership of Minera Li. Minera Li holds 60% ownership of Sociedades Legales Mineras Litio1 a 6 de la Sierra Hoyada de Maricunga (“SLM Litio 1-6”), a group of six private companies (the “Maricunga Companies”), and the Cocina Mining Concessions (together with SLM Litio 1-6, the “Maricunga Project”).

We have generated no revenues to date and do not anticipate generating any revenues in the near term. Our activities have been limited to capital formation, organization, acquisition of interests in mining properties and limited exploration on the Maricunga Project, of which we currently hold a minority interest. The Company’s operations will be subject to all the risks inherent in the establishment of a developing enterprise and the uncertainties arising from the absence of a significant operating history. We may be unable to locate exploitable quantities of mineral resources or operate on a profitable basis, or we may fail to secure additional funding to support our operations.

The accompanying unaudited interim consolidated financial statements of Li3 Energy, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s latest Annual Report on Form 10-K filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year ended June 30, 2015, as reported in Form 10-K, have been omitted.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Li3 Peru, Alfredo and Li3 Copiapó. As a result of the Company disposing of its controlling interest in Minera Li on January 27, 2014, the Company deconsolidated Minera Li from its consolidated financial statements and now accounts for its remaining 49% investment in Minera Li under the equity method. On October 22, 2014, the Company sold 60% of its shares in Noto Energy SA and now accounts for its remaining 40% investment under the equity method. All intercompany amounts have been eliminated in consolidation.

b. Use of Estimates and Assumptions

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management has made significant estimates related to the fair value of its mineral assets; the fair value of derivative liabilities; stock-based payments; and contingencies.

c. Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company had no cash equivalents at March 31, 2016 and June 30, 2015. The Company has not experienced any losses on its deposits of cash and cash equivalents.

d. Investment in Minera Li

As of January 27, 2014, the Company’s investment in Minera Li is accounted for under the equity method in accordance with ASC 323 –Equity Investments and Joint Ventures. Under the equity method, the carrying value of the investment is adjusted for the Company’s share of Minera Li earnings and losses, as well as any capital contributions to and distributions from associates. Distributions in excess of equity method earnings are recognized as a return of investment and recorded as investing cash inflows in the accompanying consolidated statements of cash flows. We classify operating income and losses as well as gains and impairments related to our equity investees as a component of operating income or loss, as the Company’s equity investees is an extension of our core business.

We evaluate equity investments for impairment whenever events or changes in circumstances indicate that the carrying value of the investment may have experienced an ‘‘other-than-temporary’’ decline in value. If such conditions exist, we compare the estimated fair value of the investment to its carrying value to determine if an impairment is indicated and determines whether the impairment is ‘‘other-than-temporary’’ based on an assessment of all relevant factors, including consideration of our intent and ability to retain the investment.

e. Foreign Currency

The Company has determined that the functional currency of the parent company and each of its foreign subsidiaries is U.S. Dollars.

Foreign currency transaction gains and losses are included in the statement of operations as other income (expense).

f. Income Taxes

A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and for net operating loss carry-forwards. Deferred tax expense (benefit) results from the net change during the period of deferred tax assets and liabilities.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

For financial statement purposes, we recognize the impact of an uncertain income tax position on the income tax return at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained.

The Company recognizes interest related to income tax matters in income tax expense and penalties related to income tax matters in general and administrative expenses. The Company did not have any uncertain income tax positions or accrued interest included in our consolidated balance sheets at March 31, 2016, or June 30, 2015, and did not recognize any interest in its consolidated statements of operations during the nine months ended March 31, 2016 or 2015.

g. Fair Value Measurements

As defined in FASB ASC Topic No. 820 - 10, fair value is the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC Topic No. 820 - 10 requires disclosure that establishes a framework for measuring fair value and expands disclosure about fair value measurements. The statement requires fair value measurements be classified and disclosed in one of the following categories:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that the Company values using observable market data. Substantially all of these inputs are observable in the marketplace throughout the term of the derivative instruments, can be derived from observable data, or supported by observable levels at which transactions are executed in the marketplace.

Level 3: Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity). The Company’s valuation models are primarily industry standard models.  Level 3 instruments include derivative warrant instruments.  The Company does not have sufficient corroborating evidence to support classifying these assets and liabilities as Level 1 or Level 2.

As required by FASB ASC Topic No. 820 - 10, financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The fair value of the Company’s derivative liabilities are estimated using a modified lattice valuation model.

h. Earnings per Share

Basic net earnings per share amounts are computed by dividing the net income available to Li3 Energy, Inc.’s shareholders by the weighted average number of common shares outstanding over the reporting period. In periods in which the Company reports a net loss, dilutive securities are excluded from the calculation of diluted earnings per share as the effect would be anti-dilutive.

For the three and nine months ended March 31, 2016 and 2015, the following convertible debt, stock options and warrants to purchase shares of common stock were excluded from the computation of diluted net loss per share, as the inclusion of such shares would be anti-dilutive:

	Three Months Ended
	March 31,
	2016		2015
Stock options		916,666		1,450,000
Restricted stock units		800,000		-
Convertible debt		5,808,081		-
Stock warrants		3,955,950		98,590,015
		11,480,697		100,040,015

	Nine Months Ended
	March 31,
	2016		2015
Stock options		916,666		1,450,000
Restricted stock units		800,000		-
Convertible debt		5,808,081		-
Stock warrants		3,955,950		98,590,015
		11,480,697		100,040,015

i. Recent Accounting Pronouncements

There were various accounting standards and interpretations issued recently, none of which are expected to a have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

j. Subsequent Events

The Company evaluated material events occurring between March 31, 2016, and through the date when the consolidated financial statements were available to be issued for disclosure consideration.

XML

GOING CONCERN

9 Months Ended

Mar. 31, 2016

Other Liabilities Disclosure [Abstract]

Going Concern [Text Block]

NOTE 3. GOING CONCERN

As of March 31, 2016, the Company had no source of current revenue, a cash balance of $9,607 and negative working capital of $1,154,313.

The Company’s current negative working capital position is not sufficient to maintain its basic operations for at least the next 12 months.

In the course of its development activities, the Company has sustained and continues to sustain losses. The Company cannot predict if and when the Company may generate profits.  In the event we identify commercial reserves of lithium or other minerals, we will require substantial additional capital to develop those reserves and certain governmental permits to exploit such resources.  The Company expects to finance its future operations primarily through future equity or debt financing. However, there exists substantial doubt about the Company’s ability to continue as a going concern because there is no assurance that it will be able to obtain such capital, through equity or debt financing, or any combination thereof, on satisfactory terms or at all. Additionally, no assurance can be given that any such financing, if obtained, will be adequate to meet the Company’s ultimate capital needs and to support its growth. If adequate capital cannot be obtained on a timely basis and on satisfactory terms, then the Company’s operations would be materially negatively impacted.

The Company’s ability to complete additional offerings is dependent on the state of the debt and/or equity markets at the time of any proposed offering, and such market’s reception of the Company and the offering terms. In addition, the Company’s ability to complete an offering may be dependent on the status of its exploration activities, which cannot be predicted. There is no assurance that capital in any form would be available to the Company, and if available, on terms and conditions that are acceptable.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s continuation as a going concern is dependent on its ability to obtain the necessary rights to exploit its mineral rights; meet its financial and operational obligations, to obtain additional financing as may be required until such time as it can generate sources of recurring revenues and to ultimately attain profitability. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

XML

INVESTMENT IN MINERA LI

9 Months Ended

Mar. 31, 2016

Investments [Abstract]

Equity Method Investments and Joint Ventures Disclosure [Text Block]

NOTE 4. INVESTMENT IN MINERA LI

The Company’s equity investment at March 31, 2016 and June 30, 2015 relates to its 49% investment in Minera Li. The activity of the investment for the nine months ended March 31, 2016 and 2015 is as follows:

	March 31, 2016		March 31, 2015
Opening balance - July 1, 2015 and 2014	$	7,336,375	$	7,572,425
Less: Equity in loss of Minera Li		(562,228)		(180,786)
Closing balance – March 31, 2016 and 2015	$	6,774,147	$	7,391,639

Summarized Financial Information of Minera Li

Set out below is the summarized financial information of Minera Li, which is accounted for using the equity method. The information reflects the amounts presented in the financial statements of Minera Li adjusted for differences in accounting policies between the Company and Minera Li. Our share of income and losses from our equity method investment in Minera Li is included in loss from Minera Li equity investment in the consolidated statements of operations.

