Li3 Energy, Inc. (OTCMKTS:LIEG) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01 Entry Into A Material Definitive Agreement.

Merger Agreement and Merger
Consideration

On January 27, 2017, Li3 Energy, Inc., a Nevada corporation
(Li3 or the Company), entered into an Agreement and
Plan of Merger (the Merger Agreement) with Bearing
Resources Ltd., a corporation formed under the laws of British
Columbia, Canada (Bearing), and Li Acquisition
Corporation, a Nevada corporation and wholly-owned subsidiary of
Bearing (Merger Sub).

The Merger Agreement provides for the acquisition by Bearing of
all of the outstanding capital stock of the Company, through the
merger of Merger Sub with and into the Company, with the Company
surviving such merger as a direct wholly-owned subsidiary of
Bearing (the Merger). As a result of the closing of the
Merger Agreement (the Closing) and consummation of the
Merger, at the effective time of the Merger (the Effective
Time), and subject to the terms and conditions set forth in
the Merger Agreement, the holders of the Companys issued and
outstanding shares of common stock, par value $0.001 per share
(the Company Common Stock) will receive an aggregate total
of 16 million newly issued shares (the Merger
Consideration) of common stock, no par value, of Bearing
(Bearing Common Stock), with each holder of Company Common
Stock receiving its pro rata share of the Merger Consideration.
Upon the Effective Time, (1) the outstanding warrants to purchase
shares of Company Common Stock (the Company Warrants) will
be assumed by Bearing and converted into the right to acquire
Bearing Common Stock (or cash, if so provided under the terms of
such Company Warrant) (the Assumed Warrants), with each
Assumed Warrant having the same terms and conditions as the
corresponding original Company Warrant, except that the number of
shares of Bearing Common Stock which can be acquired thereunder
and the exercise price will be equitably adjusted, and (3) the
holders of the Companys issued and outstanding options (the
Company Options) and restricted stock units (the
Company RSUs) will have their Company Options and Company
Restricted Stock Units, as applicable, cancelled by Bearing and
will instead receive substantially identical options (the
Replacement Options) or restricted stock units (the
Replacement RSUs), as applicable, to acquire shares of
Bearing Common Stock upon the exercise of such Replacement
Options or Replacement RSUs, with the number of shares which can
be acquired thereunder and the exercise price equitably adjusted.

Representations and Warranties

Under the Merger Agreement, the Company, on the one hand, and
Bearing and Merger Sub, on the other hand, each made
representations and warranties for transactions of this nature.
The representations and warranties made by the parties in the
Merger Agreement will not survive the Closing.

The assertions embodied in those representations and warranties
were made for purposes of the Merger Agreement and are subject to
important qualifications and limitations agreed to by the parties
in connection with negotiating such agreement. The
representations and warranties in the Merger Agreement are also
modified in important part by the disclosure schedules and
annexes attached thereto, which are not filed publicly and
whichmay be subject to contractual standards of materiality or
material adverse effect applicable to the contracting parties
that differ from what may be viewed as material to investors. The
representations and warranties in the Merger Agreement and the
items listed in the disclosure schedules were used for the
purpose of allocating risk among the parties rather than
establishing matters as facts. Investors are not third-party
beneficiaries under the Merger Agreement and should not rely on
the representations and warranties or any descriptions thereof as
characterizations of the actual state of facts or condition of
the parties thereto or any of their respective subsidiaries or
affiliates.

