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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year endedJune 30, 2011

[   ]TRANSITION REPORT UNDER SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from [   ] to [  
]

Commission file number 333-137481

LITHIUM EXPLORATION GROUP,
INC.(Exact name of registrant as specified in its
charter)

|Nevada                                                               | 06-1781911                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|                                                                     |                                     
|3200 N. Hayden Road, Suite 300, Scottsdale, AZ                       | 85251                               
|(Address of principal executive offices)                             | (Zip Code)                          
|                                                                     |                                     
|Registrant's telephone number, including area code:                  | 480.641.4790                        

Securities registered pursuant to Section 12(b) of the Act:

|Title of Each Class | Name of Each Exchange On Which Registered
|------------------- | -----------------------------------------
|N/A                 | N/A                                      

Securities registered pursuant to Section 12(g) of the Act:

N/A
  (Title of class)

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 the Securities Act.

  Yes [   ]     No [X]

Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the ActYes [   ]     No [X]

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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 last 90 days.
Yes [X]     No [   ]

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Website, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-K (§229.405 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 [   ]     No
[   ]

Indicate by check mark if disclosure of delinquent filers pursuant
  to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained
  herein, and will not be contained, to the best of registrant's knowledge, in
  definitive proxy or information statements incorporated by reference in Part
  III of this Form 10-K or any amendment to this Form 10-K. [   ]

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 definition 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]                        

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).Yes [   ]     No [X]

State the aggregate market value of voting and non-voting common
equity held by non-affiliates computed by reference to the price at which the
common equity was last sold, or the average bid and ask price of such common
equity, as of the last business day of the registrants most recently completed
second fiscal quarter.

The aggregate market value of Common Stock held by
non-affiliates of the Registrant on December 31, 2010 was $1,737,500 based on a $.10
closing price for the Common Stock on December 31, 2010. For purposes of this
computation, all executive officers and directors have been deemed to be
affiliates. Such determination should not be deemed to be an admission that such
executive officers and directors are, in fact, affiliates of the Registrant.

Indicate the number of shares outstanding of each of the
registrants classes of common stock as of the latest practicable date.
51,115,476 shares of common stock issued & outstanding as of October 13, 2011

DOCUMENTS INCORPORATED BY REFERENCE

None.

2

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TABLE OF CONTENTS

|Item
      1.  | Business                                                                                                                    | 4 
|-------------- | --------------------------------------------------------------------------------------------------------------------------- | --
|               |                                                                                                                             |   
|Item
      1A. | Risk
      Factors                                                                                                          | 8 
|               |                                                                                                                             |   
|Item
      1B. | Unresolved
      Staff Comments                                                                                             | 14
|               |                                                                                                                             |   
|Item
      2.  | Properties                                                                                                                  | 14
|               |                                                                                                                             |   
|Item
      3.  | Legal
      Proceedings                                                                                                     | 23
|               |                                                                                                                             |   
|Item
      4.  | [Removed
      and Reserved]                                                                                                | 23
|               |                                                                                                                             |   
|Item
      5.  | Market
      for Registrant's Common Equity and Related Stockholder Matters and Issuer
      Purchases of Equity Securities | 23
|               |                                                                                                                             |   
|Item
      6.  | Selected
      Financial Data                                                                                               | 24
|               |                                                                                                                             |   
|Item
      7.  | Managements
      Discussion and Analysis of Financial Condition and Results of Operations                                 | 24
|               |                                                                                                                             |   
|Item
      7A. | Quantitative
      and Qualitative Disclosures About Market Risk                                                            | 28
|               |                                                                                                                             |   
|Item
      8.  | Financial
      Statements and Supplementary Data                                                                           | 28
|               |                                                                                                                             |   
|Item
      9.  | Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure                            | 30
|               |                                                                                                                             |   
|Item
      9A. | Controls
      and Procedures                                                                                               | 30
|               |                                                                                                                             |   
|Item
      9B. | Other
      Information                                                                                                     | 31
|               |                                                                                                                             |   
|Item
      10. | Directors,
      Executive Officers and Corporate Governance                                                                | 31
|               |                                                                                                                             |   
|Item
      11. | Executive
      Compensation                                                                                                | 35
|               |                                                                                                                             |   
|Item
      12. | Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters                  | 37
|               |                                                                                                                             |   
|Item
      13. | Certain
      Relationships and Related Transactions, and Director Independence                                             | 38
|               |                                                                                                                             |   
|Item
      14. | Principal
      Accountants Fees and Services                                                                               | 38
|               |                                                                                                                             |   
|Item
      15. | Exhibits,
      Financial Statement Schedules                                                                               | 39

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PART I

Item
1.             
Business

This annual report contains forward-looking statements. These
statements relate to future events or our future financial performance. In some
cases, you can identify forward-looking statements by terminology such as may,
should, expects, plans, anticipates, believes, estimates,
predicts, potential or continue or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled Risk Factors, that may cause our or our industrys actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.

Our financial statements are stated in United States Dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles.

In this annual report, unless otherwise specified, all dollar
amounts are expressed in United States Dollars and all references to common
shares refer to the common shares in our capital stock.

As used in this annual report, the terms we, us, our
company, mean Lithium Exploration Group, Inc. a Nevada corporation, unless
otherwise indicated.

Corporate History

We were incorporated on May 31, 2006 in the State of Nevada
under the name Mariposa Resources, Ltd.. Effective November 30, 2010, we
changed our name to Lithium Exploration Group, Inc., by way of a merger with
our wholly-owned subsidiary Lithium Exploration Group, Inc., which was formed
solely for the change of name.

Our executive offices are located at 3200 N. Hayden Road, Suite
235, Scottsdale, Arizona 85251, and our telephone number is (480) 641-4790.

We do not have any subsidiaries.

Other than as set out herein, we have not been involved in any
bankruptcy, receivership or similar proceedings, nor have we been a party to any
material reclassification, merger, consolidation or purchase or sale of a
significant amount of assets not in the ordinary course of our business.

Our Current Business

We are an exploration stage company that engages principally in
the acquisition, exploration, and development of resource properties. Prior to
June 25, 2009, we had the right to conduct exploration work on 20 mineral mining
claims in Esmeralda County, Nevada. On July 31, 2009, we acquired an option to
enter into a joint venture for the management and ownership of the Jack Creek
Project, a mining project located in Elko County, Nevada. On September 25, 2009,
the joint venture was terminated and we entered into an agreement with Beeston
Enterprises Ltd., under which our company was granted an option to acquire an
undivided 50% interest in eight mineral claims located in the Clinton Mining
District of British Columbia, Canada. On February 14, 2011 we sent notice to
Beeston to terminate the option agreement.

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On December 16, 2010, we entered into an assignment agreement
to acquire an undivided 100% right, title and interest in and to certain mineral
permits located in the Province of Alberta, Canada. To date, our activities have
been limited to our formation, the raising of equity capital and our mining
exploration work program.

On January 18, 2011, we entered into a purchase option
agreement with Salta Water Co. and we have acquired a 60% interest on the Salta
Aqua claims in Salta Province, Argentina. We have a further option to acquire
the remaining 40% interest from Salta Water. On February 1, 2011, we issued
250,000 common shares at a deemed price of $0.10 per share for mining expenses
relating to the Salta Aqua Claims. The price of the issued shares was based on
the market price of the shares on January 31, 2011.

On March 17, 2011, we entered into a letter agreement between
our company and Glottech-USA, LLC for an acquisition of one initial unit of
certain proprietary and patented mechanical ultrasound technology for use in the
water treatment in regards to our lithium operations in Alberta, Canada. Our
officer and director Alex Walsh met the principals of Glottech-USA in 2009 in
the course of operating his consulting company AW Enterprises LLC. Pursuant to
the terms of the agreement, Glottech-USA will assemble and ship to our company
one unit of the technology specifically designed for our water treatment
purposes and will license the use of the technology. Furthermore, we have agreed
that in the event that we have purchased a minimum of five technology units
within twelve months from the date of execution, Glottech-USA has agreed that it
will neither license nor lease the technology to any third party for the
purposes of mineral extraction in the country of Canada.

In exchange for the acquisition of the technology, we have
agreed to pay to Glottech-USA a licensing and technology payment in the amount
of $800,000 as follows:

| | (1) | $25,000 upon execution of the agreement;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (2) | $75,000 within 180 days of the date of execution which
      shall serve as confirmation by the company of its intent to formally
      proceed with the intent of the agreement (the confirmation
    payment);                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (3) | $700,000 within 10 days of receipt of invoice from
      Glottech-USA to cover the cost of components and assembly for one
      technology unit; and monthly royalties, to be paid within 15 calendar days
      from the receipt of the invoice, in an amount of $2.00 per physical ton of
      water processed pursuant to the usage of the technology following
      satisfactory delivery and physical setup of the technology and continuing
      thereafter for as long as the technology remains in our
  possession.

In addition, as amended, the agreement provides for the
issuance to Glottech-USA of an option to acquire up to 2,000,000 shares of our
common stock owned by our president, Alex Walsh. Such option is exercisable for
a period of 12 months at an aggregate exercise price of $1.00. The share
issuance to Glottech-USA will come from the shares held by president, Alex
Walsh. This pledge is written into the terms of the agreement and as such there
is no separate pledge agreement between Mr. Walsh and Glottech-USA.

Glottech-USAs technology is designed to separate suspended
solids from water (brine), which is one step in the process that we are taking
to produce commercially viable minerals. The technology produces extremely high
temperatures which destroy organic substances such as bacteria and other toxic
agents. We believe that Glottech-USA's technology can provide lower costs of
operation as well as reduced time for site clean-up than traditional methods of
water treatment. We anticipate using this application to extract dissolved
solids like lithium, potassium, and magnesium from oil field brine. The disposal
of produced water (brine) from oil and gas production in Alberta is a
significant environmental issue for the province and presents a considerable
economic issue for producers. We intend to partner with the use of the
technology on our Valleyview Property in Alberta, in cooperation with oil and
gas producers, to treat and dispose of their produced water while monetizing the
minerals that are contained within that produced water stream that is being
brought to the surface during the oil and gas production process. As we own the
MAIM (metals and industrial minerals) claims to the minerals on the Valleyview
Property, the minerals contained in their produced water stream fall under our
rights. While we have had discussions with oil and gas consultants and oil operators regarding their difficulties in
treating the brine at some of their fields, we have no formal agreements in
place.

5

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The technical process is based on the use of mechanical
ultrasound generated through the production of a series of cavitations.
Mechanical ultrasound is a machine-produced sound of a frequency above the upper
limit of the normal range of human hearing. Cavitations are the rapid formation
and collapse of bubbles in liquids, caused by the movement of something such as
a propeller or by waves of high-frequency sound. The production of mechanical
ultrasound allows Glottech-USAs technology to distil the fluid stock. Using
mechanical ultrasound for distillation has been attempted before, but the
external energy requirement needed to produce the mechanical ultrasound was far
too expensive to make it commercially viable. Glottech-USAs technology uses the
energy released during the cavitations in order to make it commercially viable
from an economic perspective. During these cavitations, a millisecond of energy
is released. During this release temperatures can reach 5000 degrees Centigrade.
As this is a pilot unit, no other units are currently in production.

Competition

The mineral exploration industry is highly competitive. We are
a new exploration stage company and have a weak competitive position in the
industry. We compete with junior and senior mineral exploration companies,
independent producers and institutional and individual investors who are
actively seeking to acquire mineral exploration properties throughout the world
together with the equipment, labor and materials required to operate on those
properties. Competition for the acquisition of mineral exploration interests is
intense with many mineral exploration leases or concessions available in a
competitive bidding process in which we may lack the technological information
or expertise available to other bidders.

Many of the mineral exploration companies with which we compete
for financing and for the acquisition of mineral exploration properties have
greater financial and technical resources than those available to us.
Accordingly, these competitors may be able to spend greater amounts on acquiring
mineral exploration interests of merit or on exploring or developing their
mineral exploration properties. This advantage could enable our competitors to
acquire mineral exploration properties of greater quality and interest to
prospective investors who may choose to finance their additional exploration and
development. Such competition could adversely impact our ability to attain the
financing necessary for us to acquire further mineral exploration interests or
explore and develop our current or future mineral exploration properties.

We also compete with other junior mineral exploration companies
for financing from a limited number of investors that are prepared to invest in
such companies. The presence of competing junior mineral exploration companies
may impact our ability to raise additional capital in order to fund our
acquisition or exploration programs if investors perceive that investments in
our competitors are more attractive based on the merit of their mineral
exploration properties or the price of the investment opportunity. In addition,
we compete with both junior and senior mineral exploration companies for
available resources, including, but not limited to, professional geologists,
land specialists, engineers, camp staff, helicopters, float planes, mineral
exploration supplies and drill rigs.

General competitive conditions may be substantially affected by
various forms of energy legislation and/or regulation introduced from time to
time by the governments of the United States and other countries, as well as
factors beyond our control, including international political conditions,
overall levels of supply and demand for mineral exploration.

In the face of competition, we may not be successful in
acquiring, exploring or developing profitable mineral properties or interests,
and we cannot give any assurance that suitable oil and gas properties or
interests will be available for our acquisition, exploration or development.
Despite this, we hope to compete successfully in the mineral exploration
industry by:

- keeping our costs low;
- relying on the strength of our managements contacts; and
- using our size and experience to our advantage by adapting quickly to
  changing market conditions or responding swiftly to potential opportunities.

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Intellectual Property

We have not filed for any trademark protection, and we do not
have any other intellectual property.

Government Regulation

Any operations at our Lithium properties will be subject to
various federal and state laws and regulations in Canada and Argentina which
govern prospecting, development, mining, production, exports, taxes, labor
standards, occupational health, waste disposal, protection of the environment,
mine safety, hazardous substances and other matters. We will be required to
obtain those licenses, permits or other authorizations currently required to
conduct exploration and other programs. There are no current orders or
directions relating to us or our Lithium properties with respect to the
foregoing laws and regulations. Such compliance may include feasibility studies
on the surface impact of our proposed operations, costs associated with
minimizing surface impact, water treatment and protection, reclamation
activities, including rehabilitation of various sites, on-going efforts at
alleviating the mining impact on wildlife and permits or bonds as may be
required to ensure our compliance with applicable regulations. It is possible
that the costs and delays associated with such compliance could become so
prohibitive that we may decide to not proceed with exploration, development, or
mining operations on any of our mineral properties. We are not presently aware
of any specific material environmental constraints affecting our properties that
would preclude the economic development or operation of property in Canada or
Argentina.

Environmental Regulations

We are not aware of any material violations of environmental
permits, licenses or approvals that have been issued with respect to our
operations. We expect to comply with all applicable laws, rules and regulations
relating to our business, and at this time, we do not anticipate incurring any
material capital expenditures to comply with any environmental regulations or
other requirements.

While our intended projects and business activities do not
currently violate any laws, any regulatory changes that impose additional
restrictions or requirements on us or on our potential customers could adversely
affect us by increasing our operating costs or decreasing demand for our
products or services, which could have a material adverse effect on our results
of operations.

Employees

We currently have no employees, but engage two consultants on a
part time basis. Alex Walsh as Chief Executive Officer is paid for his day to
day management of the Company, and Shanon Chilson is employed as Mr. Walshs
administrative assistant and controller. There are outside consultants that have
been engaged for administrative duties and industry specialties. There are two
other directors in the company, Jon Jazwinski and Brandon Colker, who spend
approximately 15 hours per month on various company activities. Mr. Jazwinskis
primary role is to review the geological findings and exploration strategies
taken by management at the direction of consultants. Mr. Colkers primary role
is to work with management on research and networking with global industry
professionals and capital sources. Mr. Jazwinski and Mr. Colker are both
responsible for shaping the direction of the Company and assist with the
submission of corporate filings.

Research and Development

We have not spent any amounts on which has been classified as
research and development activities in our financial statements during the last
two fiscal years.

Going Concern

We anticipate that additional funding will be required in the
form of equity financing from the sale of our common stock. At this time, we
cannot provide investors with any assurance that we will be able to raise
sufficient funding from the sale of our common stock or through a loan from our
directors to meet our obligations over the next twelve months. We do not have
any arrangements in place for any future equity financing.

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Subsidiaries

We do not have any subsidiaries.

REPORTS TO SECURITY HOLDERS

We are not required to deliver an annual report to our
stockholders but will voluntarily send an annual report, together with our
annual audited financial statements upon request. We are required to file
annual, quarterly and current reports, proxy statements, and other information
with the Securities and Exchange Commission. Our Securities and Exchange
Commission filings are available to the public over the Internet at the SEC's
website at http://www.sec.gov.

The public may read and copy any materials filed by us with the
SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington DC 20549.
The public may obtain information on the operation of the Public Reference Room
by calling the SEC at 1-800-SEC-0330. We are an electronic filer. The SEC
maintains an Internet site that contains reports, proxy and information
statements, and other information regarding issuers that file electronically
with the SEC. The Internet address of the site is http://www.sec.gov.

Item
1A.           Risk Factors

Much of the information included in this annual report includes
or is based upon estimates, projections or other forward looking statements.
Such forward looking statements include any projections and estimates made by us
and our management in connection with our business operations. While these
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect our current judgment regarding the direction of
our business, actual results will almost always vary, sometimes materially, from
any estimates, predictions, projections, assumptions or other future performance
suggested herein.