Summarized Balance Sheets

	March 31,		June 30,
	2016		2015
Current assets	$	42,855	$	122,106
Non-current assets		17,061,936		17,062,020
Total assets	$	17,104,791	$	17,184,126
Current liabilities	$	1,554,398	$	486,329
Equity		15,550,393		16,697,797
Total liabilities and equity	$	17,104,791	$	17,184,126

Summarized Statements of Operations

	Nine Months Ended		Nine Months Ended
	March 31, 2016		March 31, 2015
Revenue	$	-	$	-
Operating expenses:
Exploration expenses		(902,849)		(18,791)
General & administrative expenses		(244,555)		(350,160)
Total operating expenses		(1,147,404)		(368,951)
Net loss	$	(1,147,404)	$	(368,951)

	Three Months Ended		Three Months Ended
	March 31, 2016		March 31, 2015
Revenue	$	-	$	-
Operating expenses:
Exploration expenses		(300,950)		(756)
General & administrative expenses		(80,675)		(9,720)
Total operating expenses		(381,625)		(10,476)
Net loss	$	(381,625)	$	(10,476)

XML

RELATED PARTY TRANSACTIONS

9 Months Ended

Mar. 31, 2016

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

NOTE 5. RELATED PARTY TRANSACTIONS

MSB

MSB owns 51% of Minera Li with Li3 retaining a 49% ownership interest. MSB is a private Chilean corporation with an objective to advance a business in the production of lithium. MSB is controlled by a Chilean entrepreneur.

As of June 30, 2015, the Company had received a total of $1,220,000 of loans from MSB, bearing interest of 8.5% per annum and due within 18 months from the date of receipt. On January 19, 2016, the Company entered into an additional agreement with MSB whereby the Company and MSB agreed to offset the $1,000,000 Additional Payment MSB previously agreed to provide to the Company against $1,000,000 of the Company’s notes payable to MSB and $134,901 of accrued interest owed to MSB was rolled into the Company’s existing note payable. In addition, MSB loaned an additional $100,000 to the Company and MSB waived the 13 shares in Minera Li which were pledged by the Company to MSB as security for its notes payable. The resulting $454,901 loan payable and accrued interest is due on January 18, 2018, bears interest at 8.5% per annum, and is secured by 5 of the Company’s shares in Minera Li.

The total interest accrued on the loans from MSB as of March 31, 2016 and June 30, 2015 was $7,627 (with $134,901 of accrued interest to January19, 2016 rolled into the note payable) and $79,355, respectively. For the nine months ended March 31, 2016 and 2015, $64,755 and $50,870, respectively, of interest expense was recognized in our consolidated statements of operations.

On January 19, 2016, the Company entered into an amendment to the Shareholders Agreement with MSB, pursuant to which the total number of directors of Minera Li was reduced from 7 to 5 and the parties agreed to allow MSB, in its capacity as majority shareholder and principal of Minera Li, to lead and carry out negotiations with a third party to decide and execute individually on matters that previously required a special quorum under the initial Shareholders Agreement. The amendments to the Shareholders Agreement were approved at an extraordinary shareholders meeting of Minera Li. 

Notes Payable to Directors

On July 31, 2015, the Company issued an unsecured promissory note to Mr. Luis Saenz, the CEO of the Company, bearing an interest rate of 3% per annum, for cash proceeds of $7,500, and due on January 31, 2016. Also on July 31, 2015, the Company issued an unsecured promissory note to Mr. Patrick Cussen, the Company’s Chairman of the Board, bearing an interest rate of 3% per annum, for cash proceeds of $7,500, and due on January 31, 2016. On March 8, 2016, the Company issued 667,807 shares of its common stock to each of Mr. Saenz and Mr. Cussen in repayment of the principal and accrued interest of $226.

On November 4, 2015, the Company issued unsecured non-interest-bearing promissory notes to the following directors:

Director	Amount
Mr. Patrick Cussen	$	10,000
Mr. Patricio Campos	$	15,000

The promissory notes were repaid on February 9, 2016.

XML

CONVERTIBLE DEBT

9 Months Ended

Mar. 31, 2016

Convertible Debt [Abstract]

Convertible Debt [Text Block]

NOTE 6. CONVERTIBLE DEBT

On December 8, 2015, the Company issued a $27,500 promissory note to LG Capital Funding, LLC, which is convertible at a price equal to 55% of the lowest daily trading prices of the Company’s common stock for the last 25 trading days prior to conversion, and bears interest at 10% per annum. The note is due and payable on December 8, 2016.

Also on December 8, 2015, the Company issued a $30,000 promissory note to JDF Capital Inc. (together with the promissory note issued to LG Capital Funding, LLC, the “Convertible Notes”), which is convertible at a price equal to the lower of (i) 55% of the lowest reported sale price of the Company’s common stock for the 25 trading days immediately prior to the issuance date, or (ii) 55% of the lowest reported sale price for the 25 days prior to conversion, and bears interest at 10% per annum. The note is due and payable on December 8, 2016.

The Company determined that the Convertible Notes contained embedded derivative instruments as the conversion prices were based on a variable that was not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No. 815 - 40. The fair values of the Convertible Notes were recognized as derivative instruments at issuance and are measured at fair value at each reporting period. The Company determined that the fair value of the derivatives was $131,884 at the issuance date. As the proceeds from the debt at issuance was $52,500, an initial loss of $79,384 was recognized and recorded to change in fair value of derivative liabilities during the nine months ended March 31, 2016.

The Company determined the fair values of the embedded derivatives on the grant dates using the modified lattice valuation model with the following assumptions: stock price on the measurement date of $0.025 per share, term of 1 year, expected volatility of 156%, and a discount rate of 0.15%.

The table below summarizes the carrying value of debt as of March 31, 2016.

Value of convertible debt on issue date of December 8, 2015	$	57,500
Less: Original issue discount		(57,500)
Carrying value at December 8, 2015		-
Amortization of debt discount (recorded as interest expense)		19,167
Carrying value at March 31, 2016	$	19,167

XML

DERIVATIVE LIABILITIES

9 Months Ended

Mar. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

NOTE 7. DERIVATIVE LIABILITIES

Warrants

The Company has determined that certain warrants that the Company has issued contain provisions that protect holders from future issuances of the Company’s common stock at prices below such warrants’ respective exercise prices and these provisions could result in modification of the warrants exercise price based on a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No. 815 - 40.

Activity for derivative warrant instruments during the nine months ended March 31, 2016 was as follows:

			Decrease in
	Balance at		fair value of		Balance at
	June 30,		derivative		March 31,
	2015		liabilities		2016
Lender warrants	$	3,799	$	(3,799)	$	-
Warrants for advisory services and arranger warrants		241		(241)		-
	$	4,040	$	(4,040)	$	-

There were no warrants exercised during the nine months ended March 31, 2016. On July 13, 2015, 5,488,115 of the warrants issued pursuant to the first 2010 unit offering expired unexercised, with the balance of the warrants issued pursuant to the first 2010 unit offering of 671,244 warrants expiring unexercised on September 13, 2015. On August 17, 2015, 62,499,938 of the POSCAN warrants issued on August 17, 2012 expired unexercised. On November 28, 2015, 1,886,716 of the warrants issued pursuant to the second 2010 unit offering expired unexercised and in December 2015, a total of 6,866,798 of the warrants issued pursuant to the third 2010 unit offering expired unexercised. On February 23, 2016, the balance of the warrants issued pursuant to the third 2010 unit offering of 119,634 warrants expired unexercised. On March 23, 2016, 7,879,635 of the incentive warrants issued on March 24, 2011 expired unexercised.

Activity for derivative warrant instruments during the nine months ended March 31, 2015 was as follows:

			Decrease in
	Balance at		fair value of		Balance at
	June 30,		derivative		March 31,
	2014		liabilities		2015
2009 Unit Offering warrants	$	1,499	$	(1,499)	$	-
First 2010 Unit Offering warrants		305,483		(305,483)		-
Second 2010 Unit Offering warrants		46,224		(34,287)		11,937
Third 2010 Unit Offering warrants		108,685		(86,492)		22,193
Incentive warrants		110,027		(91,613)		18,414
Lender warrants		41,372		(30,548)		10,824
Warrants for advisory services and arranger warrants		2,111		(1,531)		580
POSCAN warrants		1,233,606		(1,233,606)		-
	$	1,849,007	$	(1,785,059)	$	63,948

On September 13, 2014, 38,095,300 of the POSCAN warrants issued on September 14, 2011 expired unexercised. During November and December 2014, 14,618,791 of the warrants issued pursuant to the 2009 unit offering expired unexercised.