Covenants of the Parties

Each partyagreed in the Merger Agreement to use their reasonable
best efforts to effect the Closing.The Merger Agreement also
contains certain covenants by the parties during the period
between the signing of the Merger Agreement and the earlier of
the Effective Time or the termination of the Merger Agreement in
accordance with its terms, including covenants regarding (1)
continuing to operate their respective businesses in the ordinary
course consistent with past practice, preserving their respective
business organizations and material assets, maintaining their
respective rights and franchises, keeping available the services
of their respective employees, consultants, and independent
contractors, and taking no action that would be reasonably likely
to materially adversely affect their respective abilities to
obtain any consents required for the transactions contemplated by
the Merger Agreement, or that would materially adversely affect
their respective abilities to perform their respective covenants
under the Merger Agreement, (2) refraining from taking certain
actions outside the ordinary course of business, (3) notification
of any communication alleging that a consent is required from a
third party, communications from government authorities regarding
the Merger, litigation or certain other matters, (4) filing
reports required by the Securities Act of 1933, as amended (the
Securities Act), the Securities and Exchange Act of 1934,
as amended (the Exchange Act), and any other applicable
securities laws, the rules of any stock exchange on which their
respective securities are listed and, with respect to Bearing,
the TSX Venture Exchange, and the filing of the Registration
Statement and Proxy Statement/Prospectus as described below, (5)
if required, a requirement for Bearing to hold a shareholders
meeting to approve the Merger Agreement and related transactions,
(6) with respect to the Company, no solicitation of other
competing transactions, and with respect to Bearing, no
solicitation of transactions that would reasonably be expected to
materially delay, impair or prohibit the timely occurrence of the
Closing or Bearings performance of its obligations under the
Merger Agreement, (7) the provision of access to their respective
properties, books and personnel, (8) reasonable efforts to make
all necessary filings, consummate the Closing and obtain third
party and regulatory approvals, (9) indemnification and
advancement of expenses of all officers and directors of the
Company or persons who were serving as directors or officers of
others enterprise at the request of the Company, (10) generally
not releasing any press releases or making any public disclosures
materially related to the Merger Agreement, the Merger or the
transactions contemplated thereby without the consent of the
other party, (11) taking all necessary action to ensure that
entering into the Merger Agreement and related transactions does
not result in the grant of any rights to any person under such
persons organizational documents or restrict or impair any partys
ability to vote or exercise its shareholder rights with respect
to shares of the Company, and that no party adopts any
anti-takeover plan or arrangement, (12) the provision of pension,
welfare and fringe benefits by Bearing to employees of the
Company and its subsidiaries, (13) keeping the other parties
informed of any shareholder litigation or claims against such
party or its directors or officers and a not settling any such
litigation or claim without the consent of the other party, (14)
cooperating with one another and using reasonable efforts to,
promptly after the Effective Time, cause the shares of Company
Common Stock to be removed from the OTCQB and to deregister the
Company Common Stock under the Exchange Act, (15)
confidentiality, (16) the Company using commercially reasonable
efforts to cause certain of its insider shareholders to enter
into a voting and support agreement to vote in favor of the
Merger and elect certain persons to Bearings board of directors,
and Bearing agreeing to do the same in the event that a meeting
of Bearings shareholders is required, (17) the composition of
Bearings future board of directors, and (18) each partys right to
update its disclosure schedules to add disclosures related to
actions contemplated by the Merger Agreement or which are in the
ordinary course of business and are expressly permitted under the
Merger Agreement.

Proxy Statement/Prospectus and Registration
Statement

to the Merger Agreement, Bearing has agreed to file with the U.S.
Securities and Exchange Commission (the SEC), a
registration statement on Form F-4 (the Registration
Statement) to which the shares of Bearing Common Stock
issuable as Merger Consideration will be registered with the SEC
under the Securities Act, and the Company will prepare a proxy
statement on Schedule 14A relating to the approval and adoption
by the Companys shareholders at a meeting of the Companys
shareholders (the Company Shareholder Meeting), of the
Merger Agreement, the Merger and the other transactions
contemplated by the Merger Agreement (the Proxy
Statement/Prospectus), for inclusion in the Registration
Statement as a prospectus, and to be filed with the SEC as part
of the Registration Statement. Bearing and the Company agreed to
use reasonable best efforts to cause the Registration Statement
to become effective under the Securities Act as soon after filing
as practicable and to keep the Registration Statement effective
as long as is necessary to consummate the Merger and the
transactions contemplated thereby. Further, the Company agreed to
use its reasonable best efforts to cause the Proxy
Statement/Prospectus to be mailed to its shareholders as promptly
as practicable after the Registration Statement becomes
effective.

Conditions to Consummation of the Business
Combination

Consummation of the transactions contemplated by the Merger
Agreement is subject to the satisfaction or waiver of customary
conditions by the respective parties, including that each partys
respective representations and warranties be true and correct,
except for those that do not have a material adverse effect,
material performance by each party with all covenants it is
required to comply with under the Merger Agreement at or prior to
the Closing, and neither party, having suffered a material
adverse effect since the date of the Merger Agreement that is
continuing and uncured. Other Closing conditions include, among
others: (i) the approval of the Merger Agreement and the Merger
by the Companys stockholders and, if required, by Bearings
shareholders, (ii) the approval of the Merger by the TSX Venture
Exchange, (iii) the absence of any order of a court or U.S.
government entity prohibiting, restraining or enjoining the
Merger or the related transactions, (iv) obtaining necessary
third party consents and approvals, (v) the declaration by the
SEC that the Registration Statement is effective under the
Securities Act, (vi) the dissolution of Minera Li Energy SpA, a
sociedad por acciones organized under the laws of Chile,
(vii) the due execution of the shareholders agreement of Minera
Salar Blanco S.A. by and among the Company, Minera Salar Blanco
S.p.A., Lithium Power Inversiones Chile S.p.A. and Lithium Power
International Limited, and (viii) the appointment of certain
directors to Bearings board of directors.

