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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year endedDecember 31, 2010

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

For the transition period from ________ to ________

Commission file number:000-53811

BE RESOURCES INC.(Exact name of registrant as specified in its charter)

|Colorado                                        | 42-1737182         
|----------------------------------------------- | -------------------
|(State or other jurisdiction of                 | (I.R.S. Employer   
|incorporation or organization)                  | Identification No.)
|                                                |                    
|107 Hackney Circle, Box 684, Elephant Butte, NM | 87935              
|(Address of principal executive offices)        | (Zip Code)         

(575) 744-4014(Registrants telephone number,
including area code)

Securities registered pursuant to Section 12(b) of the Act:
None

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, no par valueTitle of each class

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of 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 Act. Yes
[   ]     No [X]

Indicate by check mark whether the registrant has (1) filed all
reports required to be filed by Sections 13 or 15(d) of the Securities Exchange
Act of 1934 during the past 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X]     No
[   ]

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such
files). Yes [   ]     No [   ]

---

Indicate by checkmark 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.
[X]

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

|Large accelerated filer [   ] | Accelerated filer [   ]      
|----------------------------- | -----------------------------
|Non-accelerated filer [   ]   | Smaller reporting company
[X]

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

As of June 30, 2010, the last business day of the registrants
second fiscal quarter, the aggregate market value of the registrants common
equity held by non-affiliates was $11,150,524 based on the closing price of $0.29 per share
as reported on the TSX Venture Exchange. As of March 29, 2011, there were
50,045,750
shares of the registrants Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:Portions of the
Proxy Statement for the 2011 Annual Meeting of Shareholders are incorporated
into Part III, Items 10 through 14 of this report.

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TABLE OF CONTENTS

|              |                                                                                                      | Page
|------------- | ---------------------------------------------------------------------------------------------------- | ----
|              | PART I                                                                                               |     
|              |                                                                                                      |     
|ITEM 1:       | BUSINESS                                                                                             | 1   
|ITEM 1A:      | RISK FACTORS                                                                                         | 5   
|ITEM 1B:      | UNRESOLVED STAFF COMMENTS                                                                            | 12  
|ITEM 2:       | PROPERTIES                                                                                           | 12  
|ITEM 3:       | LEGAL PROCEEDINGS                                                                                    | 19  
|ITEM 4:       | RESERVED                                                                                             | 20  
|              |                                                                                                      |     
|              | PART II                                                                                              |     
|              |                                                                                                      |     
|ITEM 5:       | MARKET FOR COMMON EQUITY, RELATED
      STOCKHOLDER MATTERS AND PURCHASES OF EQUITY SECURITIES       | 20  
|ITEM 6:       | SELECTED FINANCIAL DATA                                                                              | 21  
|ITEM 7:       | MANAGEMENTS DISCUSSION
      AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION           | 22  
|ITEM 7A.      | QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK                                            | 30  
|ITEM 8:       | FINANCIAL STATEMENTS AND SUPPLEMENTARY
      DATA                                                    | 30  
|ITEM 9:       | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
      AND FINANCIAL DISCLOSURE           | 56  
|ITEM 9A:      | CONTROLS AND PROCEDURES                                                                              | 56  
|ITEM 9B:      | OTHER INFORMATION                                                                                    | 56  
|              |                                                                                                      |     
|              | PART III                                                                                             |     
|              |                                                                                                      |     
|ITEM 10:      | DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE                                              | 56  
|ITEM 11:      | EXECUTIVE COMPENSATION                                                                               | 56  
|ITEM 12:      | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
      AND RELATED STOCKHOLDER MATTERS | 56  
|ITEM 13:      | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE                      | 56  
|ITEM 14:      | PRINCIPAL ACCOUNTING FEES AND SERVICES                                                               | 57  
|              |                                                                                                      |     
|              | PART IV                                                                                              |     
|              |                                                                                                      |     
|ITEM 15:      | EXHIBITS, FINANCIAL STATEMENT SCHEDULES                                                              | 57  
|              |                                                                                                      |     
|SIGNATURES    | 59                                                                                                  
|EXHIBIT INDEX | 60                                                                                                  

ADDITIONAL INFORMATION

Descriptions
of agreements or other documents contained in this report are intended as
summaries and are not necessarily complete. Please refer to the agreements or
other documents filed or incorporated herein by reference as exhibits. Please
see the exhibit index at the end of this report for a complete list of those
exhibits.

i

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements that involve
risks and uncertainties. The statements contained in this report that are not
purely historical are forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of
1934, and applicable Canadian securities laws. When used in this report, the
words plan, target, anticipate, believe, estimate, intend, expect
and similar expressions are intended to identify such forward-looking
statements. Such forward-looking statements include, without limitation, the
statements regarding BE Resources Inc.s strategy, future plans for exploration,
future expenses and costs, future liquidity and capital resources, and estimates
of mineralized material. All forward-looking statements in this report are based
upon information available to BE Resources Inc. on the date of this report, and
the company assumes no obligation to update any such forward-looking statements
whether as a result of new information, future events or otherwise.
Forward-looking statements involve a number of risks and uncertainties, and
there can be no assurance that such statements will prove to be accurate. BE
Resources Inc.s actual results could differ materially from those discussed in
this report. Factors that could cause or contribute to such differences include,
but are not limited to, those discussed in the Item 1A. Risk Factors
section of this Form 10-K.

In addition to the specific factors identified under Item
1A. Risk Factors in this report, other uncertainties that could affect the
accuracy of forward-looking statements include:

- decisions of foreign countries and banks within those countries;
- unexpected changes in business and economic conditions;
- changes in interest and currency exchange rates;
- timing and amount of production, if any;
- technological changes in the mining industry;
- our costs;
- changes in exploration and overhead costs;
- access to and availability of materials, equipment, supplies, labor and
  supervision, power and water;
- results of future exploration and feasibility studies;
- the level of demand for our products;
- changes in our business strategy;
- local and community impact;
- interpretation of drill hole results and the geology, grade and continuity
  of mineralization;
- the uncertainty of mineralized material estimates and timing of
  development expenditures; and
- commodity price fluctuations.

This list, together with the factors identified under Item
1A. Risk Factors, is not exhaustive of the factors that may affect any of
our forward-looking statements. You should read this report completely and with
the understanding that our actual future results may be materially different
from what we expect. These forward-looking statements represent our beliefs,
expectations, opinions and what we believe to be reasonable assumptions only as
of the date of this report. We do not intend to update these forward looking
statements except as required by law. Accordingly, the reader is cautioned not
to place undue reliance on forward-looking statements. We qualify all of our
forward-looking statements by these cautionary statements.

ii

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CONVERSION FACTORS

The following units of measure may be used in this report:

|To Convert
      From             | To                      | Multiply By
|--------------------------------- | ----------------------- | -----------
|Feet                              | Metres                  | 0.305      
|Metres                            | Feet                    | 3.281      
|Miles                             | Kilometres              | 1.609      
|Kilometres                        | Miles                   | 0.6214     
|Acres                             | Hectares                | 0.405      
|Hectares                          | Acres                   | 2.471      
|Grams                             | Ounces (Troy)           | 0.03215    
|Grams/Tonne                       | Ounces (Troy)/Short Ton | 0.02917    
|Tonnes (metric)                   | Pounds                  | 2,204.62   
|Tonnes (metric)                   | Short Tons              | 1.1023     
|Parts per million                 | Percent (%)             | 0.0001     
|Percentage                        | Parts per million       | 10,000     
|Grams/Tonne                       | Parts per billion       | 1,000      
|Parts per billion                 | Grams/Tonne             | 0.001      
|Parts per million                 | Grams/Tonne             | 1.0        
|*United States Dollar (U.S.$) (1) | Canadian Dollar (Cdn$)  | 0.99       

__________________________ (1) The applicable exchange rate
is based upon the noon buying rate of the Bank of Canada as of December 31,
2010. Note that specific calculations pertaining to the disclosure of particular
transactions or events throughout this report may utilize an exchange rate
different from that set forth above as may be appropriate under the
circumstances. In the event a different exchange rate is utilized, the
applicable exchange rate and the date will be set forth in a footnote to the
disclosure. As of March 30, 2011, the applicable exchange rate was U.S.$1 = Cdn$
0.9761.

iii

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PART I

ITEM 1. BUSINESS

History and Organization

BE Resources Inc. (we, us, BE or the Company) is a
mineral exploration company engaged in the exploration and evaluation of mineral
properties in the State of New Mexico. We were incorporated under the laws of
the State of Colorado on August 8, 2007. On October 1, 2007, we acquired a 100%
interest in mineral leases and claims covering an area of approximately 20,000
acres in the State of New Mexico (the Acquired Property) from Great Western
Exploration, LLC (GWE). In May 2008, we staked 690 additional lode claims
overlying certain of the association placer claims previously acquired from GWE,
of which 5 were subsequently dropped and in 2010, we staked an additional 207
lode claims. We refer to the mineral leases and claims acquired from GWE along
with the additional claims staked by us as the New Mexico Beryllium Project.
We were organized primarily to evaluate the grade and tonnage of beryllium in
the New Mexico Beryllium Project.

We completed our initial public offering on October 26, 2009 by
selling 5,750,000 shares of common stock at a price of Cdn$0.30 per share for
gross proceeds of Cdn$1,725,000. Trading of our common stock commenced on the
TSX -Venture Exchange on October 26, 2009 under the symbol BER-V.

Our principal office address is 107 Hackney Circle, Elephant
Butte, New Mexico 87935. Our registered and records office address is 1700
Broadway, Suite 2100, Denver, Colorado 80290 and our telephone number is (575)
744-4014. We maintain a web site at www.beresources.com. We do not make available on our
website the periodic filings we make with the Securities and Exchange Commission
(SEC) or Canadian regulatory authorities. However, you can view the periodic
filings on the SECs website at www.sec.gov or
on the System for Electronic Document Analysis and Retrieval (SEDAR). We will
also deliver free of charge to any interested party in either paper or
electronic form our periodic reports upon written or oral request to our
corporate secretary.

Recent Developments

Drilling at Warm Springs. In September 2010, pursuant to
permits granted by the New Mexico Energy, Minerals and Natural Resource
Department, Mining and Minerals Division (MMD), we commenced drilling at the
Warm Springs area of our New Mexico Beryllium Project. Our initial drilling
effort consisted of five core holes in an area of the property previously
identified by the United States Bureau of Mines (USBM) as containing higher
than average amounts of beryllium and identified a zone of mineralization in
excess of 100 feet thick. This initial phase of the drilling program was
designed to confirm the outer dimensions of the beryllium-bearing zone and to
determine the extent and size of the beryllium mineralization.

As the results of the initial 5-hole program were inconclusive,
we applied for, and were granted, a modification to our original permit to drill
an additional twelve holes within the boundaries of the initial permit area. The
specific target of this second phase will be the area surrounding the first hole
drilled in the 5-hole program. The holes in the second phase are anticipated to
range in depth from 200 to 650 feet and will be spaced on a 75-foot grid around
and extending to the north of the first drill hole. As of March 30, 2011, we are
also working with the MMD as they review permitting for an additional eight
holes.

The Warm Springs area consists of 680 acres located in Socorro
County, New Mexico. The vast majority of this area, totaling 520 acres, is
privately owned by the Sullivan family and leased to us (the Sullivan Lease).
Additionally, we are the holder of New Mexico State mining leases and various
lode and association placer claims in the area which we acquired as part of the
Acquired Property from GWE. In June 2009, we obtained a technical report on the
Warm Springs area recognizing the presence of beryllium mineralization in
amounts greater than what would be expected in average soil samples. The
Technical Report is discussed in more detail in Item 2. Properties.

1

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The remaining portions of our New Mexico Beryllium Project,
which we refer to as the outlying hydrothermal areas, consist of three state
mining leases and 817 unpatented mining claims located in Socorro County and
Sierra County, New Mexico. The unpatented mining claims are located on land
owned by the United States Department of Interior, Bureau of Land Management,
which we refer to as the BLM. The outlying hydrothermal areas lie to the south
and east of the Warm Springs area and total approximately 19,008 acres. We
acquired the three state leases and 132 of the unpatented mining claims as part
of our acquisition transaction with GWE. The remaining unpatented mining claims
were staked by us in 2008 and in 2010.

The exploration permits allowing us to drill on the outlying
hydrothermal areas were approved in 2010. However, since our current efforts are
focused on the Warm Springs area, we have elected not to post the bonds required
to commence drilling under those permits. We believe that we can pay those bonds
and commence drilling at our discretion.

Additional Financing.In June 2010, we completed a
private placement in which we sold 10 million units at a price of Cdn$0.30 per
unit for gross proceeds of Cdn$3,000,000. Each unit sold in the placement
consisted of one share of our common stock and one-half of one common stock
purchase warrant. Each warrant entitled the holder to purchase an additional
share of common stock at a price of Cdn$0.50 per share. As part consideration
for services rendered in the placement, we issued compensation options to the
placement agent and other members of the selling group to purchase up to 983,334
units at a price of Cdn$0.30 per unit.

In December 2010, we accelerated the expiration date of the
warrants issued in connection with the placement and sold an additional
4,960,000 shares of our common stock pursuant to the exercise of those warrants.
At the same time, we completed the sale of an additional 1,590,750 shares of our
common stock pursuant to the exercise of compensation options issued to the
placement agent and members of the selling group in connection with the
placement, together with the exercise of warrants received upon exercise of the
compensation options. Total proceeds from these transactions in December were
Cdn$3,051,808. We have used proceeds from the original placement, and intend to
use proceeds from the exercise of the compensation options and the warrants, to
continue our exploration activities and for general corporate purposes.

Overview of the Beryllium Market

Beryllium is a lightweight metal possessing unique mechanical
and thermal properties.  According to the U.S. Department
of the Interior's 2008 Minerals Yearbook (the "Yearbook"), the physical and mechanical
properties of beryllium include high stiffness-to-weight and strength-to-weight
ratios, stability within a broad range of temperatures, resistance to corrosion
and fatigue, excellent electric conductivity and one of the highest melting
points of all light metals. Beryllium products are used in a variety of high
performance applications in the defense, aerospace, industrial, scientific
equipment, electronics (including acoustics), medical, automotive, optical
scanning and oil and gas markets. It is estimated that close to half of the
beryllium sold is used in computer and telecommunications products, with the
remainder used in aerospace and defense applications, automotive electronics,
industrial components and other applications.

Only two beryllium minerals are commercially important:
bertrandite, which contains less than 1% beryllium (and approximately 40%
beryllium oxide or BeO) and is the principal beryllium mineral mined in the
United States, and beryl, which contains about 4% beryllium and is the principal
beryllium mineral mined outside of the United States (U.S.). According to the

Yearbook, the
U.S. is one of only three countries known to process beryllium ores and
concentrates into beryllium products. A subsidiary of Materion Corporation,
formerly Brush Engineered Materials Inc. produces beryllium hydroxide from bertrandite mined from open pit mines in
the Spor Mountain area of Utah and from purchased beryl ore. The beryllium
hydroxide is used as a raw material to make beryllium-copper master alloy,
beryllium metal or beryllium oxide.

According to the Yearbook, beryl is frequently stockpiled for
later processing. China is thought to be a significant producer, but does not
report its beryl production. As a result, world production and the U.S. share of
world production have a high degree of uncertainty. According to the Yearbook,
the United States accounted for 89% of estimated world production in 2008.

2

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Large quantities of beryllium are imported and exported
annually on the world market. Since a very limited public market and essentially
no spot or futures market exists for beryllium trading, beryllium is priced
based on the negotiated price in private contracts between the mine and the
producer. Thus, the price largely
reflects the operating expenses, supply and demand of beryllium at the time it
is being sold.  The
most recent report on beryllium prices by the United States Geological Survey
discloses  that estimates of beryllium prices rose from $154 per pound in 2009 to
$230 per pound in 2010. However, the report states that these figures may not reflect true
transaction prices as they represent estimates of the prices extrapolated from
the price of a beryllium alloy.

Regulation of the Mining Industry in New Mexico/United
States

U.S. federal laws deal with both the acquisition of mineral
rights in federal lands and the development of the mineral interests secured in
these lands in the U.S. The principal U.S. federal law dealing with the
acquisition of mineral rights is the Mining Law of 1872. In general, it states
that unless otherwise provided, all valuable mineral deposits in lands owned by
the U.S. shall be free and open to mineral exploration by U.S. citizens. This
law and accompanying regulations and court interpretations provide the means and
methods for securing interests in these lands owned by the U.S.

On state land in New Mexico, State Trust Land Leases
administered by the Commissioner of Public Land of the New Mexico State Land
Office can be granted for exploration and development activities under the State
Trust Land Leasing Statutes. The leases provide for the controlled development
of state property and the protection of natural resources. In applying for a
lease, the applicant must submit its plans for the leased land and receive the
approval of the Commissioner. The leases are granted for an initial term of
three years and can be renewed.

Our mineral interests are comprised of a combination of private
land leases, State Trust Land Leases and federal claims.

Exploration and potential development of the mineral interests
controlled by us are governed by both federal and New Mexico state laws. A
comprehensive body of law requires the securing of various permits relating to
the exploration of mineral properties and the operation of mines at both the
federal and state level. In order to secure a permit involving any federal
lands, the National Environmental Policy Act (federal) may require the
preparation of an Environmental Assessment (EA) or an Environmental Impact
Statement (EIS) for any potential development of a mining site. Generally, an
EA briefly outlines the need for the proposed action, evaluates the
environmental impacts of the proposed action and potential alternatives, and
provides a listing of agencies and persons consulted in preparing the EA. If the
EA results in a determination that the environmental consequences of the
proposed exploration may be significant, an EIS is required to be prepared. An
EIS analyzes the environmental impact of the proposed action in greater detail,
describes any adverse environmental effects which cannot be avoided should the
proposed action be implemented and provides alternatives to the proposed action.
The preparation of the EIS is generally a collaborative effort between the
federal and state government with a primary agency from the state or federal
government taking the lead role in the development of the EIS and acting to
secure input and coordinate action between the agencies.

At the state level, environmental matters fall under the
Environmental Improvement Act and the New Mexico Mining Act (Act) which is
administered by the MMD and the New Mexico Department of Energy, Minerals and
Natural Resources under regulations contained in the New Mexico Administrative
Code. Permits are required for mineral exploration and mining activities, and
applicants for permits must demonstrate that their activities will be in
compliance with all state and federal environmental laws and regulations.
Applicants must provide detailed site assessments, reclamation plans and address
approximately 24 additional requirements, including potential impacts on the
site, surface water, groundwater, wildlife, nearby communities, traditional
cultural and historic properties, and others, as set out in NMSA 1978 §§
69-36-1, et seq. The Act also provides for significant public input and input
from various state and federal agencies regarding the project.

3

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Environmental and Other Matters

Like all other mining companies doing business in the U.S., we
are subject to a variety of federal, state and local statutes, rules and
regulations designed to protect the quality of the air and water, and threatened
or endangered species, in the vicinity of our operations. These include
permitting or pre-operating approval requirements designed to ensure the
environmental integrity of a proposed mining facility, operating requirements
designed to mitigate the effects of discharges into the environment during
exploration and any mining operations, and reclamation or post-operation
requirements designed to remediate the lands affected by a mining facility once
commercial mining operations have ceased. Following completion of any
exploration or development activities at the New Mexico Beryllium Project, we
will also have to comply with the reclamation program under the Act to return
the land to its original state.

Federal legislation in the U.S. and implementing regulations
adopted and administered by the Environmental Protection Agency, the Forest
Service, the BLM, the Fish and Wildlife Service, the Army Corps of Engineers and
other agencies  in particular, legislation such as the federal Clean Water Act,
the Clean Air Act, the National Environmental Policy Act, the Endangered Species
Act, the National Forest Management Act, the Wilderness Act, the Resource
Conservation and Recovery Act, the National Historic Preservation Act and the
Comprehensive Environmental Response, Compensation and Liability Acthave a
direct bearing on domestic mining operations. These federal initiatives are
often administered and enforced through state agencies operating under parallel
state statutes and regulations.

State legislation in New Mexico, including the Act and the
regulations contained in the New Mexico Administrative Code as they apply to the
mining industry, are administered by the New Mexico Environment Department and
the MMD and will also have to be complied with. As stated above, much of the
state legislation compliments federal legislation and both sets of statutes and
regulations are often administered at the state level.

As part of our exploration activities, we are required to
monitor certain wildlife species, ground and surface water in the area
surrounding our activities. Any adverse impact noted with regard to this species
or the water could adversely affect our exploration and any future development
efforts.

Competition

The beryllium market is currently centered in the United
States. According to the Yearbook, production in the United States accounted for
approximately 89% of world production in 2008. We believe that an estimated 80%
of the reported world supply of beryllium is mined in Utah by Materion Brush
Inc., an Ohio company wholly owned by Materion Corporation, formerly known as Brush Engineered Materials Inc., which we
believe holds a monopoly on the beryllium market. In the event that we are
successful in identifying and developing one or more economical deposits of
beryllium on our property, we could face significant competition from Materion and other larger, more established companies.

Employees

We currently have one employee, our president and chief
executive officer. We subcontract the remainder of our services to a variety of
consultants, including environmental and permitting, accounting and legal firms.
We believe this arrangement is suitable for the foreseeable future.

Facilities

We currently share office space at the home of our president.
We currently pay him $15,000 per month for the use of this space and for all
administrative services necessary to operate our executive office. We expect
this arrangement to be suitable for our needs for the foreseeable future.

4

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ITEM 1A. RISK FACTORS

This report, including Managements Discussion and Analysis of
Financial Condition and Results of Operation, contain forward-looking statements
and a description of our business operations which may be materially affected by
several risk factors, including those summarized below.

We have no proven or probable reserves, and any funds
spent by us on exploration or development could be lost.We have not
established the presence of any proven or probable mineral reserves, as defined
by the SEC, at any of our properties. In what is known as Industry Guide 7, the
SEC has defined a reserve as that part of a mineral deposit which could be
economically and legally extracted or produced at the time of the reserve
determination. Any mineralized material discovered or produced by us should not
be considered proven or probable reserves.

In order to demonstrate the existence of proven or probable
reserves, it would be necessary for us to perform additional exploration to
demonstrate the existence of sufficient mineralized material with satisfactory
continuity and then obtain a positive feasibility study. Exploration is
inherently risky, with few properties ultimately proving economically
successful. Establishing reserves also requires a feasibility study
demonstrating with reasonable certainty that the deposit can be economically and
legally extracted and produced. We have not completed a feasibility study with
regard to all or a portion of any of our properties to date. The absence of
proven or probable reserves makes it more likely that our properties may never
be profitable and that the money we have spent on exploration and development
may never be recovered.

Our exploration activities may not be commercially
successful.Mineral exploration is highly speculative in nature,
involves many risks and is frequently non-productive. Unusual or unexpected
geologic formations, and the inability to obtain suitable or adequate machinery,
equipment or labour are risks involved in the conduct of exploration programs.
The success of mineral exploration and development is determined in part by the
following factors:

- the identification of potential mineralization based on analysis;
- the availability of exploration permits;
- the quality of our management and our geological and technical expertise;
  and
- the capital available for exploration.

Substantial expenditures and time are required to establish
proven and probable reserves through drilling and analysis, to develop
metallurgical processes to extract metal, and to develop the mining and
processing facilities and infrastructure at any site chosen for mining. Whether
a mineral deposit will be commercially viable depends on a number of factors,
which include, without limitation, the particular attributes of the deposit,
such as size, grade and proximity to infrastructure; metal prices, which
fluctuate widely; and government regulations, including, without limitation,
regulations relating to prices, taxes, royalties, land tenure, land use,
importing and exporting of minerals and environmental protection.

Since we are a new business with no operating history,
investors have no basis to evaluate our ability to operate profitably.We were incorporated in 2007 and have had no revenue from operations
since our inception. Our activities to date have been limited to organizational
efforts, acquiring our land position, raising financing, obtaining permits and
commencing exploration activities. We face all of the risks commonly encountered
by other new businesses, including the lack of an established operating history,
need for additional capital and personnel, and intense competition.

Our operations are subject to strict permitting
requirements which could require us to delay, suspend or terminate our
operations on our mining properties.Our operations, including ongoing
exploration drilling programs, require permits from state or federal
governments, including monitoring of wildlife species and water. We have
experienced significant delays in obtaining drilling permits in the past, and
may experience such delays in the future. We may be unable to maintain our
existing permits or obtain additional permits on reasonable terms in the future,
on terms that provide us sufficient resources to develop our properties, or at
all. Even if we are able to obtain such permits, the time and funding required
by the permitting process is significant. If we cannot obtain or maintain the
necessary permits, or if there is a delay in receiving these permits, our
timetable and business plan for exploration of our properties will be adversely
affected, which may adversely affect our results of operations, financial
condition and cash flow.

