NOTE 6. NOTES PAYABLE

On January 29, 2016, the Company executed a non-binding letter of intent (“LOI”) with Wealth Minerals Ltd ("Wealth") for a transaction between the companies and on signing the LOI, the Company received a payment of $50,000 from Wealth which was recorded as notes payable in the consolidated balance sheet. On March 22, 2016, the parties extended the LOI for an additional 60 days and on April 29, 2016, the Company received a further payment of $150,000 from Wealth, also recorded as notes payable in the consolidated balance sheet. As of September 30, 2016, and June 30, 2016, the Company has recorded notes payable to Wealth of $200,000.

If the transaction is completed, the payments from Wealth will remain a non-interest bearing shareholder loan. If the transaction is terminated by Li3, the Company is required to repay the amounts within 30 days. If the transaction is terminated by Wealth, the payments will be converted into common shares of Li3 at a price equal to the greater of $0.02 per share or the 10-day volume weighted average price of the common shares of Li3 as quoted on the OTCBB.

On November 15, 2016, the Company entered into an agreement with Wealth pursuant to which the LOI with Wealth was terminated and the Company’s obligation to repay the notes payable to Wealth of $200,000 was also terminated.