In addition, each partys obligation to consummate the Closing is
conditioned on the receipt of certain Closing deliverables from
the other party including, among others: (i) receipt by the
Company of an executed employment agreement for certain key
employees of the Company, and (ii) receipt by the Company of an
opinion of counsel that, other than as may be expressly required
by the TSX Venture Exchange prior to the Closing, the approval of
Bearings shareholders is not required and that the Merger
Consideration will be freely tradeable on the date which is four
months and one day after the Effective Time.

Termination

The Merger Agreement may be terminated under certain customary
and limited circumstances at any time prior to the Closing,
including by either party if the transactions contemplated by the
Merger Agreement have not been completed by December 31, 2017
(provided that the party seeking to terminate shall not have
breached in any material respect its obligations thereunder in
any manner that has proximately caused the failure to consummate
the Merger or the other transactions contemplated by the Merger
Agreement), as well as customary termination rights for the other
partys breach, if one party is prepared to consummate the Closing
but the other party does not timely consummate the Closing, the
occurrence of an event having a material adverse effect on the
other party after the date of the Merger Agreement which is
continuing and uncured, and the failure of the Companys
shareholders to approve the Merger Agreement at the Company
Shareholder Meeting. The Merger Agreement may also be terminated
by Bearing or the Company within 45 days after the effective date
of the Merger Agreement if, during such time, either such party
is not reasonably satisfied with the results of its due diligence
investigation of the other such party. If the Merger Agreement is
validly terminated, no party thereto will have any liability or
any further obligation to any other party under the Merger
Agreement, with certain limited exceptions, including liability
for any fraud, intentional misrepresentation or intentional and
material breach of the Merger Agreement prior to termination.

A copy of the Merger Agreement is filed with this Report as
Exhibit 2.1 and is incorporated herein by reference, and the
foregoing description of the Merger Agreement is qualified in its
entirety by reference thereto.

Voting and Support Agreement

to the Merger Agreement, the Company is obligated to use its
commercially reasonable efforts prior to the Company Shareholder
Meeting to cause certain of its insider shareholders to enter
into a voting and support agreement with the Company, Bearing and
Merger Sub (the Voting Agreement and each shareholder who
enters into a Voting Agreement, a Voting Agreement
Shareholder). The Voting Agreement will require each Voting
Agreement Shareholder to agree, among other things, to vote all
of its shares of the Company Common Stock: (i) in favor of the
Merger Agreement, the Merger and the related articles of merger,
and the other transactions contemplated by the Merger Agreement;
(ii) against any alternative transaction relating to any merger,
business combination or acquisition regarding the Company and not
involving Bearing or an affiliate of Bearing, and (iii) against
any agreement, amendment of the Companys organizational documents
or other action that is intended or would reasonably be expected
to prevent, impede, materially interfere with or materially delay
the consummation of the Merger. Each Voting Agreement Shareholder
will retain its right to vote its shares of Company Common stock
in its sole discretion on matters which are not covered by the
Voting Agreement.

The Voting Agreement will also require each Voting Agreement
Shareholder to give its proxy to Bearing or its designee, waive
any dissenters or appraisal rights under Nevada or other
applicable law in connection with the Merger, prohibit transfers
of their shares of Company Common Stock prior to the termination
of the Agreement and other actions that would impair their
ability to fulfill their obligations under the Voting Agreement.

The Voting Agreement will automatically terminate upon the first
to occur of (a) the termination of the Merger Agreement in
accordance with its terms and (b) the Effective Time or, if
earlier, upon the mutual written consent of the parties to the
Voting Agreement. In addition, each Voting Agreement Shareholder
who executes a Voting Agreement has the right to terminate such
agreement immediately following (i)any decrease in the
consideration payable to the Companys shareholders in the Merger,
(ii) any change in form of the consideration payable in the
Merger to include a non-publicly-traded security and (iii)
December 31, 2017. A copy of the Voting Agreement is filed with
this Report as Exhibit 10.1 and is incorporated herein by
reference, and the foregoing description of the Voting Agreement
is qualified in its entirety by reference thereto.

Additional Information About the Merger and
Disclaimer

The proposed Merger will be submitted to stockholders of the
Company for their consideration.The Company and Bearing intend to
file relevant materials with the SEC, including a registration
statement on Form F-4 for Bearing that will include a proxy
statements for the Company, in connection with the Merger and
other matters and the Company will mail the relevant documents to
its stockholders as of the record date established for voting on
the Merger. The Companys stockholders and other interested
persons are advised to read, once available, the registration
statement, the preliminary proxy statement and any amendments
thereto and, once available, the definitive proxy statement, in
connection with the Companys solicitation of proxies for its
stockholders meeting to be held to approve, among other things,
the Merger because these documents will contain important
information about the Company, Bearing and the Merger.
Stockholders may also obtain a copy of the proxy statement, once
available, as well as other documents filed with the SEC that
will be incorporated by reference in the proxy statement, without
charge, at the SECs website located at www.sec.gov, on the
Companys website at www.li3energy.com or by directing a request
to the Companys investor relations department at
[email protected]. This report does not constitute an offer to
sell or the solicitation of an offer to buy any securities, or a
solicitation of any vote or approval, nor shall there be any sale
of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.