5

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Our independent registered accountant has raised
substantial doubt about our ability to continue as a going concern in its report
on our financial statements for the year ended December 31, 2010.This
doubt is based in part on the recognition that we are an exploration-stage
company, have no established source of revenue, have an accumulated deficit of
$12,823,328 at December 31, 2010, and are dependent on raising capital from our
shareholders or other sources to continue in business. In the event that we are
unable to raise additional capital, develop one or more of our properties and
generate revenue, we may be forced to curtail our exploration activities,
liquidate one or more of our properties or cease operations altogether. In any
of those events, your investment in our company may decline.

We will require significant additional capital to fund
our business plan.At December 31, 2010, we had limited working capital,
no producing properties and no cash flow from operations. We will be required to
expend significant amounts for drilling, geological and geochemical analysis,
assaying, additional permitting and bonding and, if warranted, feasibility
studies. We may not benefit from such investments if we are unable to identify
commercially exploitable mineralized material. If we are successful in
identifying reserves, we will require significant additional capital to extract
the reserves. That funding, in turn, depends upon a number of factors, including
the state of the national and worldwide economy, capital markets, and the price
of beryllium. We may not be successful in obtaining the required financing for
these and other purposes, in which case our ability to continue operating would
be adversely affected. Failure to obtain such additional financing would result
in delay or indefinite postponement of further exploration or if applicable,
development and the possible, partial or total loss of our interest in the New
Mexico Beryllium Project. The possible development or a possible joint venture
of our property will require additional financing and we may not be able to
obtain such financing on terms favorable to us or at all. We are unable at this
time to estimate with any reasonable degree of certainty the amount of capital
required in the future. However, we believe that the amount will be significant.
Also, any adverse developments in our exploration efforts may force us to sell
our stock at a discount to raise additional funds.

We have a history of losses and may incur losses in the
future.We have incurred losses since inception and may incur net losses
in the future. We incurred the following losses from operations during each of
the following periods:

- approximately $6.7 million for the year ended December 31, 2010;
- approximately $1.5 million for the year ended December 31, 2009; and
- approximately $2.2 million for the year ended December 31, 2008.

We had an accumulated deficit of approximately $12.8 million as
of December 31, 2010.

We expect to continue to incur losses unless and until such
time, if ever, as one of our properties enters into commercial production and
generates sufficient revenues to fund continuing operations. The amount and
timing of future expenditures will depend on a number of factors, including the
progress of permitting and exploration activities, the timing of any future
development, if economical, the commercial viability of production and other
factors. We may never achieve profitability.

At the present time, we are totally dependent upon the
discovery of beryllium or other metals in commercially viable quantities from a
single project, raising the risk if the area proves unproductive.Since
we have never produced beryllium or other metals from the New Mexico Beryllium
Project or any other property, and since we have no proven or probable reserves,
we may not be able to economically produce beryllium or other metals under
existing and future costs and expenses. If we are unable to economically produce
beryllium from the New Mexico Beryllium Project, we would be forced to identify
and invest substantial sums in one or more additional properties, and we may be
unable to obtain such properties on terms favorable to us.

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The volatility of the price of beryllium could adversely
affect our future operations and our ability to explore and develop the New
Mexico Beryllium Project.The commercial feasibility of the New Mexico
Beryllium Project and our ability to raise funding to conduct exploration and
development is dependent on the price of beryllium and other metals. The price
of beryllium may also have a significant influence on the market price of our
common stock and the value of our assets. Our decision to put a mine into
production and to commit the funds necessary for that purpose must be made long
before the first revenue from production would be received. A decrease in the
price of beryllium may prevent the New Mexico Beryllium Project from being
explored, economically mined or result in the write-off of assets whose value is
impaired as a result of lower beryllium prices. We believe that an estimated 80%
of the reported world supply of beryllium is mined in Utah by Materion Brush
Inc., which we believe presently dominates the
world beryllium market. The current market price of beryllium is affected by
this monopoly and could significantly decrease upon the discovery of other large
proven commercially viable reserves and the entry of new participants into the
market. The exact world supply of beryllium is unknown. The majority of
beryllium mining outside of the United States is not publicly reported. There is
speculation that stockpiles of beryllium still exist in Russia and Kazakhstan.
There is also speculation that China may currently be mining beryllium. If
proven reserves or stockpiles of beryllium are discovered outside of the U.S.,
such a discovery could impact the market price of beryllium. The price of
beryllium may also be affected by factors such as inflation, fluctuation in
value of the U.S. Dollar and foreign currencies, global and regional demand, and
the political and economic conditions of beryllium producing countries
throughout the world. The volatility of mineral prices represents a substantial
risk, which no amount of planning or technical expertise can completely
eliminate.

The existing monopoly for mining of beryllium may create
barriers to entry which are difficult to overcome.If we are successful
in identifying one or more economical deposits of beryllium, and decide to
market this beryllium ourselves, it will be necessary for us to overcome
barriers created by the existing monopoly for this product. Since it is likely
that our initial production will be limited, the holder of the monopoly could
reduce its price, making it more difficult for us to operate at a profit. It
will also be necessary for us to identify purchasers willing to purchase our
product when little public information exists about the market for this product.
The existence of limited market may also make it more difficult for us to
identify individuals with the technical expertise and experience necessary to
mine and market the product. For all of these reasons, the discovery of an
economical deposit does not ensure that we can operate at a profit.

Legislation has been proposed that would significantly
affect the mining industry.Periodically, members of the U.S. Congress
have introduced bills which would supplant or alter the provisions of the
General Mining Law of 1872, which governs unpatented mining claims. One such
amendment has become law and has imposed a moratorium on the patenting of mining
claims, which reduced the security of title provided by unpatented claims.
Another proposed amendment has sought to impose a federal 4% to 8% gross royalty
on production of minerals from public lands, impose additional claim maintenance
fees on unpatented mining claims, and declare certain lands as unsuitable for
mining. If such proposed legislation is enacted, it could substantially increase
the cost of holding unpatented mining claims by requiring payment of royalties,
and could significantly impair our ability to develop mineral resources on
unpatented mining claims. The enactment of any legislation imposing such
royalties or fees could adversely affect the potential development of mining
claims and could adversely affect our business.

We are subject to extensive governmental regulations in
addition to permitting requirements which could require us to delay, suspend or
terminate our operations.The exploration, and possible future
development and production of the New Mexico Beryllium Project, are subject to
various federal and state laws governing prospecting, development, production,
labor standards and occupational health, mine safety, toxic substances, land
use, water use, taxes and others. For example, applicable federal legislation in
the United States would require us to immediately suspend operations, including
exploration activities, upon discovery of any remains, funerary objects, or
objects of ceremonial, historic or cultural importance to Native Americans. The
application of these laws may require us to delay, suspend or terminate our
operations. The enactment of additional laws and regulations, amendments to
current laws and regulations, and/or more stringent application of existing laws
or regulation could adversely impact our exploration timetable and business
plan.

The mining and production of beryllium are subject to
occupational health and safety legislation due to the hazardous nature of
air-borne beryllium and the health risks associated with exposure.The
U.S. Department of Health and Human Services and the International Agency for
Research on Cancer have reported that beryllium is a human carcinogen. Beryllium
exposure increases the risk of developing chronic beryllium disease and
significantly elevated risks of lung cancer. Exposure to beryllium dust
through skin contact increases the risk of skin disease. As a result of the
health risks, the U.S. Environmental Protection Agency and U.S. Occupational
Safety and Health Administration issue health and safety standards for exposure
to beryllium. Complying with these standards will require additional expenditure
on testing and the installation of safety equipment. Failure to comply with
health and safety standards could result in statutory penalties and civil
liability.

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Our exploration and development activities are subject to
environmental risks, which could expose us to significant liability and delay,
suspension or termination of our operations.The exploration, possible
future development and production phases of our business will be subject to
federal, state and local environmental regulation. These regulations mandate,
among other things, the maintenance of air and water quality standards and land
reclamation. They also set out limitations on the generation, transportation,
storage and disposal of solid and hazardous waste. Environmental legislation is
evolving in a manner which will require stricter standards and enforcement,
increased fines and penalties for non-compliance, more stringent environmental
assessments, and a heightened degree of responsibility for companies and their
officers, directors and employees. Future changes in environmental regulations,
if any, may adversely affect our operations. If we fail to comply with any of
the applicable environmental laws, regulations or permit requirements, we could
face regulatory or judicial sanctions. Penalties imposed by either the courts or
administrative bodies could delay or stop our operations or require a
considerable capital expenditure. There is a possibility that those opposed to
exploration and mining will attempt to interfere with our operations, whether by
legal process, regulatory process or otherwise.

We could be subject to environmental lawsuits.Neighboring landowners and other third parties could file claims based
on environmental statutes and common law for personal injury and property damage
allegedly caused by the release of hazardous substances or other waste material
into the environment on or around our properties. We may not be successful in
defending any claims that are brought against us. A successful claim against us
could have an adverse effect on our business prospects, financial condition and
results of operation.

We are subject to risks related to community action.All industries, including the mining industry, are subject to community
actions. In recent years, communities and non-governmental organizations have
become more vocal and active with respect to mining activities at or near their
communities. These parties may take actions such as road blockades, applications
for injunctions seeking work stoppage and lawsuits for damages. These actions
can relate not only to current activities but also in respect of decades old
mining activities by prior owners of subject mining properties.

If we lose our key executive, we may not be able to find
a suitable replacement on acceptable terms.Our success is dependent to
a large degree on the efforts and abilities of David Q. Tognoni, our president
and chief executive officer. If Mr. Tognoni were to die, become disabled or
leave the Company, we would be forced to identify and retain an individual to
replace him. We may not find a suitable individual to replace Mr. Tognoni or to
add to our employee base if that becomes necessary. We have no insurance on Mr.
Tognoni at this time. Therefore, if the services of Mr. Tognoni were to be lost,
our plans and operations could be adversely affected.

A portion of the New Mexico Beryllium Project is
comprised of a lease on privately owned lands.The Sullivan Lease
continues until January 2, 2024 and continues thereafter unless terminated by
either party based on a default by the other of any of the obligations of the
other under the lease. Upon the expiration of the lease, in the event that for
any reason we are unable to extend the lease or purchase the land from the
owner, we would be forced to forfeit the underlying minerals and our ability to
explore and develop the property would be adversely affected.

Title to mineral properties can be uncertain, and we are
at risk of loss of ownership of our property.Our ability to explore and
potentially develop beryllium and other valuable minerals depends on the
validity of title to the New Mexico Beryllium Project. In addition to the
Sullivan Lease, the New Mexico Beryllium Project includes state leases and
unpatented mining claims. Unpatented mining claims are unique property interests
and are generally considered to be subject to greater risk than other real
property interests because the validity of unpatented mining claims is often
uncertain. Unpatented mining claims provide only possessory title and their
validity is often subject to contest by third parties or the federal government.
These uncertainties relate to such things as the sufficiency of mineral
discovery, proper posting and marking of boundaries, assessment work and
possible conflicts with other claims not determinable from descriptions of
record. There may be challenges to the title to our property which could prove both time-consuming and costly to defend.
Additionally, if valuable mineral deposits are discovered on our property, a
successful challenge to our title could adversely impact exploration,
extraction, development, operations and the value of our assets and future
earnings and revenue potential. Our investigation of the status of title to the
New Mexico Beryllium Project should not be construed as a guarantee of title.
Title to the New Mexico Beryllium Project may be challenged by a third party.
Our interests may be subject to unregistered agreements or transfers or may be
affected by undetected defects.

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Any mineral production from the New Mexico Beryllium
Project is subject to royalty payments in favor of third parties in addition to
the lessor of the property, which may reduce the revenue, if any, that we
receive from the Project or reduce the value of the Project if we attempt to
sell it to a third party.In addition to royalties payable to landowners
or lessors, David Tognoni, our president and chief executive officer, is the
owner of a 1% gross royalty on the New Mexico Beryllium Project which he
acquired as part consideration for his service as an officer and employee of our
company. Further, GWE and certain others hold a 10% net profits royalty in the
New Mexico Beryllium Project which they received as part consideration for the
transfer of the Acquired Property. These royalties are payable indefinitely
based on adjusted revenue generated from the New Mexico Beryllium Project and
any additional claims that may be staked in an area of interest surrounding the
New Mexico Beryllium Project, as defined in the respective agreements. In
addition, under the Sullivan Lease, we are obligated to pay a 4% gross
production royalty, with a $12,000 annual minimum, from the sale or disposition
of minerals taken from the Warm Springs area. Finally, the leases with the State
of New Mexico which cover a portion of the Project require payment of a 2%
royalty on production, subject to certain offsets. If we are successful in
identifying sufficient mineralization to warrant placing the property into
production, the obligation to pay royalties to the holders of the royalties
would reduce the revenue we receive and may reduce the value of the New Mexico
Beryllium Project if we endeavor to sell it to a third party.

The nature of mineral exploration and production
activities involves a high degree of risk and the possibility of uninsured
losses.The business of exploring for minerals, including beryllium,
involves a high degree of risk. Few properties are ultimately developed into
producing mines. Whether a mineral deposit can be commercially viable depends
upon a number of factors, including the particular attributes of the deposit,
including size, grade and proximity to infrastructure, metal prices, which can
be highly variable, and government regulation, including environmental and
reclamation obligations. Uncertainties as to the metallurgical amenability of
any minerals discovered may not warrant the mining of these minerals on the
basis of available technology. Our operations are subject to all of the
operating hazards and risks normally incident to exploring for and developing
mineral properties, such as, but not limited to:

- encountering unusual or unexpected formations;
- environmental pollution;
- personal injury, flooding and landslides;
- variations in grades of minerals;
- labor disputes; and
- a decline in the price of beryllium.

We currently have no insurance to guard against any of these
risks. If we determine that capitalized costs associated with any of our mineral
interests are not likely to be recovered, we would incur a write-down on our
investment in such property interests. All of these factors may result in losses
in relation to amounts spent which are not recoverable.

We do not insure against all risks to which we may be
subject in our planned operations.The exploration phase of our business
will involve a significant amount of risk. We currently maintain no insurance on
any of our current or proposed operations. Even if we acquire insurance in the
future, such insurance may not cover all potential risks associated with
exploration activities. We may also not be able to maintain insurance to cover
risks at economically feasible premiums. Insurance coverage may not continue to
be available or may not be adequate to cover any resulting liability. Moreover,
the insurance against risks such as environmental pollution or other hazards as
a result of exploration is generally not available on acceptable terms to
companies in the mining industry. We might also become subject to liability for
environmental pollution or other hazards associated with mineral exploration and production which may not be insured against, which may exceed
the limits of our insurance coverage, or which we may elect not to insure
against because of premium costs or other reasons. Losses from these events may
cause us to incur significant costs that could materially adversely affect our
financial condition and our ability to fund exploration and any development and
production activities. A significant loss could force us to reduce or terminate
our operations.

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Our directors and officers face potential conflicts of
interest in their capacities as such.David Tognoni, Edward Godin and
Carmelo Marrelli serve as officers and/or directors for us as well as other
mineral exploration and development companies. Conflicts of interests could
arise between these persons duties as officers and directors of our company and
their respective positions as officers and directors of such other entities.
These conflicts may arise from corporate opportunities that may be presented to
such individuals or because of the time they must devote to their position with
each company. In addition to these potential conflicts, these individuals have
in the past, and may in the future, enter into agreements with our company,
either as individuals or as officers or directors of other companies. For
example, David Tognoni was a manager of GWE, from which we purchased the
Acquired Property. We also entered into an employment agreement with Mr. Tognoni
and granted stock options to each of our officers and directors. None of these
agreements were negotiated at arms length.

Competition in the mining industry is intense, and we
have limited financial and personnel resources with which to compete.Competition in the mining industry for desirable properties, investment
capital, equipment and personnel is intense. Numerous companies headquartered in
the United States, Canada and elsewhere throughout the world compete for
properties on a global basis. We are currently an insignificant participant in
the beryllium mining industry due to our limited financial and personnel
resources. We may be unable to attract the necessary investment capital to fully
develop the New Mexico Beryllium Project, be unable to acquire other desirable
properties, be unable to attract and hire necessary personnel, or be unable to
purchase necessary equipment.

Colorado law and our Articles of Incorporation may
protect our directors from certain types of lawsuits at the expense of the
shareholders.The laws of the State of Colorado provide that directors
of a company shall not be liable to the company or shareholders of the company
for monetary damages for all but limited types of conduct. Our Articles of
Incorporation permit us to indemnify our directors and officers against all
damages incurred in connection with our business to the fullest extent provided
or allowed by law. The exculpation provisions may have the effect of preventing
shareholders from recovering damages against our directors caused by their
negligence, poor judgment or other circumstances. The indemnification provisions
may require us to use limited assets to defend our directors and officers
against claims, including claims arising out of their negligence, poor judgment
or other circumstances.

We are required to evaluate our internal controls under
Section 404 of the Sarbanes-Oxley Act of 2002, and any adverse results from such
evaluation could result in a loss of investor confidence in our financial
reports and have an adverse effect on the price of our shares of common stock.Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we are and
will be required to furnish a report by management on our internal controls over
financial reporting. Such report contains, among other matters, an assessment of
the effectiveness of our internal control over financial reporting, including a
statement as to whether or not our internal control over financial reporting is
effective. This assessment must include disclosure of any material weaknesses in
our internal control over financial reporting identified by our management.

We will be required to evaluate and test our internal controls
on an ongoing basis. During the evaluation and testing process, if we identify
one or more material weaknesses in our internal control over financial
reporting, we will be unable to assert that such internal control is effective
and we could lose investor confidence in the accuracy and completeness of our
financial reports, which would have a material adverse effect on our stock
price.

Gain recognized by non-U.S. shareholders on the sale or
other disposition of shares of our common stock may be subject to U.S. federal
income tax.We believe that we are currently a U.S. real property
holding corporation under section 897(c) of the Internal Revenue Code
(USRPHC) and there is a substantial likelihood that we will continue to be a
USRPHC. Generally, gain recognized by a non-U.S. holder on the sale or other
disposition of our common stock will be subject to U.S. federal income tax on a
net income basis at normal graduated U.S. federal income tax rates if we are a
USRPHC at any time during the 5-year period ending on the date of the sale or disposition of the common stock (or the non-U.S. holders
holding period for the common stock if shorter). Under an exception to these
USRPHC rules, if the common stock is regularly traded on an established
securities market, the common stock will not be treated as a USRPHC. This
exception is not available, however, to a non-U.S. holder that held or was
deemed to hold, directly or under certain constructive ownership rules, more
than 5% of the common stock at any time during the 5-year period ending on the
date of the sale or other disposition (or the non-U.S. holders holding period
of the common stock if shorter). Our common stock may never be regularly
traded on an established securities market as recognized by the Internal
Revenue Code.

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Our stock price has been and may continue to be volatile
and as a result you could lose all or part of your investment.The
market prices for the securities of companies engaged in mineral exploration and
development can be volatile. The value of your investment could decline due to
the impact of any of the following factors upon the market price of our common
stock:

- changes in the worldwide price for beryllium;
- disappointing results from our exploration or development efforts;
- failure to meet our operating budget or achieve profitability;
- decline in demand for our common stock;
- the issuance of additional securities;
- downward revisions in securities analysts estimates or changes in general
  market conditions;
- technological innovations by competitors or in competing technologies;
- investor perception of our industry or our prospects; and
- general economic trends.

In addition, stock markets have experienced extreme price and
volume fluctuations and the market prices of securities have been highly
volatile. These fluctuations are often unrelated to operating performance and
may adversely affect the market price of our common stock. As a result,
investors may be unable to resell their shares at a fair price.

We have never paid dividends on our common stock and we
may never pay them in the future.We have never declared or paid cash
dividends on our common stock and do not anticipate doing so in the foreseeable
future. Our ability to pay dividends is dependent on our ability to successfully
develop one or more properties and generate revenue from operations. Further,
our initial earnings, if any, may be retained to finance our growth. Any future
dividends will be directly dependent upon any future earnings, our then-existing
financial requirements and other factors and are solely within the discretion of
our board of directors.

A large number of our shares will be eligible for future
sale and may depress the price of our common stock.In addition to the
shares issued in our initial public offering, a large amount of our common stock
is currently eligible for sale under Rule 144 of the United States Securities
Act of 1933 (the Securities Act). Under Rule 144, a shareholder owning
restricted stock who is not an affiliate of our Company is permitted to sell all
of the common stock owned by him or her following expiration of the shorter of:
(i) one year from the date of acquisition; or (ii) six months from the date of
acquisition, assuming we have been required to file reports with the SEC for at
least 90 days and have filed all reports required to be filed with the SEC up to
the time of the proposed sale. Affiliates of our Company are permitted to sell
securities owned by them in limited quantities at a similar time under Rule 144.
As of March 29, 2011, we also have outstanding options to purchase an aggregate
of 5,950,000 shares of common stock, a significant portion of which are exercisable at a price below the
public offering price of our common stock and have issued compensation warrants
for 440,499 additional shares of our common stock. The sale of common stock in the future
may depress the price of our common stock, may result in a loss in your
investment and may make it difficult for us to sell common stock in the future.

Since no broker or dealer has committed to create or
maintain a market in our stock, our stock may never be quoted in the OTC
Bulletin Board, and purchasers of our common stock may have difficulty selling
their shares, should they desire to do so.It is our intention to seek
one or more broker-dealers to apply for quotation of our common stock in the OTC
Bulletin Board. However, we have no agreement with any broker-dealer at this
time, and we may not find one in the future. In addition, we believe that our
stock will be characterized as a micro-cap security and therefore subject to increased scrutiny by the
Financial Industry Regulatory Authority (FINRA). A micro-cap security is
generally a low priced security issued by a small company, or the stock of
companies with low capitalization. If we are unable to obtain quotation of our
common stock on the OTC Bulletin Board, trading in our stock may be limited, and
purchasers of our common stock may have difficulty selling their shares, should
they desire to do so.

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Since our stock will not be listed on a stock exchange in the
United States, trading in our shares may be subject to rules governing penny
stocks, which will impair trading activity in our shares. It is likely that our
common stock will not initially be listed on a national stock exchange
registered with the Securities and Exchange Commission, or SEC, and may
therefore be subject to rules regulating broker dealer practices in connection
with transactions in penny stocks. Those disclosure rules applicable to penny
stocks require a broker dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized disclosure document
required by the SEC. These rules also require a cooling off period before the
transaction can be finalized. These requirements may have the effect of reducing
the level of trading activity in any secondary market for our common stock. Many
brokers may be unwilling to engage in transactions in our common stock because
of the added disclosure requirements, thereby making it more difficult for
stockholders to dispose of their shares.

Issuances of our common stock in the future could dilute
existing shareholders and adversely affect the market price of our common stock.We have the authority to issue up to 250,000,000 shares of common stock,
10,000,000 shares of preferred stock and to issue options and warrants to
purchase shares of our common stock without stockholder approval. These future
issuances could be at values substantially below the price at which our common
stock was sold in our initial public offering. In addition, we could issue large
blocks of our common stock to fend off unwanted tender offers or hostile
takeovers without further stockholder approval. Because trading in our common
stock is limited, the issuance of our stock may have a disproportionately large
impact on its price compared to larger companies.

Pursuant to pending Canadian tax proposals, Canadian holders
of our stock may be subject to rules for investments in offshore investment
funds. In the Canadian federal budget released on March 4, 2010, the
Minister of Finance announced that certain prior tax proposals relating to the
taxation of Canadian residents investing in certain non-resident entities (the
"FIE Proposals") will not be implemented. The Minister of Finance proposed to
replace the FIE Proposals with a slightly revised version of the current
offshore fund property rules. These revisions were released as draft legislation
on August 27, 2010. The offshore investment fund property rules may, in certain
circumstances, require a Canadian holder of shares of common stock to include an
amount in income in a taxation year in respect of the shares of common stock, if
the value of such shares may reasonably be considered to be derived, directly or
indirectly, primarily from portfolio investments in certain assets and one of
the main reasons for the Canadian holder acquiring or holding the shares is to
derive a benefit from the income, profits and gains on those portfolio
investments in such a manner that Canadian taxes payable by the Canadian holder
are less than would have been the case if the Canadian holder had earned that
income, profits or gains directly. The determination of whether or not our
common stock may constitute an offshore investment fund property of a Canadian
holder at any time depends upon our property and our activities at that time.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

New Mexico Beryllium Project  Overview

The New Mexico Beryllium Project consists of the Companys
interest in Socorro County and Sierra County, New Mexico described in this
report as the Warm Springs area and the outlying hydrothermal areas. The New
Mexico Beryllium Project covers an area of approximately 20,000 acres and is
comprised of a private lease, state leases and unpatented mining claims. The map
below shows the general location of the Warm Springs area in New Mexico.