Such estimates, projections or other forward looking
statements involve various risks and uncertainties as outlined below. We
caution the reader that important factors in some cases have affected and, in
the future, could materially affect actual results and cause actual results to
differ materially from the results expressed in any such estimates, projections
or other forward looking statements.

Risks Related to Our Business

We have a limited operating history and as a result there is
no assurance we can operate on a profitable basis.

We have a limited operating history. Our company's operations
will be subject to all the uncertainties arising from the absence of a
significant operating history. Potential investors should be aware of the
difficulties normally encountered by resource exploration companies and the high
rate of failure of such enterprises. The likelihood of success must be
considered in light of the problems, expenses, difficulties, complications and
delays encountered in connection with the exploration of the properties that we
plan to undertake. These potential problems include, but are not limited to,
unanticipated problems relating to exploration, and additional costs and
expenses that may exceed current estimates. The expenditures to be made by us in
the exploration of our properties may not result in the discovery of reserves.
Problems such as unusual or unexpected formations of rock or land and other
conditions are involved in resource exploration and often result in unsuccessful
exploration efforts. If the results of our exploration do not reveal viable
commercial reserves, we may decide to abandon our claims and acquire new claims
for new exploration or cease operations. The acquisition of additional claims
will be dependent upon us possessing capital resources at the time in order to
purchase such claims. If no funding is available, we may be forced to abandon
our operations. There can be no assurance that we will be able to operate on a
profitable basis.

8

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If we do not obtain additional financing, our business will
fail and our investors could lose their investment.

We had cash in the amount of $1,009,993 and working capital
deficiency of $633,810 as of the period ended June 30, 2011. We currently do not
generate any revenues from our operations. Any direct acquisition of a claim
under lease or option is subject to our ability to obtain the financing
necessary for us to fund and carry out exploration programs on potential
properties. The requirements are substantial. Obtaining additional financing
beyond the financing we received in June and July 2011 would be subject to a
number of factors, including market prices for resources, investor acceptance of
our properties and investor sentiment. These factors may negatively affect the
timing, amount, terms or conditions of any additional financing available to us.
The most likely source of future funds presently available to us is through the
sale of equity capital and loans. Any sale of share capital will result in
dilution to existing shareholders.

Because of the speculative nature of exploration of mineral
properties, we may never discover a commercially exploitable quantity of
minerals, our business may fail and investors may lose their entire
investment.

We are in the very early exploration stage and cannot guarantee
that our exploration work will be successful, or that any minerals will be
found, or that any production of minerals will be realized. The search for
valuable minerals as a business is extremely risky. Substantial investment will
be required to move the Company toward the production of minerals. This may
require bringing in a partner to make the necessary investment, but there are no
plans at this time for any form of partnership or merger. We can provide
investors with no assurance that exploration on our properties will establish
that commercially exploitable reserves of minerals exist on our property.
Additional potential problems that may prevent us from discovering any reserves
of minerals on our property include, but are not limited to, unanticipated
problems relating to exploration and additional costs and expenses that may
exceed current estimates. If we are unable to establish the presence of
commercially exploitable reserves of minerals on our property our ability to
fund future exploration activities will be impeded, we will not be able to
operate profitably and investors may lose all of their investment in our
company.

We have no known mineral reserves and we may not find any
lithium and even if we find lithium it may not be in economic quantities. If we
fail to find any lithium or if we are unable to find lithium in economic
quantities, we will have to suspend operations.

We have no known mineral reserves. Additionally, even if we
find lithium in sufficient quantity to warrant recovery it ultimately may not be
recoverable. Finally, even if any lithium is recoverable, we do not know that
this can be done at a profit. Failure to locate lithium in economically
recoverable quantities will cause us to suspend operations.

Supplies needed for exploration may not always be available.
If we are unable to secure exploration supplies we may have to delay our
anticipated business operations.

Competition and unforeseen limited sources of supplies needed
for our proposed exploration work could result in occasional spot shortages of
supplies of certain products, equipment or materials. There is no guarantee we
will be able to obtain certain products, equipment and/or materials as and when
needed, without interruption, or on favorable terms. Such delays could affect
our anticipated business operations and increase our expenses.

Because of the unique difficulties and uncertainties
inherent in mineral exploration ventures, we face a high risk of business
failure.

Potential investors should be aware of the difficulties
normally encountered by new mineral exploration companies and the high rate of
failure of such enterprises. The likelihood of success must be considered in
light of the problems, expenses, difficulties, complications and delays
encountered in connection with the exploration of the mineral properties that we
plan to undertake. These potential problems include, but are not limited to,
unanticipated problems relating to exploration, and additional costs and
expenses that may exceed current estimates. The expenditures to be made by us in
the exploration of the mineral claim may not result in the discovery of mineral
deposits. Problems such as unusual or unexpected formations and other conditions
are involved in mineral exploration and often result in unsuccessful exploration
efforts. If the results of our exploration do not reveal viable commercial
mineralization, we may decide to abandon our claims. If this happens, our
business will likely fail.

9

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The marketability of natural resources will be affected by
numerous factors beyond our control which may result in us not receiving an
adequate return on invested capital to be profitable or viable.

The marketability of natural resources which may be acquired or
discovered by us will be affected by numerous factors beyond our control. These
factors include market fluctuations in lithium pricing and demand, the proximity
and capacity of natural resource markets and processing equipment, governmental
regulations, land tenure, land use, regulation concerning the importing and
exporting of mineral resources and environmental protection regulations. The
exact effect of these factors cannot be accurately predicted, but the
combination of these factors may result in us not receiving an adequate return
on invested capital to be profitable or viable.

Exploration and production activities are subject to certain
environmental regulations which may prevent or delay the commencement or
continuation of our operations.

In general, our exploration and production activities are
subject to certain federal, state and local laws and regulations relating to
environmental quality and pollution control. Such laws and regulations increase
the costs of these activities and may prevent or delay the commencement or
continuation of a given operation. Specifically, we may be subject to
legislation regarding emissions into the environment, water discharges and
storage and disposition of hazardous wastes. In addition, legislation has been
enacted which requires well and facility sites to be abandoned and reclaimed to
the satisfaction of state authorities. However, such laws and regulations are
frequently changed and we are unable to predict the ultimate cost of compliance.
Generally, environmental requirements do not appear to affect us any differently
or to any greater or lesser extent than other companies in the industry.

Any change to government regulation/administrative practices
may have a negative impact on our ability to operate and our profitability.

The business of mineral exploration and development is subject
to substantial regulation under various countries laws relating to the
exploration for, and the development, upgrading, marketing, pricing, taxation,
and transportation of mineral resources and related products and other matters.
Amendments to current laws and regulations governing operations and activities
of mineral exploration and development operations could have a material adverse
impact on our business. In addition, there can be no assurance that income tax
laws, royalty regulations and government incentive programs related to the
properties mineral exploration industry generally will not be changed in a
manner which may adversely affect our progress and cause delays, inability to
explore and develop or abandonment of these interests.

Permits, leases, licenses, and approvals are required from a
variety of regulatory authorities at various stages of exploration and
development. There can be no assurance that the various government permits,
leases, licenses and approvals sought will be granted in respect of our
activities or, if granted, will not be cancelled or will be renewed upon expiry.
There is no assurance that such permits, leases, licenses, and approvals will
not contain terms and provisions which may adversely affect our exploration and
development activities.

If we are unable to hire and retain key personnel, we may
not be able to implement our business plan.

Our success is largely dependent on our ability to hire highly
qualified personnel. This is particularly true in highly technical businesses
such as resource exploration. These individuals are in high demand and we may
not be able to attract the personnel we need. In addition, we may not be able to
afford the high salaries and fees demanded by qualified personnel, or may lose
such employees after they are hired. Failure to hire key personnel when needed,
or on acceptable terms, would have a significant negative effect on our
business. We currently have two employees. Alex Walsh as Chief Executive Officer
is paid for his day to day management of the Company, and Shanon Chilson is
employed as Mr. Walshs administrative assistant and controller.

Our independent certified public accounting firm, in their
report on the audited financial statements for the year ended June 30, 2011
states that there is a substantial doubt that we will be able to continue as a
going concern.

As at June 30, 2011, we have experienced significant losses
since inception. Failure to arrange adequate financing on acceptable terms and
to achieve profitability would have an adverse effect on our financial position,
results of operations, cash flows and prospects. Accordingly, there is
substantial doubt that we will be able to continue as a going concern.

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Risks relating to the industry in general

Planned exploration, and if warranted, development and
mining activities involve a high degree of risk.

We cannot assure you of the success of our planned operations.
Exploration costs are not fixed, and resources cannot be reliably identified
until substantial development has taken place, which entails high exploration
and development costs. The costs of mining, processing, development and
exploitation activities are subject to numerous variables which could result in
substantial cost overruns. Mining for base or precious metals may involve
unprofitable efforts, not only from dry properties, but from properties that are
productive but do not produce sufficient net revenues to return a profit after
accounting for mining, operating and other costs.

Our operations may be curtailed, delayed or cancelled as a
result of numerous factors, many of which are beyond our control, including
economic conditions, mechanical problems, title problems, weather conditions,
compliance with governmental requirements and shortages or delays of equipment
and services.

We do not insure against all risks associated with our business
because insurance is either unavailable or its cost of coverage is prohibitive.
The occurrence of an event that is not covered by insurance could have a
material adverse effect on our financial condition.

The impact of government regulation could adversely affect
our business.

Our business is subject to applicable domestic and foreign laws
and regulations, including laws and regulations on taxation, exploration, and
environmental and safety matters. Many laws and regulations govern the spacing
of mines, rates of production, prevention of waste and other matters. These laws
and regulations may increase the costs and timing of planning, designing,
drilling, installing, operating and abandoning our mines and other facilities.
In addition, our operations are subject to complex environmental laws and
regulations adopted by domestic and foreign jurisdictions where we operate. We
could incur liability to governments or third parties for any unlawful discharge
of pollutants into the air, soil or water, including responsibility for remedial
costs.

The submission and approval of environmental impact
assessments may be required.

Environmental legislation is evolving in a manner which means
stricter standards; enforcement, fines and penalties for noncompliance are more
stringent. Environmental assessments of proposed projects carry a heightened
degree of responsibility for companies and directors, officers and employees.
The cost of compliance with changes in governmental regulations has a potential
to reduce the profitability of operations.

Because the requirements imposed by these laws and regulations
frequently change, we cannot assure you that laws and regulations enacted in the
future, including changes to existing laws and regulations, will not adversely
affect our business.

Decline in mineral prices may make it commercially
infeasible for us to develop our property and may cause our stock price to
decline.

The value and price of your investment in our common shares,
our financial results, and our exploration, development and mining activities
may be significantly adversely affected by declines in the price of minerals and
other precious metals. Mineral prices fluctuate widely and are affected by
numerous factors beyond our control such as interest rates, exchange rates,
inflation or deflation, fluctuation in the value of the United States dollar and
foreign currencies, global and regional supply and demand, and the political and
economic conditions of mineral-producing countries throughout the world. The
price of minerals fluctuates in response to many factors, which are beyond
anyones prediction abilities. The prices used in making the estimates in our
plans differ from daily prices quoted in the news media. Because mining occurs
over a number of years, it may be prudent to continue mining for some periods during which cash flows are temporarily negative for a
variety of reasons. Such reasons include a belief that the low price is
temporary, and/or the expense incurred is greater when permanently closing a
mine.

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We may not have access to all of the supplies and materials
we need to begin exploration, which could cause us to delay or suspend
operations.

Competition and unforeseen limited sources of supplies in the
industry could result in occasional spot shortages of supplies such as dynamite
as well as certain equipment like bulldozers and excavators that we might need
to conduct exploration. If we cannot obtain the necessary supplies, we will have
to suspend our exploration plans until we do obtain such supplies.

Management has no experience in mining or mineral processing
and as a result it may be difficult to judge our prospects.

Management has no experience in mining or mineral processing.
Jon Jawinski has an undergraduate degree and over 10 years of experience
relevant to the industry, and management takes direction on all issues related
to exploration, mining and mineral processing from qualified consultants. Our
decisions and choices may not take into account standard engineering or
managerial approaches mineral exploration companies commonly use, and our
operations, earnings, and ultimate financial success could suffer due to
management's lack of experience in this industry.

Risks Associated with Our Common Stock

Trading on the OTC Bulletin Board may be volatile and
sporadic, which could depress the market price of our common stock and make it
difficult for our stockholders to resell their shares.

Our common stock is quoted on the OTC Bulletin Board service of
the Financial Industry Regulatory Authority. Trading in stock quoted on the OTC
Bulletin Board is often thin and characterized by wide fluctuations in trading
prices, due to many factors that may have little to do with our operations or
business prospects. This volatility could depress the market price of our common
stock for reasons unrelated to operating performance. Moreover, the OTC Bulletin
Board is not a stock exchange, and trading of securities on the OTC Bulletin
Board is often more sporadic than the trading of securities listed on a
quotation system like Nasdaq or a stock exchange like NYSE or Amex. Accordingly,
shareholders may have difficulty reselling any of the shares.

Penny stock rules will limit the ability of our stockholders
to sell their stock.

The Securities and Exchange Commission has adopted regulations
which generally define penny stock to be any equity security that has a market
price (as defined) less than $5.00 per share or an exercise price of less than
$5.00 per share, subject to certain exceptions. Our securities are covered by
the penny stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
accredited investors. The term accredited investor refers generally to
institutions with assets in excess of $5,000,000 or individuals with a net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouse. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the Securities and
Exchange Commission which provides information about penny stocks and the nature
and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customers account. The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the transaction and must be given to the customer in
writing before or with the customers confirmation. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise exempt
from these rules, the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the
purchasers written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage
investor interest in and limit the marketability of our common stock.

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The Financial Industry Regulatory Authority, or FINRA, has
adopted sales practice requirements which may also limit a shareholder's ability
to buy and sell our stock.

In addition to the "penny stock" rules described above, FINRA
has adopted rules that require that in recommending an investment to a customer,
a broker-dealer must have reasonable grounds for believing that the investment
is suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customer's financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, FINRA believes that there is a high probability that speculative
low priced securities will not be suitable for at least some customers. FINRA
requirements make it more difficult for broker-dealers to recommend that their
customers buy our common stock, which may limit your ability to buy and sell our
stock and have an adverse effect on the market for its shares.

We do not intend to pay dividends and there will thus be
fewer ways in which you are able to make a gain on your investment.

We have never paid dividends and do not intend to pay any
dividends for the foreseeable future. To the extent that we may require
additional funding currently not provided for in our financing plan, our funding
sources may prohibit the declaration of dividends. Because we do not intend to
pay dividends, any gain on your investment will need to result from an
appreciation in the price of our common stock. There will therefore be fewer
ways in which you are able to make a gain on your investment.

Because the SEC imposes additional sales practice
requirements on brokers who deal in shares of penny stocks, some brokers may be
unwilling to trade our securities. This means that you may have difficulty
reselling your shares, which may cause the value of your investment to
decline.

Our shares are classified as penny stocks and are covered by
Section 15(g) of the Securities Exchange Act of 1934 (the Exchange Act) which
imposes additional sales practice requirements on brokers-dealers who sell our
securities in this offering or in the aftermarket. For sales of our securities,
broker-dealers must make a special suitability determination and receive a
written agreement from you prior to making a sale on your behalf. Because of the
imposition of the foregoing additional sales practices, it is possible that
broker-dealers will not want to make a market in our common stock. This could
prevent you from reselling your shares and may cause the value of your
investment to decline.

We face risks related to compliance with corporate
governance laws and financial reporting standards.

The Sarbanes-Oxley Act of 2002, as well as related new rules
and regulations implemented by the Securities and Exchange Commission and the
Public Company Accounting Oversight Board, require changes in the corporate
governance practices and financial reporting standards for public companies.
These new laws, rules and regulations, including compliance with Section 404 of
the Sarbanes-Oxley Act of 2002 relating to internal control over financial
reporting, referred to as Section 404, have materially increased our legal and
financial compliance costs and made some activities more time-consuming and more
burdensome.

Other Risks

Trends, Risks and Uncertainties

We have sought to identify what we believe to be the most
significant risks to our business, but we cannot predict whether, or to what
extent, any of such risks may be realized nor can we guarantee that we have
identified all possible risks that might arise. Investors should carefully
consider all of such risk factors before making an investment decision with
respect to our common stock.

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Item
1B.           Unresolved
Staff Comments

As a smaller reporting company, we are not required to
provide the information required by this Item.

Item
2.             
Properties

We currently rent an office totaling approximately 600 square
feet located at 3200 N. Hayden Road, Suite 300, Scottsdale, AZ, 85251 for $600 a
month. Our telephone number is 480-641-4790.

Valleyview Property

There are over 100 active oil or gas wells on our property. Oil
and/or gas coexist within the same aquifers as our lithium and potassium-bearing
brines. In recovering the oil and gas, brine is also drawn to the surface, but
generally in much larger quantities.