The following is a summary of the assumptions used in the modified lattice valuation model as of March 31, 2016 and 2015, respectively:

	Valuation as of
	March 31,
	2016			2015
Common stock issuable upon exercise of warrants		3,955,950			98,590,015
Market value of common stock on measurement date (1)	$	0.02		$	0.0129
Adjusted exercise price	$	0.20-$0.23		$	0.04-$0.28
Risk free interest rate (2)		0.39	%		0.14%-0.26	%
Warrant lives in years		0.1-1.4			0.19 – 1.09
Expected volatility (3)		143	%		167%-197%	%
Expected dividend yields (4)		None			None
Assumed stock offerings per year over next two years (5)		1			1
Probability of stock offering in any year over next two years (6)		100	%		100	%
Range of percentage of existing shares offered (7)		14	%		22% - 24	%
Offering price range (8)	$	0.03		$	0.02 - $0.03

(1) The market value of common stock is the stock price at the close of trading on the date of issuance or at period-end, as applicable.

(2) The risk-free interest rate was determined by management using the 0.5-year Treasury Bill as of the respective offering or measurement date.

(3) The historical trading volatility was determined by the Company’s trading history.

(4) Management determined the dividend yield to be -0-% based upon its expectation that it will not pay dividends for the foreseeable future.

(5) Management estimates the Company will have at least one stock offering in the next year.

(6) Management estimates that the probability of a stock offering is 100% during the next year.

(7) Management estimates that the range of percentages of existing shares offered in each stock offering will be 14% of the shares outstanding.

(8) Represents the estimated offering price range in future offerings as determined by management.

Embedded Derivative Instruments

The Company determined that the Convertible Notes, issued during December 2015, contain an embedded derivative instrument as the conversion price is based on a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No. 815 – 40. The fair value of the derivatives was recognized as a derivative instrument at issuance and is measured at fair value at each reporting period.

The following is a summary of the assumptions used in the modified lattice valuation model as of December 8, 2015 and March 31, 2016, respectively:

	Valuation as of
	December 8,			March 31,
	2015			2016
Common stock issuable upon conversion of debt		5,227,273			6,575,186
Market value of common stock on measurement date (1)	$	0.025		$	0.02
Adjusted exercise price	$	0.011		$	0.020
Risk free interest rate (2)		0.15	%		0.39	%
Life in years		1.0			0.7
Expected volatility (3)		156	%		143	%
Expected dividend yields (4)		None			None
Assumed stock offerings per year over next two years (5)		1			1
Probability of stock offering in any year over next two years (6)		100	%		100	%
Range of percentage of existing shares offered (7)		14	%		15% - 20	%
Offering price range (8)	$	0.03		$	0.03 - $0.04

(1) The market value of common stock is the stock price at the close of trading on the date of issuance or at period-end, as applicable.

(2) The risk-free interest rate was determined by management using the 1 year Treasury Bill as of the respective offering or measurement date.

(3) The historical trading volatility was determined by the Company’s trading history.

(4) Management determined the dividend yield to be -0-% based upon its expectation that it will not pay dividends for the foreseeable future.

(5) Management estimates the Company will have at least one stock offering in the next year.

(6) Management estimates that the probability of a stock offering is 100% during the next year.

(7) Management estimates that the range of percentages of existing shares offered in each stock offering will be 14% of the shares outstanding.

(8) Represents the estimated offering price range in future offerings as determined by management.

Activity for embedded derivative instruments during the nine months ended March 31, 2016 was as follows:

			Initial valuation
			of embedded		Increase
			derivative		in
	Balance at		instruments		fair value of		Balance at
	June 30,		issued during		derivative		March 31,
	2015		the period		liabilities		2016
Convertible Notes	$	-	$	52,500	$	79,864	$	132,364
	$	-	$	52,500	$	79,864	$	132,364

XML

STOCKHOLDERS' EQUITY

9 Months Ended

Mar. 31, 2016

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

NOTE 8. STOCKHOLDERS’ EQUITY

Common Stock Issued for Services and Repayment of Loans

On August 19, 2015, the Company issued 3,508,771 shares of common stock to Mr. Marc Lubow, a former officer of the Company, valued at $40,000 and recorded as common stock payable at June 30, 2015.

On March 8, 2016, the Company issued 667,807 shares of its common stock to each of Mr. Saenz and Mr. Cussen in repayment of loans from each of the directors, including both principal and accrued interest, of $7,613.

During the nine months ended March 31, 2016, the Company issued an aggregate of 5,344,402 shares of common stock as consideration in lieu of $102,232 of accrued directors fees. The Company recorded stock-compensation of $26,531 for the difference between the fair value of the common stock on the measurement dates and the fees accrued by the Company.

Restricted Stock Units

The Company committed to grant restricted stock units with respect to an aggregate of 800,000 shares to members of its Board of Directors, with such restricted stock units to vest over a period of three years starting from the later of July 1, 2011 and the initial date of the applicable director’s substantial involvement with the Board’s activities. However, the Company does not currently have enough shares authorized for issuance under our 2009 Plan to satisfy all of these obligations. The Company recorded compensation expense of $176 and $5,185 during the nine months ended March 31, 2016 and 2015, respectively, in relation to the restricted stock units to be granted to its directors.

Stock Option Awards

There were no stock options issued during the nine months ended March 31, 2016. A summary of stock option activity is presented in the table below:

					Weighted-
			Weighted-		average
			average		Remaining		Aggregate
	Number of		Exercise		Contractual		Intrinsic
	Shares		Price		Term (years)		Value
Outstanding at June 30, 2015		1,250,000	$	0.21		1.2	$	-
Granted		-		-		-		-
Exercised		-		-		-		-
Expired/Forfeited		(333,334)		-		-		-
Outstanding at March 31, 2016		916,666	$	0.23		0.9	$	-
Exercisable at March 31, 2016		916,666	$	0.23		0.9	$	-

Warrants

Summary information regarding common stock warrants outstanding is as follows:

			Weighted-
			average
	Number of		Exercise
	Warrants		Price
Outstanding at June 30, 2015		89,125,976	$	0.15
Issued		-
Additional shares issuable upon exercise of warrants as a result of adjustments pursuant to anti-dilution provisions		242,053		n/a
Expired		(85,412,079)		-
Outstanding at March 31, 2016		3,955,950	$	0.22

Warrants outstanding as of March 31, 2016 are as follows:

			Outstanding				Exercisable
	Exercise		number		Remaining		number
	price		of shares		life		of shares
Lender warrants	$	0.23		1,500,000		0.08 years		1,500,000
Warrants for advisory services	$	0.20		75,000		0.08 years		75,000
Arranger warrants	$	0.21		2,380,950		1.38 years		2,380,950
				3,955,950				3,955,950

The warrants outstanding at March 31, 2016 had no intrinsic value.

During the nine months ended March 31, 2016, 85,412,079 warrants expired unexercised.

XML

FAIR VALUE MEASUREMENTS

9 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

NOTE 9. FAIR VALUE MEASUREMENTS

The following table sets forth, by level within the fair value hierarchy, the Company’s derivative liabilities that were accounted for at fair value on a recurring basis:

	Quoted Prices
	In Active		Significant
	Markets for		Other		Significant
	Identical		Observable		Unobservable		Total
	Assets		Inputs		Inputs		Carrying
Description	(Level 1)		(Level 2)		(Level 3)		Value
As of March 31, 2016	$	-	$	-	$	132,364	$	132,364
As of June 30, 2015	$	-	$	-	$	4,040	$	4,040

The following table sets forth a reconciliation of changes in the fair value of financial liabilities classified as level 3 in the fair value hierarchy:

	Significant Unobservable Inputs
	(Level 3)
	Nine months Ended March 31,
	2016		2015
Beginning balance as of June 30	$	4,040	$	1,849,007
Change in fair value		49,380		290,432
Additions		-		-
Balance as of September 30	$	53,420	$	2,139,439
Change in fair value		6,298		(1,767,270)
Additions		52,500		-
Balance as of December 31	$	112,218	$	372,169
Change in fair value		20,146		(308,221)
Additions		-		-
Ending balance as of March 31		132,364		63,948
Change in unrealized gains (losses) included in earnings for the three months ended March 31, 2016 and 2015	$	(20,146)	$	308,221
Change in unrealized gains (losses) included in earnings for the nine months ended March 31, 2016 and 2015	$	(75,824)	$	1,785,059

XML

COMMITMENTS AND CONTINGENCIES

9 Months Ended

Mar. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

NOTE 10. COMMITMENTS AND CONTINGENCIES

On January 29, 2016, the Company executed a non-binding letter of intent (“LOI”) with Wealth Minerals Ltd ("Wealth") (TSX.V: WML) for a transaction between the companies under the following terms: 

• Wealth will undertake an equity financing of CAD$3 million.