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Unpatented mining claims comprise the vast majority of the
project, covering 18,240 acres or roughly 96% of the total acreage of the New
Mexico Beryllium Project. Unpatented mining claims are governed by the General
Mining Law of 1872 (General Mining Law) as amended, 30 U.S.C. §§ 21-161
(various sections), which allows the location of mining claims on public domain
lands of the United States upon the discovery of a valuable mineral deposit and
proper compliance with claim location requirements. A valid mining claim
provides the holder with the right to conduct mining operations for the removal
of locatable minerals, subject to compliance with the General Mining Law and New
Mexico state law governing the staking and registration of mining claims, as
well as compliance with various federal, state, and local exploration,
operating, and environmental laws, regulations, and ordinances.

As the owner of the unpatented mining claims, we have the right
to conduct mining operations on the lands, subject to the prior procurement of
required exploration and operating permits and approvals, compliance with the
terms and conditions of the claims, and compliance with applicable federal,
state, and local laws, regulation and ordinances. Historically, the owner of an
unpatented mining claim could, upon strict compliance with legal requirements,
file a patent application to obtain full fee title to the surface and mineral
rights with the claim; however, continuing Congressional moratoriums have
precluded new mining claim patent applications since 1993.

As discussed below, our unpatented mining claims consist of
lode claims and association placer claims. Lode claims are mining claims located
on a classic vein, ledge, or other rock in place between definite walls. A lode
claim is located by metes and bounds. The maximum length of a lode claim is
1,500 feet by 600 feet. Association placer claims are mining claims located upon
sand or gravel. Association placer claims are located by legal subdivision and
can be located up to a maximum 160 contiguous acres.

The following disclosure more fully discusses our specific
mineral property interests comprising the New Mexico Beryllium Project and has
been derived from various agreements to which the Company is a party, together
with the Technical Report dated June 5, 2009 prepared by Fred Brown, CPG, Pr.
Sci. Nat., and Tracy Armstrong, P. Geo., of P&E Mining Consultants Inc.,
each an independent qualified person within the meaning of National Instrument
43-101Standards of Disclosure for Mineral Projectsof the
Canadian Securities Administrators (NI 43-101). NI 43-101 is designed to
implement standards of disclosure for mineral properties of companies subject to
the jurisdiction of the Canadian Securities Administrators. The Technical Report
is available for inspection and review during normal business hours at our
registered and records office and has been filed on SEDAR at www.sedar.com.

13

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Cautionary Note to U.S. Investors: National Instrument
43-101 is promulgated under Canadian laws and regulations and uses definitions
and standards that differ from those in the SECs Industry Guide 7 regarding
disclosure on mineral properties. Accordingly, information contained in reports
prepared pursuant to NI 43-101 containing descriptions of the Companys
mineralization may not be comparable to similar information that the Company can
disclose in the reports it files with the SEC pursuant to the requirements of
United States federal securities laws and the rules and regulations
thereunder.

Warm Springs Area

Property Description and Tenure.The Warm Springs area
consists of 680 acres located in Socorro County, New Mexico. The vast majority
of this area, 520 acres, is privately owned by the Sullivan family and leased to
us under the Sullivan Lease dated January 2, 2004. We became the lease holder
under the Sullivan Lease and certain New Mexico State mining leases and the
owner of various lode and association placer claims on October 1, 2007. On April
9, 2008, we executed an amendment to the Sullivan Lease in order to clarify
certain provisions of the lease relating to the property description, term, and
conduct of operations.

The Sullivan Lease is described as: All of Special Section
2, and access through the East 1⁄2 of Special Section 4, Township 8 South, Range 7
West, save and except that portion of the Real Estate conveyed previously to
Commissioners of the Acequia de Canada Alamosa of Sierra County, New Mexico.

The Sullivan Lease provides us with the ability to conduct
mining exploration and operations with respect to all minerals, including
beryllium, in the Warm Springs area of the New Mexico Beryllium Project. The
surface and water rights on the Warm Springs area are also owned by the Sullivan
family and the Sullivan Lease allows us water rights and surface access to the
leased property as necessary for mining and milling operations. In exchange, we
are required to pay a gross production royalty to the Sullivans equal to 4% of
the annual proceeds from the sale or disposition of minerals, metals and
materials obtained from the leased property, and from any claims or leases we
acquire within a one mile area of interest from the perimeter of the leased
property, in the minimum amount of $12,000 per year. The $12,000 minimum annual
gross production royalty payment is due on January 1st of each year for the
balance of the lease.

In addition to the royalty, we are also obligated to pay all
real property taxes assessed on the leased property, provide accountings to the
Sullivan family with respect to monies received from the sale or disposition of
ore from the leased property, purchase and maintain commercial general liability
insurance and state industrial insurance, conduct our operations in a
workmanlike manner, and protect the leased property from liens which result from
our activities on the leased property. If we fail to satisfy any of these
obligations under the Sullivan Lease, then we would be in breach of the lease,
and the Sullivan family could, after providing notice to us and an opportunity
to cure the defect, elect to terminate the Sullivan Lease. The Sullivan Lease
provides for a term of 20 years and continues thereafter unless terminated by
either party based on a default by the other of any of the obligations of the
other under the lease.

We hold our interest in the remaining 160 acres of the Warm
Springs area under an unpatented mining claim known as Bertrandite claim #45
which we acquired from GWE as part of the 133 unpatented mining claims included
in the Acquired Property. This is an association placer claim situated to the
south of the area covered by the Sullivan Lease. We acquired this claim in
October 2007 as part of our acquisition from GWE.

Accessibility. The Warm Springs property is located
approximately 50 miles northwest of the community of Elephant Butte, New Mexico.
From Elephant Butte, travel is along the paved portion of state highway NM52 for
41 miles. The remaining nine miles are along the well-maintained unpaved portion
of state highway NM52 to the Warm Springs property entrance. Property access is
along seasonal four-wheel drive tracks.

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Climate. The Warm Springs property is located in a
semi-arid, high-desert climate approximately twenty miles north of
Chloride/Winston, New Mexico. Chloride/Winston has an average annual temperature
range between 18° F in January and 55° F in July. Average annual precipitation
is 13 inches, and average annual snowfall is 11 inches.

Local Resources and Infrastructure. The Warm Springs
property is currently undeveloped except for seasonal dirt access roads.
However, the property is well situated with regard to surrounding
infrastructure, with a power line crossing highway NM52 within seven miles of
the property. Water in the area is typically sourced from local wells. New
Mexico is home to a developed mineral industry, producing coal, uranium, silver,
manganese, potash, salt, perlite, copper ore and tin concentrates. The nearby
town of Elephant Butte is a small residential community with a population of
approximately 1,300 serviced by a modern municipal airport. Albuquerque, a major
urban center, lies approximately 170 miles to the north-northeast of the Warm
Springs property, and the New Mexico Institute of Mining and Technology is
located in nearby Socorro, New Mexico.

Physiography. The Warm Springs property lies in the
foothills of the northern Sierra Cuchillo Mountains, just south of Monticello
Canyon and north of Iron Mountain. Maximum local elevation is approximately
6,600 feet, with a vertical relief of 400 feet. Intermittent seasonal stream
channels drain the property. Local vegetation is typical of semi-arid regions
and includes juniper, cedar and pinion.

History. The Warm Springs property lies on the
northern-most limit of the Church Rock mining district, which also encompasses
numerous beryllium and tungsten deposits at Iron Mountain. Beryllium
mineralization at Warm Springs was first reported by M. Howard Milligan in
November 1961.

Eighteen exploration drill holes were completed in the 1960s
as part of a USBM project investigating mineralization in the northern Cuchillo
Mountains. Drilling was centered on a bertrandite mineralized outcrop. Samples
from seven trenches were also taken. The overall drilling depth was limited by
the water table. Six drill holes penetrated the surface mineralization and
intersected additional mineralization at depth. The deposit was also examined by
the USBM with a portable beryllium detector, and additional samples were taken
from shallow trenches in the bertrandite mineralized outcrop.

Subsequent to the USBM project, a reexamination of the property
was completed by Hillard in 1969, who mapped a thick sequence of andesitic and
latitic flows. Later sampling of non-magnetic concentrates in stream sediments
yielded anomalous values of lead, molybdenum, zinc and copper.

No original source records of the sampling program or the USBM
investigation were available for the Technical Report, except for information
contained in Hillard (1969) and Meeves (1966). The location of the USBM drill
holes and trenches were not able to be verified in the field by the authors of
the Technical Report. The accuracy and validity of the historical results were
therefore not established by the authors of the Technical Report.

A total of fourteen exploratory RC drill holes for a total of
7,576 feet were completed in 2001 and 2002 in the general vicinity of the
bertrandite mineralized outcrop located by the USBM program. The Beryllium
Group, LLC was in control of the project from 2001 to 2002. GWE was in control
of the project from February 2004 to October 1, 2007. BE has been in control of
the property since October 1, 2007.

The initial six drill holes were completed and the remaining
eight drill holes were sealed with a concrete plug with the exception of BE20
and BE25, which were left as water wells for the property owner. All drilling
was done with a reverse circulation air-rig with six-inch down-the-hole hammer
and tri-cone bit as required. Drill hole collar locations were determined by Mr.
David Tognoni using a Magellan SporTrak Prohandheld GPS unit. No
drill-hole surveys were undertaken.

Regional Geology. The Warm Springs property lies within
the eastern edge of the Datil-Mogollon volcanic field of southern New Mexico.
The volcanic field consists of mafic to silicic extrusive units of Tertiary age
and Quaternary basalts. The volcanic field is cut along its eastern margin by
multiple north-striking normal faults which formed a series of eastward-tilted
fault blocks in the Sierra Cuchillo. The Datil-Mogollon volcanic field is
bordered on the east by the Rio Grande rift, where a series of rhyolitic
ash-flow tuffs have been exposed. Beneath the ash-flow tuffs are latite conglomerates, mud-flow deposits and sandstones
representing the alluvial apron which surrounded the Datil-Mogollon field prior
to its ignimbrite climax. The base of the volcanic pile rests unconformably upon
rocks ranging from late Eocene to Precambrian in age. Much of the area lies on
the northeast flank of a major Laramide uplift from which the Mesozoic rocks
were stripped by early Tertiary erosion. Basal volcanic rocks resting upon late
Paleozoic limestones, quartzites, or shales on the uplift lap off the structure
onto Eocene arkosic sediments which overlie Cretaceous sandstones and shales.
Locally, Precambrian rocks generally consist of low-grade metasedimentary rocks,
metavolcanic rocks, and intrusive rocks ranging from large granitic plutons to
gabbroic stocks and diabase dikes.

15

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Property Geology. Hillard (1969) identified several
lithologies in the Warm Springs property area. Arranged in approximate
stratigraphic order these are: gravel, dikes, flow-banded rhyolite, rhyolite,
massive rhyolite, rhyolite tuff, sedimentary rocks, andesitic and latite flows,
and latitic tuffs and coarse pyroclastics, as well as a quartz monzonite
intrusive plug. Andesitic and latite flows are the most widespread volcanic unit
in the area. The surficial geology is dominated by colluvium and Tertiary
volcanics. James (1978) further suggests that the local high hills are underlain
by a hypabyssal stock complex cut by a swarm of radial dykes. The area is highly
faulted, situated on the eastern edge of the graben between the Sierra Cuchillo
and the Black Range.

Deposit Types.Beryllium is a lithophile element (i.e.
an element that tends to concentrate in silicate materials such as igneous
rocks) concentrated in the residual phases of magmatic systems. Commercial
beryllium mineralization typically occurs as bertrandite (Be4Si2O7(OH)2) which
contains approximately 40% BeO, or helvite (Mn4Be3(SiO4)3S) containing
approximately 14% BeO. Nonpegmatic bertrandite has been reported at Mt. Wheeler,
Nevada; Lake George District, Colorado; Spor Mountain, Utah; and Aguachile,
Mexico, among others. The principal source of commercial production of beryllium
in the United States is the Spor Mountain deposit, Utah. Beryllium
mineralization at Warm Springs is typical of volcanic-exhalative deposits.

Mineralization.The Warm Springs property hosts
beryllium mineralization in the form of bertrandite associated with late-stage
faulting of volcanic rocks and intense hydrothermal alteration. Hillard (1969)
also reports the presence of alunite and montmorillinite. As reported by Hillard
(1969), the surface exposure of the bertrandite mineralization occurs in altered
rhyolite tuff along projected fault zones. The mineralized outcrop as identified
by the USBM sampling program demarcates a zone of higher-grade bertrandite
approximately 100 feet long and 30 feet wide, with additional historical
drilling demonstrating mineralization to a depth of 190 feet. The historical
USBM drill hole results indicate that mineralization is tightly confined to
discrete, narrow zones. Hillard (1969) also reports a zone of weaker beryllium
mineralization south of the main mineralized outcrop, which may be due to
irregularities in the local fault geometry.

Griffitts and Alminas (1968) suggest that the bertrandite was
introduced into faulted volcanic rocks, and is unrelated to local base-metal
mineralization. The host rock for the mineralization is hydrothermally altered
rhyolite-tuff agglomerate, and Hillard (1969) reports that local beryllium ore
consists of an altered rhyolite tuff fault breccia with a montmorillonite
matrix. Coatings of bertrandite on the fault breccia and spheres of radiating
bertrandite crystals in the fine fault material indicate that beryllium
mineralization occurred after faulting.

Exploration.We commenced exploration at our Warm
Springs property in 2010. Our initial exploration efforts consisted of a phase
one, 5-hole core drilling program designed to determine the boundaries of the
beryllium mineralization and determined the extent and size of that
mineralization.

The first drill hole (location DH5) was completed to a depth of
1,000 feet. Five-foot interval samples were submitted to ALS Mineral for assay.
Hole DH5 intersected a beryllium mineralized zone in excess of 100 feet in
thickness. Maximum grades in the mineralized zone exceeded 1% as BeO. Assay
values for the beryllium mineralized zone of DH5 are reported in the table
below:

16

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Assay Results from DH5

Borehole 5
    Depth of Sample
    Reported as
    Reported asInterval ID
    (ft.)
    Be %
    BeO%DH5 50-55
    50-55
    0.003
    0.00834DH5 55-60
    55-60
    0.032
    0.0889DH5 60-65
    60-65
    0.014
    0.0389DH5 65-70
    65-70
    0.009
    0.0250DH5 70-75
    70-75
    0.011
    0.0306DH5 75-80
    75-80
    0.186
    0.517DH5 80-85
    80-85
    0.252
    0.701DH5 85-90
    85-90
    0.028
    0.0778DH5 90-95
    90-95
    0.117
    0.325DH5 95-100
    95-100
    0.220
    0.612DH5 100-105
    100-105
    0.022
    0.0612DH5 105-110
    105-110
    0.019
    0.0528DH5 110-115
    110-115
    0.028
    0.0778DH5 115-120
    115-120
    0.088
    0.245DH5 120-125
    120-125
    0.028
    0.0778DH5 125-130
    125-130
    0.032
    0.0900DH5 130-135
    130-135
    0.033
    0.0917DH5 135-140
    135-140
    0.297
    0.826DH5 140-145
    140-145
    0.361
    1.004DH5 145-150
    145-150
    0.098
    0.272DH5 150-155
    150-155
    0.005
    0.0139


________________True widths have not yet been
determined.

Assay samples from the second drill hole did not detect BeO in
significant amounts. Results from holes 3 through 5 are still pending.

Since the results of the initial 5-hole program were
inconclusive, we applied for, and were granted, a modification to our permit to
allow permission to drill an additional 12 holes within the boundaries of the
initial permit area. The specific target of the second phase of the program will
be the area surrounding DH5. The holes in the second program will range in depth
from 200 to 650 feet and will be spaced on a 75-foot grid around and extending
to the north of DH5. We continue efforts to determine the boundaries, size and
extent of the beryllium mineralization.

Outlying Hydrothermal Areas

Property Description and Tenure.The outlying
hydrothermal areas consist of three state mining leases and 817 unpatented
mining claims located in Socorro County and Sierra County, New Mexico. The
outlying hydrothermal areas lie to the south and east of the Warm Springs area
and total approximately 19,008 acres. We acquired the three state leases and 132
of the unpatented mining claims via our acquisition transaction with GWE. We
staked the additional 690 unpatented mining claims in May 2008, 5 of which have
subsequently been dropped.

The three state leases are comprised of State of New Mexico
Mineral Lease Numbers HG 0059, HG 0060, and HG 0061 (collectively, the State
Leases). The assignments from GWE to our Company were filed with, and approved
by, the New Mexico Commissioner of Public Lands on September 6, 2007.

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The State Leases cover an area of approximately 928 acres
located in Socorro County, New Mexico as follows:

|Mineral Lease No. | Subdivision           | Section | Township | Range | Acres
|----------------- | --------------------- | ------- | -------- | ----- | -----
|HG 0059           | NW4NW4, S2NW4, NW4SW4 | 15      | 9S       | 8W    | 160  
|HG 0060           | ALL                   | 16      | 9S       | 8W    | 640  
|HG 0061           | Lots 7,8,9            | 17      | 9S       | 8W    | 127.9

Accessibility.The two outlying hydrothermal areas are
42 miles Northwest of Truth or Consequences, NM and 35 miles North Northwest of
Truth or Consequences, NM, respectively. These areas can be accessed using state
highway NM 52 & NM 142 respectively from the Truth or Consequences, New
Mexico airport. State highway NM 52 is a paved road and NM highway 142 is paved
for the first 15 miles and the remainder is a graded gravel road.

The State Leases provide us with the ability to conduct
exploration and mining operations to remove and process beryllium and associated
minerals from the leased property, subject to the receipt of necessary permits.
Each State Lease has a primary term of three years and requires an annual rental
payment of $1.00 per acre. The term of each State Lease extends in perpetuity so
long as minerals are produced or mined in paying quantities. The term can also
be extended in the absence of mineral production for a secondary term of 2 years
with an annual rent of $10.00 per acre, a tertiary term of 5 years with an
annual rent of $3.00 per acre, and a quaternary term of 5 years with an annual
rent of $10.00 in year 11 increasing by $10.00 per acre, per year to $50.00 per
acre, per year in year 15. The State Leases also require us to pay the State of
New Mexico royalties in the amount of 2% of the gross returns from minerals
produced from the property less the actual and reasonable transportation and
smelting or reduction costs, up to 50% of the gross returns.

The 132 unpatented mining claims we acquired from GWE cover an
area of approximately 18,080 acres and consist of the following 20 lode claims
and 112 association placer claims:

|Claim                                                                     | Type               |  | County  | Acres 
|------------------------------------------------------------------------- | ------------------ |  | ------- | ------
|                                                                          |                    |  |         |       
|Bert #1-12                                                                | Lode               |  | Socorro | 240   
|Special Clay #100-107                                                     | Lode               |  | Socorro | 160   
|Bertrandite #34, 35, 54                                                   | Association Placer |  | Sierra  | 480   
|Berts Clay #92, 93                                                        | Association Placer |  | Sierra  | 320   
|Bertrandite #9-12, 15, 18, 21, 22, 25, 26,
      29-31, 39, 41, 56-59, 64 | Association Placer |  | Socorro | 2,960 
|Berts Clay #1-11, 13-19, 21-31, 33-40, 42-91                              | Association Placer |  | Socorro | 13,920

Some of these claims are located on property where both the
surface estate and mineral estate are owned by the Federal Bureau of Land
Management (the BLM), while other claims are located on property where the
surface estate and mineral estate are separately owned. In the latter case, the
surface estate has been transferred to private parties while ownership of the
mineral estate, which serves as the basis for our claims, has been retained by
the BLM. In either event, we believe we have the right to access the surface as
necessary to conduct our exploration and mining operations on all 132 of these
unpatented mining claims, subject to the receipt of necessary permits. However,
with respect to the claims which are located on property where the surface and
mineral estate are separately owned, we may elect to negotiate agreements with
the private surface owners in order to more clearly define our rights and
responsibilities concerning our exploration, mining, and reclamation
activities.

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In 2008, we staked the following additional 690 lode claims:

|Claim                                                                                | Type | County         | Acres 
|------------------------------------------------------------------------------------ | ---- | -------------- | ------
|BU #7-26, 39-58, 65-204, 207-689, 691-693,
      695-701, 703- 705,707- 709, 711-716 | Lode | Socorro        | 13,680
|BU #690, 694, 698, 702, 706, 710                                                     | Lode | Sierra/Socorro | 120   

In July 2009, we disclaimed an interest in 5 of the lode
claims, including BU #43, BU #111, BU #351, BU #482 and BU #484. The remaining
685 lode claims comprise approximately 13,700 acres, overlying certain of the
association placer claims forming part of the Acquired Property. The BLM owns
the surface and mineral estate with respect to these 685 lode claims. As part of
our claims, we have the right to access the surface of such property to the
extent necessary to conduct our exploration and mining operations on all 685 of
these unpatented mining claims, subject to the receipt of necessary permits.

In November 2010, we staked 42 additional lode claims in Sierra
County and 165 additional lode claims in Socorro County.

Maintenance Fees and Royalties

In order to maintain the unpatented claims on the Warm Springs
area and the outlying hydrothermal areas, we are required to pay an annual
maintenance fee of $125 to the BLM on or before August 31st of each calendar
year, which may be adjusted annually. We are also required to make various
filings with state and federal agencies. We are not required to pay royalty
payments to the BLM from mining production on any of the unpatented claims.

In addition to royalty payments that may become due to the
Sullivan family pursuant to the Sullivan Lease and the State of New Mexico
pursuant to State Leases, we are also required to pay a 10% net profits royalty
interest to various former owners of our properties and an additional 1% gross
profit royalty interest to David Q. Tognoni, our president and chief executive
officer. Should payments become due under these royalty interests, such payments
are calculated and payable on a quarterly basis.

The net profits royalty interests require us to pay 10% of our
net profits from mineral production from the Sullivan Lease, the State Leases,
and the 133 unpatented mining claims acquired from GWE as well as from all
mineral production from a three mile area of interest around the outside
boundary of the Sullivan Lease, the State Leases, and the 133 unpatented mining
claims acquired from GWE. The remaining 685 lode claims that we staked in 2008
are located within the three mile area of interest and therefore are subject to
the net profits royalty interests, as well as the gross profits royalty interest
discussed below. Net profits are determined by subtracting gross royalty
payments, marketing costs, distribution costs, operating costs, taxes, interest,
capital costs, and exploration costs from revenue generated from mineral
production.

The gross profits royalty interest requires us to pay 1% of our
gross profits from mineral production from the Sullivan Lease, the State Leases,
and the 133 unpatented mining claims acquired from GWE as well as from all
mineral production from a three mile area of interest around the outside
boundary of the Sullivan Lease, the State Leases, and the 133 unpatented mining
claims acquired from GWE. Gross profits are determined by subtracting marketing
costs, distribution costs, taxes, and royalty payments (excluding the 10% net
profit royalty interest granted to GWE and others) from revenue generated from
mineral production.

ITEM 3. LEGAL PROCEEDINGS

We are not currently subject to any legal proceedings, and to
the best of our knowledge, no such proceeding is threatened or contemplated, the
results of which would have a material impact on our properties, results of
operation, or financial condition. Nor, to the best of our knowledge, are any of
our officers or directors involved in any legal proceedings in which we are an
adverse party.

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ITEM 4. RESERVED

PART II

ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND PURCHASES OF EQUITY SECURITIES

Market Information

There is currently no established public trading market for our
common stock in the United States. We intend to make an application for
quotation of our common stock on the OTC Bulletin Board. However, our common
stock is currently traded only in Canada on the TSX Venture Exchange.

The table below sets forth the high and low sales prices for
our common stock on a quarterly basis as reported by TSX Venture Exchange from
October 29, 2009, the beginning of trading, to December 31, 2010:

| |                              |   | TSX-V
      (Cdn$) | 
| | ---------------------------- | - | ------------------ | 
| |                              |   | High               | 
| | Year Ended December 31, 2010 |   |                    | 
| | First Quarter                | $ | 0.45               | 
| | Second Quarter               |   | 0.38               | 
| | Third Quarter                |   | 1.20               | 
| | Fourth Quarter               |   | 1.30               | 
| |                              |   |                    | 
| | Year Ended December 31, 2009 |   |                    | 
| | First Quarter                | $ | -                  | 
| | Second Quarter               |   | -                  | 
| | Third Quarter                |   | -                  | 
| | Fourth Quarter               |   | 0.38               | 

As of March 29, 2011, there were approximately 44 record holders
of our common stock.