The energy operator must process the brine and then separate it
from the oil and/or gas. When this process is completed, the brine is returned
to the aquifer. Given these circumstances, potential exists for a symbiotic
relationship between us and other energy companies, with a result being that we
may never have to even drill a hole to extract our own resource. Barrick Energy
Inc, Paramount Resources, Signalta Resources Ltd, Penn West Petroleum Ltd and
Canadian Natural Resources Ltd are among the companies actively operating wells
on property for oil and gas deposits. We have rights to any minerals produced
from their activity. In addition to lithium and potassium, other rare metals and
minerals on the property include calcium, magnesium, iodine, and bromine. There
can be no assurance that we will be able to locate and extract commercially
viable amounts of lithium or any other minerals.

This property is without known reserves and the proposed
program is exploratory in nature to comply with the guidance in paragraph
(b)(4)(i) of Industry Guide 7. There is significant infrastructure here
including power from a local utility and 12-month road access.

At this point we have no intention of doing any drilling or
traditional exploration of any kind. We will be sampling and taking the produced
water from oil companies that is already coming to the surface and being
separated from the oil and gas as part of their operation. Taking possession and
processing the minerals and water will require certain permits and royalty
agreements with the local and provincial governments.

Location and Access

The property covers 5 townships just south and east of
Valleyview, Alberta and covers approximately 113,500 acres. The townships it is
located within include 68-21-W5, 69-21-W5, 67-22-W5, 68-22-W5, and 69-22-W5.
Almost all of the property has paved roads and all year round access. Alberta
Provincial Highway 43 runs north to south through the center of the property.
The property is 1.5 hours driving from Grand Prairie, Alberta and 3.5 hours
driving from Edmonton, Alberta.

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Ownership Interest

On December 16, 2010, we entered into an assignment agreement
with Lithium Exploration VIII Ltd., a Nevada company, in regards to the
acquisition of an option interest in the Valleyview Property.

First Lithium Resources Inc. and Lithium Exploration VIII had
entered into an option agreement dated October 6, 2010, in regards to an option
interest in certain mineral permits in Alberta, Canada, which option agreement
and interest have been assigned to our company. Specifically, Lithium
Exploration acquired an option to acquire a 100% interest in five mineral
permits (which are issued on a per township basis in Canada) totaling 45,952
hectares in Alberta, Canada which we have assumed.

In regards to the option agreement for the property, our
obligations for the property that we have assumed consist of:

- Making payments in the aggregate amount of $500,000 in annual periodic
  payments escalating from $40,000 to $300,000, to January 1, 2014.
- Complying with the net smelter royalty payments upon commercial production,
  which consists of 1% to First Lithium and certain underlying royalties payable
  to the original property vendor (a 3% net smelter return royalty and a 5%
  gross overriding royalty, which latter royalty is specific to diamond
  production).

The first cash payment of $40,000 has been made by Lithium
Exploration VIII and in addition they also made a payment of $50,000 towards
work assessment payments and for maintenance of the permits. In consideration
for the assignment, we have agreed to pay Lithium Exploration VIII $90,000 in
cash or the equivalent amount in shares of common stock.

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History of Operations

A 1995 report authored by S. Bachu, M. Brulotte and L.P. Yuan
of the Alberta Research Council, "Resource Estimates of Industrial Minerals in
Alberta Formation Waters," discusses the area in which the Valleyview Property
is located as having potential for resources of lithium within formation waters.

Of the more than 1,511 records in the 1995 AGS study, the well
with the highest concentration of lithium (140mg/L or ppm) is located nearly in
the center of the Valleyview Property, based on longitude and latitude
coordinates. In addition, a second well in the top 50 is located approximately a
mile from that well.

More recently, in January 2010, D.R. Eccles and G.M. Jean of
the Alberta Geological Survey (AGS) published "Lithium Ground and Formation
Water Geochemical Data," with the intention of enabling present and future
companies to better evaluate their targets and characterize their resource
estimates by being able to distinguish between background and anomalous
concentrations of lithium throughout Alberta. The report, researched during
2009, is a compilation of ground- and formation-water geochemical lithium data
from government sources and from AGS data holdings, resulting in 1,511 records.
These past studies performed by the AGS have assisted us in our exploration
efforts on the property.

Current State and Plan of Operations

We completed a 12 week sample testing program on May 31, 2011.
We are initiating the process to complete the resource estimates for the
Valleyview Project, and hope to have it completed by December 31, 2011.
Immediate plans include conducting bulk sampling to be utilized in the design of
a separation process to produce battery-grade lithium carbonate, potash (KCl),
and magnesium hydroxide: Once the bulk sampling and separation process have been
completed we will raise capital to build a pilot scale plant in Valleyview to
begin the production of the outlined minerals.

APEX Geoscience Ltd., with whom we entered into a consulting
agreement in August 2011, will assist us in furthering the Valleyview Project.
The substantive steps and timeline of this project are as follows:

- July 20 to September 1, 2011: Download and prepare downhole GeoScout
  geological, geophysical, water chemistry and water production data required to
  forward to hydrogeological consultant. This part of the project has been completed.
- September 1 to October 30th, 2011: Forward water data for hydrogeological
  characterization. Commence downhole geological modeling of the pertinent
  reservoir geology in Micromine.
- October 30 to November 21, 2011: Receive and integrate aquifer data into
  Micromine. Start wire-framing aquifer data into a 3D model that will include
  porosity, effective porosity, permeability and potential flow dynamics. Once
  aquifer model is created and checked, integrate into some sort of basic
  formation water flow simulation model. Commence block modeling and in-situ
  resource estimate.
- November 21 to December 21, 2011: Complete resource estimation and create
  preliminary draft of Resource Technical Report, and upon review complete
  resource Technical Report.

Our total budget for this project is $139,825. $60,500 is
budgeted for reservoir characterization; $28,500 is budgeted for Sturgeon Lake
oilfield geological modeling; $18,075 is budgeted for formation water and
reservoir geological modeling; $15,500 is budgeted for Li and other metal
resource modeling; and $17,250 is budgeted for the 43-101 report preparation. We
intend to fund operations through equity financing arrangements, which may be
insufficient to fund our capital expenditures, working capital and other cash
requirements for the next twelve months. Exploration work wil be led by Mike
Dufresne, President of APEX Geoscience Ltd.

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Geology

In 1993, a data set comprising nearly 130, 000 formation water
  analyses from the Alberta Basin was reviewed for potential economic industrial
  mineral interest (Hitchon, B., Underschultz, J.R. and Bachu, S. 1993: Industrial mineral potential of Alberta formation waters. Alberta Research
  Council, Alberta Geological Survey, Open File Report 1993-15, 85 p). The study
  identified anomalous values of certain elements in Devonian formation waters
  associated with producing oil and gas wells in the Valleyview and Swan Hills
  areas of west-central Alberta including brines with up to 140 mg/L lithium. This
  value is significant considering the median values of lithium in Alberta
  formation waters is 0.2 mg/L (based on 1,511 analyses; Eccles, D.R. and Berhane,
  H. (2011): Geological introduction to lithium-rich formation water in Alberta,
  west-central Alberta; Energy Resources Conservation Board, ERCB/AGS Open
  FileReport, 36 p.). Further modeling in 1995 (Bachu, S. Yuan, L.P. and Brulotte,
  M. (1995): Resource estimates of industrial minerals in Alberta formation
  waters.

The Li-rich formation waters appear to be associated with
carbonate build-ups of the Leduc Formation (both Leduc north and south) in the
Woodbend Group and the Swan Hills Formation of the Beaverhill Lake Group. The
Woodbend Group carbonates, including the Leduc and Cooking Lake formations,
reach thicknesses of >300 m in places, while the Beaverhill Lake carbonate
platform varies in thickness from >150 m in the southern reef portion to
around 50 m in the northwest. However, in the Swan Hills area the carbonate
platform of the Cooking Lake Formation and the reefs of the Leduc Formation
(both of Woodbend Group) directly overlie the Beaverhill Lake Group carbonates,
such that it is likely difficult to differentiate between the various formation
waters.

Recent (2011) Devonian oilfield formation water sampling by our
company shows that a large area of their property comprises Lithium-enriched
formation waters. Some 40 wells have >60 mg/L Li with about 15 of those wells
containing between 70 and 85 mg/L Li. The consistency of the dataset indicates a
fairly homogenous Devonian source of Lithium-enriched formation waters. Other
minerals of interest include calcium (up to 28,100 gm/L), magnesium (up to 4,630
mg/L), iodine (up to 27 mg/L), bromine (up to 4,000 mg/L), and potassium (6,500
mg/L).

The source of lithium in oil field waters remains subject to
debate. Explanations generally conform with those for Li-rich brine solutions
and include recycling of earlier deposits/salars, mixing with pre-existing
subsurface brines, weathering of volcanic and/or basement rocks, and transport
from hydrothermal volcanic activity, but none of these hypotheses has clearly
pointed to the ultimate source for the anomalous values of Lithium. However, in
a recent isotopic study, Eccles and Berhane (2011) suggested that any viable
lithium source model in northwestern Alberta should invoke direct contact
between Devonian formation water and the crystalline basement or with immature
siliciclastics deposited above the basement (basal Cambrian sandstone, Granite
Wash or the Gilwood Member), and mobilization of silicate-bearing fluids to the
aquifer.

Salta Agua Claims Location and Access

These properties, totaling just over 42,000 hectares, are
located in northwestern Argentina, at the foothills of the Andes Mountains. They
are made up of 5 separate mining concessions. The 5 mining concessions are Rio
Grande (9,758 hectares), Vega Sur (9,585 hectares), Vega Oeste (9,686 hectares),
Vega Cono (7897 hectares), and Vega Este (5,487 hectares). There is year round
road access to a majority of the claims.

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These properties are without known reserves and the proposed
program is exploratory in nature to comply with the guidance in paragraph
(b)(4)(i) of Industry Guide 7. These are remote properties and to our knowledge
there are no paved roads or sources of power at this time.

We have produced high resolution imaging of our Argentine
claims to show where the road access is on the property. We will send a team to
the property to take samples via a hand auger and pictures of the surrounding
area. Once that is complete we will make decisions about the direction of our
exploration efforts to include trenching and drilling. At such time there will
be required government approvals for exploration.

Ownership Interest

On January 18, 2011 we entered into a purchase option agreement
with Salta Water. Salta Water holds 100% interest in the Salta Agua claims.

We have acquired an option entitling us to acquire certain
legal and beneficial interests in and to the Salta Agua claims, and to
participate in the further exploration and, if deemed warranted, the development
of the Salta Agua claims. Specifically, we have acquired a right and option to
acquire undivided legal and beneficial interests of up to 100% in the Salta Agua
claims free and clear of all liens, charges and claims of others.

In order for us to exercise the option and acquire an initial
60% interest, we are required to make the following payments to Salta Water and
incur the expenses indicated, prior to the fifth anniversary of the date of the
Option Agreement:

| | (1) | an initial payment of $25,000, which has been paid by
      us;                                                                                                                     
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                     
| | (2) | pay a further $50,000 no later than thirty days after the
      Effective Date which has been paid and issue 250,000 restricted shares of
      common stock which have been issued;
| |     |                                                                                                                                                                                     
| | (3) | pay a further $100,000 on or before the first anniversary
      of the Effective Date and issue 250,000 restricted shares of common
      stock;                                    
| |     |                                                                                                                                                                                     
| | (4) | pay a further $100,000 on or before the second
      anniversary of the Effective Date and issue 250,000 restricted shares of
      common stock;                                   
| |     |                                                                                                                                                                                     
| | (5) | pay a further $100,000 on or before the third anniversary
      of the Effective Date and issue 250,000 restricted shares of common stock;
      and                                
| |     |                                                                                                                                                                                     
| | (6) | incur or fund expenditures on the Property prior to the
      Option Deadline of not less than $4,000,000 on or before the fifth
      anniversary of the Effective Date.           

Once we have completed the foregoing conditions, we will then
have the further option to acquire the remaining 40% of the Salta Agua claims by
paying $6,000,000 within 180 days or by paying $3,000,000 within 180 days and the
balance of $3,000,000 within a further 12 months, which balance shall accrue
interest at the rate of LIBOR plus 5%.

History of Operations

In November of 2009 a report was completed on the Salta Agua
Claims outlining the geological formation of the property which collected some
surface water samples from alluvial fans and compiled data collected by other
projects in close proximity to these claims. The report outlined the needs for
future exploration including trenching and drilling efforts that could produce a
resource estimate for lithium and potassium.

We have recently engaged an imaging firm to get high resolution
imaging for all 5 claims to serve as the map of the property to identify road
access and potential pooling of surface water that could assist in the future
exploration efforts. Once this imaging is complete we intend to send a team out
to each of the 5 claims to do some trenching and take some samples of the
minerals 3  4 meters underground. This trench testing will assist us in
identifying the next steps in our exploration of these assets.

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We are not aware of any other history of operations on the
Salta Agua Claims.

Plan of Exploration

We anticipate undertaking an exploration program which will
include drilling, detailed geologic mapping and geophysical surveys. We
anticipate that drilling will consist of completing 20 to 30 widely spaced drill
holes for a total of 3,000 meters. Drill depths are expected to range between 50
and 300 meters. Each drill hole will be drilled using a reverse-circulation
rotary method, sampling sediment every 1 meter for stratigraphic analysis and
sampling brines separately. Resistivity, and possibly seismic surveys, are
planned to delineate the salt-body geometry. Pumping tests are planned for those
drill holes with better lithium-brine grades. Once the initial steps are
completed, we anticipate that a pre-feasibility study will be performed on the
most favorable targets. It will include a detailed description of
infrastructure, logistics and resources. The trip to this site and testing is
budgeted at $50,000. Mike Dufresne, President of APEX Geoscience Ltd., and Roy
Eccles, Senior Consultant and Operations Manager at APEX Geoscience Ltd., will
oversee the planned activity.

Geology

The Altiplano-Puna plateau comprises numerous salt pans, known
as salars that contain high concentrations of Lithium, Potassium and Boron. The
salars occur at a variety of elevations ranging from 1000 m to more than 4000 m.
They typically form in closed topographic depressions, most likely related to
structural events that created initial accommodation space. There are many
variations in salar development owing to continual deviations associated with
tectonism, sediment supply, basin asymmetry and climate change. In general, the
salars represent the end product of a basin infill process that can include
deposition of colluvial talus and gravel fans, grading upwards into sheet sands,
and playa silts and clays (Alonso, R.N., Jordan, R.E., Tebbutt, K.T. and
Vandervoort, D.S. 1991. Giant evaporite belts of the Neogene central Andes.
Geology, v. 19, p. 401-404.). The origin of the high-Lithium brines remains
speculative, but they are considered intimately linked to volcanism because the
Lithium-bearing brine region roughly coincides with the Altiplano-Puna magma
body (de Silva, S.L., Zandt, G., Trumball, R., Viramonte, J.G., Salas, G. and
Jimenez, N. 2006. Large imbrignite eruptions and volcano-tectonic depressions in
the Central Andes: A thermomechanical perspective. In: C. Troise, G. de Natale
and C.R.J. Kilburn (eds), Mechanisms of Activity and Unrest at Large Calderas,
Geological Society, London, Special Publication, No. 269, p. 47-63.). Volcanism
also plays a significant role in basin infill and basin closure and isolation.
Lastly, the Altiplano-Puna climate has been dominated by hyper-arid conditions
since the Andes reached their current elevation (about 6 million years ago)
causing evaporation and precipitation of a variety of evaporite deposits.

The Salta Agua Claims, which are located within the Puna
Plateau on the eastern slope of the Andes Mountains, Argentina, encompasses two
large salars: Salar Rio Grande (~10,000 Ha) and Salar Arizaro (~32,500 Ha;
Ebisch, J.F. 2009. Salta Agua Claims, NI 43-101 Compliant Technical Report, 56
p). The better documented of the two salars, the Salar de Arizaro represents a
mature salar, which are typically characterized by a relatively uniform and
thick sequence of halite deposited under varying subaqueous to subaerial
conditions (Bobst, A.L., Lowenstein, T.K., Jordan, T.E. Godfrey, L.V., Ku, T.L.
and Luo, S. 2001. A 106 ka paleoclimate record from drill core of the Salar de
Atacama, northern Chile. Paleogeography, Palaeoclimatology, Palaeoecology, v.
173, p. 21-42). It is hosted in a mid to Late Tertiary andesitic volcanic
complex. The Salar del Rio Grande is associated with intense volcanic activity
as evidenced by numerous sulphur deposits near the western edge of the salar.
The Salar del Rio Grande is filled by clastic and evaporitic sediments
characterized by at least three zones: a central zone rich in sulphate, and
northern and southern zones comprised of Ordovician and Tertiary sediments,
respectively (Ebisch, 2009).

The Salta Agua Claims are in the infancy stages of exploration.
Sampling to date has only focused on surface waters and well water at the top of
the water column.