Participants in the Solicitation

The Company, Bearing, and their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies from the stockholders of the Company in
connection with the Merger. Information regarding the officers
and directors of the Company is set forth in the Companys annual
report on Form 10-K for the year ended June 30, 2016, which was
filed with the SEC on October 7, 2016. Additional information
regarding the interests of such potential participants will also
be included in the registration statement on Form F-4 (and will
be included in the definitive proxy statement/prospectus for the
Merger) and other relevant documents when they are filed with the
SEC.

Forward Looking Statements

This report includes forward-looking statements within the
meaning of the United States Private Securities Litigation Reform
Act of 1995 that may not be based on historical fact, but instead
relate to future events, including without limitation statements
containing the words believe, may, plan, will, estimate,
continue, anticipate, intend, expect and similar expressions. All
statements other than statements of historical fact included in
this release are forward-looking statements, including statements
regarding: the ability of Bearing and the Company to consummate
the transactions contemplated by the Merger Agreement; the
anticipated benefits of the transactions contemplated by the
Merger Agreement, including the Merger; and statements regarding
the operation of each of the Company and Bearings businesses,
including the direct or indirect interests in mineral properties
to be acquired by virtue of the Merger.

Such forward-looking statements are based on a number of
assumptions, including assumptions regarding the ability of the
parties to satisfy, in a timely manner, the conditions contained
in the Merger Agreement; the successful development and/or
commercialization of the Company and Bearings respective
products, including the receipt of necessary regulatory
approvals; general economic conditions; that the parties
respective businesses are able to operate as anticipated without
interruptions; competitive conditions; and changes in laws, rules
and regulations applicable to the Company and Bearing. Although
management of the Company and Bearing believe that the
assumptions made and expectations represented by such statements
are reasonable, there can be no assurance that a forward-looking
statement contained herein will prove to be accurate. Actual
results and developments may differ materially from those
expressed or implied by the forward-looking statements contained
herein and even if such actual results and developments are
realized or substantially realized, there can be no assurance
that they will have the expected consequences or effects. Factors
which could cause actual results to differ materially from
current expectations include: non-completion of the transactions
contemplated by the Merger Agreement, including due to the
parties failing to receive the necessary shareholder, stock
exchange and regulatory approvals or the inability of the parties
to satisfy in a timely manner and on satisfactory terms the
necessary conditions; the failure to successfully develop or
commercialize the parties respective products; adverse changes in
general economic conditions or applicable laws, rules and
regulations; and other factors detailed from time to time in each
of the Company and Bearings periodic disclosure. All
forward-looking statements and information made herein are based
on the parties current expectations and neither party undertakes
an obligation to revise or update such forward looking statements
and information to reflect subsequent events or circumstances,
except as required by law.

No Offer or Solicitation of Securities

This report does not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there
be any sale of securities in any jurisdiction in which the offer,
solicitation or sale would be unlawful prior to the registration
or qualification under the securities laws of any such
jurisdiction.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

The exhibits and schedules to this Exhibit have been omitted in
accordance with Regulation S-K Item 601(b)(2). The registrant
agrees to furnish supplementally a copy of all omitted exhibits
and schedules to the Securities and Exchange Commission upon its
request.

About Li3 Energy, Inc. (OTCMKTS:LIEG)

Li3 Energy, Inc. is an exploration company in the lithium and potassium mining sector, based in South America. The Company is focused on acquiring and developing a portfolio of lithium and potassium brine projects in the Americas. It is also focused on further exploring, developing and commercializing its approximately 49% interest in the Maricunga Project, located in the northeast section of the Salar de Maricunga in Region III of Atacama in northern Chile, as well as increasing its portfolio of projects. The Maricunga Project is a lithium and potassium exploration project consisting of over two adjacent properties covering an aggregate of approximately 1,888 hectares; over 60% interest in Sociedades Legales Mineras Litio 1 a 6 de la Sierra Hoyada de Maricunga, and approximately 100% interest in a group of exploitation mining concessions named Cocina 19 through 27 (the Cocina Mining Concessions). As of June 30, 2016, the Company had not generated revenues from operations.

Li3 Energy, Inc. (OTCMKTS:LIEG) Recent Trading Information

Li3 Energy, Inc. (OTCMKTS:LIEG) closed its last trading session down -0.0002 at 0.0153 with 733,317 shares trading hands.