Penny Stock Rules

Due to the price of our common stock, as well as the fact that
our common stock is not listed on a national securities exchange registered with
the SEC, our stock is characterized as penny stocks under applicable
securities regulations. Our stock will therefore be subject to rules adopted by
the SEC regulating broker-dealer practices in connection with transactions in
penny stocks. The broker or dealer proposing to effect a transaction in a penny
stock must furnish his customer a document containing information prescribed by
the SEC and obtain from the customer an executed acknowledgment of receipt of
that document. The broker or dealer must also provide the customer with pricing
information regarding the security prior to the transaction and with the written
confirmation of the transaction. The broker or dealer must also disclose the
aggregate amount of any compensation received or receivable by him in connection
with such transaction prior to consummating the transaction and with the written
confirmation of the trade. The broker or dealer must also send an account
statement to each customer for which he has executed a transaction in a penny
stock each month in which such security is held for the customers account. The
existence of these rules may have an effect on the price of our stock, and the
willingness of certain brokers to effect transactions in our stock.

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Transfer Agent

We have appointed Registrar and Transfer Company at 10 Commerce
Dr., Cranford, New Jersey 07016-3572, USA, telephone (908) 272-8511 and Equity
Transfer & Trust Company at 200 University Avenue, Suite 400, Toronto,
Ontario, Canada M5H 4H1, telephone (416) 361-0930 as the co-transfer agents for
our common stock.

Dividend Policy

We have never declared or paid dividends on our common stock.
Payment of future dividends, if any, will be at the discretion of our Board of
Directors after taking into account various factors, including the terms of any
credit arrangements, our financial condition, operating results, current and
anticipated cash needs and plans for expansion. At the present time, we are not
party to any agreement that would limit our ability to pay dividends.

Securities Authorized for Issuance Under Equity Compensation
Plans

Set out below is information as of December 31, 2010 with
respect to compensation plans (including individual compensation arrangements)
under which our equity securities are authorized for issuance. This information
relates to our Equity Incentive Plan.

Equity Compensation Plan InformationPlan
        category
      Number of securities
        to be issued upon exercise of outstanding
        options, warrants and rights (a)
      Weighted-average exercise
        price of outstanding options, warrants and rights
        (b)
      Number of securities
        remaining available for future issuance under
        equity compensation plans (excluding securities
        reflected in column (a)) (c)Equity compensation plans approved
        by security holders
      5,910,000
      $ 0.29 (1)
      40,000Equity compensation plans not approved by security
        holders
      
      
      Total
      5,910,000
      $0.29
      40,000


(1) The option exercise price set forth in the options to
purchase 3,560,000 shares of our common stock is denominated in Canadian dollars
rather than U.S. dollars. The option exercise price for those options is
Cdn$0.25 and have been converted to U.S. dollars at the rate of CDN $1 = US
$1.0054 at Dec.31, 2010. The option exercise price set forth in the option grant
for options to purchase 2,350,000 shares of our common stock is denominated in
U.S. dollars. The weighted average exercise price for the 2,350,000 options is US
$0.39.___________________________

ITEM 6. SELECTED FINANCIAL DATA

Not required.

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ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION

Introduction

The following discussion updates our plan of operation as of
March 30, 2011 for the remainder of the year. It also analyzes our financial
condition at December 31, 2010 and compares it to our financial condition at
December 31, 2009. The discussion also summarizes the results of our operations
for the years ended December 31, 2010 and 2009, and compares each years results
to the results of the prior year. The discussion in this Managements
Discussion and Analysis of Financial Condition and Results of Operationshould be read in conjunction with our audited financial statements and the
notes thereto appearing in this report.

Overview

We are an exploration stage company engaged in the exploration
for beryllium. All of our properties are at an early stage of exploration and it
has not been determined whether any of the properties contain economic amounts
of mineralization. Our future performance is dependent on the results of our
future exploration efforts, and if warranted, development of our properties and
the state of the financial markets, as we will need to raise additional capital
to further our business plan.

On October 1, 2007, we purchased the Acquired Property from GWE
in exchange for the issuance of 10 million shares of our common stock and the
grant of a 20% net profit royalty interest in the Acquired Property to GWE and
certain other parties. In May 2009, the net profit royalty interest in the
Acquired Property was reduced to 10% in the aggregate in consideration for our
agreement to pursue our initial public offering. The total number of shares
issued to GWE as consideration for the Acquired Property represented
approximately 72% of our common stock after giving effect to the acquisition. As
a result, for financial statement reporting purposes, the acquisition of the
Acquired Property and related business operations have been reflected as a
reverse acquisition in accordance with applicable accounting principles and the
financial statements presented for comparative purposes represent the operations
of GWE that were acquired by us. The Acquired Property has been carried forward
at its historical carrying value before the combination.

Plan of Operation

Our plan of operation is to continue a two-year exploration
program commenced in 2010 and aimed at evaluating the grade and tonnage of
beryllium in the New Mexico Beryllium Project. In late 2007, we commissioned a
technical report from an independent mining consulting firm to obtain an
independent evaluation of the New Mexico Beryllium Project. The report, dated
June 5, 2009, was prepared by Fred Brown, CPG, Pr. Sci. Nat. and Tracy
Armstrong, P. Geo, of P&E Mining Consultants, Inc. It was prepared pursuant
to the standards of National Instrument 43-101-Standards of Disclosure for
Mineral Projectsof the Canadian Securities Administrators, which we refer
to as NI 43-101. We refer to this technical report as the Technical Report.

The initial phase of our exploration program consisted of a
5-hole core drilling program completed in January 2011. We anticipate that the
second phase of follow-up diamond core drilling will begin in 2011, which we
contemplate might total 20 holes at an average depth of 300 feet for a total of
6,000 feet at Warm Springs at an estimated cost of $1,600,000 and 20,000 feet
of rotary drilling in outlying hydrothermal areas at an estimated cost of $1,000,000.
We will require additional capital, which we contemplate will come from
additional sales of our common stock, to complete the second phase of this
program.

Property Maintenance Costs.In addition to expenses
expected to be incurred in connection with our exploration activities, we will
be required to incur property maintenance costs. These costs are currently
estimated at $171,000 for each year and include the following items:

22

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| | (i)  | Annual fees of $140 per claim per year to maintain
      federal mining claims; and                           
| | ---- | --------------------------------------------------------------------------------------------------------------
| |      |                                                                                                               
| | (ii) | Annual lease payments for state leases and the minimum
      annual royalty of $12,000 for the Sullivan Lease.

Corporate Overhead.Included in our plan of operation
are the expenses of overseeing our business and paying other general and
administrative expenses. These expenses primarily include salaries and other
compensation, administrative overhead, the reporting costs associated with being
a public company, and travel. We currently estimate these expenses at $75,000
per month, based on existing commitments and expectations, including the $3,000
per month commitment to our chief executive officer under his employment
agreement, as amended, and the $15,000 per month overhead allowance. We expect
these expenses will be paid from existing working capital and future equity
offerings, if necessary, until such time, if ever, we are successful in putting
our project into production or selling our properties to a major mining company.

Liquidity and Capital Resources

As of December 31, 2010, we had working capital of $1,609,692,
consisting of current assets of $3,032,843 and current liabilities of
$1,423,151. Our working capital at December 31, 2010 represents an increase in
working capital of $1,980,756 from December 31, 2009, and represents cash raised
from the sale of common stock offset by cash spent on our business during the
last 12 months, including drilling, consulting, professional and permitting
fees. We have continued to deplete our working capital subsequent to year-end.

Substantially all of our current assets at December 31, 2010
consisted of cash, representing the remaining proceeds from our private
placement completed June 18, 2010 and the exercise of warrants and stock options
throughout the year. Our current liabilities at December 31, 2010 consisted of
accounts payable, accrued liabilities and non-cash stock option and warrant
liability. The stock option and warrant liability, a non-cash liability, arises
from the fact that the stock options and warrants issued by us to certain
parties are denominated in a currency (Canadian dollars) other than our
functional currency (U.S. dollars) and are recorded as a liability pursuant to
applicable accounting principles. If the stock option and warrant liability at
December 31, 2010 of $846,300 is excluded from the calculation of our working
capital, our working capital at that date would be $2,455,992.

Our longer term ability to carry out our business plan beyond
the end of 2011 is dependent on our ability to achieve profitable operations or
to obtain additional financing. Due to the fact that we are an exploration stage
company, have no established source of revenue and are dependent on receipt of
additional financing, our independent accountants have raised substantial doubt
about our ability to continue as a going concern. See Item 1A. RISK
FACTORS and Item 8. Financial Statements.

We have financed all of our operations since inception through
the sale of equity, to this point entirely of common stock. In June 2010, we
completed our private placement of 10 million units at a price of Cdn$0.30
(US$0.29) per unit for gross proceeds of Cdn$3,000,000 (US$2,930,260). Each unit
is comprised of one common share and one-half of one common share purchase
warrant. Each full common share purchase warrant entitled the holder to purchase
one common share for a period of two years from the closing date at an exercise
price of Cdn$0.50. Related issue costs, including commission, totaled $289,109.
In connection with the placement, we granted 983,333 compensation warrants to
agents to purchase units at a price of Cdn$0.30 for a period of two years from
the closing of the private placement and paid a cash commission equal to 8% of
the gross proceeds.

During the year ended December 31, 2010, we completed the sale
of 7,100,750 additional common shares from the exercise of warrants and stock
options for gross proceeds of $3,162,038. The majority of the proceeds came from
the exercise of warrants issued in connection with the June 2010 private
placement, following acceleration of the expiration date of the warrants in
accordance with their terms.

We have expended a significant portion of the proceeds of our
equity financing on exploration on our properties, maintaining licenses and
permits and general corporate overhead. It will be necessary for us to raise
additional financing in the near future. While we have no existing arrangements
to obtain such financing at present, we anticipate it will likely take the form of additional equity
financing. There is no assurance we will be successful in obtaining this
financing. In the event we are not successful in obtaining such financing, we
may be forced to curtail operations and liquidate some or all of our assets.

23

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During the year ended December 31, 2010, our cash increased by
$2,326,687 as a result of our financing activities, net of cash used in
operating activities. Operating expenses for the year totaled $6,707,546, which
were reduced by non-cash expenses such as stock-based compensation, change in
warrant liability, unrealized foreign exchange loss, amortization of equipment,
and changes in current assets and liabilities, resulting in $3,476,502 of net
cash used in operating activities. Cash provided by financing activities totaled
$5,803,189 and represented the gross proceeds, net of costs, from the private
placement and the exercise of stock options and warrants. The $6,707,546 of
operating expenses represented our net loss for the year.

As of December 31, 2009, we had a deficit in working capital of
$371,064, consisting of current assets of $570,727 and current liabilities of
$941,791. Our deficit at December 31, 2009 represented a decrease in working
capital of $532,184 from December 31, 2008, and represented cash spent on our
business during 2009, including consulting, professional and permitting fees.

During the year ended December 31, 2009, our cash increased by
$47,752 as a result of our financing activities, net of cash used in operating
activities. Operating expenses for 2009 totaled $1,478,711, which were reduced
by non-cash expenses such as stock-based compensation, unrealized foreign
exchange loss, amortization of equipment, and changes in current assets and
liabilities, resulting in $959,245 of net cash used in operating activities.
Cash provided by financing activities totaled $1,006,997 and represented the
gross proceeds, net of costs, from the initial public offering and the exercise
of the over-allotment option. The $1,478,711 of operating expenses represented
our net loss for the year.

Off Balance Sheet Arrangements

As of December 31, 2010, we had no off-balance sheet
arrangements or obligations that are likely to have a material effect on our
financial condition, results of operation or business.

Tabular Disclosure of Contractual Obligations

The following table summarizes our obligations and commitments
as of December 31, 2010 to make future payments under certain contracts,
aggregated by category of obligation, for the specified time periods:

Payments due by period

|Contractual Obligations      |   |        |     |   |              |  |   |           |  |   |       |  |   | More   | 
|---------------------------- | - | ------ | --- | - | ------------ |  | - | --------- |  | - | ----- |  | - | ------ | 
|                             |   |        |     |   | Less than    |  |   |           |  |   | 4-5   |  |   | than 5 | 
|                             |   | Total  |     |   | 1
      year |  |   | 1-3 years |  |   | years |  |   | years  | 
|                             |   |        |     |   |              |  |   |           |  |   |       |  |   |        | 
|Purchase Obligations         | $ | 72,000 | (1) | $ | 36,000       |  | $ | 36,000    |  | $ |      |  | $ |       | 
|                             |   |        |     |   |              |  |   |           |  |   |       |  |   |        | 
|Asset Retirement Obligations |   | 12,506 | (2) |   |             |  |   |          |  |   |      |  |   |       | 
|Total                        | $ | 84,506 |     | $ | 36,000       |  | $ | 36,000    |  | $ |      |  | $ |       | 

(1) Represents amounts due to David Tognoni, our
President and Chief Executive Officer, under his employment agreement with our
Company. Effective September 1, 2009, Mr. Tognoni agreed to a base salary to
$36,000 per year.

(2) We are unable to predict when these obligations
will mature, since they depend on our exploration efforts in the future.
____________________

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Results of Operations

For the year ended December 31, 2010, we realized a net loss of
$6,707,546 (December 31, 2009: $1,478,711) or $0.17 per share (December 31,
2009: $0.05 per share), on no revenue. Since we are an exploration company, we
do not expect to receive revenue from operations until such time, if ever, we
identify sufficient mineralized material to justify placing our property into
production. During the year ended December 31, 2010, there were increases in
management and consulting fees, drilling costs, geological consulting fees,
professional fees, foreign exchange loss, change in warrant liability,
stock-based compensation and transfer agent and filing fees compared to the year
ended December 31, 2009. Each of these items is analyzed in more detail
immediately below:

- Management and consulting fees increased by $287,098 from 2009 to 2010,
  primarily due to the payment of expense allowance to our president and chief
  executive officer on a retroactive basis;
- Drilling expenses for the year ended December 31, 2010, were $889,954
  (year ended December 31, 2009 - $nil). The increase of $889,954 can be
  attributed to commencement of drilling upon receipt of permits during the year
  ended December 31, 2010. During the year ended December 31, 2009, permits had
  not been granted for drilling on the properties;
- Geological consulting fees for the year ended December 31, 2010 were
  $1,465,500 (year ended December 31, 2009 - $411,731). The increase of
  $1,053,769 can be attributed to increased exploration on the properties
  congruent with the receipt of permits and drilling activity during the year
  ended December 31, 2010 compared to the year ended December 31, 2009;
- Professional fees for the year ended December 31, 2010, were $471,505
  (year ended December 31, 2009 - $345,177). The increase of $126,328 can be
  attributed to increased accounting, legal and audit fees incurred during the
  year ended December 31, 2010 as a result of our status as a publicly-traded
  company;
- Our foreign exchange loss increased $101,218 as a result of a weakening of
  the U.S. dollar against the Canadian dollar;
- Fees, licenses and permits fees for the year ended December 31, 2010 were
  $117,024 (year ended December 31, 2009 - $119,194). Permit and license fees
  were consistent for the year ended December 31, 2010 compared to the year
  ended December 31, 2009;
- The increase of $1,967,193 in warrant liability during the year ended
  December 31, 2010 compared to the same period in 2009 was mainly due to
  valuation of the 6,456,249 warrants issued pursuant to the private placement
  and exercise of compensation warrants.
- The increase of $681,603 in stock-based compensation during the year ended
  December 31, 2010, compared to the same period in 2009, was mainly due to the
  vesting of a portion of the 3,000,000 stock options granted during 2010 and
  the change in valuation of the stock option liability. The Company expenses
  the options over the vesting term which can create variances from one period
  to another. Users of the Companys financial statements should be cautious of
  share based payments since it can impact operating results significantly; and
- Transfer agent and filing fees for the year ended December 31, 2010, was
  $194,986 (year ended December 31, 2008 - $56,193). The increase of $138,793
  can be attributed to transfer agent services required to facilitate the
  completion of the private placement and common share issuances during the year
  ended December 31, 2010.

We expect to incur losses until such time, if ever, we identify
commercial amounts of mineralized material and successfully extract such
material for sale to third parties.

Please see Plan of Operation above for a description
of costs and expenses that we expect to incur during 2010.

Critical Accounting Policies

The following are the accounting policies that we believe are
most critical in the preparation of our financial statements:

25

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Mineral Rights and Exploration Costs

Mineral rights include the cost of obtaining unpatented and
patented mining claims and the cost of acquisition of properties. Significant
payments related to the acquisition of land and mineral rights are capitalized
as tangible assets. If a mineable ore body is discovered, such costs are
amortized when production begins using the units-of-production method based on
proven and probable reserves. If no mineable ore body is discovered or such
rights are otherwise determined to have no value, such costs are expensed in the
period in which it is determined the property has no future economic value.

When mineral properties are acquired under option agreements
with future acquisition payments to be made at the sole discretion of the
Company, those future payments, whether in cash or shares, are recorded only
when the Company has made or is obliged to make the payment or issue the shares.

The Company expenses all costs related to the maintenance and
development of mineral interests prior to the establishment of proven and
probable reserves. As at December 31, 2010 and 2009, the Company had not
established any proven or probable reserves.

Share-Based Payments

The Company issues stock options to employees and consultants
in connection with various business activities. These are accounted for in
accordance with the provisions of ASC 718 Compensation  Stock Compensation
and ASC 505 Equity as well as other authoritative accounting pronouncements.
The Company is required to make estimates of the fair value of the related
instruments based on the Black- Scholes option pricing model and recognize
expenses over the period benefited, usually the vesting period.

Stock options and warrants which are indexed to a factor which
is not a market, performance or service condition, in addition to the Companys
share price, are classified as liabilities and remeasured at each reporting date
based on the Black-Scholes option pricing model with a charge to operations,
until the date of settlement. Some warrants have been reflected as a liability
as they are indexed to a factor which is not a market performance or service
condition.

Options granted to consultants are amortized over their
performance period and remeasured at their then-current fair value as of the
financial reporting date until the measurement date is reached.

The expected forfeiture rate is estimated based on historical
forfeitures and expectations of future forfeiture rates. The Company makes
adjustments if the actual forfeiture rate differs from the expected rate.

Asset Retirement Obligations

In accordance with ASC 410 "Asset Retirement and Environmental
Obligations", the fair values of asset retirement obligations are recorded as
liabilities on a discounted basis when incurred. The associated asset retirement
costs are capitalized as part of the carrying amount of the long-lived asset
unless the asset has been previously charged to operations, in which case the
amount is expensed. Over time, the liabilities will be accreted for the change
in their present value and the initial capitalized costs will be depleted and
amortized over the useful lives of the related assets.

Impairment of Long-Lived Assets

In accordance with ASC 360 Property, Plant and Equipment,
long-lived assets to be held and used are analyzed for impairment whenever
events or changes in circumstances indicate that the related carrying amounts
may not be recoverable. The Company evaluates at each balance sheet date whether
events and circumstances have occurred that indicate possible impairment. If
there are indications of impairment, the Company uses the future undiscounted
cash flows of the related asset or asset grouping over the remaining life in
measuring whether the assets are recoverable. In the event such cash flows are
not expected to be sufficient to recover the recorded asset values, the assets are written down to their estimated fair value.
Long-lived assets to be disposed of are reported at the lower of their carrying
amount or their fair value, less the cost to sell.

26

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Income Taxes

The Company uses the asset and liability method of tax
allocation to account for income taxes. Deferred income taxes reflect the net
tax effects of temporary differences between the carrying amount of assets and
liabilities for financial reporting purposes and the amounts used for income tax
purposes and are measured using enacted tax rates in effect for the year in
which these temporary differences are expected to be recovered or settled. The
effect of changes in income tax rates on deferred income tax assets and
liabilities is recognized in operations in the period that the changes are
enacted. When the future realization of deferred tax assets does not meet the
test of being more likely than not to occur, a valuation allowance in the amount
of the potential future benefit is taken. Tax benefits are recorded only for tax
positions that are more likely than not to be sustained upon examination by tax
authorities. The amount recognized is measured as the largest amount of benefit
that is greater than 50 percent likely to be realized upon ultimate settlement.
Unrecognized tax benefits are tax benefits claimed in our tax returns that do
not meet these recognition and measurement standards. The Company believes that
there are no tax positions taken or expected to be taken that would
significantly increase or decrease unrecognized tax benefits within 12 months of
the reporting date.

Issue Costs

Direct costs associated with the issuance of our common stock,
including professional fees and selling expenses relating to broker-dealer
relationships, are reflected as a reduction of shareholders equity.

Foreign Currency Translation

Our functional currency of the Company is the U.S. dollar.
Certain monetary assets and liabilities of the Company denominated in Canadian
dollars are remeasured into U.S. dollars at exchange rates in effect at the
balance sheet dates. As at December 31, 2010 and 2009, substantially all of the
Companys Canadian dollar denominated monetary assets and liabilities were
comprised of cash and stock option and warrant liability. Non-monetary assets
and liabilities are remeasured at historical exchange rates, unless such items
are carried at market, in which case they are translated at the exchange rates
in effect on the balance sheet date. Revenues and expenses are remeasured at
rates approximating the exchange rates in effect at the time of the transaction.
During the years ended December 31, 2010 and 2009, substantially all cash
expenses were transacted in U.S. dollars.

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 certain reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from those estimates.
Significant estimates include the valuation of share-based payments, mineral
rights, asset retirement obligations, stock option and warrant liability and
deferred tax assets and liabilities. These estimates are reviewed periodically,
and, as adjustments become necessary, they are reported in operations in the
period in which they become known.

Accounting Standards Codification

The Company uses ASC Topic 105, Accounting Standards
Codification (ASC 105), which establishes the FASB Accounting Standards
Codification as the source of authoritative accounting principles recognized by
the FASB to be applied by nongovernmental entities in the preparation of
financial statements in conformity with GAAP. Rules and interpretive releases of
the SEC under authority of federal securities laws are also sources of
authoritative GAAP for SEC registrants.

27

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Fair Value Measurements and Disclosures

Accounting Standards Update (ASU) 200905, Fair Value
Measurements and Disclosures (Topic 820) - Measuring Liabilities at Fair Value,
clarifies that the quoted price for an identical liability, when traded as an
asset in an active market, is also a Level 1 measurement for that liability when
no adjustment to the quoted price is required. In the absence of a Level 1
measurement, an entity must use one or more of the following valuation
techniques to estimate fair value (in a manner consistent with the principles in
ASC Topic 820), which can be classified into two categories: 1) a valuation
technique that uses a quoted price; and 2) another valuation technique based on
the amount an entity would pay to transfer the identical liability or based on
the amount an entity would receive to enter into an identical liability.

The ASC guidance for fair value measurements and disclosure
establishes a fair value hierarchy that prioritizes the inputs to valuation
techniques used to measure fair value. The hierarchy gives the highest priority
to unadjusted quoted prices in active markets for identical asset or liabilities
(Level 1 measurements) and the lowest priority to unobservable inputs (Level 3
measurements).

The three levels of the fair value hierarchy are described
below.

|Level 1 - | Unadjusted quoted prices in active markets that are
      accessible at the measurement date for identical unrestricted assets or
      liabilities;                               
|--------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|          |                                                                                                                                                                                    
|Level 2 - | Quoted prices in markets that are not active, or inputs
      that are observable, either directly or indirectly, for substantially the
      full term of the asset or liability; 
|          |                                                                                                                                                                                    
|Level 3 - | Price or valuation techniques that require inputs that
      are both significant to the fair value measurement and unobservable
      (supported by little or no market activity).

The Companys equity-linked financial instruments reflected as
stock option and warrant liability on the balance sheet represent financial
liabilities classified as Level 2 as per ASU 2009-05. As required by the
guidance, assets and liabilities are classified in their entirety based on the
lowest level of input that is significant to the fair value measurement. The
fair value of the stock option and warrant liability which is not traded in an
active market, has been determined using the Black-Scholes model based on
assumptions that are supported by observable market conditions.

Accounting Principles Recently Adopted

In January 2010, the FASB issued ASU 2010-05, Compensation 
Stock Compensation (Topic 718): Escrowed Share Arrangements and the Presumption
of Compensation, which reflects the SEC's views on overcoming the presumption
that escrowed share arrangements represent compensation for certain
shareholders. ASU 2010-05 did not have an impact on the Company's financial
position, results of operations or cash flows.

Future Accounting Pronouncements

In January 2010, the FASB issued ASU 2010-06, Fair Value
Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value
Measurements, which adds new requirements for disclosures about transfers into
and out of Levels 1 and 2 and separate disclosures about purchases, sales,
issuances and settlements relating to Level 3 measurements. ASU 2010-06 is
effective for the first reporting period (including interim periods) beginning
after December 15, 2010. The Company does not expect the impact of adopting ASU
2010-06 on its financial position, results of operations or cash flows to be
material.