Index of Geologic Terms

TERM
    DEFINITIONAndesitic
    a fine-grained grayish volcanic rock
      characterized by feldspar minerals


21

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TERM
      DEFINITIONBasal
    at or forming the bottom of somethingBasin
    a broad area of land drained by a single river and its
      tributaries, or draining into a lakeBrine
    water containing a significant amount of salt, used for
      curing, preserving, and developing flavor inCambrian
    the period of geologic time, 570 million to 500 million
      years ago, during which invertebrate animal life, including trilobites,
      appeared, and marine algae developedCarbonate
    a salt or ester of carbonic acidCenozoic
    the most recent era of geologic time, beginning about 65
      million years ago, during which modern plants and animals evolvedColluvial talus
    loose rock and soil at the base of a cliff or steep slopeCrystalline
    relating to, made of, containing, or resembling crystalsDevonian
    Is a geologic period and system of the Paleozoic era
      spanning from 416 to 359.2 million years ago, where rocks from this period
      were first studied. During this period the pectoral and pelvic fins of
      lobe-finned fish evolved into legs as they started to walk on land as
      tetrapods around 397 Ma.Entrada Sandstone
    a formation that is spread across the U.S. states of
      Wyoming, Colorado, northwest New Mexico, northeast Arizona and southeast
      Utah. Part of the Colorado Plateau, this formation was deposited during
      the Jurassic period sometime between 180 and 140 million years ago in
      various environments, including: tidal mudflats, beaches and sand dunesEvaporite
    Water-soluble mineral sediments that result from the
      evaporation from an aqueous solution and has been concentrated by
      evaporation. There are two types of evaporate deposits, marine which can
      also be described as ocean deposits, and non-marine which are found in
      standing bodies of water such as lakes. Evaporites are considered
      sedimentary rocks.Halite
    a colorless or white crystalline mineral consisting of
      sodium chloride. Use: table salt, source of chlorine.Hydrochemical
    a chemical characteristic of waterPlaya silts
    a fine-grained sediment, especially of mud or clay
      particles at the lower part of an inland desert drainage basinSandstone
    a sedimentary rock made up of particles of sand bound
      together with a mineral cement. Use: building materialSediment
    material, originally suspended in a liquid, that settles
      at the bottom of the liquid when it is left standing for a long timeSheet sands
    flat, gently undulating sandy plots of sand surfaced by
      grains that may be too large for saltation Sand sheets exist where grain
      size is too large, or wind velocities too low, for dunes to form


22

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TERM
      DEFINITIONSiliciclastics
    rocks formed by inorganic processes or deposited through
      some mechanical process, such as stream deposits that areSubaerial
    used in geology to describe events or structures that are
      located at the earths surfaceSubaqueous
    living, found, or formed under waterTectonism
    is the faulting or folding or other deformation of the
      outer layer of a planet caused by heat lossTertiary
    the period of geologic time, 65 million to 1.6 million
      years ago, during which mammals became dominant and modern plants evolvedThermomechanical
    A technique used in thermal analysis, a branch


Item
3.             
Legal Proceedings

We know of no material, existing or pending legal proceedings
against us, nor are we involved as a plaintiff in any material proceeding or
pending litigation. There are no proceedings in which any of our directors,
officers or affiliates, or any registered or beneficial shareholder, is an
adverse party or has a material interest adverse to our company.

Item
4.             
[Removed and Reserved]

PART II

Item
5.             
Market for Registrant's Common Equity and Related Stockholder Matters and Issuer
Purchases of Equity Securities

The high and low bid prices of our common stock for the periods
indicated below are as follows:

OTC Bulletin BoardQuarter Ended(1)
      High
      LowJune 30, 2011
      $10.68
      $1.20March 31, 2011
      $1.42
      $0.10December 31, 2010
      $0.10
      $0.10September 30, 2010
      $0.30
      $0.30June 30, 2010
      $0.40
      $0.30March 31, 2010
      $0.60
      $0.50December 31, 2009
      $0.65
      $0.20September 30, 2009
      $0.50
      $0.50June 30, 2009
      $0.26
      $0.26


Our common shares are issued in registered form. Island Stock
Transfer, 100 Second Avenue South, Suite 705S, St. Petersburg, Florida 33701
(Telephone: 727-289-0010; Facsimile: 727-289-0069) is the registrar and transfer
agent for our common shares.

23

---

On October 13, 2011, the list of stockholders for our shares
of common stock showed 66 registered stockholders and 51,115,476 shares of
common stock outstanding.

Dividends

We have not declared any dividends on our common stock since
the inception of our company on March 8, 2006. There is no restriction in our
Articles of Incorporation and Bylaws that will limit our ability to pay
dividends on our common stock. However, we do not anticipate declaring and
paying dividends to our shareholders in the near future.

Equity Compensation Plan Information

As of June 30, 2011, we have not adopted an equity compensation
plan under which our common stock is authorized for issuance.

Purchase of Equity Securities by the Issuer and Affiliated
Purchasers

We did not purchase any of our shares of common stock or other
securities during the year ended June 30, 2011.

Recent Sales of Unregistered Securities

None.

Item
6.             
Selected Financial Data

As a smaller reporting company, we are not required to
provide the information required by this Item.

Item
7.             
Managements Discussion and Analysis of Financial Condition and Results of
Operations

The following discussion should be read in conjunction with our
audited financial statements and the related notes for the years ended June 30,
2011 and June 30, 2010 that appear elsewhere in this annual report. The
following discussion contains forward-looking statements that reflect our plans,
estimates and beliefs. Our actual results could differ materially from those
discussed in the forward looking statements. Factors that could cause or
contribute to such differences include, but are not limited to those discussed
below and elsewhere in this registration statement, particularly in the section
entitled "Risk Factors" beginning on page 8 of this annual report.

Our audited financial statements are stated in United States
Dollars and are prepared in accordance with United States Generally Accepted
Accounting Principles.

Plan of Operation

On June, 29, 2011 we entered into a debenture agreement which
will provide $1,500,000 to the company fulfilling our planned exploration
expenditures as well as providing working capital to the companys future
planning. Our present plan of operations calls for $650,000 in planned
exploration, operation, and administrative expenses for the year end June 30,
2012.

We received the initial $1,000,000 on June 29, 2011 and the
remaining $500,000 on July 13, 2011. The debentures mature on December 28, 2012
and carry an interest rate of twelve percent per annum. The interest is payable
on the maturity date in cash or, at our option, in duly authorized, validly
issued, fully paid and non-assessable shares of our common stock, subject to
certain prescribed conditions. The debentures are also convertible, in whole or
in part, into shares of common stock at a price equal to (i) the lesser of 65%
of the lowest reported sale price of the common stock for the twenty trading
days immediately prior to the date of conversion, or (ii) $0.83 per share,
subject to various prescribed conditions. The investor may not convert the
debentures at any time if upon such conversion the investor would become the
beneficial owner of more than 4.99% of the outstanding shares of our common
stock. The debentures include anti-dilution protection with respect to
lower priced issuances of common stock or securities convertible or exchangeable
into common stock.

24

---

Along with the debentures, we also issued warrants to acquire a
total of 1,807,229 shares of our common stock for a period of five years at a
price of $0.913 per share, subject to certain adjustments. The warrants also
include cashless exercise provisions in the event that the Registration
Statement is not effective. The investor may not exercise the warrants at any
time if upon such exercise the investor would become the beneficial owner of
more than 4.99% of the outstanding shares of our common stock. The warrants
include anti-dilution protection with respect to lower priced issuances of
common stock or securities convertible or exchangeable into common stock.

Capital Expenditures

We do not intend to invest in capital expenditures during the
twelve-month period ending June 30, 2012.

General and Administrative Expenses

We expect to spend $250,000 during the twelve-month period
ending June 30, 2012 on general and administrative expenses including legal and
auditing fees, rent, office equipment and other administrative related
expenses.

Product Research and Development

We do not anticipate expending any funds on research and
development, manufacturing and engineering over the twelve months ending June
30, 2012.

Purchase of Significant Equipment

We do not intend to purchase any significant equipment over the
twelve months ending June 30, 2012.

Results of Operations for the Years Ended June 30, 2011 and
2010

The following summary of our results of operations should be
read in conjunction with our audited financial statements for the years ended
June 30, 2011 and 2010.

Our operating results for the years ended June 30, 2011 and
2010 are summarized as follows:

Year EndedJune 302011
      
      
      2010Revenue
      $
      Nil
      
      $
      NilOperating Expenses
      $
      24,269,435
      
      $
      20,639Net Loss
      $
      25,329,675
      
      $
      20,639


Revenues

We have not earned revenues since our inception.

Operating Expenses

Our operating expenses for the year ended June 30, 2011 and
June 30, 2010 are outlined in the table below:

25

---

Year EndedJune 302011
      
      
      2010Advertising
      $
      27,095
      
      $
      NilConsulting
      $
      111,900
      
      $
      NilDirector fees (Note 3)
      $
      17,595,000
      
      $
      NilGeneral and administrative
      $
      13,361
      
      $
      354Investor relations (Note 3)
      $
      150,400
      
      $
      NilManagement fees
      $
      45,000
      
      $
      NilMining expenses (Note 5)
      $
      6,227,641
      
      $
      NilProfessional fees
      $
      84,041
      
      $
      20,285Travel
      $
      14,997
      
      $
      Nil


The increase in operating expenses for the year ended June 30,
2011, compared to the same period in fiscal 2010, was mainly due to the
acquisition of our lithium properties as well as our lithium extraction
technology. We did not undertake any business operations during the year ended
June 30, 2010.

Liquidity and Financial Condition

As  of June 30, 2011, our total assets were $1,657,161and our total current  liabilities were $2,290,971 and  we had a working capital deficit of $633,810.  Our financial statements report a net loss of $25,329,675 for the year ended June 30, 2011,  and a net loss of $25,466,833 for  the period from May 31, 2006 (date of inception) to June 30, 2011.

We have suffered recurring losses from operations. The
continuation of our company is dependent upon our company attaining and
maintaining profitable operations and raising additional capital as needed. In
this regard we have raised additional capital through equity offerings and loan
transactions.

Cash Flows

At
    
    
    AtJune 30, 2011
    
    
    June 30, 2010Net Cash (Used in) Operating
      Activities
    $
    (1,251,186
    )
    $
    (22,823
    )Net Cash Provided by (Used In) Investing
      Activities
    $
    Nil
    
    $
    NilNet Cash Provided by
      Financing Activities
    $
    2,260,738
    
    $
    23,132Cash (decrease) increase during the
      year
    $
    1,009,552
    
    $
    309


We had cash in the amount of $1,009,993 as of June 30, 2011 as
compared to $441 as of June 30, 2010. We had a working capital deficit of
$633,810 as of June 30, 2011 compared to working capital deficit of $37,658 as of
June 30, 2010.

Our principal sources of funds have been from sales of our
common stock.

Anticipated Cash Requirements

We estimate that our expenses over the next 12 months will be
approximately $650,000 as described in the table below. These estimates may
change significantly depending on the nature of our future business activities
and our ability to raise capital from shareholders or other sources.

26

---

|Description                | Estimated  | Estimated
|-------------------------- | ---------- | ---------
|                           | Completion | Expenses 
|                           | Date       | ($)      
|General and administrative | 12 months  | 200,000  
|Mining expenses            | 12 months  | 400,000  
|Professional fees          | 12 months  | 50,000   
|Total                      |            | $650,000 

We intend to meet our cash requirements for the next 12 months
through a combination of debt financing and equity financing by way of private
placements. On June 29, 2011 we entered into a securities purchase agreement
with one investor. Pursuant to the terms of the agreement, the investor acquired
convertible debentures with an aggregate total principal of $1,500,000. We
received the initial $1,000,000 on June 29, 2011 and the remaining $500,000 on
July 13, 2011. The investor has a right to invest an additional $1,500,000 on
the same terms. We currently do not have any other arrangements in place to
complete any private placement financings and there is no assurance that we will
be successful in completing any such financings on terms that will be acceptable
to us.

Contractual Obligations

As a smaller reporting company, we are not required to
provide tabular disclosure obligations.

Going Concern

The audited financial statements included with this annual
report have been prepared on the going concern basis which assumes that adequate
sources of financing will be obtained as required and that our assets will be
realized and liabilities settled in the ordinary course of business.
Accordingly, the audited financial statements do not include any adjustments
related to the recoverability of assets and classification of assets and
liabilities that might be necessary should we be unable to continue as a going
concern.

Off-Balance Sheet Arrangements

We have no 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
stockholders.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

Our audited financial statements and accompanying notes are
prepared in accordance with generally accepted accounting principles used in the
United States. Preparing financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, revenue, and expenses. These estimates and assumptions are affected
by management's application of accounting policies. We believe that
understanding the basis and nature of the estimates and assumptions involved
with the following aspects of our financial statements is critical to an
understanding of our financial statements.

Use of Estimates

The preparation of financial statements in conformity with
United States 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 amount of revenues and expenses during
the reporting period. Actual results could differ from those estimates. Our
periodic filings with the Securities and Exchange Commission include, where
applicable, disclosures of estimates, assumptions, uncertainties and markets
that could affect the financial statements and future operations of our company.

27

---

Mineral Acquisition and Exploration Costs

Our company has been in the exploration stage since its
formation on May 31, 2006 and has not yet realized any revenue from our planned
operations. We are primarily engaged in the acquisition, exploration, and
development of mining properties. Mineral property acquisition and exploration
costs are expensed as incurred. When it has been determined that a mineral
property can be economically developed as a result of establishing proven and
probable reserves, the costs incurred to develop such property are capitalized.
Such costs will be amortized using the units-of-production method over the
estimated life of the probable reserves.

Net Income or (Loss) per Share of Common Stock

Our company has adopted FASC Topic No. 260, Earnings Per
Share, (EPS) which requires presentation of basic and diluted EPS on the
face of the income statement for all entities with complex capital structures
and requires a reconciliation of the numerator and denominator of the basic EPS
computation to the numerator and denominator of the diluted EPS computation. In
the accompanying financial statements, basic earnings (loss) per share is
computed by dividing net income/loss by the weighted average number of shares of
common stock outstanding during the period.

Our company has no potentially dilutive securities, such as
options or warrants, currently issued and outstanding.

NEW ACCOUNTING PRONOUNCEMENTS

Recent accounting pronouncements did not, and are not currently
expected to, have a material effect on our financial statements, but will be
implemented in our future financial reporting when applicable.

With the exception of the pronouncements noted above, no other
  accounting standards or interpretations issued or recently adopted are expected
  to have a material impact on our companys financial position, operations
  or cash flows.

Item
7A.           Quantitative and
Qualitative Disclosures About Market Risk

As a smaller reporting company, we are not required to
provide the information required by this Item.

Item
8.             
Financial Statements and Supplementary Data

Our audited financial statements are stated in United States
dollars (US$) and are prepared in accordance with United States Generally
Accepted Accounting Principles.

The following audited financial statements are filed as part of
this annual report:

| | Independent
      Auditor's Report.                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------
| |                                                                                                                       
| | Audited
      Balance Sheets as at June 30, 2011 and 2010.                                                            
| |                                                                                                                       
| | Audited
      Statements of Operations for the years ended June 30, 2011 and June 30,
      2010.                     
| |                                                                                                                       
| | Audited
      Statements of Changes in Stockholders' Equity for the years ended June 30,
      2011 and June 30, 2010.
| |                                                                                                                       
| | Audited
      Statements of Cash Flows for the for the years ended June 30, 2011 and
      June 30, 2010.             
| |                                                                                                                       
| | Notes
      to the Financial Statements.                                                                              

28

---

LITHIUM EXPLORATION GROUP, INC.(formerly Mariposa
Resources, Ltd.)

(An Exploration Stage Company)

AUDITED FINANCIAL STATEMENTS

June 30, 2011 and 2010

---

| | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
        FIRM
      Officers and Directors 
        Mariposa Resources, Ltd.
      We have audited the accompanying balance sheet of Lithium
        Exploration Group, Inc. (formerly Mariposa Resources, Ltd.) (an exploration
        stage company) (the Company) as of June 30, 2011 and 2010, and the related
        statements of operations, changes in stockholders equity (deficit), and cash
        flows for the years then ended. These financial statements are the
        responsibility of the Companys management. Our responsibility is to express an
        opinion on these financial statements based on our audits.
      We conducted our audits in accordance with the standards of
        the Public Company Accounting Oversight Board (United States of America). Those
        standards require that we plan and perform the audit to obtain reasonable
        assurance about whether the financial statements are free of material
        misstatement. The Company is not required to have, nor were we engaged to
        perform, an audit of its internal control over financial reporting. Our audit
        included consideration of internal control over financial reporting as a basis
        for designing audit procedures that are appropriate in the circumstances, but
        not for the purpose of expressing an opinion on the effectiveness of the
        Companys internal control over financial reporting. Accordingly, we express no
        such opinion. An audit also includes examining, on a test basis, evidence
        supporting the amounts and disclosures in the financial statements, assessing
        the accounting principles used and significant estimates made by management, as
        well as evaluating the overall financial statement presentation.We believe that our audits provide a reasonable basis for
        our opinion.
      In our opinion, the financial statements referred to above
        present fairly, in all material respects, the financial position of Lithium
        Exploration Group, Inc. (formerly Mariposa Resources, Ltd.) as of June 30, 2011
        and 2010, and the results of its operations, and its cash flows for the years
        then ended, in conformity with accounting principles generally accepted in the
        United States of America.
      The accompanying financial statements have been prepared
        assuming the Company will continue as a going concern. As discussed in Note 8 to
        the financial statements, the Company has recurring losses and has not generated
        revenues from its planned principal operations. These factors raise substantial
        doubt that the Company will be able to continue as a going concern. The
        financial statements do not include any adjustments that might result from the
        outcome of this uncertainty.
      