• Post-financing, Wealth and Li3 shareholders will each hold 50% of the new company.

• The use of proceeds of the financing will be to advance Li3's Maricunga lithium project in Chile and pursue other corporate initiatives.

• The new company will have seven Board seats, with Wealth holding four and Li3 holding the remaining three seats.  The management of Wealth will largely remain intact and Li3's current management team will support the new company as necessary.

• Wealth will have a 60-day exclusivity period to complete its due diligence and financing.

On signing the non-binding letter of intent with Wealth, the Company received a payment of $50,000 from Wealth recorded as Notes Payable in the Consolidated Balance Sheets. If the transaction is completed, the payment will remain a non-interest bearing shareholder loan. If the transaction is terminated by Li3, the Company is required to repay the amount within 30 days. If the transaction is terminated by Wealth, the payment will be converted into common shares of Li3 at a price equal to $0.02 per share or the 10-day volume weighted average price of the common shares of Li3 as quoted on the OTCBB.

On March 22, 2016, the parties extended the LOI for an additional 60 days.

XML

SUBSEQUENT EVENTS

9 Months Ended

Mar. 31, 2016

Subsequent Events [Abstract]

Subsequent Events [Text Block]

NOTE 11. SUBSEQUENT EVENTS

On May 2, 2016, 1,500,000 of the lender warrants and 75,000 of the warrants for advisory services expired unexercised.

On May 12, 2016, the Company entered into unsecured convertible promissory notes with third parties for total cash proceeds of $275,000 bearing interest at 10% per annum and payable on May 11, 2017. The notes and accrued interest are convertible at the option of the note holders any time prior to the maturity date into common stock of the Company at a conversion price of $0.0125 per share. In addition, the notes and accrued interest automatically convert into common stock of the Company upon the Company entering into either a definitive merger or a sale of the Company to Wealth, at a conversion rate of $0.0125. In the event the transaction with Wealth is cancelled, Li3 must seek the noteholders’ permission to execute any other debt. The conversion feature of the notes has down round protection. In the event the proposed transaction with Wealth is changed to reduce the Company’s ownership of Wealth to below 40%, the conversion rate of the notes will change to $0.0100.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

a. Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Li3 Peru, Alfredo and Li3 Copiapó. As a result of the Company disposing of its controlling interest in Minera Li on January 27, 2014, the Company deconsolidated Minera Li from its consolidated financial statements and now accounts for its remaining 49% investment in Minera Li under the equity method. On October 22, 2014, the Company sold 60% of its shares in Noto Energy SA and now accounts for its remaining 40% investment under the equity method. All intercompany amounts have been eliminated in consolidation.

Use of Estimates, Policy [Policy Text Block]

b. Use of Estimates and Assumptions

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management has made significant estimates related to the fair value of its mineral assets; the fair value of derivative liabilities; stock-based payments; and contingencies.

Cash and Cash Equivalents, Policy [Policy Text Block]

c. Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company had no cash equivalents at March 31, 2016 and June 30, 2015. The Company has not experienced any losses on its deposits of cash and cash equivalents.

Equity Method Investments, Policy [Policy Text Block]

d. Investment in Minera Li

As of January 27, 2014, the Company’s investment in Minera Li is accounted for under the equity method in accordance with ASC 323 –Equity Investments and Joint Ventures. Under the equity method, the carrying value of the investment is adjusted for the Company’s share of Minera Li earnings and losses, as well as any capital contributions to and distributions from associates. Distributions in excess of equity method earnings are recognized as a return of investment and recorded as investing cash inflows in the accompanying consolidated statements of cash flows. We classify operating income and losses as well as gains and impairments related to our equity investees as a component of operating income or loss, as the Company’s equity investees is an extension of our core business.

We evaluate equity investments for impairment whenever events or changes in circumstances indicate that the carrying value of the investment may have experienced an ‘‘other-than-temporary’’ decline in value. If such conditions exist, we compare the estimated fair value of the investment to its carrying value to determine if an impairment is indicated and determines whether the impairment is ‘‘other-than-temporary’’ based on an assessment of all relevant factors, including consideration of our intent and ability to retain the investment.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

e. Foreign Currency

The Company has determined that the functional currency of the parent company and each of its foreign subsidiaries is U.S. Dollars.

Foreign currency transaction gains and losses are included in the statement of operations as other income (expense).

Income Tax, Policy [Policy Text Block]

f. Income Taxes

A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and for net operating loss carry-forwards. Deferred tax expense (benefit) results from the net change during the period of deferred tax assets and liabilities.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

For financial statement purposes, we recognize the impact of an uncertain income tax position on the income tax return at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained.

The Company recognizes interest related to income tax matters in income tax expense and penalties related to income tax matters in general and administrative expenses. The Company did not have any uncertain income tax positions or accrued interest included in our consolidated balance sheets at March 31, 2016, or June 30, 2015, and did not recognize any interest in its consolidated statements of operations during the nine months ended March 31, 2016 or 2015.

Fair Value Measurement, Policy [Policy Text Block]

g. Fair Value Measurements

As defined in FASB ASC Topic No. 820 - 10, fair value is the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC Topic No. 820 - 10 requires disclosure that establishes a framework for measuring fair value and expands disclosure about fair value measurements. The statement requires fair value measurements be classified and disclosed in one of the following categories:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that the Company values using observable market data. Substantially all of these inputs are observable in the marketplace throughout the term of the derivative instruments, can be derived from observable data, or supported by observable levels at which transactions are executed in the marketplace.

Level 3: Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity). The Company’s valuation models are primarily industry standard models.  Level 3 instruments include derivative warrant instruments.  The Company does not have sufficient corroborating evidence to support classifying these assets and liabilities as Level 1 or Level 2.

As required by FASB ASC Topic No. 820 - 10, financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The fair value of the Company’s derivative liabilities are estimated using a modified lattice valuation model.

Earnings Per Share, Policy [Policy Text Block]

h. Earnings per Share

Basic net earnings per share amounts are computed by dividing the net income available to Li3 Energy, Inc.’s shareholders by the weighted average number of common shares outstanding over the reporting period. In periods in which the Company reports a net loss, dilutive securities are excluded from the calculation of diluted earnings per share as the effect would be anti-dilutive.

For the three and nine months ended March 31, 2016 and 2015, the following convertible debt, stock options and warrants to purchase shares of common stock were excluded from the computation of diluted net loss per share, as the inclusion of such shares would be anti-dilutive:

	Three Months Ended
	March 31,
	2016		2015
Stock options		916,666		1,450,000
Restricted stock units		800,000		-
Convertible debt		5,808,081		-
Stock warrants		3,955,950		98,590,015
		11,480,697		100,040,015

	Nine Months Ended
	March 31,
	2016		2015
Stock options		916,666		1,450,000
Restricted stock units		800,000		-
Convertible debt		5,808,081		-
Stock warrants		3,955,950		98,590,015
		11,480,697		100,040,015

New Accounting Pronouncements, Policy [Policy Text Block]

i. Recent Accounting Pronouncements

There were various accounting standards and interpretations issued recently, none of which are expected to a have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

Subsequent Events, Policy [Policy Text Block]

j. Subsequent Events

The Company evaluated material events occurring between March 31, 2016, and through the date when the consolidated financial statements were available to be issued for disclosure consideration.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

For the three and nine months ended March 31, 2016 and 2015, the following convertible debt, stock options and warrants to purchase shares of common stock were excluded from the computation of diluted net loss per share, as the inclusion of such shares would be anti-dilutive:

	Three Months Ended
	March 31,
	2016		2015
Stock options		916,666		1,450,000
Restricted stock units		800,000		-
Convertible debt		5,808,081		-
Stock warrants		3,955,950		98,590,015
		11,480,697		100,040,015

	Nine Months Ended
	March 31,
	2016		2015
Stock options		916,666		1,450,000
Restricted stock units		800,000		-
Convertible debt		5,808,081		-
Stock warrants		3,955,950		98,590,015
		11,480,697		100,040,015

XML

INVESTMENT IN MINERA LI (Tables)

9 Months Ended

Mar. 31, 2016

Investments [Abstract]

Summary Investment Holdings [Table Text Block]

The activity of the investment for the nine months ended March 31, 2016 and 2015 is as follows:

	March 31, 2016		March 31, 2015
Opening balance - July 1, 2015 and 2014	$	7,336,375	$	7,572,425
Less: Equity in loss of Minera Li		(562,228)		(180,786)
Closing balance – March 31, 2016 and 2015	$	6,774,147	$	7,391,639

Equity Method Investments [Table Text Block]

Summarized Balance Sheets

	March 31,		June 30,
	2016		2015
Current assets	$	42,855	$	122,106
Non-current assets		17,061,936		17,062,020
Total assets	$	17,104,791	$	17,184,126
Current liabilities	$	1,554,398	$	486,329
Equity		15,550,393		16,697,797
Total liabilities and equity	$	17,104,791	$	17,184,126

Summarized Statements of Operations

	Nine Months Ended		Nine Months Ended
	March 31, 2016		March 31, 2015
Revenue	$	-	$	-
Operating expenses:
Exploration expenses		(902,849)		(18,791)
General & administrative expenses		(244,555)		(350,160)
Total operating expenses		(1,147,404)		(368,951)
Net loss	$	(1,147,404)	$	(368,951)

	Three Months Ended		Three Months Ended
	March 31, 2016		March 31, 2015
Revenue	$	-	$	-
Operating expenses:
Exploration expenses		(300,950)		(756)
General & administrative expenses		(80,675)		(9,720)
Total operating expenses		(381,625)		(10,476)
Net loss	$	(381,625)	$	(10,476)

XML

RELATED PARTY TRANSACTIONS (Tables)

9 Months Ended

Mar. 31, 2016

Related Party Transactions [Abstract]

Schedule Off Notes Payable To Directors [Table Text Block]

On November 4, 2015, the Company issued unsecured non-interest-bearing promissory notes to the following directors:

Director	Amount
Mr. Patrick Cussen	$	10,000
Mr. Patricio Campos	$	15,000

XML

CONVERTIBLE DEBT (Tables)

9 Months Ended

Mar. 31, 2016

Convertible Debt [Abstract]

Convertible Debt [Table Text Block]

The table below summarizes the carrying value of debt as of March 31, 2016.

Value of convertible debt on issue date of December 8, 2015	$	57,500
Less: Original issue discount		(57,500)
Carrying value at December 8, 2015		-
Amortization of debt discount (recorded as interest expense)		19,167
Carrying value at March 31, 2016	$	19,167

XML

DERIVATIVE LIABILITIES (Tables)

9 Months Ended

Mar. 31, 2016

Derivative Liabilities [Line Items]

Schedule of Derivative Liabilities at Fair Value [Table Text Block]

Activity for derivative warrant instruments during the nine months ended March 31, 2016 was as follows:

			Decrease in
	Balance at		fair value of		Balance at
	June 30,		derivative		March 31,
	2015		liabilities		2016
Lender warrants	$	3,799	$	(3,799)	$	-
Warrants for advisory services and arranger warrants		241		(241)		-
	$	4,040	$	(4,040)	$	-

Activity for derivative warrant instruments during the nine months ended March 31, 2015 was as follows:

			Decrease in
	Balance at		fair value of		Balance at
	June 30,		derivative		March 31,
	2014		liabilities		2015
2009 Unit Offering warrants	$	1,499	$	(1,499)	$	-
First 2010 Unit Offering warrants		305,483		(305,483)		-
Second 2010 Unit Offering warrants		46,224		(34,287)		11,937
Third 2010 Unit Offering warrants		108,685		(86,492)		22,193
Incentive warrants		110,027		(91,613)		18,414
Lender warrants		41,372		(30,548)		10,824
Warrants for advisory services and arranger warrants		2,111		(1,531)		580
POSCAN warrants		1,233,606		(1,233,606)		-
	$	1,849,007	$	(1,785,059)	$	63,948

Schedule of Embedded Derivatives [Table Text Block]

Activity for embedded derivative instruments during the nine months ended March 31, 2016 was as follows:

			Initial valuation
			of embedded		Increase
			derivative		in
	Balance at		instruments		fair value of		Balance at
	June 30,		issued during		derivative		March 31,
	2015		the period		liabilities		2016
Convertible Notes	$	-	$	52,500	$	79,864	$	132,364
	$	-	$	52,500	$	79,864	$	132,364

Embedded Derivative Financial Instruments [Member]

Derivative Liabilities [Line Items]

Schedule Of Fair Value Assumptions Used In Derivative Warrant Instruments Valuation [Table Text Block]

The following is a summary of the assumptions used in the modified lattice valuation model as of March 31, 2016 and 2015, respectively:

	Valuation as of
	March 31,
	2016			2015
Common stock issuable upon exercise of warrants		3,955,950			98,590,015
Market value of common stock on measurement date (1)	$	0.02		$	0.0129
Adjusted exercise price	$	0.20-$0.23		$	0.04-$0.28
Risk free interest rate (2)		0.39	%		0.14%-0.26	%
Warrant lives in years		0.1-1.4			0.19 – 1.09
Expected volatility (3)		143	%		167%-197%	%
Expected dividend yields (4)		None			None
Assumed stock offerings per year over next two years (5)		1			1
Probability of stock offering in any year over next two years (6)		100	%		100	%
Range of percentage of existing shares offered (7)		14	%		22% - 24	%
Offering price range (8)	$	0.03		$	0.02 - $0.03

(1) The market value of common stock is the stock price at the close of trading on the date of issuance or at period-end, as applicable.

(2) The risk-free interest rate was determined by management using the 0.5-year Treasury Bill as of the respective offering or measurement date.

(3) The historical trading volatility was determined by the Company’s trading history.

(4) Management determined the dividend yield to be -0-% based upon its expectation that it will not pay dividends for the foreseeable future.

(5) Management estimates the Company will have at least one stock offering in the next year.

(6) Management estimates that the probability of a stock offering is 100% during the next year.

(7) Management estimates that the range of percentages of existing shares offered in each stock offering will be 14% of the shares outstanding.

(8) Represents the estimated offering price range in future offerings as determined by management.

Warrant [Member]

Derivative Liabilities [Line Items]

Schedule Of Fair Value Assumptions Used In Derivative Warrant Instruments Valuation [Table Text Block]

The following is a summary of the assumptions used in the modified lattice valuation model as of December 8, 2015 and March 31, 2016, respectively:

	Valuation as of
	December 8,			March 31,
	2015			2016
Common stock issuable upon conversion of debt		5,227,273			6,575,186
Market value of common stock on measurement date (1)	$	0.025		$	0.02
Adjusted exercise price	$	0.011		$	0.020
Risk free interest rate (2)		0.15	%		0.39	%
Life in years		1.0			0.7
Expected volatility (3)		156	%		143	%
Expected dividend yields (4)		None			None
Assumed stock offerings per year over next two years (5)		1			1
Probability of stock offering in any year over next two years (6)		100	%		100	%
Range of percentage of existing shares offered (7)		14	%		15% - 20	%
Offering price range (8)	$	0.03		$	0.03 - $0.04

(1) The market value of common stock is the stock price at the close of trading on the date of issuance or at period-end, as applicable.

(2) The risk-free interest rate was determined by management using the 1 year Treasury Bill as of the respective offering or measurement date.

(3) The historical trading volatility was determined by the Company’s trading history.

(4) Management determined the dividend yield to be -0-% based upon its expectation that it will not pay dividends for the foreseeable future.

(5) Management estimates the Company will have at least one stock offering in the next year.

(6) Management estimates that the probability of a stock offering is 100% during the next year.

(7) Management estimates that the range of percentages of existing shares offered in each stock offering will be 14% of the shares outstanding.

(8) Represents the estimated offering price range in future offerings as determined by management.