In April 2010, the FASB issued ASU 2010-13, "Compensation-Stock
Compensation (Topic 718) - Effect of Denominating the Exercise Price of a
Share-Based Payment Award in the Currency of the Market in Which the Underlying
Equity Security Trades - a consensus of the FASB Emerging Issues Task Force".
ASU 2010-13 provides amendments to Topic 718 to clarify that an employee share-based
payment award with an exercise price denominated in the currency of a market in
which a substantial portion of the entity's equity securities trades should not
be considered to contain a condition that is not a market, performance, or
service condition. Therefore, an entity would not classify such an award as a
liability if it otherwise qualifies as equity. The amendments in this update do
not expand the recurring disclosures required by Topic 718. Disclosures
currently required under Topic 718 are applicable to a share-based payment
award, including the nature and the term of share-based payment arrangements.
The amendments in this update are effective for fiscal years, and interim
periods within those fiscal years, beginning on or after December 15, 2010. The
Company has assessed the impact of this accounting update and expects to
reclassify the stock option liability relating to the 2.2 million stock options
with exercise price denominated in Canadian dollars to equity.

28

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Forward-Looking Statements

This report contains or incorporates by reference
forward-looking statements, as that term is used in federal securities laws,
about our financial condition, results of operations and business. These
statements include, among others:

- statements concerning the benefits that we expect will result from our
  business activities and certain transactions that we contemplate or have
  completed, such as receipt of proceeds, increased revenues, decreased expenses
  and avoided expenses and expenditures; and
- statements of our expectations, beliefs, future plans and strategies,
  anticipated developments and other matters that are not historical facts.

These statements may be made expressly in this document or may
be incorporated by reference to other documents that we will file with the SEC
and on SEDAR. You can find many of these statements by looking for words such as
believes, expects, anticipates, estimates or similar expressions used in
this report or incorporated by reference in this report.

These forward-looking statements are subject to numerous
assumptions, risks and uncertainties that may cause our actual results to be
materially different from any future results expressed or implied in those
statements. Because the statements are subject to risks and uncertainties,
actual results may differ materially from those expressed or implied. We caution
you not to put undue reliance on these statements, which speak only as of the
date of this report. Further, the information contained in this document or
incorporated herein by reference is a statement of our present intention and is
based on present facts and assumptions, and may change at any time and without
notice, based on changes in such facts or assumptions.

Risk Factors Impacting Forward-Looking Statements

The important factors that could prevent us from achieving our
stated goals and objectives include, in addition to the risk factors identified
elsewhere in this report, the following:

- The success of our exploration program;
- Unexpected changes in business and economic conditions;
- Commodity price fluctuations;
- Technological changes in the mining industry;
- Any change in interest rates, currency exchange rates or inflation;
- The willingness and ability of third parties to honour their contractual
  commitments;
- Our ability to raise additional capital, as it may be affected by current
  conditions in the stock market and competition in the mining industry for risk
  capital;
- Our costs of exploration and production, if any;
- Environmental and other regulations, as the same presently exist and may
  hereafter be amended;
- Local and community impacts and issues; and
- Volatility of our stock price.

29

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We undertake no responsibility or obligation to update publicly
these forward-looking statements, but may do so in the future in written or oral
statements at our discretion. Investors should take note of any future
statements made by or on our behalf.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT
MARKET RISK

Not required.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Financial Statements

|Managements
      Report on Internal Control Over Financial Reporting                                                                                        | 31
|------------------------------------------------------------------------------------------------------------------------------------------------------------- | --
|Report
      of Independent Registered Public Accounting Firm                                                                                                 | 32
|Balance
      Sheets at December 31, 2010 and 2009                                                                                                            | 33
|Statements
      of Operations for the years ended December 31, 2010 and 2009 and for the
      period from inception (February 3, 2004) to December 31, 2010 | 34
|Statements
      of Shareholders Equity (Deficiency) for the period from inception
    (February 3, 2004) to December 31, 2010                               | 35
|Statements
      of Cash Flows for the years ended December 31, 2010 and 2009 and for the
      period from inception (February 3, 2004) to December 31, 2010 | 38
|Notes
      to Financial Statements                                                                                                                           | 40

30

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Managements Report on Internal Control Over Financial
Reporting

Our management is responsible for establishing and maintaining
adequate internal control over financial reporting.

The Securities Exchange Act of 1934 defines internal control
over financial reporting in Rules 13a-15(f) and 15d-15(f) as a process designed
by, or under the supervision of, the companys principal executive and principal
financial officers and effected by the companys board of directors, management,
and other personnel to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles and
includes those policies and procedures that:

- Pertain to the maintenance of records that in reasonable detail accurately
  and fairly reflect the transactions and disposition of assets of the company;
- Provide reasonable assurance that transactions are recorded as necessary to
  permit preparation of financial statements in accordance with generally
  accepted accounting principles, and that our receipts and expenditures are
  being made only in accordance with authorizations of management and our board
  of directors; and
- Provide reasonable assurance regarding prevention and timely detection of
  unauthorized acquisition, use or disposition of our assets that could have a
  material effect on our financial statements.

Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control
over financial reporting as of December 31, 2010 based on criteria for effective
internal control over financial reporting described in Internal Control 
Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission.

Based on its assessment, management concluded that the Company
maintained effective internal control over financial reporting as of December
31, 2010 based on those criteria.

31

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Directors of
BE Resources Inc. 
(An Exploration Stage Entity)

We have audited the accompanying balance sheets of BE Resources Inc. (an exploration stage entity) as of December 31, 2010 and 2009 and the related statements of operations, shareholders’ (deficiency) equity and cash flows for the years ended
December 31, 2010 and 2009, and the cumulative period from inception (February 3, 2004) through December 31, 2010. 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). 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 audits 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 includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes 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 BE Resources Inc. as of December 31, 2010 and 2009 and the results of its operations and its cash flows for each of the
years ended December 31, 2010 and 2009 and the cumulative period from inception (February 3, 2004) through December 31, 2010, in conformity with generally accepted accounting principles in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company is in the exploration stage, has no established sources of revenue
and is dependent on its ability to raise capital from shareholders or other sources to sustain operations.  These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to
these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

McGOVERN, HURLEY, CUNNINGHAM, LLP

/s/ McGovern, Hurley, Cunningham, LLP

Chartered Accountants 
Licensed Public Accountants

TORONTO, Canada 
March 29, 2011

32

---

|BE Resources Inc.                                                         
|--------------------------------------------------------------------------
|(A Continuation of the Operations of Great Western
      Exploration, LLC)
|(An Exploration Stage Entity)                                             
|Balance Sheets                                                            
|Presented in US
      Dollars                                             

|                                                            |   | December 31, |   |   | December 31, |  
|----------------------------------------------------------- | - | ------------ | - | - | ------------ | -
|                                                            |   | 2010         |   |   | 2009         |  
|                                                            |   |              |   |   |              |  
|Assets                                                      |   |              |   |   |              |  
|Current assets                                              |   |              |   |   |              |  
|Cash                                                        | $ | 2,897,414    |   | $ | 570,727      |  
|Prepaid expenses, deposits and
      other receivables      |   | 135,429      |   |   | -            |  
|                                                            |   |              |   |   |              |  
|Total current
      assets                                  |   | 3,032,843    |   |   | 570,727      |  
|Mineral rights (note 3)                                     |   | 110,400      |   |   | 110,400      |  
|Reclamation bonds
      (note 4)                            |   | 92,050       |   |   | 25,946       |  
|Equipment (note 5)                                          |   | -            |   |   | 95           |  
|                                                            |   |              |   |   |              |  
|Total assets                                                | $ | 3,235,293    |   | $ | 707,168      |  
|                                                            |   |              |   |   |              |  
|Liabilities                                                 |   |              |   |   |              |  
|Current
      liabilities                                   |   |              |   |   |              |  
|Accounts payable (note 8)                                   | $ | 571,037      |   | $ | 255,826      |  
|Accrued
      liabilities                                   |   | 5,814        |   |   | 89,465       |  
|Stock option and warrant
      liability (note 7(b)(c)(d))) |   | 846,300      |   |   | 596,500      |  
|                                                            |   |              |   |   |              |  
|Total current liabilities                                   |   | 1,423,151    |   |   | 941,791      |  
|Asset retirement obligation
      (note 4)                  |   | 12,506       |   |   | 12,506       |  
|                                                            |   |              |   |   |              |  
|Total Liabilities                                           |   | 1,435,657    |   |   | 954,297      |  
|                                                            |   |              |   |   |              |  
|Commitments and contingencies (note 6)                      |   |              |   |   |              |  
|Shareholders' equity
      (deficiency)                     |   |              |   |   |              |  
|Capital stock
      (note 7(a)(b))                          |   | 13,869,935   |   |   | 5,636,536    |  
|Additional paid-in capital                                  |   | 753,029      |   |   | 232,117      |  
|Deficit accumulated during the
      exploration stage      |   | (12,823,328  | ) |   | (6,115,782   | )
|Total shareholders' equity (deficiency)                     |   | 1,799,636    |   |   | (247,129     | )
|                                                            |   |              |   |   |              |  
|Total liabilities and shareholders' equity (deficiency)     | $ | 3,235,293    |   | $ | 707,168      |  

|Approved on behalf of the Board: |                           
|-------------------------------- | --------------------------
|                                 |                           
|/s/ David Tognoni, Director      | /s/ Edward Godin, Director

The accompanying notes are an integral part of these
financial statements

33

---

|BE Resources Inc.                                                         
|--------------------------------------------------------------------------
|(A Continuation of the Operations of Great Western
      Exploration, LLC)
|(An Exploration Stage Entity)                                             
|Statements of Operations                                                  
|Presented in US
      Dollars                                             

|                                                                       |   |            |   |   |            |   |   | Cumulative         |  
|---------------------------------------------------------------------- | - | ---------- | - | - | ---------- | - | - | ------------------ | -
|                                                                       |   |            |   |   |            |   |   | from inception     |  
|                                                                       |   |            |   |   |            |   |   | (February 3, 2004) |  
|                                                                       |   |            |   |   |            |   |   | to December 31,    |  
|Year ended
      December 31,                                          |   | 2010       |   |   | 2009       |   |   | 2010               |  
|                                                                       |   |            |   |   |            |   |   |                    |  
|Operating expenses                                                     |   |            |   |   |            |   |   |                    |  
|Management and consulting fees
      (note 8)                          | $ | 409,650    |   | $ | 122,552    |   | $ | 1,306,518          |  
|Drilling                                                               |   | 889,954    |   |   | -          |   |   | 1,711,325          |  
|Geological consulting fees                                             |   | 1,465,500  |   |   | 411,731    |   |   | 2,355,272          |  
|Office and
      general                                               |   | 34,212     |   |   | 81,951     |   |   | 487,006            |  
|Professional fees                                                      |   | 471,505    |   |   | 345,177    |   |   | 1,240,456          |  
|Foreign exchange
      loss                                            |   | 127,782    |   |   | 26,564     |   |   | 431,938            |  
|Change in warrant liability
      (note 7(b))                          |   | 1,967,193  |   |   | -          |   |   | 1,967,193          |  
|Stock-based
      compensation (note 7(c))                             |   | 963,027    |   |   | 281,424    |   |   | 1,678,744          |  
|Fees, licenses and permits                                             |   | 117,024    |   |   | 119,194    |   |   | 571,882            |  
|Transfer agent
      and filing fees                                   |   | 194,986    |   |   | 56,193     |   |   | 251,179            |  
|Lease expense                                                          |   | 12,000     |   |   | 12,000     |   |   | 84,566             |  
|Interest and
      accretion expense                                   |   | -          |   |   | -          |   |   | 5,475              |  
|Gain on disposition of equipment                                       |   | -          |   |   | -          |   |   | (602               | )
|Travelling                                                             |   | 54,618     |   |   | 20,818     |   |   | 158,087            |  
|Amortization of equipment                                              |   | 95         |   |   | 1,107      |   |   | 9,387              |  
|Financing costs                                                        |   | -          |   |   |            |   |   | 571,335            |  
|                                                                       |   |            |   |   |            |   |   |                    |  
|                                                                       |   | -          |   |   | -          |   |   | 571,335            |  
|                                                                       |   |            |   |   |            |   |   |                    |  
|                                                                       |   | 6,707,546  |   |   | 1,478,711  |   |   | 12,829,761         |  
|Less: other income                                                     |   |            |   |   |            |   |   |                    |  
|Dividend income                                                        |   |            |   |   |            |   |   | (6,433             | )
|                                                                       |   |            |   |   |            |   |   |                    |  
|                                                                       |   | -          |   |   | -          |   |   | (6,433             | )
|                                                                       |   |            |   |   |            |   |   |                    |  
|Net loss for the period                                                | $ | (6,707,546 | ) | $ | (1,478,711 | ) | $ | (12,823,328        | )
|                                                                       |   |            |   |   |            |   |   |                    |  
|Net loss per share - Basic and diluted                                 | $ | (0.17      | ) | $ | (0.05      | ) |   |                    |  
|                                                                       |   |            |   |   |            |   |   |                    |  
|Weighted average number of shares outstanding-
      basic and diluted |   | 38,990,215 |   |   | 28,213,493 |   |   |                    |  

The accompanying notes are an integral part of these
financial statements

34

---

|BE Resources Inc.                                                         
|--------------------------------------------------------------------------
|(A Continuation of the Operations of Great Western
      Exploration, LLC)
|(An Exploration Stage Entity)                                             
|Statement of Shareholders' Equity (Deficiency)                            
|Presented in US
      Dollars                                             

|                                                                                                                           |   |            |  |  |              |  |   |            |   |   | Deficit     |   |   |            |  
|-------------------------------------------------------------------------------------------------------------------------- | - | ---------- |  |  | ------------ |  | - | ---------- | - | - | ----------- | - | - | ---------- | -
|                                                                                                                           |   |            |  |  |              |  |   |            |   |   | Accumulated |   |   |            |  
|                                                                                                                           |   | Additional |  |  | Common Stock |  |   | During the |   |   |             |  
|                                                                                                                           |   | Paid-in    |  |  | Number of    |  |   |            |   |   | Exploration |   |   |            |  
|                                                                                                                           |   | Capital    |  |  | Shares       |  |   | Amount     |   |   | Stage       |   |   | Total      |  
|                                                                                                                           |   |            |  |  |              |  |   |            |   |   |             |   |   |            |  
|February 3, 2004, issued to the manager 
         of GWE for interest in mining lease     valued
      at $0.002 per share | $ | -          |  |  | 6,734,160    |  | $ | 11,000     |   | $ | -           |   | $ | 11,000     |  
|Fiscal 2004, issued for cash at $0.53 per share                                                                            |   | -          |  |  | 1,870,600    |  |   | 1,000,000  |   |   | -           |   |   | 1,000,000  |  
|Issue costs                                                                                                                |   | -          |  |  | -            |  |   | (10,545    | ) |   | -           |   |   | (10,545    | )
|Loss for the period                                                                                                        |   | -          |  |  | -            |  |   | -          |   |   | (417,520    | ) |   | (417,520   | )
|                                                                                                                           |   |            |  |  |              |  |   |            |   |   |             |   |   |            |  
|Balance, December 31, 2004                                                                                                 |   | -          |  |  | 8,604,760    |  |   | 1,000,455  |   |   | (417,520    | ) |   | 582,935    |  
|Fiscal 2005, issued for cash at $0.36 per
      share                                                                      |   | -          |  |  | 140,295      |  |   | 50,000     |   |   | -           |   |   | 50,000     |  
|Fiscal 2005, issued for cash at $0.80 per share                                                                            |   | -          |  |  | 374,120      |  |   | 300,000    |   |   | -           |   |   | 300,000    |  
|Fiscal 2005, issued for cash at $0.82 per
      share                                                                      |   | -          |  |  | 140,295      |  |   | 115,000    |   |   | -           |   |   | 115,000    |  
|Fiscal 2005, issued for cash at $1.07 per share                                                                            |   | -          |  |  | 93,530       |  |   | 100,000    |   |   | -           |   |   | 100,000    |  
|Issue costs                                                                                                                |   | -          |  |  | -            |  |   | (19,278    | ) |   | -           |   |   | (19,278    | )
|Loss for the period                                                                                                        |   | -          |  |  | -            |  |   | -          |   |   | (1,017,725  | ) |   | (1,017,725 | )
|                                                                                                                           |   |            |  |  |              |  |   |            |   |   |             |   |   |            |  
|Balance, December 31, 2005                                                                                                 |   | -          |  |  | 9,353,000    |  |   | 1,546,177  |   |   | (1,435,245  | ) |   | 110,932    |  
|May 7, 2006, issued for cash at $2.13 per
      share                                                                      |   | -          |  |  | 47,000       |  |   | 100,000    |   |   | -           |   |   | 100,000    |  
|December 2006, subscriptions receivable                                                                                    |   | -          |  |  | -            |  |   | (37,500    | ) |   | -           |   |   | (37,500    | )
|Issue costs                                                                                                                |   | -          |  |  | -            |  |   | (26,986    | ) |   | -           |   |   | (26,986    | )
|Contribution of capital from GWE to fund                                                                                   |   |            |  |  |              |  |   |            |   |   |             |   |   |            |  
|exploration operations                                                                                                     |   | -          |  |  | -            |  |   | 240,000    |   |   | -           |   |   | 240,000    |  
|Loss for the period                                                                                                        |   | -          |  |  | -            |  |   | -          |   |   | (251,061    | ) |   | (251,061   | )
|                                                                                                                           |   |            |  |  |              |  |   |            |   |   |             |   |   |            |  
|Balance, December 31, 2006                                                                                                 | $ | -          |  |  | 9,400,000    |  | $ | 1,821,691  |   | $ | (1,686,306  | ) | $ | 135,385    |  

The accompanying notes are an integral part of these
financial statements

35

---

|BE Resources Inc.                                                         
|--------------------------------------------------------------------------
|(A Continuation of the Operations of Great Western
      Exploration, LLC)
|(An Exploration Stage Entity)                                             
|Statement of Shareholders' Equity (Deficiency)
      (Continued)          
|Presented in US
      Dollars                                             

|                                                                                                                                                                                                                                |   |            |  |  |              |  |   |            |   |   | Deficit     |   |   |            |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ---------- |  |  | ------------ |  | - | ---------- | - | - | ----------- | - | - | ---------- | -
|                                                                                                                                                                                                                                |   |            |  |  |              |  |   |            |   |   | Accumulated |   |   |            |  
|                                                                                                                                                                                                                                |   | Additional |  |  | Common Stock |  |   | During the |   |   |             |  
|                                                                                                                                                                                                                                |   | Paid-in    |  |  | Number of    |  |   |            |   |   | Exploration |   |   |            |  
|                                                                                                                                                                                                                                |   | Capital    |  |  | Shares       |  |   | Amount     |   |   | Stage       |   |   | Total      |  
|                                                                                                                                                                                                                                |   |            |  |  |              |  |   |            |   |   |             |   |   |            |  
|Balance, December 31, 2006                                                                                                                                                                                                      | $ | -          |  |  | 9,400,000    |  | $ | 1,821,691  |   | $ | (1,686,306  | ) | $ | 135,385    |  
|Receipt of subscriptions receivable                                                                                                                                                                                             |   | -          |  |  | -            |  |   | 37,500     |   |   | -           |   |   | 37,500     |  
|Reverse merger adjustment                                                                                                                                                                                                       |   | -          |  |  | 3,000,000    |  |   | (30,123    | ) |   | -           |   |   | (30,123    | )
|October 1, 2007, issued to buy out minority      
      interest in mineral rights, valued at       historical
      cost                                                                                                       |   | -          |  |  | 600,000      |  |   | -          |   |   | -           |   |   | -          |  
|Contribution of capital from GWE to fund 
           exploration operations                                                                                                                                                     |   | -          |  |  | -            |  |   | 46,362     |   |   | -           |   |   | 46,362     |  
|October and November 2007, issued for      
      cash at $0.21 (Cdn $0.20) per share                                                                                                                                           |   | -          |  |  | 13,895,000   |  |   | 2,923,434  |   |   | -           |   |   | 2,923,434  |  
|December 7, 2007, issued for service valued 
           at $0.21 (Cdn$0.20) per share based on 
           the sales price of the October and      
      November 2007 private placement                                       |   | -          |  |  | 300,000      |  |   | 60,102     |   |   | -           |   |   | 60,102     |  
|Issue costs                                                                                                                                                                                                                     |   | -          |  |  | -            |  |   | (118,026   | ) |   | -           |   |   | (118,026   | )
|Stock-based compensation, grant of 1,360,000 
           stock options valued at $0.15 per stock 
           option based on the Black-Scholes option 
           pricing model, amortized over the vesting 
           period  |   | 59,700     |  |  | -            |  |   | -          |   |   | -           |   |   | 59,700     |  
|Loss for the period                                                                                                                                                                                                             |   | -          |  |  | -            |  |   | -          |   |   | (758,640    | ) |   | (758,640   | )
|                                                                                                                                                                                                                                |   |            |  |  |              |  |   |            |   |   |             |   |   |            |  
|Balance, December 31, 2007                                                                                                                                                                                                      |   | 59,700     |  |  | 27,195,000   |  |   | 4,740,940  |   |   | (2,444,946  | ) |   | 2,355,694  |  
|Stock-based compensation , grant of 1,360,000 
           stock options valued at $0.15 per stock 
           option based on the Black-Scholes option 
           pricing model, amortized over the vesting 
           period |   | 122,593    |  |  | -            |  |   | -          |   |   | -           |   |   | 122,593    |  
|Loss for the period                                                                                                                                                                                                             |   | -          |  |  | -            |  |   | -          |   |   | (2,192,125  | ) |   | (2,192,125 | )
|                                                                                                                                                                                                                                |   |            |  |  |              |  |   |            |   |   |             |   |   |            |  
|Balance, December 31, 2008                                                                                                                                                                                                      |   | 182,293    |  |  | 27,195,000   |  |   | 4,740,940  |   |   | (4,637,071  | ) |   | 286,162    |  
|Common shares issued for cash (IPO) at $0.28 
           (Cdn$0.30) per share                                                                                                                                                   |   | -          |  |  | 5,000,000    |  |   | 1,412,962  |   |   | -           |   |   | 1,412,962  |  
|Additional shares issued for cash (over-allotment) 
           at $0.29 (Cdn$0.30) per share                                                                                                                                    |   | -          |  |  | 750,000      |  |   | 214,123    |   |   | -           |   |   | 214,123    |  
|Issue costs                                                                                                                                                                                                                     |   | -          |  |  | -            |  |   | (620,089   | ) |   | -           |   |   | (620,089   | )
|Issue of compensation warrants valued at $0.19      
      per warrant                                                                                                                                                          |   | -          |  |  | -            |  |   | (111,400   | ) |   | -           |   |   | (111,400   | )
|Stock-based compensation based on the 
           Black-Scholes option pricing model,      
      amortized over the vesting period                                                                                             |   | 49,824     |  |  | -            |  |   | -          |   |   | -           |   |   | 49,824     |  
|Loss for the period                                                                                                                                                                                                             |   | -          |  |  | -            |  |   | -          |   |   | (1,478,711  | ) |   | (1,478,711 | )
|                                                                                                                                                                                                                                |   |            |  |  |              |  |   |            |   |   |             |   |   |            |  
|Balance, December 31, 2009                                                                                                                                                                                                      | $ | 232,117    |  |  | 32,945,000   |  | $ | 5,636,536  |   | $ | (6,115,782  | ) | $ | (247,129   | )