      /s/ Child, Van Wagoner & Bradshaw, PLLC 
        Certified
        Public Accountants 
        Salt Lake City, Utah 
  October 14, 2011
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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|Lithium Exploration Group, Inc.    
|-----------------------------------
|(formerly Mariposa Resources, Ltd.)
|(An Exploration Stage Company)     
|Balance Sheets                     
|As of June 30,                     

|                                                                                                                                                                                                                                                               |   | 2011        |   |   | 2010     |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ----------- | - | - | -------- | -
|ASSETS                                                                                                                                                                                                                                                         |   |             |   |   |          |  
|                                                                                                                                                                                                                                                               |   |             |   |   |          |  
|                                                                                                                                                                                                                                                               |   |             |   |   |          |  
|Current                                                                                                                                                                                                                                                        |   |             |   |   |          |  
|Cash and cash
      equivalents                                                                                                                                                                                                                                | $ | 1,009,993   |   | $ | 441      |  
|Prepaid expenses                                                                                                                                                                                                                                               |   | 647,168     |   |   | 200      |  
|Total Current Assets                                                                                                                                                                                                                                           |   | 1,657,161   |   |   | 641      |  
|                                                                                                                                                                                                                                                               |   |             |   |   |          |  
|Total Assets                                                                                                                                                                                                                                                   | $ | 1,657,161   |   | $ | 641      |  
|                                                                                                                                                                                                                                                               |   |             |   |   |          |  
|                                                                                                                                                                                                                                                               |   |             |   |   |          |  
|LIABILITIES                                                                                                                                                                                                                                                    |   |             |   |   |          |  
|                                                                                                                                                                                                                                                               |   |             |   |   |          |  
|Current                                                                                                                                                                                                                                                        |   |             |   |   |          |  
|Accounts payable
      and accrued liabilities                                                                                                                                                                                                                 | $ | 183,194     |   | $ | 1,500    |  
|Derivative liability (Note 6)                                                                                                                                                                                                                                  |   | 2,060,240   |   |   | -        |  
|Due to related party (Note 7)                                                                                                                                                                                                                                  |   | 47,537      |   |   | 36,799   |  
|Total Current
      Liabilities                                                                                                                                                                                                                                |   | 2,290,971   |   |   | 38,299   |  
|                                                                                                                                                                                                                                                               |   |             |   |   |          |  
|Total Liabilities                                                                                                                                                                                                                                              |   | 2,290,971   |   |   | 38,299   |  
|                                                                                                                                                                                                                                                               |   |             |   |   |          |  
|STOCKHOLDERS DEFICIT                                                                                                                                                                                                                                          |   |             |   |   |          |  
|                                                                                                                                                                                                                                                               |   |             |   |   |          |  
|Capital stock (Note 3)                                                                                                                                                                                                                                         |   |             |   |   |          |  
|Authorized: 
              100,000,000
      preferred shares, $0.001 par value
              500,000,000 common shares,
      $0.001 par
      value         Issued
      and outstanding:         51,115,476
      common shares (June 30, 2010: 47,375,000) |   | 51,116      |   |   | 47,375   |  
|Additional paid-in capital                                                                                                                                                                                                                                     |   | 24,781,907  |   |   | 52,125   |  
|Deficit accumulated during the exploration stage                                                                                                                                                                                                               |   | (25,466,833 | ) |   | (137,158 | )
|Total
      Stockholders Deficit                                                                                                                                                                                                                              |   | (633,810    | ) |   | (37,658  | )
|                                                                                                                                                                                                                                                               |   |             |   |   |          |  
|Total
      Liabilities and Stockholders Deficit                                                                                                                                                                                                              | $ | 1,657,161   |   | $ | 641      |  

F-3

---

|Lithium Exploration Group, Inc.    
|-----------------------------------
|(formerly Mariposa Resources, Ltd.)
|(An Exploration Stage Company)     
|Statements of Operations           

|                                                           |   |                     |    |   |            |   |   | Cumulative from   |  
|---------------------------------------------------------- | - | ------------------- | -- | - | ---------- | - | - | ----------------- | -
|                                                           |   |                     |    |   |            |   |   | Inception         |  
|                                                           |   |                     |    |   |            |   |   | (May 31, 2006) to |  
|                                                           |   | Year Ended June 30, |    |   | June 30,   |  
|                                                           |   | 2011                |    |   | 2010       |   |   | 2011              |  
|                                                           |   |                     |    |   |            |   |   |                   |  
|Revenue:                                                   | $ | -                   |    | $ | -          |   | $ | -                 |  
|                                                           |   |                     |    |   |            |   |   |                   |  
|                                                           |   |                     |    |   |            |   |   |                   |  
|Operating expenses:                                        |   |                     |    |   |            |   |   |                   |  
|Advertising                                                |   | 27,095              |    |   | -          |   |   | 27,095            |  
|Consulting                                                 |   | 111,900             |    |   | -          |   |   | 111,900           |  
|Directors fees                                             |   | 17,595,000          |    |   | -          |   |   | 17,595,000        |  
|General and administrative                                 |   | 13,361              |    |   | 354        |   |   | 23,268            |  
|Investor relations (Note 3)                                |   | 150,400             |    |   | -          |   |   | 150,400           |  
|Management fees                                            |   | 45,000              |    |   | -          |   |   | 45,000            |  
|Mining expenses (Note 5)                                   |   | 6,227,641           |    |   | -          |   |   | 6,278,906         |  
|Professional fees                                          |   | 84,041              |    |   | 20,285     |   |   | 160,027           |  
|Travel                                                     |   | 14,997              |    |   | -          |   |   | 14,997            |  
|                                                           |   |                     |    |   |            |   |   |                   |  
|Loss from operations                                       |   | (24,269,435         | )  |   | (20,639    | ) |   | (24,406,593       | )
|                                                           |   |                     |    |   |            |   |   |                   |  
|Other income (expenses)                                    |   |                     |    |   |            |   |   |                   |  
|Gain on derivative liability - warrants                    |   | 108,434             |    |   | -          |   |   | 108,434           |  
|Financing expense                                          |   | (1,168,674          | )  |   | -          |   |   | (1,168,674        | )
|                                                           |   |                     |    |   |            |   |   |                   |  
|Loss before income taxes                                   |   | (25,329,675         | )) |   | (20,639    | ) |   | (25,446,833       | )
|                                                           |   |                     |    |   |            |   |   |                   |  
|Provision for income taxes (Note 4)                        |   | -                   |    |   | -          |   |   | -                 |  
|                                                           |   |                     |    |   |            |   |   |                   |  
|                                                           |   |                     |    |   |            |   |   |                   |  
|Net Loss for
      the year                                | $ | (25,329,675         | )  | $ | (20,639    | ) | $ | (25,466,833       | )
|                                                           |   |                     |    |   |            |   |   |                   |  
|Basic and
      Diluted Loss per Common Share              | $ | (0.44               | )  | $ | (0.00      | ) |   |                   |  
|                                                           |   |                     |    |   |            |   |   |                   |  
|                                                           |   |                     |    |   |            |   |   |                   |  
|Weighted Average Number of Common Shares
      Outstanding |   | 47,818,327          |    |   | 47,375,000 |   |   |                   |  

F-4

---

|Lithium Exploration Group, Inc.                                  
|-----------------------------------------------------------------
|(formerly Mariposa Resources, Ltd.)                              
|(An Exploration Stage Company)                                   
|Statements of Changes in Stockholders Equity
      (Deficit)    
|For the Period
      of Inception (May 31, 2006) to June 30, 2011

|                                                                                |  | Common Stock |  |   |        |  |   |                 |  |   |             |  
|------------------------------------------------------------------------------- |  | ------------ |  | - | ------ |  | - | --------------- |  | - | ----------- | -
|                                                                                |  |              |  |   |        |  |   |                 |  |   | Deficit     |  
|                                                                                |  |              |  |   |        |  |   |                 |  |   | Accumulated |  
|                                                                                |  |              |  |   |        |  |   |                 |  |   | During the  |  
|                                                                                |  | Number of    |  |   |        |  |   | Additional      |  |   | Exploration |  
|                                                                                |  | Shares       |  |   | Amount |  |   | Paid-in Capital |  |   | Stage       |  
|Inception  May 31, 2006                                                        |  | -            |  | $ | -      |  | $ | -               |  | $ | -           |  
|Common shares issued to founders at 
      $0.01 per share,
      June 6, 2006  |  | 20,000,000   |  |   | 20,000 |  |   | -               |  |   | -           |  
|Loss for the period (Unaudited)                                                 |  | -            |  |   | -      |  |   | -               |  |   | (2,687      | )
|Balance  June 30, 2006 (Unaudited)                                             |  | 20,000,000   |  |   | 20,000 |  |   | -               |  |   | (2,687      | )
|Common shares issued to founders at
      
      $0.01 per share, July 1, 2006  |  | 10,000,000   |  |   | 10,000 |  |   | -               |  |   | -           |  
|Common shares issued for cash at
    $0.04 per share, December 11, 2006         |  | 17,375,000   |  |   | 17,375 |  |   | 52,125          |  |   | -           |  
|Loss for the year (Unaudited)                                                   |  | -            |  |   | -      |  |   | -               |  |   | (59,320     | )
|Balance  June 30, 2007 (Unaudited)                                             |  | 47,375,000   |  |   | 47,375 |  |   | 52,125          |  |   | (62,007     | )
|Loss for the year                                                               |  | -            |  |   | -      |  |   | -               |  |   | (22,888     | )
|Balance  June 30, 2008                                                         |  | 47,375,000   |  |   | 47,375 |  |   | 52,125          |  |   | (84,895     | )
|Loss for the year                                                               |  | -            |  |   | -      |  |   | -               |  |   | (31,624     | )
|Balance  June 30, 2009                                                         |  | 47,375,000   |  |   | 47,375 |  |   | 52,125          |  |   | (116,519    | )
|Loss for the year                                                               |  | -            |  |   | -      |  |   | -               |  |   | (20,639     | )
|Balance  June 30, 2010                                                         |  | 47,375,000   |  |   | 47,375 |  |   | 52,125          |  |   | (137,158    | )
|Common shares issued for cash at 
      $1.00 per share,
      January 27, 2011 |  | 250,000      |  |   | 250    |  |   | 249,750         |  |   | -           |  
|Common shares issued for cash at 
      $5.25
      per share, April 28, 2011   |  | 190,476      |  |   | 191    |  |   | 999,809         |  |   | -           |  
|Common shares issued for mining 
  expenses and related
      finders fees     |  | 500,000      |  |   | 500    |  |   | 49,500          |  |   | -           |  
|Common shares issued for settlement 
      of
      mining expenses             |  | 200,000      |  |   | 200    |  |   | 739,800         |  |   | -           |  
|Common shares issued for director 
    fees                                     |  | 2,300,000    |  |   | 2,300  |  |   | 17,592,700      |  |   | -           |  
|Common shares issued for investor
      
      relations                        |  | 300,000      |  |   | 300    |  |   | 701,700         |  |   | -           |  
|Options issued for mining expenses                                              |  |              |  |   |        |  |   | 4,396,523       |  |   |             |  
|Loss for the year                                                               |  | -            |  |   | -      |  |   | -               |  |   | (25,329,675 | )
|Balance  June
      30, 2011                                                   |  | 51,115,476   |  | $ | 51,116 |  | $ | 24,781,907      |  | $ | (25,466,907 | )

F-5

---

|Lithium Exploration Group, Inc.    
|-----------------------------------
|(formerly Mariposa Resources, Ltd.)
|(An Exploration Stage Company)     
|Statements of Cash Flows           

|                                                      |   |             |   |   |          |   |   | Cumulative     |  
|----------------------------------------------------- | - | ----------- | - | - | -------- | - | - | -------------- | -
|                                                      |   |             |   |   | Year     |   |   | from Inception |  
|                                                      |   | Year End    |   |   | End      |   |   | (May 31, 2006) |  
|                                                      |   | June 30,    |   |   | June 30, |   |   | to June 30,    |  
|                                                      |   | 2011        |   |   | 2010     |   |   | 2011           |  
|                                                      |   |             |   |   |          |   |   |                |  
|                                                      |   |             |   |   |          |   |   |                |  
|Cash Flows from Operating Activities                  |   |             |   |   |          |   |   |                |  
|Net loss for the
      year                           | $ | (25,329,675 | ) | $ | (20,639  | ) | $ | (25,466,833    | )
|Items not affecting cash:                             |   |             |   |   |          |   |   |                |  
|Common shares issued for mining                       |   |             |   |   |          |   |   |                |  
|expenses and related finders
      fees              |   | 790,000     |   |   | -        |   |   | 790,000        |  
|Common shares issued for director fees                |   | 17,595,000  |   |   | -        |   |   | 17,595,000     |  
|Common
      shares issued for investor               |   |             |   |   |          |   |   |                |  
|relations                                             |   | 702,000     |   |   | -        |   |   | 702,000        |  
|Options
      issued for mining expenses              |   | 4,396,523   |   |   |          |   |   | 4,396,523      |  
|Financing expense                                     |   | 1,168,674   |   |   |          |   |   | 1,168,674      |  
|Gain on
      derivative liability - warrants         |   | (108,434    | ) |   |          |   |   | (108,434       | )
|                                                      |   |             |   |   |          |   |   |                |  
|Changes in operating assets and
      liabilities:    |   |             |   |   |          |   |   |                |  
|Prepaid expenses                                      |   | (646,968    | ) |   | (200     | ) |   | (647,168       | )
|Accounts payable and accrued                          |   |             |   |   |          |   |   |                |  
|liabilities                                           |   | 181,694     |   |   | (1,984   | ) |   | 183,194        |  
|Net cash used
      in operations                     |   | (1,251,186  | ) |   | (22,823  | ) |   | (1,387,044     | )
|                                                      |   |             |   |   |          |   |   |                |  
|Cash Flows from Financing Activities                  |   |             |   |   |          |   |   |                |  
|Advance from
      related party                      |   | 10,738      |   |   | 23,132   |   |   | 47,537         |  
|Issuance of common shares for
      cash              |   | 1,250,000   |   |   | -        |   |   | 1,349,500      |  
|Issuance of convertible
      debenture               |   | 1,000,000   |   |   | -        |   |   | 1,000,000      |  
|Net cash
      provided by financing activities       |   | 2,260,738   |   |   | 23,132   |   |   | 2,397,037      |  
|                                                      |   |             |   |   |          |   |   |                |  
|Increase in cash and cash equivalents                 |   | 1,009,552   |   |   | 309      |   |   | 1,009,993      |  
|                                                      |   |             |   |   |          |   |   |                |  
|Cash and cash
      equivalents - beginning of period |   | 441         |   |   | 132      |   |   | -              |  
|                                                      |   |             |   |   |          |   |   |                |  
|Cash and cash
      equivalents - end of period       | $ | 1,009,993   |   | $ | 441      |   | $ | 1,009,993      |  
|                                                      |   |             |   |   |          |   |   |                |  
|Supplementary Cash Flow Information                   |   |             |   |   |          |   |   |                |  
|Cash paid for:                                        |   |             |   |   |          |   |   |                |  
|Interest                                              | $ |             |   | $ | -        |   | $ | -              |  
|Income taxes                                          | $ |             |   | $ | -        |   | $ | -              |  

F-6

---

|Lithium Exploration Group, Inc.      
|-------------------------------------
|(formerly Mariposa Resources, Ltd.)  
|(An Exploration Stage Company)       
|Notes to Audited Financial Statements
|June 30, 2011
      and 2010         

1. Organization

Lithium Exploration Group, Inc (formerly Mariposa Resources,
Ltd.) (the Company) was incorporated on May 31, 2006 in the State of Nevada,
U.S.A. It is based in Scottsdale, Arizona, USA. The accounting and reporting
policies of the Company conform to accounting principles generally accepted in
the United States of America, and the Companys fiscal year end is June 30.

Effective November 30, 2010, the Company changed its name to
Lithium Exploration Group, Inc., by way of a merger with its wholly-owned
subsidiary Lithium Exploration Group, Inc., which was formed solely for the
change of name.

The Company is an exploration stage company that engages
principally in the acquisition, exploration, and development of resource
properties. Prior to June 25, 2009, the Company had the right to conduct
exploration work on 20 mineral mining claims in Esmeralda County, Nevada, U.S.A.
On July 31, 2009, the Company acquired an option to enter into a joint venture
for the management and ownership of the Jack Creek Project, a mining project
located in Elko County, Nevada. On September 25, 2009, the joint venture was
terminated and the Company entered into an agreement with Beeston Enterprises
Ltd., under which the Company was granted an option to acquire an undivided 50%
interest in eight mineral claims located in the Clinton Mining District of
British Columbia, Canada. On December 16, 2010, the Company entered into an
Assignment Agreement to acquire an undivided 100% right, title and interest in
and to certain mineral permits located in the Province of Alberta, Canada (see
Note 5). On January 18, 2011, the Company entered into a Purchase Option
Agreement to acquire an undivided 60% interest in certain mineral claims known
as the Salta Aqua Claims located in Salta Province, Argentina (See Note 5). To
date, the Companys activities have been limited to its formation, the raising
of equity capital and its mining exploration work program.

