---

|PAN AMERICAN LITHIUM CORP.         
|-----------------------------------
|Suite 110, 3040 N. Campbell Avenue 
|Tucson, AZ 85719                   
|Tel: 520-989-0020 Fax: 520-623-3326

February 14, 2011

|Sociedad Gareste Limitada
|-------------------------
|208 Van Buren            
|Copiapo, Chile           

Attention : Harold Gardner, Co-Managing Partner

|Re: | Binding Letter of Intent (LOI) for
      Proposed Joint Venture and Earn-In with Pan American Lithium
      Corp.
|--- | -------------------------------------------------------------------------------------------------------------------

This binding letter of intent is
intended to set out the initial terms of a proposed earn-in of up to a 70%
interest in the Project (as hereinafter defined) by Pan American Lithium
Corporation (the Corporation) from Sociedad Gareste Limitada
(Gareste) and the corresponding entry into a joint venture by all
parties holding an interest in the Project for the purpose of exploring and
developing the Project (the Joint Venture). These terms are not
intended to be comprehensive, and final and additional terms, including
customary representations and warranties, will be incorporated into a
formal option and joint venture agreement (the Agreement) which will be
negotiated among the Corporation and Gareste. The basic terms are as
follows:

|1. | Project: Property interests held (100%) by Gareste
      in the Llanta lithium brines project located approximately 15 kilometers
      east of Diego de Almagro in Atacama Region III, Chile, which interests are
      further described in Schedule A attached hereto.                                                                                                                                                                                   
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|2. | The Corporation: The Corporation is British
      Columbia corporation, and is a reporting issuer in the Provinces of
      British Columbia and Alberta, with its common shares listed for trading on
      the TSX Venture Exchange (the TSXV) under the trading symbol
      PL, and also has its common shares registered under the United States
      Securities Exchange Act of 1934and quoted on the Pink Sheets under
      the symbol PALTF.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|3. | Gareste: Gareste is a private Limitada (limited
      liability company) incorporated in the Republic of Chile.                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4. | Consideration:Gareste agrees to grant the
      following interest in the Property to the Corporation upon the Corporation
      making the following payments and issuing the following number of shares
      on or prior to the following dates:                                                                                                                                                                                                         

MILESTONE
    CASH PAYMENT
    SHARES
    INCREMENTAL % INTEREST
      EARNEDRegulatory approval of Agreement
    
    50,000One year from execution of Agreement
    US$25,000
    25,000Two years from execution of Agreement
    US$25,000
    25,000Three years from execution of Agreement
    US$50,000
    50,000Delivery of scoping study
    
    50,000
    10Delivery of pre-feasibility study (PFS)
    
    100,000
    20180 days after Delivery of PFS
    US$ 50,000Delivery of bankable feasibility study (BFS)
    
    200,000
    40180 days after Delivery of BFS
    US$ 100,000Receipt of actual funds from project debt financing to
      build production facility based on BFS
    US$350,000
    400,000
    10TOTALS
    US$600,000
    900,000
    80


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|   | The Corporation may earn a 70% interest in the Project by
      delivering all of the three studies and paying the first three cash
      payments and share installments, all as referred to in the table above,
      which payments may be accelerated at the discretion of the Corporation.
      Should the Corporation determine to complete its 70% earn-in through the
      delivery of the BFS, all expenses of the Joint Venture will be paid by the
      Corporation, but the Corporation has the right to terminate the Earn-In at
      any time at its sole discretion, and maintain any Project interest it has
      earned up to that point.                                                                                                                                                                                                                                                                                                       
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | An additional 10% of the Project will be earned should
      the Corporation elect to secure project debt financing (in a minimum
      amount of 60% of the total capital requirements to build the Project) for
      both its share and Garestes share of the debt portion of the Project. In
      the event that the Corporation secures project financing (including
      third-party guarantees therefor) and/or third-party equity financing for
      its share of the complete build of the Project, the Corporation will use
      its best efforts to procure the same terms for the Gareste portions of
      debt and equity required. Alternatively, the Corporation shall have the
      further election to fully fund and build the project on its own account,
      in which case it will receive an additional 6% project interest from
      Gareste such that Gareste will effectively own a fully-carried 14%
      interest in the Project.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In addition, the parties under and at the time of
      formation of the joint venture would grant and deliver to Gareste a 2% Net
      Smelter Return (NSR) royalty on the sale of production from the Project,
      capped at $6 million. This royalty shall take the form of a NSR Royalty
      Deed customarily used in mineral transactions of this type. At any time
      prior to the commencement of commercial production from the Project, the
      Corporation shall have the right to repurchase one-half, or a 1% NSR, from
      Gareste, for the sum of $2 million.                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|5. | Management of Project: The parties acknowledge and
      agree that during the full 70% Earn-In, subject to certain rights of
      Gareste and timing requirements to be negotiated in the Agreement, the
      Corporation shall control the exploration programs and expenditures of
      funds with respect to the Project. Thereafter, the Agreement will provide
      for the creation of a management committee (the Management
      Committee) to supervise and coordinate the development of the Project
      and each partys obligations under the Agreement. The Management Committee
      will consist of three (3) members and parties will be eligible to appoint
      one (1) member for each 33.33% interest they hold in the Joint
    Venture.                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|6. | Operator Status: Upon entry into the Agreement,
      subject to control of funding and management from the Management Committee
      as set forth in clause 5 above, Gareste will act as the operator of the
      Project (the Operator). In the event it defaults on its
      obligations under the Agreement, or otherwise fails to act as Operator,
      the Corporation will be appointed Operator of the Project. The
      compensation of the Operator will be negotiated and provided in the
      Agreement and shall be based on industry standard rates.                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|7. | Work Plans and Budget: The parties acknowledge and
      agree that, subject to clause 5 above, the Operator will submit the yearly
      work plan and budget for the approval of the Management Committee, and
      conduct quarterly meetings with the Management Committee to review the
      exploration activities carried out by the Operator. Any member of the
      joint venture shall have the right to inspect the accounts and records
      relating to the Project kept by the Operator.                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|8. | Structure: In order to facilitate the earn-in, the
      parties agree that each will use their best efforts to formulate a
      structure for the joint venture which is acceptable to each party and
      which is formulated to:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