The accompanying notes are an integral part of these
financial statements

36

---

|BE Resources Inc.                                                         
|--------------------------------------------------------------------------
|(A Continuation of the Operations of Great Western
      Exploration, LLC)
|(An Exploration Stage Entity)                                             
|Statement of Shareholders' (Deficiency) Equity
      (Continued)          
|Presented in US
      Dollars                                             

|                                                                                                                                    |   |            |   |  |              |  |   |            |   |   | Deficit     |   |   |            |  
|----------------------------------------------------------------------------------------------------------------------------------- | - | ---------- | - |  | ------------ |  | - | ---------- | - | - | ----------- | - | - | ---------- | -
|                                                                                                                                    |   |            |   |  |              |  |   |            |   |   | Accumulated |   |   |            |  
|                                                                                                                                    |   | Additional |   |  | Common Stock |  |   | During the |   |   |             |  
|                                                                                                                                    |   | Paid-in    |   |  | Number of    |  |   |            |   |   | Exploration |   |   |            |  
|                                                                                                                                    |   | Capital    |   |  | Shares       |  |   | Amount     |   |   | Stage       |   |   | Total      |  
|                                                                                                                                    |   |            |   |  |              |  |   |            |   |   |             |   |   |            |  
|Balance, December 31, 2009                                                                                                          | $ | 232,117    |   |  | 32,945,000   |  | $ | 5,636,536  |   | $ | (6,115,782  | ) | $ | (247,129   | )
|Common shares issued for cash at $0.29      
      (Cdn$0.30) per share                                                             |   | -          |   |  | 10,000,000   |  |   | 2,930,260  |   |   | -           |   |   | 2,930,260  |  
|Issue costs                                                                                                                         |   | -          |   |  | -            |  |   | (289,109   | ) |   | -           |   |   | (289,109   | )
|Issue of warrants valued at $0.14 per warrant                                                                                       |   | -          |   |  | -            |  |   | (688,600   | ) |   | -           |   |   | (688,600   | )
|Issue of compensation warrants valued 
           at $0.16 per warrant                                                              |   | -          |   |  | -            |  |   | (161,645   | ) |   | -           |   |   | (161,645   | )
|Common shares issued for cash from the exercise      
      of stock options                                                        |   | -          |   |  | 550,000      |  |   | 165,000    |   |   | -           |   |   | 165,000    |  
|Black-Scholes value of stock options exercised                                                                                      |   | (314,955   | ) |  | -            |  |   | 314,955    |   |   | -           |   |   | -          |  
|Common shares issued for cash from the exercise      
      of warrants                                                             |   | -          |   |  | 6,550,750    |  |   | 2,997,038  |   |   | -           |   |   | 2,997,038  |  
|Black-Scholes value of warrants exercised 
           transferred from warrant liability                                            |   | -          |   |  | -            |  |   | 2,965,500  |   |   | -           |   |   | 2,965,500  |  
|Stock-based compensation based on the      
      Black-Scholes option pricing model,       amortized
      over the vesting period |   | 835,867    |   |  | -            |  |   | -          |   |   | -           |   |   | 835,867    |  
|Loss for the period                                                                                                                 |   | -          |   |  | -            |  |   | -          |   |   | (6,707,546  | ) |   | (6,707,546 | )
|                                                                                                                                    |   |            |   |  |              |  |   |            |   |   |             |   |   |            |  
|Balance, December 31, 2010                                                                                                          | $ | 753,029    |   |  | 50,045,750   |  | $ | 13,869,935 |   | $ | (12,823,328 | ) | $ | 1,799,636  |  

The accompanying notes are an integral part of these
financial statements

37

---

|BE Resources Inc.                                                         
|--------------------------------------------------------------------------
|(A Continuation of the Operations of Great Western
      Exploration, LLC)
|(An Exploration Stage Entity)                                             
|Statement of Cash Flows                                                   
|Presented in US
      Dollars                                             

|                                                                                                            |   |            |   |   |            |   |   | Cumulative         |  
|----------------------------------------------------------------------------------------------------------- | - | ---------- | - | - | ---------- | - | - | ------------------ | -
|                                                                                                            |   |            |   |   |            |   |   | from inception     |  
|                                                                                                            |   |            |   |   |            |   |   | (February 3, 2004) |  
|                                                                                                            |   |            |   |   |            |   |   | to December 31,    |  
|Year ended
      December 31,                                                                               |   | 2010       |   |   | 2009       |   |   | 2010               |  
|                                                                                                            |   |            |   |   |            |   |   |                    |  
|Cash flow from operating activities                                                                         |   |            |   |   |            |   |   |                    |  
|Net loss for the
      period                                                                               | $ | (6,707,546 | ) | $ | (1,478,711 | ) | $ | (12,823,328        | )
|Adjustments to
      reconcile net loss to net
      cash              
      used in operating activities: |   |            |   |   |            |   |   |                    |  
|Stock-based
      compensation                                                                              |   | 963,027    |   |   | 281,424    |   |   | 1,678,744          |  
|Change in warrant liability                                                                                 |   | 1,967,193  |   |   | -          |   |   | 1,967,193          |  
|Foreign exchange
      loss                                                                                 |   | 189,119    |   |   | 36,799     |   |   | 190,618            |  
|Common shares issued for
      services                                                                     |   | -          |   |   | -          |   |   | 60,102             |  
|Common
      shares issued for interest
      in              
      exploration property                   |   | -          |   |   | -          |   |   | 11,000             |  
|(Gain) on disposition of
      equipment                                                                    |   | -          |   |   | -          |   |   | (602               | )
|Accretion of
      asset retirement obligation                                                              |   | -          |   |   | -          |   |   | 3,111              |  
|Amortization of equipment                                                                                   |   | 95         |   |   | 1,107      |   |   | 9,387              |  
|Write off of
      prior year's deferred costs                                                              |   | -          |   |   | -          |   |   | 115,684            |  
|Increase in asset retirement
      obligation                                                               |   | -          |   |   | -          |   |   | 9,395              |  
|Changes in
      operating assets and liabilities:                                                          |   |            |   |   |            |   |   |                    |  
|Decrease (increase) in
      prepaid expenses,
      deposits              
      and other receivables     |   | (53,846    | ) |   | 4,722      |   |   | (53,846            | )
|(Increase) in
      reclamation bonds                                                                       |   | (66,104    | ) |   | -          |   |   | (92,050            | )
|Increase in accounts
      payable and accrued liabilities                                                  |   | 231,560    |   |   | 195,414    |   |   | 508,549            |  
|                                                                                                            |   |            |   |   |            |   |   |                    |  
|Net cash (used
      in) operating activities                                                               |   | (3,476,502 | ) |   | (959,245   | ) |   | (8,416,043         | )
|                                                                                                            |   |            |   |   |            |   |   |                    |  
|Cash flow from investing activities                                                                         |   |            |   |   |            |   |   |                    |  
|Purchase of
      mineral rights                                                                            |   | -          |   |   | -          |   |   | (110,400           | )
|Purchase of equipment                                                                                       |   | -          |   |   | -          |   |   | (14,535            | )
|Proceeds from sale of equipment                                                                             |   | -          |   |   | -          |   |   | 5,750              |  
|                                                                                                            |   |            |   |   |            |   |   |                    |  
|Net cash (used in) investing activities                                                                     | $ | -          |   | $ | -          |   | $ | (119,185           | )

The accompanying notes are an integral part of these
financial statements

38

---

|BE Resources Inc.                                                         
|--------------------------------------------------------------------------
|(A Continuation of the Operations of Great Western
      Exploration, LLC)
|(An Exploration Stage Entity)                                             
|Statement of Cash Flows (Continued)                                       
|Presented in US
      Dollars                                             

|                                                                                                                  |   |           |   |   |           |  |   | Cumulative         |  
|----------------------------------------------------------------------------------------------------------------- | - | --------- | - | - | --------- |  | - | ------------------ | -
|                                                                                                                  |   |           |   |   |           |  |   | from inception     |  
|                                                                                                                  |   |           |   |   |           |  |   | (February 3, 2004) |  
|                                                                                                                  |   |           |   |   |           |  |   | to December 31,    |  
|Year ended
      December 31,                                                                                     |   | 2010      |   |   | 2009      |  |   | 2010               |  
|                                                                                                                  |   |           |   |   |           |  |   |                    |  
|Cash flow from financing activities                                                                               |   |           |   |   |           |  |   |                    |  
|Issue of common shares                                                                                            | $ | 2,930,260 |   | $ | 1,006,997 |  | $ | 8,360,856          |  
|Cost of issue                                                                                                     |   | (289,109  | ) |   | -         |  |   | (289,109           | )
|Proceeds from exercise of
      options                                                                           |   | 165,000   |   |   | -         |  |   | 165,000            |  
|Proceeds from
      exercise of warrants                                                                          |   | 2,997,038 |   |   | -         |  |   | 2,997,038          |  
|Deferred transaction costs                                                                                        |   | -         |   |   | -         |  |   | (87,505            | )
|Cash provided by GWE
      to fund exploration operations                                                         |   | -         |   |   | -         |  |   | 286,362            |  
|                                                                                                                  |   |           |   |   |           |  |   |                    |  
|Net cash provided by financing activities                                                                         |   | 5,803,189 |   |   | 1,006,997 |  |   | 11,432,642         |  
|                                                                                                                  |   |           |   |   |           |  |   |                    |  
|Increase in Cash                                                                                                  |   | 2,326,687 |   |   | 47,752    |  |   | 2,897,414          |  
|Cash, beginning
      of period                                                                                   |   | 570,727   |   |   | 522,975   |  |   | -                  |  
|                                                                                                                  |   |           |   |   |           |  |   |                    |  
|Cash, end of
      period                                                                                         | $ | 2,897,414 |   | $ | 570,727   |  | $ | 2,897,414          |  
|                                                                                                                  |   |           |   |   |           |  |   |                    |  
|SUPPLEMENTARY INFORMATION                                                                                         |   |           |   |   |           |  |   |                    |  
|Non-cash investing and financing activities                                                                       |   |           |   |   |           |  |   |                    |  
|Common shares issued for interest in mining lease                                                                 | $ | -         |   | $ | -         |  | $ | 11,000             |  
|Common shares issued for services                                                                                 | $ | -         |   | $ | -         |  | $ | 60,102             |  
|Compensation warrants issued for services                                                                         | $ | -         |   | $ | 111,400   |  | $ | 111,400            |  
|Net liabilities of BE Resources Inc.
      assumed        in connection with
      the reverse merger transaction | $ | -         |   | $ | -         |  | $ | (30,123            | )

The accompanying notes are an integral part of these
financial statements

39

---

|BE Resources Inc.                                                         
|--------------------------------------------------------------------------
|(A Continuation of the Operations of Great Western
      Exploration, LLC)
|(An Exploration Stage Entity)                                             
|Notes to Financial Statements - Presented in US Dollars                   
|December 31,
      2010 and 2009                                          

|1. | Nature of Business, Basis of Presentation and Going
      Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | BE Resources Inc. (the "Company) was incorporated on
      August 8, 2007 under the laws of the State of Colorado, United States for
      the purpose of acquiring certain mineral interests and all operations from
      Great Western Exploration, LLC (GWE) and further exploring and if
      warranted, developing those interests.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Company is engaged in the business of the acquisition
      and development of mineral properties believed to be prospective for
      minerals such as Beryllium and other elements in the State of New Mexico,
      United States. To date, the Company has not earned revenue and its
      operations have been limited to general administrative operations,
      obtaining initial capital, initial property staking and exploration, and
      is considered an Exploration Stage Company in accordance with Accounting
      Standard Codification (ASC) 915.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The business of exploring for minerals involves a high
      degree of risk and there can be no assurance that current exploration
      programs will result in profitable mining operations. The Companys
      continued existence is dependent upon the preservation of its interest in
      the underlying properties, the discovery of economically recoverable
      reserves, the achievement of profitable operations, or the ability of the
      Company to raise alternative financing, if necessary, or alternatively
      upon the Companys ability to dispose of its interests on an advantageous
      basis. Although the Company has taken steps to verify title to the
      properties on which it is conducting exploration and in which it has an
      interest, in accordance with industry standards for the current stage of
      exploration of such properties, these procedures do not guarantee the
      Companys title. Property title may be subject to unregistered prior
      agreements and non-compliance with regulatory requirements, increases in
      taxes and royalties, renegotiation of contracts and political
      uncertainty.                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | These financial statements have been prepared on a going
      concern basis, which implies the Company will continue to realize its
      assets and discharge its liabilities in the normal course of business. The
      Company has an accumulated deficit of $12,823,328 as at December 31, 2010
      and a net loss of $6,707,546 and negative net cash flows from operating
      activities of $3,476,502 for the year ended December 31, 2010. The
      continuation of the Company as a going concern is dependent upon the
      continued financial support from its shareholders, the ability of the
      Company to obtain necessary equity financing to continue operations and to
      determine the existence, discovery and successful exploitation of
      economically recoverable reserves in its resource properties, confirmation
      of the Companys interests in the underlying properties, and the
      attainment of profitable operations. These financial statements do not
      include any adjustments to the recoverability and classification of
      recorded asset amounts and classification of liabilities that might be
      necessary should the Company be unable to continue as a going concern.
      These factors raise substantial doubt regarding the Companys ability to
      continue as a going concern.

40

---

|BE Resources Inc.                                                         
|--------------------------------------------------------------------------
|(A Continuation of the Operations of Great Western Exploration,
      LLC)
|(An Exploration Stage Entity)                                             
|Notes to Financial Statements - Presented in US Dollars                   
|December 31, 2010
      and 2009                                          

|2. | Summary of Significant Accounting
  Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | These financial statements have been prepared in
      accordance with United States generally accepted accounting principles and
      their basis of application is consistent with that of the previous
      periods, except as disclosed below. Outlined below are those policies
      considered particularly significant:                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Equipment is recorded at cost. Amortization is provided
      principally on the straight-line method over the estimated useful lives of
      the respective assets, estimated to be approximately five years. When
      items of property and equipment are sold or retired, the related cost and
      accumulated amortization are removed from the accounts and any gain or
      loss is included in the results of operations.                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Mineral Rights and Exploration Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Mineral rights include the cost of obtaining unpatented
      and patented mining claims and the cost of acquisition of properties.
      Significant payments related to the acquisition of land and mineral rights
      are capitalized as tangible assets. If a mineable ore body is discovered,
      such costs are amortized when production begins using the
      units-of-production method based on proven and probable reserves. If no
      mineable ore body is discovered or such rights are otherwise determined to
      have no value, such costs are expensed in the period in which it is
      determined the property has no future economic value.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | When mineral properties are acquired under option
      agreements with future acquisition payments to be made at the sole
      discretion of the Company, those future payments, whether in cash or
      shares, are recorded only when the Company has made or is obliged to make
      the payment or issue the shares.                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company expenses all costs related to the maintenance
      and development of mineral interests prior to the establishment of proven
      and probable reserves. As at December 31, 2010 and 2009, the Company had
      not established any proven or probable reserves.                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Share-Based Payments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company issues stock options to employees and
      consultants in connection with various business activities. These are
      accounted for in accordance with the provisions of ASC 718 Compensation 
      Stock Compensation and ASC 505 Equity as well as other authoritative
      accounting pronouncements. The Company is required to make estimates of
      the fair value of the related instruments based on the Black- Scholes
      option pricing model and recognize expenses over the period benefited,
      usually the vesting period.                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Stock options and warrants which are indexed to a factor
      which is not a market, performance or service condition, in addition to
      the Companys share price, are classified as liabilities and remeasured at
      each reporting date based on the Black-Scholes option pricing model with a
      charge to operations, until the date of settlement.                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Options granted to consultants are amortized over their
      performance period and remeasured at their then-current fair value as of
      the financial reporting date until the measurement date is
  reached.                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The expected forfeiture rate is estimated based on
      historical forfeitures and expectations of future forfeiture rates. The
      Company makes adjustments if the actual forfeiture rate differs from the
      expected rate.                                                                                                                                                                                                                                                                                                                                                                                                                                     

41

---

|BE Resources Inc.                                                         
|--------------------------------------------------------------------------
|(A Continuation of the Operations of Great Western Exploration,
      LLC)
|(An Exploration Stage Entity)                                             
|Notes to Financial Statements - Presented in US Dollars                   
|December 31, 2010
      and 2009                                          

|2. | Summary of Significant Accounting Policies
      (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Asset Retirement Obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | In accordance with ASC 410 "Asset Retirement and
      Environmental Obligations", the fair values of asset retirement
      obligations are recorded as liabilities on a discounted basis when
      incurred. The associated asset retirement costs are capitalized as part of
      the carrying amount of the long-lived asset unless the asset has been
      previously charged to operations, in which case the amount is expensed.
      Over time, the liabilities will be accreted for the change in their
      present value and the initial capitalized costs will be depleted and
      amortized over the useful lives of the related assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Impairment of Long-lived Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | In accordance with ASC 360 Property, Plant and
      Equipment, long-lived assets to be held and used are analyzed for
      impairment whenever events or changes in circumstances indicate that the
      related carrying amounts may not be recoverable. The Company evaluates at
      each balance sheet date whether events and circumstances have occurred
      that indicate possible impairment. If there are indications of impairment,
      the Company uses the future undiscounted cash flows of the related asset
      or asset grouping over the remaining life in measuring whether the assets
      are recoverable. In the event such cash flows are not expected to be
      sufficient to recover the recorded asset values, the assets are written
      down to their estimated fair value. Long-lived assets to be disposed of
      are reported at the lower of their carrying amount or their fair value,
      less the cost to sell.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Company uses the asset and liability method of tax
      allocation to account for income taxes. Deferred income taxes reflect the
      net tax effects of temporary differences between the carrying amount of
      assets and liabilities for financial reporting purposes and the amounts
      used for income tax purposes and are measured using enacted tax rates in
      effect for the year in which these temporary differences are expected to
      be recovered or settled. The effect of changes in income tax rates on
      deferred income tax assets and liabilities is recognized in operations in
      the period that the changes are enacted. When the future realization of
      deferred tax assets does not meet the test of being more likely than not
      to occur, a valuation allowance in the amount of the potential future
      benefit is taken. Tax benefits are recorded only for tax positions that
      are more likely than not to be sustained upon examination by tax
      authorities. The amount recognized is measured as the largest amount of
      benefit that is greater than 50 percent likely to be realized upon
      ultimate settlement. Unrecognized tax benefits are tax benefits claimed in
      the Companys tax returns that do not meet these recognition and
      measurement standards. The Company believes that there are no tax
      positions taken or expected to be taken that would significantly increase
      or decrease unrecognized tax benefits within 12 months of the reporting
      date.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Issue Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Direct costs associated with the issuance of the
      Companys common stock, including professional fees and selling expenses
      relating to broker-dealer relationships, are reflected as a reduction of
      shareholders equity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Loss Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Basic loss per share is computed by dividing the loss for
      the period by the weighted average number of common shares outstanding
      during the period. The effect of potential issuances of common shares
      would be anti-dilutive, and accordingly basic and diluted loss per share
      are the same. See notes 7(c) and (d) for potentially dilutive securities
      outstanding as at December 31, 2010 and 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

42

---

|BE Resources Inc.                                                         
|--------------------------------------------------------------------------
|(A Continuation of the Operations of Great Western Exploration,
      LLC)
|(An Exploration Stage Entity)                                             
|Notes to Financial Statements - Presented in US Dollars                   
|December 31, 2010
      and 2009                                          

|2. | Summary of Significant Accounting Policies
      (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Foreign Currency Translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The functional currency of the Company is the U.S.
      dollar. Certain monetary assets and liabilities of the Company denominated
      in Canadian dollars are remeasured into U.S. dollars at exchange rates in
      effect at the balance sheet dates. As at December 31, 2010 and 2009,
      substantially all of the Companys Canadian dollar denominated monetary
      assets and liabilities were comprised of cash and stock option and warrant
      liability. Non-monetary assets and liabilities are remeasured at
      historical exchange rates, unless such items are carried at market, in
      which case they are translated at the exchange rates in effect on the
      balance sheet date. Revenues and expenses are remeasured at rates
      approximating the exchange rates in effect at the time of the transaction.
      During the years ended December 31, 2010 and 2009, substantially all cash
      expenses were transacted in U.S. dollars.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | 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 certain reported
      amounts of assets and liabilities and disclosure of contingent assets and
      liabilities at the date of the financial statements and the reported
      amounts of revenue and expenses during the reporting period. Actual
      results could differ from those estimates. Significant estimates include
      the valuation of share-based payments, mineral rights, asset retirement
      obligations, stock option and warrant liability and deferred tax assets
      and liabilities. These estimates are reviewed periodically, and, as
      adjustments become necessary, they are reported in operations in the
      period in which they become known.                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Accounting Standards Codification                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company uses ASC Topic 105, Accounting Standards
      Codification, which establishes the FASB Accounting Standards
      Codification as the source of authoritative accounting principles
      recognized by the FASB to be applied by nongovernmental entities in the
      preparation of financial statements in conformity with GAAP. Rules and
      interpretive releases of the SEC under authority of federal securities
      laws are also sources of authoritative GAAP for SEC registrants.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Fair Value Measurements and Disclosures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Accounting Standards Update (ASU) 200905, Fair Value
      Measurements and Disclosures (Topic 820) - Measuring Liabilities at Fair
      Value, clarifies that the quoted price for an identical liability, when
      traded as an asset in an active market, is also a Level 1 measurement for
      that liability when no adjustment to the quoted price is required. In the
      absence of a Level 1 measurement, an entity must use one or more of the
      following valuation techniques to estimate fair value (in a manner
      consistent with the principles in ASC Topic 820), which can be classified
      into two categories: 1) a valuation technique that uses a quoted price;
      and 2) another valuation technique based on the amount an entity would pay
      to transfer the identical liability or based on the amount an entity would
      receive to enter into an identical liability.                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The ASC guidance for fair value measurements and
      disclosure establishes a fair value hierarchy that prioritizes the inputs
      to valuation techniques used to measure fair value. The hierarchy gives
      the highest priority to unadjusted quoted prices in active markets for
      identical asset or liabilities (Level 1 measurements) and the lowest
      priority to unobservable inputs (Level 3
measurements).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

43

---

|BE Resources Inc.                                                         
|--------------------------------------------------------------------------
|(A Continuation of the Operations of Great Western Exploration,
      LLC)
|(An Exploration Stage Entity)                                             
|Notes to Financial Statements - Presented in US Dollars                   
|December 31, 2010
      and 2009                                          

|2. | Summary of Significant Accounting Policies (continued)
      Fair Value Measurements and Disclosures (continued)
|-- | ----------------------------------------------------------------------------------------------------------------
|   |                                                                                                                 
|   | The three levels of the fair value hierarchy are
      described below.                                         

| |  | Level 1 - Unadjusted quoted prices in active markets that
      are accessible at the measurement date for identical unrestricted assets
      or liabilities;                               
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Level 2 - Quoted prices in markets that are not active,
      or inputs that are observable, either directly or indirectly, for
      substantially the full term of the asset or liability; 
| |  | Level 3 - Price or valuation techniques that require
      inputs that are both significant to the fair value measurement and
      unobservable (supported by little or no market activity).

The Companys equity-linked financial
instruments reflected as stock option and warrant liability on the balance sheet
(see notes 7(c) and (d)) represent financial liabilities classified as Level 2
as per ASU 200905. As required by the guidance, assets and liabilities are
classified in their entirety based on the lowest level of input that is
significant to the fair value measurement. The fair value of the stock option
and warrant liability which is not traded in an active market, has been
determined using the Black-Scholes model based on assumptions that are supported
by observable market conditions.

Accounting Principles Recently
Adopted

In January 2010, the FASB issued ASU
2010-05, Compensation  Stock Compensation (Topic 718): Escrowed Share
Arrangements and the Presumption of Compensation, which reflects the SEC's
views on overcoming the presumption that escrowed share arrangements represent
compensation for certain shareholders. ASU 2010-05 did not have an impact on the
Company's financial position, results of operations or cash flows.

Future Accounting Pronouncements

In January 2010, the FASB issued ASU
2010-06, Fair Value Measurements and Disclosures (Topic 820): Improving
Disclosures about Fair Value Measurements, which adds new requirements for
disclosures about transfers into and out of Levels 1 and 2 and separate
disclosures about purchases, sales, issuances and settlements relating to Level
3 measurements. ASU 2010-06 is effective for the first reporting period
(including interim periods) beginning after December 15, 2010. The Company does
not expect the impact of adopting ASU 2010-06 on its financial position, results
of operations or cash flows to be material.

In April 2010, the FASB issued ASU
2010-13, "Compensation-Stock Compensation (Topic 718) - Effect of Denominating
the Exercise Price of a Share-Based Payment Award in the Currency of the Market
in Which the Underlying Equity Security Trades - a consensus of the FASB
Emerging Issues Task Force". ASU 2010-13 provides amendments to Topic 718 to
clarify that an employee share-based payment award with an exercise price
denominated in the currency of a market in which a substantial portion of the
entity's equity securities trades should not be considered to contain a
condition that is not a market, performance, or service condition. Therefore, an
entity would not classify such an award as a liability if it otherwise qualifies
as equity. The amendments in this update do not expand the recurring disclosures
required by Topic 718. Disclosures currently required under Topic 718 are
applicable to a share-based payment award, including the nature and the term of
share-based payment arrangements. The amendments in this update are effective
for fiscal years, and interim periods within those fiscal years, beginning on or
after December 15, 2010. The Company has assessed the impact of this accounting
update and expects to reclassify the stock option liability relating to the 2.2
million stock options with exercise price denominated in Canadian dollars to
equity.