Exploration Stage Company

The Company is considered to be in the exploration stage as
defined in FASC 915-10-05 Development Stage Entities, and interpreted
by the Securities and Exchange Commission for mining companies in Industry Guide
7. The Company is devoting substantially all of its efforts to development of
business plans and the acquisition of mineral properties.

2. Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with
United States 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 amount of revenues and expenses during
the reporting period. Actual results could differ from those estimates. The
Companys periodic filings with the Securities and Exchange Commission include,
where applicable, disclosures of estimates, assumptions, uncertainties and
markets that could affect the financial statements and future operations of the
Company. Significant extimates that may change in the near term are the
valuation of warrants resulting in derivative liabilities, valuation of shares
issued for prepaid expenses, and deferred tax assets and related valuation
allowances.

F-7

---

|Lithium Exploration Group, Inc.      
|-------------------------------------
|(formerly Mariposa Resources, Ltd.)  
|(An Exploration Stage Company)       
|Notes to Audited Financial Statements
|June 30, 2011
      and 2010         

2. Significant Accounting Policies -Continued

Cash and Cash Equivalents

Cash and cash equivalents include cash in banks, money market
funds, and certificates of term deposits with original maturities of less than
three months, which are readily convertible to known amounts of cash and which,
in the opinion of management, are subject to an insignificant risk of loss in
value. The Company had $1,009,993 and $441 in cash and cash equivalents at June
30, 2011 and June 30, 2010, respectively.

Start-Up Costs

In accordance with FASC 720-15-20 Start-Up Costs,the
Company expenses all costs incurred in connection with the start-up and
organization of the Company.

Mineral Acquisition and Exploration Costs

The Company has been in the exploration stage since its
formation on May 31, 2006 and has not yet realized any revenue from its planned
operations. It is primarily engaged in the acquisition, exploration, and
development of mining properties. Mineral property acquisition and exploration
costs are expensed as incurred. When it has been determined that a mineral
property can be economically developed as a result of establishing proven and
probable reserves, the costs incurred to develop such property are capitalized.
Such costs will be amortized using the units-of-production method over the
estimated life of the probable reserves.

Concentrations of Credit Risk

The Companys financial instruments that are exposed to
concentrations of credit risk primarily consist of its cash and cash equivalents
and related party payables it will likely incur in the near future. The Company
places its cash and cash equivalents with financial institutions of high credit
worthiness. At times, its cash and cash equivalents with a particular financial
institution may exceed any applicable government insurance limits. The Companys
management plans to assess the financial strength and credit worthiness of any
parties to which it extends funds, and as such, it believes that any associated
credit risk exposures are limited.

Net Income or (Loss) per Share of Common Stock

The Company has adopted FASC Topic No. 260, Earnings Per
Share, (EPS) which requires presentation of basic and diluted EPS on the
face of the income statement for all entities with complex capital structures
and requires a reconciliation of the numerator and denominator of the basic EPS
computation to the numerator and denominator of the diluted EPS computation. In
the accompanying financial statements, basic earnings (loss) per share is
computed by dividing net income/loss by the weighted average number of shares of
common stock outstanding during the period.

The Company has no potentially dilutive securities, such as
options or warrants, currently issued and outstanding, other than an option
granted to Glottech (see note 5) for 2,000,000 shares. All potentially dilutive
securities have been excluded from the computation of diluted earnings per share
as their effect on loss per common share would have been anti-dilutive.

F-8

---

|Lithium Exploration Group, Inc.      
|-------------------------------------
|(formerly Mariposa Resources, Ltd.)  
|(An Exploration Stage Company)       
|Notes to Audited Financial Statements
|June 30, 2011
      and 2010         

2. Significant Accounting Policies -Continued

Foreign Currency Translations

The Companys functional and reporting currency is the US
dollar. All transactions initiated in other currencies are translated into US
dollars using the exchange rate prevailing on the date of transaction. Monetary
assets and liabilities denominated in foreign currencies are translated into the
US dollar at the rate of exchange in effect at the balance sheet date.
Unrealized exchange gains and losses arising from such transactions are deferred
until realization and are included as a separate component of stockholders
equity (deficit) as a component of comprehensive income or loss. Upon
realization, the amount deferred is recognized in income in the period when it
is realized.

No significant realized exchange gain or losses were recorded
from inception (May 31, 2006) to June 30, 2011.

Comprehensive Income (Loss)

FASC Topic No. 220, Comprehensive Income,establishes
standards for reporting and display of comprehensive income and its components
in a full set of general-purpose financial statements. From inception (May 31,
2006) to June 30, 2011, the Company had no items of other comprehensive income.
Therefore, net loss equals comprehensive loss from inception (May 31, 2006) to
June 30, 2011.

Risks and Uncertainties

The Company operates in the resource exploration industry that
is subject to significant risks and uncertainties, including financial,
operational, technological, and other risks associated with operating a resource
exploration business, including the potential risk of business failure.

Environmental Expenditures

The operations of the Company have been, and may in the future
be, affected from time to time in varying degree by changes in environmental
regulations, including those for future reclamation and site restoration costs.
Both the likelihood of new regulations and their overall effect upon the Company
vary greatly and are not predictable. The Company's policy is to meet or, if
possible, surpass standards set by relevant legislation by application of
technically proven and economically feasible measures.

Environmental expenditures that relate to ongoing environmental
and reclamation programs are charged against earnings as incurred or capitalized
and amortized depending on their future economic benefits. All of these types of
expenditures incurred since inception have been charged against earnings due to
the uncertainty of their future recoverability. Estimated future reclamation and
site restoration costs, when the ultimate liability is reasonably determinable,
are charged against earnings over the estimated remaining life of the related
business operation, net of expected recoveries.

F-9

---

|Lithium Exploration Group, Inc.      
|-------------------------------------
|(formerly Mariposa Resources, Ltd.)  
|(An Exploration Stage Company)       
|Notes to Audited Financial Statements
|June 30, 2011
      and 2010         

2. Significant Accounting Policies -Continued

Recent Accounting Pronouncements

Recent accounting pronouncements that are listed below did not,
and are not currently expected to, have a material effect on the Companys
financial statements, but will be implemented in the Companys future financial
reporting when applicable.

FASB Statements:

In June 2009 the FASB established the Accounting Standards
Codification ("Codification" or "ASC") as the source of authoritative accounting
principles recognized by the FASB to be applied by nongovernmental entities in
the preparation of financial statements in accordance with generally accepted
accounting principles in the United States ("GAAP"). Rules and interpretive
releases of the Securities and Exchange Commission ("SEC") issued under
authority of federal securities laws are also sources of GAAP for SEC
registrants. Existing GAAP was not intended to be changed as a result of the
Codification, and accordingly the change did not impact our financial
statements. The ASC does change the way the guidance is organized and
presented.

FASB Interpretation No. 46(R),"and SFAS No. 168 (ASC
Topic 105), "The FASB Accounting Standards Codification and the Hierarchy of
Generally Accepted Accounting Principles-a replacement of FASB Statement No.
162,"were recently issued. SFAS No. 168 has no current applicability to the
Company or its effect on the financial statements would not have been
significant.

Accounting Standards Update ("ASU") ASU No. 2009-05 (ASC Topic
820), which amends Fair Value Measurements and Disclosures - Overall, ASU No.
2009-13 (ASC Topic 605), Multiple-Deliverable Revenue Arrangements, ASU No.
2009-14 (ASC Topic 985), Certain Revenue Arrangements that include Software
Elements, and various other ASU's No. 2009-2 through ASU No. 2011-09 which
contain technical corrections to existing guidance or affect guidance to
specialized industries or entities were recently issued. These updates have no
current applicability to the Company or their effect on the financial statements
would not have been significant.

F-10

---

|Lithium Exploration Group, Inc.      
|-------------------------------------
|(formerly Mariposa Resources, Ltd.)  
|(An Exploration Stage Company)       
|Notes to Audited Financial Statements
|June 30, 2011
      and 2010         

3. Capital Stock

Authorized Stock

At inception, the Company authorized 100,000,000 common shares
and 100,000,000 preferred shares, both with a par value of $0.001 per share.
Each common share entitles the holder to one vote, in person or proxy, on any
matter on which action of the stockholders of the corporation is sought.

Effective April 8, 2009, the Company increased the number of
authorized shares to 600,000,000 shares, of which 500,000,000 shares are
designated as common stock par value $0.001 per share, and 100,000,000 shares
are designated as preferred stock, par value $0.001 per share.

Share Issuances

On January 27, 2011, the Company issued 250,000 shares of
common stock in a private placement to two unrelated off-shore investors at $1
per share for total cash proceeds of $250,000.

On April 27, 2011, the Company issued 2,300,000 common shares
at a market price of $7.65 per share for director fees.

On January 18, the Company issued 250,000 common shares at a
market price of $0.10 per share for mining expenses relating to the Salta Aqua
Claims (Note 5)

On March 7, 2011, the Company issued 250,000 common shares at a
market price of $0.10 per share for finders fees relating to the Salta Aqua
Claims (Note 5)

On April 29, 2011, the Company issued 200,000 common shares at
a market price of $3.70 per share for settlement of mineral claims in Clinton
Mining District (Note 5)

On May 10, 2011, the Company issued 190,476 shares of common
stock in a private placement to a unrelated off-shore investor at $5.25 per
share for total cash proceeds of $1,000,000.

On June 11, 2011, the Company issued 300,000 common shares at a
market price of $2.34 per share for investor relations.

Effective April 30, 2009, the Company effected a 10 for 1
forward split of its common stock, under which each stockholder of record on
that date received ten (10) new shares of the Corporations $0.001 par value
stock for every one (1) old share outstanding.

F-11

---

|Lithium Exploration Group, Inc.      
|-------------------------------------
|(formerly Mariposa Resources, Ltd.)  
|(An Exploration Stage Company)       
|Notes to Audited Financial Statements
|June 30, 2011
      and 2010         

3. Capital Stock -Continued

Since its inception (May 31, 2006), the Company has issued
shares of its common stock as follows, retroactively adjusted to give effect to
the 10 for 1 forward split:

|         |                                                 |            | Price Per |            
|-------- | ----------------------------------------------- | ---------- | --------- | -----------
|Date     | Description                                     | Shares     | Share     | Amount     
|06/06/06 | Shares issued for cash                          | 20,000,000 | $ 0.001   | $ 20,000   
|07/01/06 | Shares issued for cash                          | 10,000,000 | 0.001     | 10,000     
|12/11/06 | Shares issued for cash                          | 17,375,000 | 0.004     | 69,500     
|01/27/11 | Shares issued for cash                          | 250,000    | 1.000     | 250,000    
|04/27/11 | Shares issued for director fees                 | 2,300,000  | 7.650     | 17,595,000 
|02/01/11 | Shares issued for mining expenses               | 250,000    | 0.100     | 25,000     
|03/07/11 | Shares issued for mining
      expenses         | 250,000    | 0.100     | 25,000     
|04/29/11 | Shares issued for settlement of mining expenses | 200,000    | 3.700     | 740,000    
|05/10/11 | Shares issued for cash                          | 190,476    | 5.250     | 1,000,000  
|06/11/11 | Shares issued for investor relations            | 300,000    | 2.340     | 702,000    
|         | Cumulative Totals                               | 51,115,476 |           | $20,436,500

Of these shares, 32,300,000 were issued to directors and
officers of the Company. 17,815,476 were issued to independent investors.
500,000 were issued for mining expenses (Note 5). 300,000 were issued for
investor relation expenses. 200,000 were issued for debt settlement. There are
no preferred shares outstanding. The Company has no stock option plan, warrants
or other dilutive securities, other than an option granted to Glottech (See Note
5) for 2,000,000 shares.

As per management agreements, the Company is obligated to issue
300,000 common shares to two directors by April 27, 2012 and April 27, 2013
respectively provided that they continue to serve as members to the Companys
board of directors.

F-12

---

|Lithium Exploration Group, Inc.      
|-------------------------------------
|(formerly Mariposa Resources, Ltd.)  
|(An Exploration Stage Company)       
|Notes to Audited Financial Statements
|June 30, 2011
      and 2010         

4. Provision for Income Taxes

The Company recognizes the tax effects of transactions in the
year in which such transactions enter into the determination of net income,
regardless of when reported for tax purposes. Deferred taxes are provided in the
financial statements under FASC 718-740-20 to give effect to the resulting
temporary differences which may arise from differences in the bases of fixed
assets, depreciation methods, allowances, and start-up costs based on the income
taxes expected to be payable in future years.

Exploration stage deferred tax assets arising as a result of
net operating loss carryforwards and non deductible expenses in the current
period have been offset completely by a valuation allowance due to the
uncertainty of their utilization in future periods. Operating loss carryforwards
for tax purposes generated during the period from May 31, 2006 (date of
inception) through June 30, 2011 of $2,091,744 will begin to expire in 2026. In
addition, net deferred tax assets relating to the following items were offset by
the valuation allowance that increased by approximately $8,865,387 and $7,500
during the years ended June 30, 2011 and 2010, respectively:

The Company follows the provisions of uncertain tax positions
as addressed in FASC 740-10-65-1. The Company recognized approximately no
increase in the liability for unrecognized tax benefits.

The Company has no tax position at June 30, 2011 for which the
ultimate deductibility is highly certain but for which there is uncertainty
about the timing of such deductibility. The Company recognizes interest accrued
related to unrecognized tax benefits in interest expense and penalties in
operating expenses. No such interest or penalties were recognized during the
periods presented. The Company had no accruals for interest and penalties at
June 30, 2011. The Companys utilization of any net operating loss carry forward
may be unlikely as a result of its intended exploration stage activities. The
tax years for June 30, 2011, June 30, 2010 and June 30, 2009 are still open for
examination by the Internal Revenue Service (IRS).

|                                         |   | 2011       |  
|---------------------------------------- | - | ---------- | -
|                                         |   | Amount     |  
|Net operating losses                     | $ | 2,091,744  |  
|Shares issued for directors fees, mining |   | 19,087,000 |  
|expenses, investor relations             |   |            |  
|Options granted for mining expenses      |   | 4,396,523  |  
|Gain on derivative liability             |   | (108,434   | )
|Total                                    |   | 25,466,833 |  
|Valuation allowance                      |   | -          |  
|Net deferred tax asset (liability)       | $ | -          |  
|                                         |   |            |  
|                                         |   | 2010       |  
|                                         |   | Amount     |  
|Net operating losses                     | $ | 137,158    |  
|Valuation allowance                      |   | -          |  
|Net deferred tax asset                   | $ | 137,158    |  

F-13

---

|Lithium Exploration Group, Inc.      
|-------------------------------------
|(formerly Mariposa Resources, Ltd.)  
|(An Exploration Stage Company)       
|Notes to Audited Financial Statements
|June 30, 2011
      and 2010         

5. Mineral Property Costs

Mineral Claims, Clinton Mining District

On September 25, 2009, and amended June 24, 2010, the Company
entered into an Option Agreement under which the Company was granted an option
to acquire an undivided 50% interest in eight mineral claims located in the
Clinton Mining District, Province of British Columbia, Canada (the Claims),
which Claims total in excess of 3,900 hectares, in consideration of the issuance
of 1,500,000 common shares of the Company on or before December 31, 2010. The
Claims were subject to a two percent net smelter royalty which can be paid out
for the sum of $1,000,000 (CAD). The Company can earn an undivided 50% interest
in the Claims by carrying out a $100,000 (CAD) exploration and development
program on the Claims on or before December 31, 2010, plus an additional
$200,000 (CAD) exploration and development program on the Claims on or before
September 25, 2011.

In the event that the Company acquires an interest in the
Claims, the Company and the Optionor have further agreed, at the request of
either party, to negotiate a joint venture agreement for further exploration and
development of the Claims.

On April 29, 2011, the Company entered into a mutual release
agreement. The Company is released from any obligations related to the Claims
for consideration of a cash payment of CDN $ 54,624 (US$57,901) and the issuance
of 200,000 common shares of the Company. The shares have been valued at a market
price of $3.70 for a total of $740,000. The total amount of $797,901 has been
recorded as mining expenses.

Mineral Permit

On December 16, 2010, the Company entered into an Assignment
Agreement to acquire the following:

| | a.) | An undivided 100% right, title and interest in
      and to certain mineral permits located in the Province of Alberta, Canada.
| | --- | -------------------------------------------------------------------------------------------------------------------------------
| | b.) | All of the assignors right, title and interest
      in and to the Option Agreement.                                          

In consideration for the Assignment, the Company agreed to pay
US$90,000 by way of cash or stock of equal value (consisting of amounts
previously paid by the Assignor pursuant to the Option Agreement). The full
$90,000 (consisting of option payments i and vi below) was expensed and
included in the June 30, 2011 accounts payable balance. The Option shall be in
good standing and exercisable by the Company by paying the following amounts on
or before the dates specified in the following schedule:

| | i.)   | CDN $40,000 (paid) upon execution of the
      agreement;                                                                                                                                                                                                                                                                                                              
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ii.)  | CDN $60,000 on or before January 1, 2012;                                                                                                                                                                                                                                                                                                                              
| | iii.) | CDN $100,000 on or before January 1, 2013;                                                                                                                                                                                                                                                                                                                             
| | iv.)  | CDN $300,000 on or before January 1, 2014; and                                                                                                                                                                                                                                                                                                                         
| | v.)   | Paying all such property payments as may be
      required to maintain the mineral permits in good standing.                                                                                                                                                                                                                                                           
| | vi.)  | The Optionee shall provide a refundable amount
      of CDN$50,000 (paid) to the Optionor by November 2, 2010, which shall be
      applied by the Optionor towards work assessment expenses acceptable to the Government of Alberta, with any
unused portion to be applied against payments required to maintain the permits
underlying the property in good standing.