XML

STOCKHOLDERS' EQUITY (Tables)

9 Months Ended

Mar. 31, 2016

Stockholders' Equity Note [Abstract]

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

A summary of stock option activity is presented in the table below:

					Weighted-
			Weighted-		average
			average		Remaining		Aggregate
	Number of		Exercise		Contractual		Intrinsic
	Shares		Price		Term (years)		Value
Outstanding at June 30, 2015		1,250,000	$	0.21		1.2	$	-
Granted		-		-		-		-
Exercised		-		-		-		-
Expired/Forfeited		(333,334)		-		-		-
Outstanding at March 31, 2016		916,666	$	0.23		0.9	$	-
Exercisable at March 31, 2016		916,666	$	0.23		0.9	$	-

Schedule Of Share Based Compensation Warrants Activity [Table Text Block]

Summary information regarding common stock warrants outstanding is as follows:

			Weighted-
			average
	Number of		Exercise
	Warrants		Price
Outstanding at June 30, 2015		89,125,976	$	0.15
Issued		-
Additional shares issuable upon exercise of warrants as a result of adjustments pursuant to anti-dilution provisions		242,053		n/a
Expired		(85,412,079)		-
Outstanding at March 31, 2016		3,955,950	$	0.22

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

Warrants outstanding as of March 31, 2016 are as follows:

			Outstanding				Exercisable
	Exercise		number		Remaining		number
	price		of shares		life		of shares
Lender warrants	$	0.23		1,500,000		0.08 years		1,500,000
Warrants for advisory services	$	0.20		75,000		0.08 years		75,000
Arranger warrants	$	0.21		2,380,950		1.38 years		2,380,950
				3,955,950				3,955,950

XML

FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value, Liabilities Measured on Recurring Basis [Table Text Block]

The following table sets forth, by level within the fair value hierarchy, the Company’s derivative liabilities that were accounted for at fair value on a recurring basis:

	Quoted Prices
	In Active		Significant
	Markets for		Other		Significant
	Identical		Observable		Unobservable		Total
	Assets		Inputs		Inputs		Carrying
Description	(Level 1)		(Level 2)		(Level 3)		Value
As of March 31, 2016	$	-	$	-	$	132,364	$	132,364
As of June 30, 2015	$	-	$	-	$	4,040	$	4,040

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

The following table sets forth a reconciliation of changes in the fair value of financial liabilities classified as level 3 in the fair value hierarchy:

	Significant Unobservable Inputs
	(Level 3)
	Nine months Ended March 31,
	2016		2015
Beginning balance as of June 30	$	4,040	$	1,849,007
Change in fair value		49,380		290,432
Additions		-		-
Balance as of September 30	$	53,420	$	2,139,439
Change in fair value		6,298		(1,767,270)
Additions		52,500		-
Balance as of December 31	$	112,218	$	372,169
Change in fair value		20,146		(308,221)
Additions		-		-
Ending balance as of March 31		132,364		63,948
Change in unrealized gains (losses) included in earnings for the three months ended March 31, 2016 and 2015	$	(20,146)	$	308,221
Change in unrealized gains (losses) included in earnings for the nine months ended March 31, 2016 and 2015	$	(75,824)	$	1,785,059

XML

NATURE OF BUSINESS AND BASIS OF PRESENTATION (Details Textual)	Mar. 31, 2016	Oct. 22, 2014	Dec. 31, 2013
Noto Energy [Member]
Business Acquisition, Percentage of Voting Interests Acquired		40.00%
Noncontrolling Interest, Ownership Percentage by Parent		100.00%	40.00%
Minera Li [Member]
Business Acquisition, Percentage of Voting Interests Acquired	60.00%
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners	51.00%
Noncontrolling Interest, Ownership Percentage by Parent	49.00%

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - shares	3 Months Ended		9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares excluded from the computation of diluted net loss per share	11,480,697	100,040,015	11,480,697	100,040,015
Stock options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares excluded from the computation of diluted net loss per share	916,666	1,450,000	916,666	1,450,000
Restricted stock units [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares excluded from the computation of diluted net loss per share	800,000	0	800,000	0
Convertible debt [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares excluded from the computation of diluted net loss per share	5,808,081	0	5,808,081	0
Stock warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares excluded from the computation of diluted net loss per share	3,955,950	98,590,015	3,955,950	98,590,015

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual)	Mar. 31, 2016	Oct. 22, 2014	Dec. 31, 2013
Noto Energy [Member]
Noncontrolling Interest, Ownership Percentage by Parent		100.00%	40.00%
Business Acquisition, Percentage of Voting Interests Acquired		40.00%
Minera Li [Member]
Noncontrolling Interest, Ownership Percentage by Parent	49.00%
Business Acquisition, Percentage of Voting Interests Acquired	60.00%

XML

GOING CONCERN (Details Textual) - USD ($)	Mar. 31, 2016	Jun. 30, 2015	Mar. 31, 2015	Jun. 30, 2014
Cash and Cash Equivalents, at Carrying Value, Total	$ 9,607	$ 6,217	$ 135,678	$ 38,490
Negative Working Capital	$ 1,154,313
MSB Loan [Member] | Loans Payable [Member]
Investment Owned, Balance, Shares	13

XML

INVESTMENT IN MINERA LI (Details) - USD ($)	9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Schedule of Equity Method Investments [Line Items]
Opening balance	$ 7,336,375
Less: Equity in loss of Minera Li	(562,228)	$ (180,786)
Closing balance	6,774,147
Minera Li [Member]
Schedule of Equity Method Investments [Line Items]
Opening balance	7,336,375	7,572,425
Less: Equity in loss of Minera Li	(562,228)	(180,786)
Closing balance	$ 6,774,147	$ 7,391,639

XML

INVESTMENT IN MINERA LI (Details 1) - Minera Li [Member] - USD ($)	Mar. 31, 2016	Jun. 30, 2015
Schedule of Equity Method Investments [Line Items]
Current assets	$ 42,855	$ 122,106
Non-current assets	17,061,936	17,062,020
Total assets	17,104,791	17,184,126
Current liabilities	1,554,398	486,329
Equity	15,550,393	16,697,797
Total liabilities and equity	$ 17,104,791	$ 17,184,126

XML

INVESTMENT IN MINERA LI (Details 2) - Minera Li [Member] - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Schedule of Equity Method Investments [Line Items]
Revenue	$ 0	$ 0	$ 0	$ 0
Exploration expenses	(300,950)	(756)	(902,849)	(18,791)
General & administrative expenses	(80,675)	(9,720)	(244,555)	(350,160)
Total operating expenses	(381,625)	(10,476)	(1,147,404)	(368,951)
Net loss	$ (381,625)	$ (10,476)	$ (1,147,404)	$ (368,951)

XML

INVESTMENT IN MINERA LI (Details Textual)	Mar. 31, 2016
Minera Li [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Ownership Percentage	49.00%

XML

RELATED PARTY TRANSACTIONS (Details) - USD ($)	Mar. 31, 2016	Jun. 30, 2015
Related Party Transaction [Line Items]
Notes Payable, Related Parties, Current	$ 0	$ 1,020,000
Mr. Patrick Cussen [Member] | Director [Member]
Related Party Transaction [Line Items]
Notes Payable, Related Parties, Current	10,000
Mr. Patricio Campos [Member] | Director [Member]
Related Party Transaction [Line Items]
Notes Payable, Related Parties, Current	$ 15,000