44

---

|BE Resources Inc.                                                         
|--------------------------------------------------------------------------
|(A Continuation of the Operations of Great Western Exploration,
      LLC)
|(An Exploration Stage Entity)                                             
|Notes to Financial Statements - Presented in US Dollars                   
|December 31, 2010
      and 2009                                          

|3. | New Mexico Beryllium Project                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | On October 1, 2007, the Company acquired GWEs interest
      in the New Mexico Beryllium Project (the Project), related technical
      data, assets and operations from GWE in exchange for the issuance of
      10,000,000 common shares and a 20% net profit royalty interest in the
      Project. Of that payment, 9,400,000 common shares and approximately 16% of
      the net profit royalty interest were issued to GWE. The remaining 600,000
      common shares were issued to the former holders of a minority interest in
      the Project and approximately 4% of the net profit royalty interest was
      issued to the same former holders of a minority interest in the Project
      and an unrelated individual at the direction of GWE. The net profit
      royalty interest provides for the payment of royalties based on net
      revenue from any production from the Project and within the three mile
      area of interest from the outside boundary of each lease and claim
      comprising the Project. The 20% net profits royalty interest is calculated
      and payable on a quarterly basis. In May 2009, the Company entered into
      agreements to reduce the 20% net profit royalty to 10%. The Project is
      also subject to a gross profits royalty interest of 1% payable to an
      officer who is also a director of the Company.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The Project is comprised of one lease from private
      landowners (the Sullivan Lease), three State leases (the State Leases)
      and 133 unpatented mining claims (the Claims) located in Socorro County
      and Sierra County, New Mexico. In addition, the Company staked an
      additional 690 lode mining claims in Socorro County and Sierra County
      during the year ended December 31, 2008 for cash consideration of
      $110,400. These lode claims are located in the eastern part of the
      outlying hydrothermal area of the Project. As the Project is in the
      exploration stage and has not been proved up, the exploration costs
      related to the Project have not been carried on the balance sheet as an
      asset.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

45

---

|BE Resources Inc.                                                         
|--------------------------------------------------------------------------
|(A Continuation of the Operations of Great Western Exploration,
      LLC)
|(An Exploration Stage Entity)                                             
|Notes to Financial Statements - Presented in US Dollars                   
|December 31, 2010
      and 2009                                          

|3. | New Mexico Beryllium Project (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|4. | Reclamation Bonds and Asset Retirement
      Obligation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Under the laws of the State of New Mexico, the Company is
      required to maintain reclamation deposits, which cover the cost to reclaim
      the ground disturbed. As at December 31, 2010, the Company has three (2009
      - two) reclamation bonds. These bonds are held with the United States
      Department of the Interior, Bureau of Land Management (BLM), the United
      States Department of Agriculture Forest Service (USDA) and the New
      Mexico Energy, Minerals and Natural Resource Department, Mining and
      Minerals Division (MMD) and are required before any surface disturbing
      activity can commence. The bonds will be released following satisfactory
      completion of reclamation of any disturbance resulting from operations at
      the site.

46

---

|BE Resources Inc.                                                         
|--------------------------------------------------------------------------
|(A Continuation of the Operations of Great Western Exploration,
      LLC)
|(An Exploration Stage Entity)                                             
|Notes to Financial Statements - Presented in US Dollars                   
|December 31, 2010
      and 2009                                          

|4. | Reclamation Bonds and Asset Retirement Obligation
      (continued)                                                                                                                                                                                                                                                                                                
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                    
|   | During the year ended December 31, 2010, the Company made
      a deposit in the amount of $66,104 to the MMD for the drilling permit for
      the Project. On April 23, 2010, the Company was granted a permit to begin
      drilling its Warm Springs Beryllium Property.                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                    
|   | Asset retirement obligations relate to the reclamation
      work required to be performed in connection with drilling activities
      performed on the Project. Exploration expenditures relating to the Project
      are expensed as incurred. Changes in asset retirement obligation during
      the years ended December 31, 2010 and 2009 are as
  follows:

| |                            |   | 2010   |  |   | 2009   | 
| | -------------------------- | - | ------ |  | - | ------ | 
| | Balance, beginning of year | $ | 12,506 |  | $ | 12,506 | 
| | Accretion expense          |   | -      |  |   | -      | 
| | Balance, end of year       | $ | 12,506 |  | $ | 12,506 | 

|5. | Equipment                                                                 
|-- | --------------------------------------------------------------------------
|   |                                                                           
|   | At December 31, 2010 and 2009, equipment consisted of the
      following:

| |                                      |   | 2010   |   |   | 2009   |  
| | ------------------------------------ | - | ------ | - | - | ------ | -
| | Cost                                 | $ | 5,535  |   | $ | 5,535  |  
| | Less: Accumulated
      amortization |   | (5,535 | ) |   | (5,440 | )
| |                                      | $ | -      |   | $ | 95     |  

|6. | Commitments and Contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Environmental Considerations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The exploration for and development of resource
      properties involves the extraction, production and transportation of
      materials, which under certain conditions, can be hazardous or cause
      environmental pollution problems. The Company is continually taking action
      it believes appropriate to satisfy applicable federal, state and local
      environmental regulations and does not currently anticipate that
      compliance with federal, state and local environmental regulations will
      have a material adverse effect upon capital expenditures, results of
      operations, financial condition or the competitive position of the Company
      in the mineral resource industry. However, due to the significant public
      and governmental interest in environmental matters related to those
      activities, the Company cannot predict the effects of possible future
      legislation, rule changes, or governmental or private
  claims.

47

---

|BE Resources Inc.                                                         
|--------------------------------------------------------------------------
|(A Continuation of the Operations of Great Western Exploration,
      LLC)
|(An Exploration Stage Entity)                                             
|Notes to Financial Statements - Presented in US Dollars                   
|December 31, 2010
      and 2009                                          

|6. | Commitments and Contingencies
(continued)                                                                                                                                                                                                                                          
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                    
|   | Employment Agreement                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                    
|   | Pursuant to an amended employment agreement dated
      September 1, 2009, in the event of certain circumstances, the Company
      would be obligated to pay the employee an amount equal to twelve times the
      employees current monthly base salary of $3,000. (Note 8(a)).
|   |                                                                                                                                                                                                                                                                                    
|   | Property Maintenance Costs                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                    
|   | The Company will be required to incur property
      maintenance costs for its mineral rights. These costs are currently
      estimated at $171,000 for each year and include the following
  items:                                                                              

| | (i)  | Annual fees of $140 per claim per year to maintain
      federal mining claims; and                                                        
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------
| | (ii) | Annual lease payments for state leases and the minimum
      annual royalty of $12,000 for the lease regarding the Sullivan
      property.

|7. | Capital Stock
|-- | -------------

| | (a) | Authorized                                                                                               
| | --- | ---------------------------------------------------------------------------------------------------------
| |     |                                                                                                          
| |     |                                                                                                          
| |     |                                                                                                          
| | (b) | Issued capital stock                                                                                     
| |     |                                                                                                          
| |     | A summary of changes in capital stock for the
      years ended December 31, 2010 and 2009 is as
follows:

| | (i)  | On June 18, 2010, the Company completed a brokered
      private placement financing of 10,000,000 units (the Units) at a price
      of Cdn$0.30 ($0.29) per Unit, for aggregate gross proceeds of
      Cdn$3,000,000 ($2,930,260). Each Unit is comprised of one common share of
      the Company (a Common Share) and one- half of one Common Share purchase
      warrant (a Warrant). Each full Warrant entitled the holder thereof to
      purchase one Common Share for a period of two years at an exercise price
      of Cdn$0.50 per Common Share. In connection with the sale of the Units,
      the Company paid a cash commission equal to 8% of the gross proceeds and
      issued 983,333 compensation warrants to purchase Units at a price of
      Cdn$0.30 per Unit for a period of two years from the closing of the
      private placement. Net proceeds of the private placement were allocated on
      a pro-rata basis between Common Shares and Warrants based on the relative
      fair values.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |      | The grant date fair values of the 5,000,000 Warrants and
      983,333 compensation warrants were estimated using the Black-Scholes
      option pricing model to be $688,600 and $211,300 respectively. The
      assumptions used were: expected dividend yield of 0%; expected volatility
      of 155%; risk free interest rate of 1.52%; and expected term of 2 years.
      The warrants and compensation warrants have been classified as liabilities
      and are remeasured at each reporting date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |      | The Chief Financial Officer of the Company
      purchased 33,333 Units of the placement at a price of Cdn$0.30 for gross
      proceeds of Cdn$10,000 ($9,767), on the same terms as other investors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (ii) | On October 26, 2009, the Company closed an initial public
      offering of 5,000,000 common shares at a price of Cdn$0.30 ($0.28) for
      gross proceeds of Cdn$1,500,000 ($1,412,962). Related issue costs,
      including finders fees, totaled $602,959.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |      | The spouse of the Chief Financial Officer of the Company
      acquired 16,666 common shares pursuant to the initial public offering.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

48

---

|BE Resources Inc.                                                         
|--------------------------------------------------------------------------
|(A Continuation of the Operations of Great Western Exploration,
      LLC)
|(An Exploration Stage Entity)                                             
|Notes to Financial Statements - Presented in US Dollars                   
|December 31, 2010
      and 2009                                          

|7. | Capital Stock
(continued)
|-- | -------------------------

| | (iii) | On November 13, 2009, the Company issued an additional
      750,000 common shares from the exercise of the over-allotment option
      associated with the initial public offering described in Note 7(b)(ii).
      The common share were issued at a price of Cdn$0.30 ($0.29) for gross
      proceeds of Cdn$225,000 ($214,123). Related issue costs, comprised of
      underwriter's commissions, totaled $17,130.                                                          
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (iv)  | Pursuant to an escrow agreement dated September 30, 2009,
      the Company had 12,425,000 shares held in escrow of which 1,242,500 were
      released on October 29, 2009, the date of listing of the Companys shares.
      As at December 31, 2009, the Company had 11,182,500 shares remaining in
      escrow which will be released in six month increments following October
      29, 2009 with all shares expected to be released from escrow by October
      29, 2012.

| | (c) | Stock options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     | The Companys stock option plan (the Plan) was amended
      in June 2010 to provide for the grant of incentive and non-qualified stock
      options for up to 6,500,000 common shares to employees, consultants,
      officers and directors of the Company. All terms and conditions of the
      options are potentially the same for consultants as well as internal
      employees and directors. Options are granted for a term of up to five
      years from the date of grant. The vesting conditions were also amended in
      June 2010 to allow for the immediate vesting of options. Stock options
      granted generally vest immediately or 25% on the date of grant and 25%
      every six months thereafter over a period of eighteen months.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     | A summary of changes in stock options during the years
      ended December 31, 2010 and 2009 are as
follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

| |                                  |  |               |   |   | Weighted average |  |   | Weighted average | 
| | -------------------------------- |  | ------------- | - | - | ---------------- |  | - | ---------------- | 
| |                                  |  | Number of     |   |   | Exercise Price   |  |   | Exercise Price   | 
| |                                  |  | Stock Options |   |   | US               |  |   | CDN              | 
| |                                  |  |               |   |   |                  |  |   |                  | 
| | Balance, December 31, 2008       |  | 3,560,000     |   | $ | 0.24             |  | $ | 0.25             | 
| | Granted                          |  | 400,000       |   | $ | 0.35             |  |   |                  | 
| |                                  |  |               |   |   |                  |  |   |                  | 
| | Balance, December 31, 2009       |  | 3,960,000     |   | $ | 0.25             |  |   |                  | 
| | Granted                          |  | 3,000,000     |   | $ | 0.34             |  |   |                  | 
| | Exercised                        |  | (550,000      | ) | $ | 0.30             |  |   |                  | 
| | Expired                          |  | (125,000      | ) | $ | 0.30             |  |   |                  | 
| | Forfeited                        |  | (375,000      | ) | $ | 0.30             |  |   |                  | 
| |                                  |  |               |   |   |                  |  |   |                  | 
| | Balance, December
      31, 2010 |  | 5,910,000     |   | $ | 0.29             |  |   |                  | 

49

---

|BE Resources Inc.                                                         
|--------------------------------------------------------------------------
|(A Continuation of the Operations of Great Western Exploration,
      LLC)
|(An Exploration Stage Entity)                                             
|Notes to Financial Statements - Presented in US Dollars                   
|December 31, 2010
      and 2009                                          

|7. | Capital Stock -
continued
|-- | -------------------------

| | (c) | Stock options - continued                                                   
| | --- | ----------------------------------------------------------------------------
| |     |                                                                             
| |     | As at December 31, 2010, the following stock options were
      outstanding:

Options
    Options
    
    Exercise
    ExpirationDate of
      Grant
    Granted
    Exercisable
    
    Price
    DateDecember 7, 2007
    3,560,000
    3,560,000
    
    CDN $0.25 (US $0.25)
    December 7, 2012November 12, 2009
    400,000
    300,000
    
    US $0.35
    November 12, 2014April 21, 2010
    500,000
    250,000
    
    US $0.20
    April 21, 2012May 11, 2010
    500,000
    250,000
    
    US $0.30
    May 11, 2012June 7, 2010
    50,000
    50,000
    
    US $0.30
    June 7, 2015July 2, 2010
    300,000
    75,000
    
    US $0.31
    July 2, 2012July 2, 2010
    300,000
    300,000
    
    US $0.31
    July 2, 2015August 5, 2010
    100,000
    100,000
    
    US $0.30
    August 5, 2012September 27, 2010
    100,000
    100,000
    
    US $1.05
    September 27, 2012October 4, 2010
    100,000
    100,000
    
    US
      $1.04
    October 4, 20125,910,000
    5,085,000


As at December 31, 2010, the weighted
average exercise price is Cdn$0.29 ($0.29) . As at December 31, 2010, the
weighted average remaining contractual life of outstanding options is 2.08
years.

The fair value of the stock options
granted was estimated using the Black-Scholes option pricing model and is
amortized over the related service period of the underlying options. This model
requires management to make estimates of the expected volatility of its common
shares, the expected term of the option to exercise, the expected future
forfeiture rate, and future interest rates. The risk free interest rate is based
on the U.S. Treasury Bond rate. The Company has not paid dividends and does not
expect to pay dividends in the immediate future. As historical volatility of the
Companys common shares is not available, expected volatility is based on the
historical performance of the common shares of other corporations with similar
operations. The expected life of the stock options was estimated to be the term
of the options.

Cash proceeds from the exercise of
options during 2010 totalled $165,000. Stock compensation expense yet to be
expensed on the remaining contractual life of stock options is $279,739.

The weighted average grant date fair
value of options granted during the year ended December 31, 2010 was Cdn$0.33
($0.34) per option.

During the year ended December 31,
2010, the Company granted the following:

| | (i) | 900,000 options for consulting services at an exercise
      price of $0.30 that expire on January 5, 2015. The options originally vest
      25% on the date of grant and 25% every six months thereafter over a period
      of eighteen months as long as the consultant continues to provide services
      to the Company. Pursuant to the amendment of the Plan in June 2010,
      400,000 of these options vested immediately after TSX approval was
      received and was subsequently exercised. The weighted average grant date
      fair value of these options was $0.29 per share. The assumptions used to
      estimate the fair value are as follows: expected dividend yield of 0%;
      expected volatility of 127%; risk free interest rate of 2.56%; and
      expected term of 5 years. Of the 900,000 options, 125,000 expired and
      375,000 failed to vest during the year ended December 31,
  2010.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

50

---

|BE Resources Inc.                                                         
|--------------------------------------------------------------------------
|(A Continuation of the Operations of Great Western Exploration,
      LLC)
|(An Exploration Stage Entity)                                             
|Notes to Financial Statements - Presented in US Dollars                   
|December 31, 2010
      and 2009                                          

|7. | Capital Stock -
continued
|-- | -------------------------

| | (c) | Stock options -
continued
| | --- | -------------------------

| | (ii)   | 500,000 options for consulting services at an exercise
      price of $0.20 that expire on April 21, 2012. The options vest 25% on the
      date of grant and 25% every six months thereafter over a period of
      eighteen months as long as the consultant continues to provide services to
      the Company. The weighted average grant date fair value of these options
      was $0.17 per share. The assumptions used to estimate the fair value are
      as follows: expected dividend yield of 0%; expected volatility of 151%;
      risk free interest rate of 1.03%; and expected term of 2 years.
| | ------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (iii)  | 500,000 options for consulting services at an exercise
      price of $0.30 that expire on May 11, 2012. The options vest 25% on the
      date of grant and 25% every six months thereafter over a period of
      eighteen months as long as the consultant continues to provide services to
      the Company. The weighted average grant date fair value of these options
      was $0.21 per share. The assumptions used to estimate the fair value are
      as follows: expected dividend yield of 0%; expected volatility of 151%;
      risk free interest rate of 0.85%; and expected term of 2 years.  
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (iv)   | 200,000 options for consulting services at an exercise
      price of $0.30 that expire on June 7, 2015. The options vested
      immediately. The weighted average grant date fair value of these options
      was $0.24 per share. The assumptions used to estimate the fair value are
      as follows: expected dividend yield of 0%; expected volatility of 159%;
      risk free interest rate of 1.95%; and expected term of 5 years. 150,000 of
      these options were exercised during the year.                                                                                                      
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (v)    | 300,000 options for consulting services at an exercise
      price of $0.31 that expire on July 2, 2012. The options vest 25% every
      three months from the date of grant over a period of twelve months as long
      as the consultant continues to provide services to the Company. The
      weighted average grant date fair value of these options was $0.21 per
      share. The assumptions used to estimate the fair value are as follows:
      expected dividend yield of 0%; expected volatility of 152%; risk free
      interest rate of 0.63%; and expected term of 2 years.                   
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (vi)   | 300,000 options to a director who is also an officer of
      the Company for management services at an exercise price of $0.31 that
      expire on July 2, 2015. The options vested immediately. The weighted
      average grant date fair value of these options was $0.25 per share. The
      assumptions used to estimate the fair value are as follows: expected
      dividend yield of 0%; expected volatility of 127%; risk free interest rate
      of 1.82%; and expected term of 5 years.                                                                                                           
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (vii)  | 100,000 options for consulting services at an exercise
      price of $0.30 that expire on August 5, 2012. The options vested
      immediately. The weighted average grant date fair value of these options
      was $0.24 per share. The assumptions used to estimate the fair value are
      as follows: expected dividend yield of 0%; expected volatility of 158%;
      risk free interest rate of 0.53%; and expected term of 2 years.                                                                                                                                                                   
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (viii) | 100,000 options for consulting services at an exercise
      price of $1.05 that expire on September 27, 2012. The options vested
      immediately. The weighted average grant date fair value of these options
      was $0.75 per share. The assumptions used to estimate the fair value are
      as follows: expected dividend yield of 0%; expected volatility of 149%;
      risk free interest rate of 0.44%; and expected term of 2
  years.                                                                                                                                                             

51

---

|BE Resources Inc.                                                         
|--------------------------------------------------------------------------
|(A Continuation of the Operations of Great Western Exploration,
      LLC)
|(An Exploration Stage Entity)                                             
|Notes to Financial Statements - Presented in US Dollars                   
|December 31, 2010
      and 2009                                          

|7. | Capital Stock -
continued
|-- | -------------------------

| | (c) | Stock options -
continued
| | --- | -------------------------

| | (ix) | 100,000 options for consulting services at an exercise
      price of $1.04 that expire on October 4, 2012. The options vested
      immediately. The weighted average grant date fair value of these options
      was $0.81 per share. The assumptions used to estimate the fair value are
      as follows: expected dividend yield of 0%; expected volatility of 189%;
      risk free interest rate of 0.41%; and expected term of 2 years.                       
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (x)  | During the year ended December 31, 2009, 400,000 options
      were granted to a consultant at an exercise price of $0.35 that expire on
      November 12, 2014. The weighted average grant date fair value of these
      options was $0.24 per share. The assumptions used to calculate the fair
      value are as follows: expected dividend yield of 0%; expected volatility
      of 111%; risk free interest rate of 2.28%; and expected term of 5
      years.

| |         | The Company has determined that 2,200,000 stock options
      granted during the year ended December 31, 2007 were effectively indexed
      to the exchange rate between the Canadian dollar and the U.S. dollar, the
      functional currency of the Company, in addition to the price of its common
      stock. As a result, these stock options have been classified as
      liabilities and are remeasured at the end of each reporting period until
      settlement. As at December 31, 2010, the fair value of the liability of
      $745,400 (2009 - $487,700) was estimated based on the following
      assumptions: expected dividend yield of 0% (2009 - 0%); expected
      volatility of 161% (2009 - 133%); risk free interest rate of 0.61% (2009 -
      1.7%); and expected life of 1.94 years (2009 - 2.94 years).
| | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |         | The intrinsic value of stock options issued and
      outstanding at December 31, 2010 was $1,187,546 (2009 - $178,000).
      Intrinsic value for stock options is calculated based on the difference
      between the exercise prices of the underlying options and the quoted price
      of the Companys common shares as of the reporting date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | **(d)** | Warrants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |         | A summary of changes in warrants during the years ended
      December 31, 2010 and 2009 is as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

| |                                                       |  |            |   |   | Weighted average |  |   | Weighted average | 
| | ----------------------------------------------------- |  | ---------- | - | - | ---------------- |  | - | ---------------- | 
| |                                                       |  | Number of  |   |   | Exercise Price   |  |   | Exercise Price   | 
| |                                                       |  | Warrants   |   |   | US               |  |   | CDN              | 
| |                                                       |  |            |   |   |                  |  |   |                  | 
| | Balance, December 31, 2008                            |  | -          |   | $ | -                |  | $ | -                | 
| | Issued - compensation warrants (ii)                   |  | 575,000    |   | $ | 0.29             |  | $ | 0.30             | 
| |                                                       |  |            |   |   |                  |  |   |                  | 
| | Balance, December 31, 2009                            |  | 575,000    |   | $ | 0.29             |  | $ | 0.30             | 
| | Issued - warrants and
      compensation warrants (i) |  | 6,456,249  |   | $ | 0.47             |  | $ | 0.47             | 
| | Exercised                                             |  | (6,550,750 | ) | $ | 0.47             |  | $ | 0.47             | 
| | Expired                                               |  | (40,000    | ) | $ | 0.50             |  | $ | 0.50             | 
| |                                                       |  |            |   |   |                  |  |   |                  | 
| | Balance, December 31, 2010                            |  | 440,499    |   | $ | 0.30             |  | $ | 0.30             | 

| | (i) | On November 3, 2010, the Company elected to accelerate
      the expiration of its Series 2010-I warrants (of which 5,000,000 warrants
      were issued on June 18, 2010 as part of the private placement of units
      described in note 7(b)(i), and up to 491,167 are issuable upon the
      exercise of compensation options issued in connection with such private
      placement). The warrants expired on December 1, 2010. Each warrant
      entitled the holder to purchase one common share at a price of Cdn$0.50
      per share.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

52

---

|BE Resources Inc.                                                         
|--------------------------------------------------------------------------
|(A Continuation of the Operations of Great Western Exploration,
      LLC)
|(An Exploration Stage Entity)                                             
|Notes to Financial Statements - Presented in US Dollars                   
|December 31, 2010
      and 2009                                          

|7. | Capital
        Stock - continued
|-- | ---------------------------------

| |      | Under the terms of the warrants, the Company had the
      right to accelerate the expiration of the warrants in the event that the
      closing price of the Companys common shares on the TSX Venture Exchange
      equalled or exceeded Cdn$0.75 for a period of ten consecutive trading days
      (Acceleration Event). If the Acceleration Event occurs, the warrants
      provide that the Company may, within five days of such occurrence, notify
      holders of the early expiration of the warrants and thereafter, such
      warrants will expire at 3:30 p.m. (Toronto time) on the date which is
      twenty-one days after the date of the notice. As of November 3, 2010, the
      closing price of the common shares of the Company had exceeded Cdn$0.75 in
      the prior ten consecutive trading days.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (ii) | In connection with the initial public offering completed
      on October 26, 2009 and exercise of the over-allotment option described in
      Notes 7(b)(ii) and (iii), the Company granted 575,000 compensation
      warrants to the underwriter, exercisable at Cdn$0.30 for a period of 2
      years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

As at December 31, 2010, the following
warrant and compensation warrants were outstanding:

Expiration Date
    
    Number of
    
    
    
    
    
    Exercisewarrants
    
    
    
    
    
    Price
    
    Fair ValueOctober 26, 2011
    
    403,000
    
    
    
    
    
    CDN$0.30 (US $0.30)
    $
    90,000June 18,
      2012(1)
    
    37,499
    
    
    
    
    
    CDN$0.30 (US $0.30)
    
    10,900440,499
    
    
    
    
    
    
    $
    100,900


| | (1) | Each compensation warrant entitles the holder to purchase
      a Unit, which is comprised of one common share and one-half of one
      warrant.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------

|8. | Related Party Transactions
|-- | --------------------------
|   |                           
|   | (a)                       
|   |                           
|   | (b)                       

The above transactions were in the normal
  course of operations and were measured at the exchange amount, which is the
  amount of consideration established and agreed to by the related parties.