F-14

---

|Lithium Exploration Group, Inc.      
|-------------------------------------
|(formerly Mariposa Resources, Ltd.)  
|(An Exploration Stage Company)       
|Notes to Audited Financial Statements
|June 30, 2011
      and 2010         

5. Mineral Property Costs -Continued

Mineral Claims, Salta Agua Claims

By agreement dated January 18, 2011, the Company entered into a
Purchase Option Agreement to acquire an undivided 60% interest in certain
mineral claims known as the Salta Agua Claims located in Salta Province,
Argentina.

To earn an undivided 60% interest in the Property, the Company
must:

| | i) | pay to the Optionor a total of US$375,000 as
    follows:
| | -- | ---------------------------------------------------------
| |    | a)                                                       
| |    | b)                                                       
| |    | c)                                                       
| |    | d)                                                       
| |    | e)                                                       

| | ii) | allot and issue to the Optionor, up
      to a total of 1,000,000 common shares as follows: |                                                                                   
| | --- | ------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------
| |     | a)                                                                                          | 250,000 Shares within thirty days
      after the effective date (issued)(Note 3);
| |     | b)                                                                                          | 250,000 Shares on or before January
      18, 2012;                               
| |     | c)                                                                                          | 250,000 Shares on or before January
      18, 2013;                               
| |     | d)                                                                                          | 250,000 Shares on or before January
      18, 2014;                               

| | iii) | incur Exploration Expenditures of not
      less than a cumulative total of US$4,000,000 as follows:
| | ---- | ----------------------------------------------------------------------------------------------------
| |      | a)                                                                                                  
| |      | b)                                                                                                  
| |      | c)                                                                                                  
| |      | d)                                                                                                  

Upon completion of the above terms, the Company will acquire
the remaining 40% interest in the Property by paying the sum of $6,000,000,
payable either in a lump sum due 180 days later, or by paying $3,000,000 at such
time and $3,000,000 plus interest at the rate of LIBOR plus 5% interest 12
months later.

Upon the commencement of Commercial Production, the Company
will pay to the Optionor a Royalty of 3% Gross Returns.

During the year ended June 30, 2011, the Company paid a
finders fee of $10,000 and issued 250,000 common shares of the Company to the
finder. The shares are valued at a market price of $0.10 for a total of
$25,000.

F-15

---

|Lithium Exploration Group, Inc.      
|-------------------------------------
|(formerly Mariposa Resources, Ltd.)  
|(An Exploration Stage Company)       
|Notes to Audited Financial Statements
|June 30, 2011
      and 2010         

5. Mineral Property Costs -Continued

Glottech Technology

On March 17, 2011, the Company entered into a letter agreement
to acquire one initial unit of proprietary and patented mechanical ultrasound
technology for use in water purification, inclusive of its process of separating
from water, as the primary fluid stock, the salt and other minerals and
byproducts contained therein, with Glottech-USA.

To acquire the unit, the Company must make the following
payments:

| | a) | US$25,000 upon execution of the agreement
      (paid);                                                                                                                                                                              
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) | US$75,000 within 180 days of execution of the
      agreement (paid);                                                                                                                                                                
| | c) | US$700,000 within 10 days of receipt of invoice
      from Glottech USA LLC if the payment in b) is made (paid).                                                                                                                    
| | d) | The Company also granted an option to acquire 2,000,000
      shares at $1.00 per share to Glottech-USA upon receipt of the operational
      ultrasonic generator that they are in the building for Lithium Exploration
      Group.

Commencing as of the end of an initial sixty day testing and
training period following satisfactory delivery and physical setup of the
technology, and continuing thereafter for as long as the technology remains in
the possession of the Company, the Company shall pay continuing monthly
royalties in an amount equal to $2.00 per physical ton of water processed
pursuant to the usage of the technology.

The option (resulting in additional mining expenses of
4,396,523) was valued using the Black-Scholes method using the following
assumptions:

- Risk-free interest rate of .18%
- Term - One Year
- Dividend yield - 0%
- Exercise price - $1.00
- Underlying stock price - $2.47

6. Convertible Debenture and Derivative Liabilities

Prior to June 30, 2011, the Company entered into a securities
purchase agreement with one investor. Pursuant to the terms of the agreement,
the investor acquired convertible debentures with an aggregate total of
$1,500,000, of which $1,000,000 was received by June 30, 2011.The debenture is
due on December 28, 2012 and carries an interest rate of 12% per annum. The
debenture is convertible at $0.83 per share subject to various prescribed
conditions. Along with the debenture, the Company issued warrants to acquire a
total of 1,807,229 shares of the Company for a period of five years at an
exercise price of $0.913, of which 1,204,819 warrants were granted by June 30,
2011.

The warrants bear a cashless exercise provision which resulted
in derivative liability treatment under ASC topic 815-10-55 totalling
$2,168,674. The Company used the Lattice Model for valuing warrants using the
following assumptions:

F-16

---

|Lithium Exploration Group, Inc.      
|-------------------------------------
|(formerly Mariposa Resources, Ltd.)  
|(An Exploration Stage Company)       
|Notes to Audited Financial Statements
|June 30, 2011
      and 2010         

- Risk free interest rate  1.76%
- Term  5 years
- Dividend yield  0%
- Underlying stock price  $1.71

At June 30, 2011, the warrants were valued at $2,060,240
resulting in a gain on derivative liability of $108,434. Because proceeds from
the debenture as of June 30, 2011 were only $1,000,000, the warrants resulted in
additional financing expenses of $1,168,674. The corresponding beneficial
conversion feature of $1,000,000 will be accreted to interest expense over the
term of the debenture of 18 months.

7. Due to Related Party

As of June 30, 2011, the Company was obligated to a director,
for a non-interest bearing demand loan with a balance of $47,537. The Company
plans to pay the loan back as cash flows become available.

8. Going Concern and Liquidity Considerations

The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern, which contemplates,
among other things, the realization of assets and satisfaction of liabilities in
the normal course of business. As at June 30, 2011, the Company had a working
capital deficiency of $633,810 and an accumulated deficit of $25,466,833. The
Company intends to fund operations through equity financing arrangements, which
may be insufficient to fund its capital expenditures, working capital and other
cash requirements for the next twelve months.

The ability of the Company to emerge from the exploration stage
is dependent upon, among other things, obtaining additional financing to
continue operations, explore and develop the mineral properties and the
discovery, development and sale of ore reserves.

In response to these problems, management intends to raise
additional funds through public or private placement offerings, and continued
funding from convertible debentures.

These factors, among others, raise substantial doubt about the
Companys ability to continue as a going concern. The accompanying financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

9. Subsequent events

Subsequent to year-end, the Company received the second
installment of proceeds from the convertible debenture totaling $500,000 before
deducting certain costs of financing. Warrants totaling 602,410 shares were
granted for the installment.

The Company has evaluated subsequent events from June 30, 2011 through the date of this report, and determined there are no additional items to disclose.

F-17

---

Item
9.             
Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure

None.

Item
9A.           Controls and
Procedures

As required by Rule 13a-15 under the Exchange Act, our
management evaluated the effectiveness of the design and operation of our
disclosure controls and procedures as of June 30, 2011.

Our management, with the participation of our president (our
principal executive officer and our principal accounting officer and principal
financial officer), evaluated the effectiveness of our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the
Securities Exchange Act of 1934, as amended ( the Exchange Act)) as of the end
of the period covered by this report. Based on this evaluation, our president
(our principal executive officer and our principal accounting officer and
principal financial officer) have concluded that, as of the end of such period,
our disclosure controls and procedures were effective to ensure that information
that is required to be disclosed by us in the reports we file or submit under
the Exchange Act is (i) recorded, processed, summarized and reported, within the
time periods specified in the SECs rules and forms and (ii) accumulated and
communicated to our management, including our president (our principal executive
officer and our principal accounting officer and principal financial officer),
as appropriate, to allow timely decisions regarding required disclosure.

Managements Report on Internal Control over Financial
Reporting

Management is responsible for establishing and maintaining
adequate internal control over financial reporting (as defined in Rules
13a-15(f) and 15d-15(f) under the Exchange Act). Internal control over financial
reporting is a process designed by, or under the supervision of, our president
(our principal executive officer and our principal accounting officer and
principal financial officer), to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
in accordance with GAAP. Internal control over financial reporting includes
those policies and procedures that (1) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of our company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial
statements in accordance with GAAP, and that receipts and expenditures of our
company are being made only in accordance with authorizations of management and
directors of our company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition
of our companys assets that could have a material effect on the financial
statements. Because of its inherent limitations, internal control over financial
reporting may not provide absolute assurance that a misstatement of our
financial statements would be prevented or detected.

Further, the evaluation of the effectiveness of internal
control over financial reporting was made as of a specific date, and continued
effectiveness in future periods is subject to the risks that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.

Management has conducted, with the participation of our
president (our principal executive officer and our principal accounting officer
and principal financial officer), an evaluation of the effectiveness of our
internal control over financial reporting as of June 30, 2011 in accordance with
the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission ("COSO") in Internal Control  Integrated Framework. Based
on this assessment, management concluded that as of June 30, 2011, our companys
internal control over financial reporting was not effective.

30

---

Change In Internal Control Over Financial Reporting

There were no changes in our internal control over financial
reporting that occurred during our last fiscal year that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.

Item
9B.           Other
Information

None.

PART III

Item
10.           Directors,
Executive Officers and Corporate Governance

All of the directors of our company hold office until the next
annual meeting of the stockholders or until their successors have been elected
and qualified. Our officers are appointed by our board of directors and hold
office until their death, resignation or removal from office. Our directors and
executive officers, their ages, positions held, and duration as such, are as
follows:

|                   |                                                                                |     | Date
      First Elected
|------------------ | ------------------------------------------------------------------------------ | --- | ------------------------
|Name               | Position Held with the Company                                                 | Age | or Appointed            
|Alexander Walsh    | President, Chief
      Executive Officer, Chief Financial Officer and Director | 30  | November 4, 2010        
|Jonathan Jazwinski | Director                                                                       | 30  | January 21, 2011        
|Brandon Colker     | Director                                                                       | 38  | January 21, 2011        

Business Experience

The following is a brief account of the education and business
experience of each director and executive officer during at least the past five
years, indicating each person's principal occupation during the period, and the
name and principal business of the organization by which he was employed.

Alexander Walsh  President, Chief Executive Officer,
Chief Financial Officer and Director

Mr. Walsh was appointed President, Chief Executive Officer,
Chief Financial Officer, Secretary, Treasurer, and Director of Lithium
Exploration in November 2010. From May 2008 to present, Alex Walsh has been a
sales, marketing, and business development consultant for AW Enterprises. AW
Enterprises was established as a management consulting firm assisting small and
middle market businesses in expanding their revenue and profits through
strategic partnerships. The roles taken by AW Enterprises were pure consultative
roles with management, business development, and sales and marketing consulting.
Mr. Walshs efforts included strategic planning for companies looking to raise
capital and assisting clients with forming strategic partnerships that could
increase their revenue and profits. From May 2006 to May 2008, Mr. Walsh was a
small business consultant and managing partner for Business Strategies Group.
Business Strategies Group is a highly specialized team focusing on providing
employee benefits, retirement programs, and insurance products to small and
middle market companies. From January 2004 to April 2006, Mr. Walsh was a
registered representative for First Investors Corporation where he built and
managed a sales and marketing initiative for the western region focusing on
small business owners. He attended DePauw University in Greencastle, Indiana
where he majored in economics and management and graduated in 2003.

Mr. Walsh was chosen as one of our directors due to his
background in venture capital, investor relations and corporate development.

31

---

Jonathan Jazwinski - Director

Mr. Jazwinski was appointed a director in January 2011. Mr.
Jazwinski has a BS in Mining Engineering from the University of Arizona
(graduated in 2004) and an MBA from the University of Phoenix (graduated in
2009). He began his career with SRK Consulting (from August 2004 to May 2005)
working as a field engineer on BHP Billitons San Manuel Mine Closure Project.
This project remains one of the largest, most comprehensive mine closures and
environmental remediations to date. He managed environmental QA/QC testing and
construction/demolition documentation.

Since May of 2005 he is employed with Freeport-McMoRan Sierrita
and is leading the short-range planning department. Responsibilities include
equipment scheduling and production forecasting. Past capacities at SRK and
Freeport-McMoRan have involved construction and demolition projects, pit
dewatering, ore control, surveying, QA/QC, equipment justification,
appropriation requests, and mine operations supervision. Mr. Jazwinski is
knowledgeable in several mining specific software programs including MineSight,
AcQuire, Aquila, CAES (Caterpillars Computer Aided Earthmoving System) and
Dispatch.

Mr. Jazwinski is a member of the Society for Mining, Metallurgy
and Exploration and has current MSHA (Mine Safety and Health Administration)
certification for surface metal mining.

Mr. Jazwinski was chosen as one of our directors due to his
experience in the mining industry.

Mr. Jazwinski is an independent director.

Brandon Colker  Director

Mr. Colker became a director in January 2011. Brandon Colker is
the CEO of Sustainable Venture Capital, a company involved in private financial
funding. Mr. Colker has been involved in real estate and corporate finance
throughout his career. In 2002, Mr. Colker founded Meridian Capital and ran that
operation until 2008. In 2008 he formed CFT Capital as a real estate and project
financing entity and in 2009 he formed Sustainable Venture Capital focusing
efforts on capital financing for sustainable technologies.

Sustainable Venture Capital and CFT Capitals transactions have
included arranging senior or subordinated debt, revolving credit facilities,
lease financing, or occasionally where they acted as a finder of private equity.
Fundamentally, Brandon is a highly intelligent, focused and effective financier,
covering many different types of industries and offering the following financial
services:

- Mezzanine, subordinated, asset-backed or other structured debt for
  refinancing, re-structuring, bridge funding, turnarounds, difficult credit
  situations and special situations.
- Revolving credit lines for most types of accounts receivable and inventory
  financing.
- Term loan facilities and project financings for general expansions.
- Finance leases or operating leases for virtually all types of equipment.
- Larger scale real estate development financing.
- Selective finding of institutional and angel private equity for venture
  stage businesses.
- Venture lease and loan debt for early-stage companies that have raised some
  equity.
- A broad range of financing experience in hi-tech businesses.
- A special expertise and committed focus in financing services to the
  environmental industry.

32

---

- Wide range of transaction sizes from small ($1-Million) to large ($5-
  Billion), depending on the nature of the asset class or scope of work.
- Typical loan terms from 1 to 20 years and the lowest relative cost of
  capital available.
- An aggressive approach to equity financing and dilution issues.

In May 1997, Mr. Colker graduated from the University of
California at Santa Barbara with a degree in Economics. Mr. Colkers connections
to private and institutional capital are the reason why he was chosen as one of
our directors.

Mr. Colker is an independent director based on the definition
of independence in the listing standards of the NYSE Corporate Governance
Rules.

Family Relationships

There are no family relationships among our directors or
officers.

Involvement in Certain Legal Proceedings

None of our directors, executive officers, promoters or control
persons has been involved in any of the following events during the past ten
years:

1. ****A
petition under the Federal bankruptcy laws or any state insolvency law was filed
by or against, or a receiver, fiscal agent or similar officer was appointed by a
court for the business or property of such person, or any partnership in which
he was a general partner at or within two years before the time of such filing,
or any corporation or business association of which he was an executive officer
at or within two years before the time of such filing;

2. ****Such person was convicted in a criminal proceeding or is a named
subject of a pending criminal proceeding (excluding traffic violations and other
minor offenses);

3. ****Such person was the subject of any order, judgment, or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining him from, or otherwise
limiting, the following activities:

| | i.   | Acting as a futures commission merchant, introducing
      broker, commodity trading advisor, commodity pool operator, floor broker,
      leverage transaction merchant, any other person regulated by the Commodity
      Futures Trading Commission, or an associated person of any of the
      foregoing, or as an investment adviser, underwriter, broker or dealer in
      securities, or as an affiliated person, director or employee of any
      investment company, bank, savings and loan association or insurance
      company, or engaging in or continuing any conduct or practice in
      connection with such activity
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | ii.  | Engaging in any type of business practice; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | iii. | Engaging in any activity in connection with the purchase
      or sale of any security or commodity or in connection with any violation
      of Federal or State securities laws or Federal commodities
  laws;                                                                                                                                                                                                                                                                                                                                                                                                                           

4. ****Such
person was the subject of any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any Federal or State authority barring,
suspending or otherwise limiting for more than 60 days the right of such person
to engage in any activity described in paragraph (f)(3)(i) of this section, or
to be associated with persons engaged in any such activity;

33

---

5. ****Such person was found by a court of competent jurisdiction in a civil
action or by the Commission to have violated any Federal or State securities
law, and the judgment in such civil action or finding by the Commission has not
been subsequently reversed, suspended, or vacated;

6. ****Such person was found by a court of competent jurisdiction in a civil
action or by the Commodity Futures Trading Commission to have violated any
Federal commodities law, and the judgment in such civil action or finding by the
Commodity Futures Trading Commission has not been subsequently reversed,
suspended or vacated;

7. ****Such person was the subject of, or a party to, any Federal or State
judicial or administrative order, judgment, decree, or finding, not subsequently
reversed, suspended or vacated, relating to an alleged violation of:

| | i.   | Any Federal or State securities or commodities law or
      regulation; or                                                                                                                                                                                                                                                
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                           
| | ii.  | Any law or regulation respecting financial institutions
      or insurance companies including, but not limited to, a temporary or
      permanent injunction, order of disgorgement or restitution, civil money
      penalty or temporary or permanent cease-and-desist order, or removal or
      prohibition order; or
| |      |                                                                                                                                                                                                                                                                                                                           
| | iii. | Any law or regulation prohibiting mail or wire fraud or
      fraud in connection with any business entity; or                                                                                                                                                                                                            

8.****
Such person was the subject of, or a party to, any sanction or order, not
subsequently reversed, suspended or vacated, of any self-regulatory organization
(as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any
registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act
(7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or
organization that has disciplinary authority over its members or persons
associated with a member.