XML

RELATED PARTY TRANSACTIONS (Details Textual)		1 Months Ended		9 Months Ended
	Mar. 08, 2016 USD ($) shares	Jan. 19, 2016 USD ($)	Jul. 31, 2015 USD ($)	Mar. 31, 2016 USD ($) shares	Mar. 31, 2015 USD ($)	Jun. 30, 2015 USD ($)	Jan. 27, 2014
Related Party Transaction [Line Items]
Proceeds from Notes Payable				$ 50,000	$ 0
Mr. Saenz [Member]
Related Party Transaction [Line Items]
Debt Conversion, Converted Instrument, Shares Issued | shares	667,807
Mr. Saenz [Member] | Interest Expense [Member]
Related Party Transaction [Line Items]
Debt Conversion, Converted Instrument, Amount	$ 226
Mr.Cussen [Member]
Related Party Transaction [Line Items]
Debt Conversion, Converted Instrument, Shares Issued | shares	667,807
Debt Conversion, Converted Instrument, Amount	$ 7,613
Mr.Cussen [Member] | Interest Expense [Member]
Related Party Transaction [Line Items]
Debt Conversion, Converted Instrument, Amount	$ 226
MSB Loan [Member]
Related Party Transaction [Line Items]
Interest Payable				7,627		$ 79,355
Interest Expense, Debt				$ 64,755	$ 50,870
Notes Payable, Related Parties						$ 1,220,000
Related Party Note One [Member]
Related Party Transaction [Line Items]
Debt Instrument, Interest Rate, Stated Percentage			3.00%
Proceeds from Notes Payable			$ 7,500
Debt Instrument, Maturity Date			Jan. 31, 2016
Related Party Note Two [Member]
Related Party Transaction [Line Items]
Debt Instrument, Interest Rate, Stated Percentage			3.00%
Proceeds from Notes Payable			$ 7,500
Debt Instrument, Maturity Date			Jan. 31, 2015
Minera Li [Member]
Related Party Transaction [Line Items]
Noncontrolling Interest, Ownership Percentage by Parent				49.00%			51.00%
Debt Instrument, Interest Rate, Stated Percentage		8.50%
Interest Payable		$ 134,901
Securities Loaned, Amount Offset Against Collateral, Total		1,000,000
Notes Payable, Related Parties		1,000,000
Loans Payable, Total		454,901
Proceeds From Loans Payable		$ 100,000
Number Of Shares Guaranteed As Security For Loan		5
Minera Li [Member] | MSB Loan [Member]
Related Party Transaction [Line Items]
Debt Instrument, Interest Rate, Stated Percentage				8.50%
Debt Instrument, Term				18 months
Number Of Shares In Related Party | shares				13

XML

CONVERTIBLE DEBT (Details) - Convertible Notes Payable [Member] - USD ($)	9 Months Ended
	Mar. 31, 2016	Dec. 08, 2015
Debt Instrument [Line Items]
Value of convertible debt on issue date		$ 57,500
Less: Original issue discount		(57,500)
Amortization of debt discount (recorded as interest expense)	$ 19,167
Carrying value	$ 19,167	$ 0

XML

CONVERTIBLE DEBT (Details Textual) - USD ($)		9 Months Ended
	Dec. 08, 2015	Mar. 31, 2016	Mar. 31, 2015	Jun. 30, 2015
Debt Instrument [Line Items]
Derivative, Fair Value, Net, Total		$ 132,364		$ 4,040
Proceeds from Notes Payable		50,000	$ 0
Convertible Notes Payable [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 57,500
Debt Instrument, Interest Rate During Period	10.00%
Derivative, Fair Value, Net, Total		131,884
Proceeds from Notes Payable		52,500
Derivative, Loss on Derivative		$ 79,384
Share Price		$ 0.025
Fair Value Assumptions, Expected Term		1 year
Fair Value Assumptions, Expected Volatility Rate		156.00%
Fair Value Inputs, Discount Rate		0.15%
Convertible Notes Payable [Member] | LG Capital Funding, LLC [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount		$ 27,500
Debt Instrument, Maturity Date	Dec. 08, 2016
Debt Instrument, Convertible, Terms of Conversion Feature	convertible at a price equal to 55% of the lowest daily trading prices of the Company’s common stock for the last 25 trading days prior to conversion
Convertible Notes Payable [Member] | JDF Capital Inc [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount		$ 30,000
Debt Instrument, Convertible, Terms of Conversion Feature		convertible at a price equal to the lower of (i) 55% of the lowest reported sale price of the Company’s common stock for the 25 trading days immediately prior to the issuance date, or (ii) 55% of the lowest reported sale price for the 25 days prior to conversion
Debt Instrument, Interest Rate During Period	10.00%

XML

DERIVATIVE LIABILITIES (Details) - USD ($)	9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Derivative [Line Items]
Balance at Begining of Period	$ 4,040	$ 1,849,007
Decrease in fair value of derivative liabilities	(4,040)	(1,785,059)
Balance at End of Period	0	63,948
Unit Offering warrants 2009 [Member]
Derivative [Line Items]
Balance at Begining of Period		1,499
Decrease in fair value of derivative liabilities		(1,499)
Balance at End of Period		0
First 2010 Unit Offering warrants [Member]
Derivative [Line Items]
Balance at Begining of Period		305,483
Decrease in fair value of derivative liabilities		(305,483)
Balance at End of Period		0
Second 2010 unit offering warrants [Member]
Derivative [Line Items]
Balance at Begining of Period		46,224
Decrease in fair value of derivative liabilities		(34,287)
Balance at End of Period		11,937
Third 2010 unit offering warrants [Member]
Derivative [Line Items]
Balance at Begining of Period		108,685
Decrease in fair value of derivative liabilities		(86,492)
Balance at End of Period		22,193
Incentive warrants [Member]
Derivative [Line Items]
Balance at Begining of Period		110,027
Decrease in fair value of derivative liabilities		(91,613)
Balance at End of Period		18,414
Lender warrants [Member]
Derivative [Line Items]
Balance at Begining of Period	3,799	41,372
Decrease in fair value of derivative liabilities	(3,799)	(30,548)
Balance at End of Period	0	10,824
Warrants for advisory services and arranger warrants [Member]
Derivative [Line Items]
Balance at Begining of Period	241	2,111
Decrease in fair value of derivative liabilities	(241)	(1,531)
Balance at End of Period	$ 0	580
POSCAN warrants [Member]
Derivative [Line Items]
Balance at Begining of Period		1,233,606
Decrease in fair value of derivative liabilities		(1,233,606)
Balance at End of Period		$ 0

XML

DERIVATIVE LIABILITIES (Details 1)			9 Months Ended			12 Months Ended
		Dec. 08, 2015 Number $ / shares shares	Mar. 31, 2016 Number $ / shares shares		Mar. 31, 2015 Number $ / shares shares	Jun. 30, 2015
Embedded Derivative Financial Instruments [Member]
Derivative [Line Items]
Common stock issuable upon conversion of debt | shares		5,227,273	6,575,186
Market value of common stock on measurement date	[1]	$ 0.025	$ 0.02
Adjusted exercise price		$ 0.011	$ 0.020
Risk free interest rate	[2]	0.15%	0.39%
Warrant lives in years		1 year	8 months 12 days
Expected volatility	[3]	156.00%	143.00%
Expected dividend yields	[4]		0.00%		0.00%
Assumed stock offerings per year over next two years | Number	[5]	1	1
Probability of stock offering in any year over next two years	[6]	100.00%	100.00%
Range of percentage of existing shares offered	[7]	14.00%
Offering price range	[8]	$ 0.03
Warrant [Member]
Derivative [Line Items]
Common stock issuable upon exercise of warrants | shares			3,955,950		98,590,015
Market value of common stock on measurement date	[1]		$ 0.02		$ 0.0129
Risk free interest rate	[9]		0.39%
Expected volatility	[3]		143.00%
Expected dividend yields			0.00%	[4]	0.00%
Assumed stock offerings per year over next two years | Number	[5]		1		1
Probability of stock offering in any year over next two years	[6]		100.00%		100.00%
Offering price range	[8]		$ 0.03
Minimum [Member] | Embedded Derivative Financial Instruments [Member]
Derivative [Line Items]
Range of percentage of existing shares offered	[7]					15.00%
Offering price range	[8]				$ 0.03
Minimum [Member] | Warrant [Member]
Derivative [Line Items]
Adjusted exercise price			$ 0.20		$ 0.04
Risk free interest rate	[9]				0.14%
Warrant lives in years			1 month 6 days		2 months 8 days
Expected volatility	[3]				167.00%
Range of percentage of existing shares offered	[7]				22.00%
Maximum [Member] | Embedded Derivative Financial Instruments [Member]
Derivative [Line Items]
Range of percentage of existing shares offered	[7]				20.00%
Offering price range	[8]		$ 0.04
Maximum [Member] | Warrant [Member]
Derivative [Line Items]
Adjusted exercise price			$ 0.23		$ 0.28
Risk free interest rate	[9]				0.26%
Warrant lives in years			1 year 4 months 24 days		1 year 1 month 2 days
Expected volatility	[3]				197.00%
Range of percentage of existing shares offered	[7]				24.00%
Offering price range	[8]				$ 0.03

[1] The market value of common stock is the stock price at the close of trading on the date of issuance or at period-end, as applicable.