53

---

|BE Resources Inc.                                                         
|--------------------------------------------------------------------------
|(A Continuation of the Operations of Great Western Exploration,
      LLC)
|(An Exploration Stage Entity)                                             
|Notes to Financial Statements - Presented in US Dollars                   
|December 31, 2010
      and 2009                                          



|8. | Related
        Party Transactions, continued
|-- | ---------------------------------------------
|   |                                              
|   | (c)                                          

|9.  | Segment Information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | The Company has one operating segment, which is the
      exploration and development of exploration properties in the United
      States. As at December 31, 2010, geographic segmentation of the Companys
      assets is as follows: Canada - $2,889,883 (2009 - $551,297) and the United
      States - $345,410 (2009 - $155,871). Substantially all of the expenses are
      made in the United States.                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10. | Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | Credit Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | Financial instruments that potentially subject the
      Company to concentrations of credit risk consist principally of cash
      deposits. Cash deposits with a major Canadian chartered bank are insured
      by the Canadian Deposit Insurance Corporation up to Cdn$100,000. Cash
      deposits with a major U.S. bank are insured by the Federal Deposit
      Insurance Corporation up to $250,000. As at December 31, 2010, the Company
      held Cdn$2,854,705 (2009 - Cdn$583,490) with the major Canadian chartered
      bank and $27,297 (2009 - $15,414) with the major U.S. bank.                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | Foreign Exchange Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | Certain of the Company's expenses were incurred in
      Canadian currency and are therefore subject to gains or losses due to
      fluctuations in this currency. As at December 31, 2010, the Company held
      cash of $2,821,419 (US$2,836,655) denominated in Canadian dollars (2009 -
      Cdn$569,616; US$544,268) had accounts payable and accrued liabilities of
      $153,876 (US$154,707) denominated in Canadian dollars (2009 - Cdn$94,807;
      US$90,588) and had a stock option and warrant liability of $841,730
      (US$846,300) denominated in Canadian currency (2009 - Cdn$624,300;
      US$596,500).            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | Commodity Price Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | The ability of the Company to develop its properties and
      the future profitability of the Company is directly related to the market
      price of certain minerals. The Companys risk management objectives are to
      ensure that business and financial exposures to risk that have been
      identified and measured are minimized using the most effective and
      efficient methods to reduce, transfer and, when possible, eliminate such
      exposures. Operating decisions contemplate associated risks and management
      strives to structure proposed transactions to avoid or reduce risk
      whenever possible.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|11. | Deferred Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | a)       Provision for
      Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | Major items causing the Companys income tax rate to
      differ from the U.S. federal statutory rate of approximately 34% (2009 
      34%) are as follows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

| |                                                                    |   | 2010       |   |   | 2009       |  
| | ------------------------------------------------------------------ | - | ---------- | - | - | ---------- | -
| |                                                                    |   |            |   |   |            |  
| | Loss before income taxes                                           | $ | (6,707,546 | ) | $ | (1,478,711 | )
| |                                                                    |   |            |   |   |            |  
| | Expected income tax benefit based on
      statutory rate          | $ | (2,281,000 | ) | $ | (503,000   | )
| | Adjustments resulting from:                                        |   |            |   |   |            |  
| | Warrant liability                                                  |   | 668.600    |   |   | (37,000    | )
| | Stock-based compensation                                           |   | 326,700    |   |   | 16,000     |  
| | Other                                                              |   | 47,700     |   |   | -          |  
| | Change in valuation allowance                                      |   | 1,238,000  |   |   | 524,000    |  
| | Income tax recovery reflected in the statement of
      operations | $ | -          |   | $ | -          |  

54

---

|BE Resources Inc.                                                         
|--------------------------------------------------------------------------
|(A Continuation of the Operations of Great Western Exploration,
      LLC)
|(An Exploration Stage Entity)                                             
|Notes to Financial Statements - Presented in US Dollars                   
|December 31, 2010
      and 2009                                          

|11. | Deferred Taxes (continued)
|--- | --------------------------

As at December 31, 2010, the Company
had approximately $7,989,000 of net operating loss carry forwards in the U.S.,
which may be used to reduce taxable income in future years which expire starting
December 31, 2027. The Company also has exploration expenditures of
approximately $268,000 which may be used to reduce taxable income in future
years. As management of the Company cannot determine that it is more likely than
not that the Company will realize the benefit of the net deferred tax asset, a
valuation allowance equal to the net deferred tax asset was recorded at December
31, 2010.

The significant components of the
deferred tax assets at December 31, 2010 and 2009 were as follows:

| |                                                      |   | 2010       |   |   | 2009       |  
| | ---------------------------------------------------- | - | ---------- | - | - | ---------- | -
| |                                                      |   |            |   |   |            |  
| | Deferred income tax assets (liabilities)             |   |            |   |   |            |  
| | Non-capital losses                                   |   | 2,717,000  |   |   | 1,511,000  |  
| | Stock-based
      compensation and warrant liability |   | 288,000    |   |   | 203,000    |  
| | Exploration expenditures                             |   | 54,000     |   |   | 107,000    |  
| | Valuation allowance                                  |   | (3,059,000 | ) |   | (1,821,000 | )
| |                                                      |   |            |   |   |            |  
| |                                                      | $ | -          |   | $ | -          |  

55

---

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

There have been no changes in our accountants during the last
two fiscal years, and we have not had any disagreements with our existing
accountants during that time.

ITEM 9A. CONTROLS AND PROCEDURES

(a) We maintain a system of
controls and procedures designed to ensure that information required to be
disclosed by us in reports that we file or submit under the Securities Exchange
Act of 1934, as amended, is recorded, processed, summarized and reported, within
time periods specified in the SECs rules and forms and to ensure that
information required to be disclosed by us in the reports that we file or submit
under the Securities Exchange Act of 1934, as amended, is accumulated and
communicated to our management, including our Chief Executive Officer and
Principal Financial Officer, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure. As of
December 31, 2010, under the supervision and with the participation of our Chief
Executive Officer and Principal Financial Officer, management has evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures. Based on that evaluation, the Chief Executive Officer and the
Principal Financial Officer concluded that our disclosure controls and
procedures were effective.

(b) There has been no change in
our internal controls over financial reporting during the most recent fiscal
quarter that has materially affected, or are reasonably likely to materially
affect, our internal controls over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE

Pursuant to General Instruction G of Form 10-K, the information
contained in this Item 10 is incorporated by reference to our Definitive Proxy
Statement for our 2011 Annual Meeting of Shareholders, expected to be filed with
the SEC on or before April 30, 2011.

ITEM 11. EXECUTIVE AND DIRECTOR COMPENSATION

The information contained in this Item 11 is incorporated by
reference to our Definitive Proxy Statement for our 2011 Annual Meeting of
Shareholders.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information contained in this Item 12 is incorporated by
reference to our Definitive Proxy Statement for our 2011 Annual Meeting of
Shareholders.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE

56

---

The information contained in this Item 13 is incorporated by
reference to our Definitive Proxy Statement for our 2011 Annual Meeting of
Shareholders.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The information contained in this Item 14 is incorporated by
reference to our Definitive Proxy Statement for our 2011 Annual Meeting of
Shareholders.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

The following Exhibits are filed or incorporated by reference
as part of this registration statement:

|Item No. | Description                                                                                                                                                                                                                                                                 
|-------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1      | Articles of Incorporation of the Company as filed with
      the Colorado Secretary of State on August 8, 2007 (incorporated by
      reference from our registration statement on Form S-1 filed on July 2,
      2009, Exhibit 3.1, File No. 333-160431).                 
|3.1.1    | Articles of Amendment to the Articles of Incorporation as
      filed with the Colorado Secretary of State on August 27, 2007
      (incorporated by reference from our registration statement on Form S-1
      filed on July 2, 2009, Exhibit 3.1.1, File No. 333-160431).
|3.1.2    | Articles of Amendment to the Articles of Incorporation as
      filed with the Colorado Secretary of State on July 3, 2008 (incorporated
      by reference from our registration statement on Form S-1 filed on July 2,
      2009, Exhibit 3.1.2, File No. 333-160431).   
|3.2      | Bylaws of the Company dated August 27, 2007 (incorporated
      by reference from our registration statement on Form S-1 filed on July 2,
      2009, Exhibit 3.2, File No. 333-160431).                                                                                    
|4        | Specimen stock certificate (incorporated by reference
      from our registration statement on Form S-1 filed on July 2, 2009, Exhibit
      4, File No. 333-160431).                                                                                                       
|10.1     | Agreement of Purchase and Sale between the Company and
      Great Western Exploration, LLC dated October 1, 2007 (incorporated by
      reference from our registration statement on Form S-1 filed on July 2,
      2009, Exhibit 10.1, File No. 333-160431).             
|10.2     | NPR Royalty Agreement between the Company and Great
      Western Exploration, LLC dated October 1, 2007 (incorporated by reference
      from our registration statement on Form S-1 filed on July 2, 2009, Exhibit
      10.2, File No. 333-160431).                      
|10.3     | NPR Royalty Agreement between the Company and South West
      Exploration, LLC dated October 1, 2007 (incorporated by reference from our
      registration statement on Form S-1 filed on July 2, 2009, Exhibit 10.3,
      File No. 333-160431).                         
|10.4     | NPR Royalty Agreement between the Company and Bethany
      Resources, LLC dated October 1, 2007. (incorporated by reference from our
      registration statement on Form S-1 filed on July 2, 2009, Exhibit 10.4,
      File No. 333-160431).                             
|10.5     | NPR Royalty Agreement between the Company and Stewart
      Jackson dated October 1, 2007 (incorporated by reference from our
      registration statement on Form S-1 filed on July 2, 2009, Exhibit 10.5,
      File No. 333-160431).                                     
|10.6     | Gross Royalty Agreement between the Company and David
      Tognoni dated October 1, 2007 (incorporated by reference from our
      registration statement on Form S-1 filed on July 2, 2009, Exhibit 10.6,
      File No. 333-160431).                                     
|10.7     | Form of Escrow Agreement between the Company, the
      Transfer Agent and Registrar and certain shareholders (incorporated by
      reference from our registration statement on Form S-1/A filed on August
      12, 2009, Exhibit 10.9, File No. 333-160431).            

57

---

|       |                                                                                                                                                                                                                                                                                                                     
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.8   | Sullivan Lease
        between David Tognoni and Kenneth Alan Sullivan and Cherrill L. Sullivan
        dated January 2, 2004 (incorporated by reference from our registration
        statement on Form S-1 filed on July 2, 2009, Exhibit 10.10, File No. 333-160431).                                            
|10.9   | Assignment of Sullivan Lease
        between David Q. Tognoni and Great Western Exploration, LLC dated February
        3, 2004 (incorporated by reference from our registration statement on
        Form S-1 filed on July 2, 2009, Exhibit 10.11, File No. 333-160431).                                          
|10.10  | Assignment of
        Sullivan Lease between the Company and Great Western Exploration, LLC
        dated October 1, 2007 (incorporated by reference from our registration
        statement on Form S-1 filed on July 2, 2009, Exhibit 10.12, File No. 333-160431).                                                
|10.11  | Amendment of Sullivan Lease between
        the Company and Kenneth Alan Sullivan and Cherrill L. Sullivan dated April
        9, 2008 (incorporated by reference from our registration statement on
        Form S-1 filed on July 2, 2009, Exhibit 10.13, File No. 333-160431).                                   
|10.12  | State of New
        Mexico Lease Number HG 0059 between New Mexico State Land Office and Great
        Western Exploration, LLC dated January 3, 2005 (incorporated by reference
        from our registration statement on Form S-1 filed on July 2, 2009, Exhibit
        10.14, File No. 333-160431).           
|10.13  | Assignment of General Mining
        Lease New Mexico Lease Number HG 0059 between the Company and Great Western
        Exploration, LLC dated September 4, 2007 (incorporated by reference from
        our registration statement on Form S-1 filed on July 2, 2009, Exhibit
        10.15, File No. 333-160431).
|10.14  | State of New
        Mexico Lease Number HG 0060 between New Mexico State Land Office and Great
        Western Exploration, LLC dated January 3, 2005                                                                                                                                                              
|10.15  | Assignment of General Mining
        Lease New Mexico Lease Number HG 0060 between the Company and Great Western
        Exploration, LLC dated September 4, 2007 (incorporated by reference from
        our registration statement on Form S-1 filed on July 2, 2009, Exhibit
        10.17, File No. 333-160431).
|10.16  | State of New
        Mexico Lease Number HG 0061 between New Mexico State Land Office and Great
        Western Exploration, LLC dated January 3, 2005 (incorporated by reference
        from our registration statement on Form S-1 filed on July 2, 2009, Exhibit
        10.18, File No. 333-160431).           
|10.17  | Assignment of General Mining
        Lease New Mexico Lease Number HG 0061 between the Company and Great Western
        Exploration, LLC dated September 4, 2007 (incorporated by reference from
        our registration statement on Form S-1 filed on July 2, 2009, Exhibit
        10.19, File No. 333-160431).
|       | BE Resources
        Inc. Stock Option Plan (incorporated by reference from our registration
        statement on Form S-1 filed on July 2, 2009, Exhibit 10.20, File No. 333-160431).                                                                                                                              
|10.18  | Form of Stock Option Agreement
        (incorporated by reference from our registration statement on Form S-
        1 filed on July 2, 2009, Exhibit 10.21, File No. 333-160431).                                                                                                                                  
|10.19  | First Amendment
        to NPR Agreement between the Company and South West Exploration, dated
        May 27, 2009 (incorporated by reference from our registration statement
        on Form S-1 filed on July 2, 2009, Exhibit 10.22, File No. 333-160431).                                                      
|10.20  | First Amendment to NPR Agreement
        between the Company and Bethany Resources, LLC, dated May 27, 2009 (incorporated
        by reference from our registration statement on Form S-1 filed on July
        2, 2009, Exhibit 10.23, File No. 333-160431).                                                      
|10.21  | First Amendment
        to NPR Agreement between the Company and Great Western Exploration, LLC,
        dated May 27, 2009 (incorporated by reference from our registration statement
        on Form S-1 filed on July 2, 2009, Exhibit 10.24, File No. 333-160431).                                              
|10.22  | First Amendment to NPR Agreement
        between the Company and Stewart Jackson, dated May 30, 2009 (incorporated
        by reference from our registration statement on Form S-1 filed on July
        2, 2009, Exhibit 10.25, File No. 333-160431).                                                             
|*10.23 | Amended and Restated Employment Agreement
    between the Company and David Q. Tognoni effective January 1, 2011.                                                                                                                                                                                                   
|10.24  | Amendment and Restatement of
    Stock Option Plan (Incorporated by reference to Annex "A" to the Definitive
    Proxy Statement on Schedule 14A as filed on April 30, 2010, File No.
    000-53811).                                                                                                               
|14     | Code of Ethics (incorporated by reference to our annual
    report on Form 10-K for the year ended December 31, 2009 filed March 31,
    2010, File No. 000-53811)                                                                                                                                                  
|*31.1  | Certification
        pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for David Q.
        Tognoni                                                                                                                                                                                                        
|*31.2  | Certification
        pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Carmelo
        Marrelli                                                                                                                                                                                                        
|*32    | Certification
        pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for David Q.
        Tognoni and Carmelo Marrelli                                                                                                                                                                                   

* Filed with this report

58

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SIGNATURES

In accordance with Section 13 or
15(d) of the Exchange Act of 1934, the registrant caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

|                      | BE RESOURCES INC.                    
|--------------------- | -------------------------------------
|                      |                                      
|                      |                                      
|                      | /s/ David Q. Tognoni                 
|Dated: March 30, 2011 | David Q. Tognoni,                    
|                      | President and Chief Executive Officer

In accordance with the Exchange
Act, this Report has been signed below by the following persons on behalf of the
Company and in the capacities and on the dates indicated.

|                           |  |                                                        |               
|-------------------------- |  | ------------------------------------------------------ | --------------
|/s/ David Q.
      Tognoni |  | President, Chief Executive
      Officer, and Director | March 30, 2011
|David Q. Tognoni           |  |                                                        |               
|                           |  |                                                        |               
|                           |  |                                                        |               
|                           |  | Chief Financial Officer                                |               
|/s/ Carmelo
      Marrelli |  | (Principal Financial and Accounting Officer)           | March 30, 2011
|Carmelo Marrelli           |  |                                                        |               
|                           |  |                                                        |               
|                           |  |                                                        |               
|/s/ Edward Godin           |  | Chairman of the Board of
      Directors               | March 30, 2011
|Edward Godin               |  |                                                        |               
|                           |  |                                                        |               
|                           |  |                                                        |               
|/s/ Robert Lufkin          |  | Director                                               | March 30, 2011
|Robert Lufkin              |  |                                                        |               

59

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Exhibit Index

|Item No. | Description                                                                                                                                                                                                                                                                 
|-------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1      | Articles of Incorporation of the Company as filed with
      the Colorado Secretary of State on August 8, 2007 (incorporated by
      reference from our registration statement on Form S-1 filed on July 2,
      2009, Exhibit 3.1, File No. 333-160431).                 
|3.1.1    | Articles of Amendment to the Articles of Incorporation as
      filed with the Colorado Secretary of State on August 27, 2007
      (incorporated by reference from our registration statement on Form S-1
      filed on July 2, 2009, Exhibit 3.1.1, File No. 333-160431).
|3.1.2    | Articles of Amendment to the Articles of Incorporation as
      filed with the Colorado Secretary of State on July 3, 2008 (incorporated
      by reference from our registration statement on Form S-1 filed on July 2,
      2009, Exhibit 3.1.2, File No. 333-160431).   
|3.2      | Bylaws of the Company dated August 27, 2007 (incorporated
      by reference from our registration statement on Form S-1 filed on July 2,
      2009, Exhibit 3.2, File No. 333-160431).                                                                                    
|4        | Specimen stock certificate (incorporated by reference
      from our registration statement on Form S-1 filed on July 2, 2009, Exhibit
      4, File No. 333-160431).                                                                                                       
|10.1     | Agreement of Purchase and Sale between the Company and
      Great Western Exploration, LLC dated October 1, 2007 (incorporated by
      reference from our registration statement on Form S-1 filed on July 2,
      2009, Exhibit 10.1, File No. 333-160431).             
|10.2     | NPR Royalty Agreement between the Company and Great
      Western Exploration, LLC dated October 1, 2007 (incorporated by reference
      from our registration statement on Form S-1 filed on July 2, 2009, Exhibit
      10.2, File No. 333-160431).                      
|10.3     | NPR Royalty Agreement between the Company and South West
      Exploration, LLC dated October 1, 2007 (incorporated by reference from our
      registration statement on Form S-1 filed on July 2, 2009, Exhibit 10.3,
      File No. 333-160431).                         
|10.4     | NPR Royalty Agreement between the Company and Bethany
      Resources, LLC dated October 1, 2007. (incorporated by reference from our
      registration statement on Form S-1 filed on July 2, 2009, Exhibit 10.4,
      File No. 333-160431).                             
|10.5     | NPR Royalty Agreement between the Company and Stewart
      Jackson dated October 1, 2007 (incorporated by reference from our
      registration statement on Form S-1 filed on July 2, 2009, Exhibit 10.5,
      File No. 333-160431).                                     
|10.6     | Gross Royalty Agreement between the Company and David
      Tognoni dated October 1, 2007 (incorporated by reference from our
      registration statement on Form S-1 filed on July 2, 2009, Exhibit 10.6,
      File No. 333-160431).                                     
|10.7     | Form of Escrow Agreement between the Company, the
      Transfer Agent and Registrar and certain shareholders (incorporated by
      reference from our registration statement on Form S-1/A filed on August
      12, 2009, Exhibit 10.9, File No. 333-160431).            

60

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|10.8   | Sullivan Lease
        between David Tognoni and Kenneth Alan Sullivan and Cherrill L. Sullivan
        dated January 2, 2004 (incorporated by reference from our registration
        statement on Form S-1 filed on July 2, 2009, Exhibit 10.10, File No. 333-160431).                                            
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.9   | Assignment of Sullivan Lease
        between David Q. Tognoni and Great Western Exploration, LLC dated February
        3, 2004 (incorporated by reference from our registration statement on
        Form S-1 filed on July 2, 2009, Exhibit 10.11, File No. 333-160431).                                          
|10.10  | Assignment of
        Sullivan Lease between the Company and Great Western Exploration, LLC
        dated October 1, 2007 (incorporated by reference from our registration
        statement on Form S-1 filed on July 2, 2009, Exhibit 10.12, File No. 333-160431).                                                
|10.11  | Amendment of Sullivan Lease between
        the Company and Kenneth Alan Sullivan and Cherrill L. Sullivan dated April
        9, 2008 (incorporated by reference from our registration statement on
        Form S-1 filed on July 2, 2009, Exhibit 10.13, File No. 333-160431).                                   
|10.12  | State of New
        Mexico Lease Number HG 0059 between New Mexico State Land Office and Great
        Western Exploration, LLC dated January 3, 2005 (incorporated by reference
        from our registration statement on Form S-1 filed on July 2, 2009, Exhibit
        10.14, File No. 333-160431).           
|10.13  | Assignment of General Mining
        Lease New Mexico Lease Number HG 0059 between the Company and Great Western
        Exploration, LLC dated September 4, 2007 (incorporated by reference from
        our registration statement on Form S-1 filed on July 2, 2009, Exhibit
        10.15, File No. 333-160431).
|10.14  | State of New
        Mexico Lease Number HG 0060 between New Mexico State Land Office and Great
        Western Exploration, LLC dated January 3, 2005                                                                                                                                                              
|10.15  | Assignment of General Mining
        Lease New Mexico Lease Number HG 0060 between the Company and Great Western
        Exploration, LLC dated September 4, 2007 (incorporated by reference from
        our registration statement on Form S-1 filed on July 2, 2009, Exhibit
        10.17, File No. 333-160431).
|10.16  | State of New
        Mexico Lease Number HG 0061 between New Mexico State Land Office and Great
        Western Exploration, LLC dated January 3, 2005 (incorporated by reference
        from our registration statement on Form S-1 filed on July 2, 2009, Exhibit
        10.18, File No. 333-160431).           
|10.17  | Assignment of General Mining
        Lease New Mexico Lease Number HG 0061 between the Company and Great Western
        Exploration, LLC dated September 4, 2007 (incorporated by reference from
        our registration statement on Form S-1 filed on July 2, 2009, Exhibit
        10.19, File No. 333-160431).
|       | BE Resources
        Inc. Stock Option Plan (incorporated by reference from our registration
        statement on Form S-1 filed on July 2, 2009, Exhibit 10.20, File No. 333-160431).                                                                                                                              
|10.18  | Form of Stock Option Agreement
        (incorporated by reference from our registration statement on Form S-
        1 filed on July 2, 2009, Exhibit 10.21, File No. 333-160431).                                                                                                                                  
|10.19  | First Amendment
        to NPR Agreement between the Company and South West Exploration, dated
        May 27, 2009 (incorporated by reference from our registration statement
        on Form S-1 filed on July 2, 2009, Exhibit 10.22, File No. 333-160431).                                                      
|10.20  | First Amendment to NPR Agreement
        between the Company and Bethany Resources, LLC, dated May 27, 2009 (incorporated
        by reference from our registration statement on Form S-1 filed on July
        2, 2009, Exhibit 10.23, File No. 333-160431).                                                      
|10.21  | First Amendment
        to NPR Agreement between the Company and Great Western Exploration, LLC,
        dated May 27, 2009 (incorporated by reference from our registration statement
        on Form S-1 filed on July 2, 2009, Exhibit 10.24, File No. 333-160431).                                              
|10.22  | First Amendment to NPR Agreement
        between the Company and Stewart Jackson, dated May 30, 2009 (incorporated
        by reference from our registration statement on Form S-1 filed on July
        2, 2009, Exhibit 10.25, File No. 333-160431).                                                             
|*10.23 | Amended and Restated Employment Agreement
    between the Company and David Q. Tognoni effective January 1, 2011.                                                                                                                                                                                                   
|10.24  | Amendment and Restatement of
    Stock Option Plan (Incorporated by reference to Annex "A" to the Definitive
    Proxy Statement on Schedule 14A as filed on April 30, 2010, File No.
    000-53811).                                                                                                               
|14     | Code of Ethics (incorporated by reference to our annual
    report on Form 10-K for the year ended December 31, 2009 filed March 31,
    2010, File No. 000-53811)                                                                                                                                                  
|*31.1  | Certification
        pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for David Q.
        Tognoni                                                                                                                                                                                                        
|*31.2  | Certification
        pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Carmelo
        Marrelli                                                                                                                                                                                                        
|*32    | Certification
        pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for David Q.
        Tognoni and Carmelo Marrelli                                                                                                                                                                                   

* Filed with this report

61

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