Section 16(a) Beneficial Ownership Compliance

Our common stock is not registered pursuant to Section 12 of
the Securities Exchange Act of 1934, as amended (the Exchange Act).
Accordingly, our officers, directors, and principal stockholders are not subject
to the beneficial ownership reporting requirements of Section 16(a) of the
Exchange Act.

Audit Committee and Audit Committee Financial Expert

Our board of directors has determined that it does not have a
member of its audit committee that qualifies as an "audit committee financial
expert" as defined in Item 407(d)(5)(ii) of Regulation S-K, and is "independent"
as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities
Exchange Act of 1934, as amended.

We believe that the members of our board of directors are
collectively capable of analyzing and evaluating our financial statements and
understanding internal controls and procedures for financial reporting. We
believe that retaining an independent director who would qualify as an "audit
committee financial expert" would be overly costly and burdensome and is not
warranted in our circumstances given the early stages of our development and the
fact that we have not generated any material revenues to date. In addition, we
currently do not have nominating, compensation or audit committees or committees
performing similar functions nor do we have a written nominating, compensation
or audit committee charter. Our board of directors does not believe that it is
necessary to have such committees because it believes the functions of such
committees can be adequately performed by our board of directors.

34

---

Code of Ethics

We have adopted a Code of Ethics that applies to, among other
persons, our companys principal executive officers and senior financial
executives, as well as persons performing similar functions. As adopted, our
Code of Ethics sets forth written policies to promote:

- honest and ethical conduct, including the ethical handling of actual or
  apparent conflicts of interest between personal and professional
  relationships;
- full, fair, accurate, timely and understandable disclosure in all reports
  and documents that the Corporation files with, or submits to, the Securities
  and Exchange Commission ("SEC") and in other public communications made by the
  Corporation that are within the Senior Officers area of responsibility;
- compliance with applicable governmental laws, rules and regulations;
- the prompt internal reporting of violations of the Code; and
- accountability for adherence to the Code.

Our Code of Ethics and Business Conduct was filed with the
Securities and Exchange Commission as Exhibit 14.1 to our annual report on Form
10-KSB on September 28, 2007. We will provide a copy of the Code of Ethics and
Business Conduct to any person without charge, upon request. Requests can be
sent to: Lithium Exploration Group, Inc. 3200 N. Hayden Road, Suite 300,
Scottsdale, AZ 85251.

Item
11.           Executive
Compensation

The particulars of the compensation paid to the following
persons:

- our principal executive officer;
- each of our two most highly compensated executive officers who were
  serving as executive officers at the end of the years ended June 30, 2011 and
  2010; and
- up to two additional individuals for whom disclosure would have been
  provided under (b) but for the fact that the individual was not serving as our
  executive officer at the end of the years ended June 30, 2011 and 2010,

who we will collectively refer to as the named executive
officers of our company, are set out in the following summary compensation
table, except that no disclosure is provided for any named executive officer,
other than our principal executive officers, whose total compensation did not
exceed $100,000 for the respective fiscal year:

SUMMARY COMPENSATION TABLEName and
        Principal Position
      Year
      Salary
        ($)
      Bonus
        ($)
      Stock
        Awards ($)
      Option
        Awards ($)
      Non-Equity
        Incentive Plan Compensation ($)
      Change in Pension
        Value and Nonqualified Deferred Compensation Earnings ($)
      All Other Compensation ($)
      Total
        ($)Alexander 
        Walsh(1)President, Chief Executive Officer,
        Chief Financial Officer
      2011 
        2010
      Nil 
        N/A
      Nil 
        N/A
      200,000 
        N/A
      Nil 
        N/A
      Nil 
        N/A
      Nil 
        N/A
      45,000 
        N/A
      245,000 
        N/A


35

---

SUMMARY COMPENSATION TABLEName and
        Principal Position
      Year
      Salary
        ($)
      Bonus
        ($)
      Stock
        Awards ($)
      Option
        Awards ($)
      Non-Equity
        Incentive Plan Compensation ($)
      Change in Pension
        Value and Nonqualified Deferred Compensation Earnings ($)
      All Other Compensation ($)
      Total
        ($)Nanuk Warman(2)Former President,
        Chief Executive Officer and Chief Financial
        Officer
      2011 
        2010
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil


| | (1) | Alexander Walsh was appointed President, Chief Executive
      Officer, Chief Financial Officer and director on November 4,
  2010.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                    
| | (2) | Nanuk Warman resigned as an officer and director on
      November 4, 2010.                                                        

Stock Options/SAR Grants

During the period from inception to June 30, 2011, we did not
grant any stock options to our executive officers.

Aggregated Option Exercises in Last Fiscal Year and Fiscal
Year-End Values

There were no options exercised during our fiscal year ended
June 30, 2011 or June 30, 2010 by any officer or director of our company.

Outstanding Equity Awards at Fiscal Year End

No equity awards were outstanding as of the year ended June 30,
2011.

Compensation of Directors

We reimburse our directors for expenses incurred in connection
with attending board meetings. We have not paid any directors fees or other
cash compensation for services rendered as a director since our inception to
June 30, 2011.

We have no formal plan for compensating our directors for their
service in their capacity as directors.. Directors are entitled to reimbursement
for reasonable travel and other out-of-pocket expenses incurred in connection
with attendance at meetings of our board of directors. Our board of directors
may award special remuneration to any director undertaking any special services
on our behalf other than services ordinarily required of a director.

Employment Contracts and Termination of Employment and
Change in Control Arrangements

Other than as set out below, we have not entered into any
employment agreement or consulting agreement with our directors and executive
officers.

There are no arrangements or plans in which we provide pension,
retirement or similar benefits for directors or executive officers. Our
directors and executive officers may receive stock options at the discretion of
our board of directors in the future. We do not have any material bonus or
profit sharing plans pursuant to which cash or non-cash compensation is or may be
paid to our directors or executive officers, except that stock options may be
granted at the discretion of our board of directors.

36

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We have no plans or arrangements with respect to remuneration
received or that may be received by our executive officers to compensate such
officers in the event of termination of employment (as a result of resignation,
retirement, change of control) or a change of responsibilities following a
change of control, where the value of such compensation exceeds $60,000 per
executive officer.

We entered into a management agreement with Mr. Walsh, our sole
officer. Mr. Walsh did receive a onetime payment of 2,000,000 shares, valued at
$7.65 per share, as consideration for services provided to us as our director and
officer. This management agreement was terminated in September 2011.

On April 27, 2011 Brandon  Colker and Jonathan Jazwinski, two of our directors, agreed to compensation of  450,000 shares each, for acting on our board of directors. The shares vest  annually at 150,000 shares per year for a total of 3 years. The initial 150,000  shares allocated to each director were valued at $7.65 per share.  We do not have any written agreements  regarding the compensation of our directors.

Item
12.           Security
Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters

The following table sets forth, as of September 27, 2011,
certain information with respect to the beneficial ownership of our common stock
by each stockholder known by us to be the beneficial owner of more than 5% of
our common stock and by each of our current directors and executive officers.
Each person has sole voting and investment power with respect to the shares of
common stock, except as otherwise indicated. Beneficial ownership consists of a
direct interest in the shares of common stock, except as otherwise indicated.

Amount and Nature of
      Percentage ofName and Address of Beneficial Owner
      Beneficial Owner(1)
      ClassAlexander Walsh
    27,000,000 common
    52.82%320 E. Fairmont Dr.,Tempe, AZ, 85282Jonathan Jazwinski
    150,000 common
    *3200 North Hayden Road, Suite 300Scottsdale, AZ, 85251Brandon Colker
    150,000 common
    *3200 North Hayden Road, Suite 300Scottsdale, AZ, 85251All Officers and Directors
    27,300,000 common
    53.41%As a GroupGekko Industries, Inc.(2)
    5,000,000 common
    9.78%Albrook, Calle CaobaLocal 55 A, Planta BajaCiudad De Panama, Panama*represents an amount less than 1%


|(1) | Under Rule 13d-3, a beneficial owner of a security
      includes any person who, directly or indirectly, through any contract,
      arrangement, understanding, relationship, or otherwise has or shares: (i)
      voting power, which includes the power to vote, or to direct the voting of
      shares; and (ii) investment power, which includes the power to dispose or
      direct the disposition of shares. Certain shares may be deemed to be
      beneficially owned by more than one person (if, for example, persons share
      the power to vote or the power to dispose of the shares). In addition,
      shares are deemed to be beneficially owned by a person if the person has
      the right to acquire the shares (for example, upon exercise of an option)
      within 60 days of the date as of which the information is provided. In
      computing the percentage ownership of any person, the amount of shares
      outstanding is deemed to include the amount of shares beneficially owned
      by such person (and only such person) by reason of these acquisition
      rights. As a result, the percentage of outstanding shares of any person as
      shown in this table does not necessarily reflect the persons actual
      ownership or voting power with respect to the number of shares of common
      stock actually outstanding on October 13, 2011. As of October 13,
      2011, there were 51,115,476 shares of our companys common stock issued
  and outstanding.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

37

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|(2) | Manuel Mauricio Monge Acuna has sole voting and
      investment control over Gekko Industries, Inc.
|--- | ----------------------------------------------------------------------------------------------------

Changes in Control

We are unaware of any contract or other arrangement or
provisions of our Articles or Bylaws the operation of which may at a subsequent
date result in a change of control of our company. There are not any provisions
in our Articles or Bylaws, the operation of which would delay, defer, or prevent
a change in control of our company.

Item
13.           Certain
Relationships and Related Transactions, and Director Independence

Except as disclosed herein, there have been no transactions or
proposed transactions in which the amount involved exceeds the lesser of
$120,000 or one percent of the average of our total assets at year-end for the
last three completed fiscal years in which any of our directors, executive
officers or beneficial holders of more than 5% of the outstanding shares of our
common stock, or any of their respective relatives, spouses, associates or
affiliates, has had or will have any direct or material indirect interest.

The promoters of our company are our directors and officers.

Director Independence

We currently act with three directors, consisting of Alexander
Walsh, Jonathan Jazwinski and Brandon Colker. We have determined that Jonathan
Jazwinski and Brandon Colker are independent directors as defined in NASDAQ
Marketplace Rule 4200(a)(15).

We do not have a standing audit, compensation or nominating
committee, but our entire board of directors act in such capacity. We believe
that our directors are capable of analyzing and evaluating our financial
statements and understanding internal controls and procedures for financial
reporting. Our directors do not believe that it is necessary to have an audit
committee because we believe that the functions of an audit committee can be
adequately performed by the board of directors. In addition, we believe that
retaining additional independent directors who would qualify as an audit
committee financial expert would be overly costly and burdensome and is not
warranted in our circumstances given the early stages of our development.

Item
14.           Principal
Accountants Fees and Services

The aggregate fees billed for the most recently completed
fiscal year ended June 30, 2011 and for fiscal year ended June 30, 2010 for
professional services rendered by the principal accountant for the audit of our
annual financial statements and review of the financial statements included in
our quarterly reports on Form 10-Q and services that are normally provided by
the accountant in connection with statutory and regulatory filings or
engagements for these fiscal periods were as follows:

Year
        EndedJune
        302011
      2010($)
      ($)Audit Fees
      13,400
      13,500


38

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Year
        EndedJune
        302011
      2010($)
      ($)Audit Related Fees
      <>
      NilTax Fees
      <>
      NilAll Other Fees
      <>
      NilTotal
      13,400
      13,500


Our board of directors pre-approves all services provided by
our independent auditors. All of the above services and fees were reviewed and
approved by the board of directors either before or after the respective
services were rendered.

Our board of directors has considered the nature and amount of
fees billed by our independent auditors and believes that the provision of
services for activities unrelated to the audit is compatible with maintaining
our independent auditors independence.

PART IV

Item
15.           Exhibits,
Financial Statement Schedules

Exhibits required by Item 601 of Regulation S-K

|Exhibit | Description                                                                                                                                                                                             
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|No.     |                                                                                                                                                                                                         
|        |                                                                                                                                                                                                         
|(3)     | (i) Articles of Incorporation; and (ii) Bylaws                                                                                                                                                          
|        |                                                                                                                                                                                                         
|3.1     | Articles of Incorporations (incorporated by reference to
      our Registration Statement on Form SB- 2 filed on September 20, 2006).                                                                   
|        |                                                                                                                                                                                                         
|3.2     | Bylaws (incorporated by reference to our Registration
      Statement on Form SB-2 filed on September 20, 2006).                                                                                        
|        |                                                                                                                                                                                                         
|3.3     | Articles of Amendment dated May 31, 2006 (incorporated by
      reference to our Current Report on Form 8-K filed on April 21, 2009).                                                                   
|        |                                                                                                                                                                                                         
|3.4     | Certificate of Amendment dated April 8, 2009
      (incorporated by reference to our Current Report on Form 8-K/A filed on
      April 23, 2009).                                                       
|        |                                                                                                                                                                                                         
|3.5     | Articles of Merger dated November 17, 2010 (incorporated
      by reference to our Current Report on Form 8-K filed on December 7, 2010).                                                               
|        |                                                                                                                                                                                                         
|(10)    | Material Contracts                                                                                                                                                                                      
|        |                                                                                                                                                                                                         
|10.1    | Option to Enter Joint Venture Agreement between our
      company and USA Uranium Corp. dated July 31, 2009 (incorporated by
      reference to our Current Report on Form 8-K filed on August 5, 2009).
|        |                                                                                                                                                                                                         
|10.2    | Assignment Agreement between our company and Lithium
      Exploration VIII Ltd. dated December 16, 2010 (incorporated by reference
      to our Current Report on Form 8-K filed on January 10, 2011). 
|        |                                                                                                                                                                                                         
|10.3    | Purchase Option Agreement between our company and Salta
      Water Co. dated January 18, 2011 (incorporated by reference to our Current
      Report on Form 8-K filed on February 2, 2011).           

39

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|Exhibit | Description                                                                                                                                                                        
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|No.     |                                                                                                                                                                                    
|        |                                                                                                                                                                                    
|10.4    | Letter Agreement
        between our company and Glottech-USA, LLC dated March 17, 2011 (incorporated
        by reference to our Current Report on Form 8-K filed on May 4, 2011).
|        |                                                                                                                                                                                    
|(31)    | Rule 13a-14(a)/15d-14(a)
        Certification                                                                                                                                     
|        |                                                                                                                                                                                    
|31.1*   | Section
        302 Certification under Sarbanes-Oxley Act of 2002 of the Principal Executive
        Officer, Principal Financial Officer and Principal Accounting Officer.       
|        |                                                                                                                                                                                    
|(32)    | Section 1350
        Certification                                                                                                                                                 
|        |                                                                                                                                                                                    
|32.1*   | Section
        906 Certification under Sarbanes-Oxley Act of 2002 of the Principal Executive
        Officer, Principal Financial Officer and Principal Accounting Officer.       

*Filed herewith.

40

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

| | LITHIUM EXPLORATION GROUP, INC.                                    
| | -------------------------------------------------------------------
| |                                                                    
| |                                                                    
| |                                                                    
| |                                                                    
| | /s/
      Alexander Walsh                                          
| | Alexander Walsh                                                    
| | President, Chief Executive Officer, Chief
      Financial Officer  
| | and Director                                                       
| | (Principal Executive Officer, Principal
      Financial Officer and
| | Principal Accounting Officer)                                      
| |                                                                    
| | Date: October 14, 2011                                             

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.

|Signature                    | Title                                | Date            
|---------------------------- | ------------------------------------ | ----------------
|                             |                                      |                 
|                             | President, Chief Executive Officer,  |                 
|/s/ Alexander
      Walsh    | Chief Financial Officer and Director | October 14, 2011
|Alexander Walsh              |                                      |                 
|                             |                                      |                 
|                             |                                      |                 
|/s/ Jonathan
      Jazwinski | Director                             | October 14, 2011
|Jonathan Jazwinski           |                                      |                 
|                             |                                      |                 
|                             |                                      |                 
|/s/ Brandon
      Colker     | Director                             | October 14, 2011
|Brandon Colker               |                                      |                 

41

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