[2] The risk-free interest rate was determined by management using the 1 year Treasury Bill as of the respective offering or measurement date.

[3] The historical trading volatility was determined by the Company’s trading history.

[4] Management determined the dividend yield to be -0-% based upon its expectation that it will not pay dividends for the foreseeable future.

[5] Management estimates the Company will have at least one stock offering in the next year.

[6] Management estimates that the probability of a stock offering is 100% during the next year.

[7] Management estimates that the range of percentages of existing shares offered in each stock offering will be 14% of the shares outstanding.

[8] Represents the estimated offering price range in future offerings as determined by management.

[9] The risk-free interest rate was determined by management using the 0.5-year Treasury Bill as of the respective offering or measurement date.

XML

DERIVATIVE LIABILITIES (Details 2)	9 Months Ended
	Mar. 31, 2016 USD ($)
Schedule of Embedded Derivatives [Line Items]
Embedded Derivative, Fair Value of Embedded Derivative, Net, Total	$ 0
Initial Valuation Of Embedded Derivative Instruments Issued During Period	52,500
Embedded Derivative, Gain on Embedded Derivative	79,864
Embedded Derivative, Fair Value of Embedded Derivative, Net, Total	132,364
Convertible Notes Payable [Member]
Schedule of Embedded Derivatives [Line Items]
Embedded Derivative, Fair Value of Embedded Derivative, Net, Total	0
Initial Valuation Of Embedded Derivative Instruments Issued During Period	52,500
Embedded Derivative, Gain on Embedded Derivative	79,864
Embedded Derivative, Fair Value of Embedded Derivative, Net, Total	$ 132,364

XML

DERIVATIVE LIABILITIES (Details Textual) - shares				1 Months Ended
	Sep. 13, 2015	Jul. 13, 2015	Sep. 13, 2014	Mar. 23, 2016	Feb. 23, 2016	Dec. 31, 2015	Nov. 28, 2015	Aug. 17, 2015	Dec. 01, 2014
First 2010 Unit Offering Warrants [Member]
Derivative [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period	671,244	5,488,115
Second 2010 Unit Offering Warrants [Member]
Derivative [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period							1,886,716
Third 2010 Unit Offering Warrants [Member]
Derivative [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period					119,634	6,866,798
POSCAN Warrants [Member]
Derivative [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period			38,095,300					62,499,938	14,618,791
Incentive Warrants [Member]
Derivative [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period				7,879,635

XML

STOCKHOLDERS' EQUITY (Details) - Employee Stock Option [Member] - USD ($)	9 Months Ended	12 Months Ended
	Mar. 31, 2016	Jun. 30, 2015
Number of Shares
Outstanding at June 30, 2015	1,250,000
Granted	0
Exercised	0
Expired/Forfeited	(333,334)
Outstanding at March 31, 2016	916,666	1,250,000
Exercisable at March 31, 2016	916,666
Weighted-average Exercise Price
Outstanding at June 30, 2015 (in dollars per share)	$ 0.21
Granted (in dollars per share)	0
Exercised (in dollars per share)	0
Expired/Forfeited (in dollars per share)	0
Outstanding at March 31, 2016 (in dollars per share)	0.23	$ 0.21
Exercisable at March 31, 2016 (in dollars per share)	$ 0.23
Weighted-average Remaining Contractual Term (years)
Outstanding	10 months 24 days	1 year 2 months 12 days
Exercisable	10 months 24 days
Aggregate Intrinsic Value
Outstanding	$ 0	$ 0
Exercisable	$ 0

XML

STOCKHOLDERS' EQUITY (Details 1) - Warrant [Member]	9 Months Ended
	Mar. 31, 2016 $ / shares shares
Number of Warrants
Outstanding at June 30, 2015	89,125,976
Additional shares issuable upon exercise of warrants as a result of adjustments pursuant to anti-dilution provisions	242,053
Expired	(85,412,079)
Outstanding at March 31, 2016	3,955,950
Weighted-average Exercise Price
Outstanding at June 30, 2015 (in dollars per share) | $ / shares	$ 0.15
Expired (in dollars per share) | $ / shares	0
Outstanding at March 31, 2016 (in dollars per share) | $ / shares	$ 0.22

XML

STOCKHOLDERS' EQUITY (Details 2)	9 Months Ended
	Mar. 31, 2016 $ / shares shares
Outstanding number of shares	3,955,950
Exercisable number of shares	3,955,950
Warrants One [Member]
Exercise price | $ / shares	$ 0.23
Outstanding number of shares	1,500,000
Remaining life	29 days
Exercisable number of shares	1,500,000
Warrants Two [Member]
Exercise price | $ / shares	$ 0.20
Outstanding number of shares	75,000
Remaining life	29 days
Exercisable number of shares	75,000
Warrants Three [Member]
Exercise price | $ / shares	$ 0.21
Outstanding number of shares	2,380,950
Remaining life	1 year 4 months 17 days
Exercisable number of shares	2,380,950

XML

STOCKHOLDERS' EQUITY (Details Textual) - USD ($)		1 Months Ended	9 Months Ended
	Mar. 08, 2016	Aug. 19, 2015	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation, Total			$ 45,408	$ 154,605
Mr. Saenz [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Debt Conversion, Converted Instrument, Shares Issued	667,807
Mr.Cussen [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Debt Conversion, Converted Instrument, Shares Issued	667,807
Debt Conversion, Converted Instrument, Amount	$ 7,613
Warrant [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period			85,412,079
Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation, Total			$ 26,531
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period			800,000
Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, Issued for Services			5,344,402
Stock Issued During Period, Value, Issued for Services			$ 102,232
Director [Member] | Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation, Total			$ 176	$ 5,185
Executive Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, Issued for Services		3,508,771
Stock Issued During Period, Value, Issued for Services		$ 40,000

XML

FAIR VALUE MEASUREMENTS (Details) - USD ($)	Mar. 31, 2016	Jun. 30, 2015
Derivative Liabilities	$ 132,364	$ 4,040
Fair Value, Inputs, Level 1 [Member]
Derivative Liabilities	0	0
Fair Value, Inputs, Level 2 [Member]
Derivative Liabilities	0	0
Fair Value, Inputs, Level 3 [Member]
Derivative Liabilities	$ 132,364	$ 4,040

XML

FAIR VALUE MEASUREMENTS (Details 1) - Fair Value, Inputs, Level 3 [Member] - USD ($)	3 Months Ended						9 Months Ended
	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Mar. 31, 2016	Mar. 31, 2015
Beginning balance	$ 112,218	$ 53,420	$ 4,040	$ 372,169	$ 2,139,439	$ 1,849,007	$ 4,040	$ 1,849,007
Change in fair value	20,146	6,298	49,380	(308,221)	(1,767,270)	290,432
Additions	0	52,500	0	0	0	0
Ending balance	132,364	$ 112,218	$ 53,420	63,948	$ 372,169	$ 2,139,439	132,364	63,948
Change in unrealized gains (losses) included in earnings	$ (20,146)			$ 308,221			$ (75,824)	$ 1,785,059

XML

COMMITMENTS AND CONTINGENCIES (Details Textual) CAD in Millions	1 Months Ended		9 Months Ended
	Jan. 29, 2016 CAD	Jan. 19, 2016	Mar. 31, 2016 USD ($)
Equity Financing Description			If the transaction is terminated by Li3, the Company is required to repay the amount within 30 days. If the transaction is terminated by Wealth, the payment will be converted into common shares of Li3 at a price equal to $0.02 per share or the 10-day volume weighted average price of the common shares of Li3 as quoted on the OTCBB.
Proceeds from Issuance or Sale of Equity, Total | $			$ 50,000
Extension Period of Letter Of Intent			60 days
Percentage For Shareholders Holding		50.00%
Equity financing | CAD	CAD 3

XML

SUBSEQUENT EVENTS (Details Textual) - Subsequent Event [Member] - USD ($)	May. 12, 2016	May. 02, 2016
Convertible Notes Payable [Member]
Debt Instrument, Interest Rate, Stated Percentage	10.00%
Change in Debt conversion Price Per share	$ 0.0100
Proceeds from Unsecured Notes Payable	$ 275,000
Debt Instrument, Convertible, Conversion Price	$ 0.0125
Lender Warrants [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period		1,500,000
Advisory services warrants [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period		75,000
Wealth Minerals Ltd [Member]
Equity Method Investment, Ownership Percentage	40.00%