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|9.  | Access to Information: The parties hereto agree
      that immediately upon execution of this letter of intent:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10. | Return of Materials: Each of the parties agrees to
      return or destroy any materials delivered in accordance with section 10 of
      this letter of intent if the Agreement is not executed within the time
      provided stated herein.                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|11. | Mutual Conditions: The obligations of the parties
      to proceed with the Agreement will be subject to satisfaction or written
      waiver by the parties of the following mutual conditions within the time
      set forth in the Agreement:                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|12. | Representations and Warranties; Indemnities:
      Gareste shall provide in the formal Agreement representations and
      warranties, and indemnities, as are customary for a mineral industry
      transaction of this type, including, but not limited to, representations
      and warranties as to good and marketable title to and proper location of
      mineral concessions, water rights and property, payment of taxes and fees,
      access, compliance with laws and regulations, no litigation, environmental
      matters, and such other representations and warranties as are standard for
      an earn-in/joint venture mineral transaction.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|13. | Conditions Precedent of the Corporation: The
      obligation of the Corporation to proceed with the Joint Venture will be
      subject to satisfaction or written waiver by the Corporation of the
      following conditions within the time set forth in the formal
    Agreement:                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

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|    | (g)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | no legal proceedings pending or threatened to enjoin,
      restrict or prohibit the transactions contemplated in this letter of
      intent; and                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                       
|    | (h)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | other conditions customary in transactions similar to the
      Joint Venture.                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                       
|14. | Conditions Precedent of Gareste: The obligation of
      Gareste to proceed with the Joint Venture will be subject to satisfaction
      or written waiver by Gareste of the following conditions within the time
      set forth in the Formal Agreement:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                       
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | review and approval of all materials in the possession
      and control of the Corporation which are germane to the decision to
      proceed with the Joint Venture;                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                       
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Gareste and its solicitors having had a reasonable
      opportunity to perform the searches and other due diligence reasonable or
      customary in a transaction of a similar nature to that contemplated herein
      and Gareste and its solicitors being satisfied with the results of such
      due diligence;
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                       
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Gareste obtaining all necessary governmental, regulatory
      and court consents, waivers and approvals;                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                       
|    | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Gareste obtaining the consent of any parties from whom
      consent to the Joint Venture is required;                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                       
|    | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | the Corporation complying with all covenants to be set
      out in the Agreement and the accuracy in all material respects of the
      representations and warranties of the Corporation;                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                       
|    | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | no material adverse change having occurred in connection
      with the Project or the business of the Corporation; and                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                       
|    | (g)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | other conditions customary in transactions similar to the
      Joint Venture.                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                       
|15. | Confidentiality: Except as and to the extent
      required by law, Gareste will not disclose or use, and will direct its
      representatives not to disclose or use to the detriment of the
      Corporation, any Confidential Information (as defined below) with respect
      to the Project or the Corporation furnished, or to be furnished, by either
      the Corporation or its representatives to Gareste or its representatives
      at any time or in any manner other than in connection with its evaluation
      of the transaction proposed in this binding letter of intent. For purposes
      of this paragraph, Confidential Informationmeans any information
      stamped confidential or identified in writing as such to Gareste by the
      Corporation promptly following its disclosure, unless (i) such information
      is already known to Gareste or its representatives or to others not bound
      by a duty of confidentiality or such information becomes publicly
      available through no fault of Gareste or its representatives, (ii) the use
      of such information is necessary or appropriate in making any filing or
      obtaining any consent or approval required for the consummation of the
      Joint Venture, or (iii) the furnishing or use of such information is
      required by or necessary or appropriate in connection with legal
      proceedings. Upon the written request of the Corporation, Gareste will
      promptly return to the Corporation or destroy any Confidential Information
      in its possession and certify in writing to the Corporation that it has
      done so. Similarly, except as and to the extent required by law, the
      Corporation will not disclose or use, and will direct its representatives
      not to disclose or use to the detriment of Gareste, any Confidential
      Information (with such corresponding changes to the definition thereof to
      reference the Confidential Information of Gareste as opposed to the
      Corporation) with respect to the Corporation furnished, or to be
      furnished, by either Gareste or its representatives to the Corporation or
      its representatives at any time or in any manner other than in connection
      with its evaluation of the transaction proposed in this binding letter of
      intent. Upon the written request of Gareste, the Corporation will promptly
      return to Gareste or destroy any Confidential Information in its
      possession and certify in writing to Gareste that it has done
  so.

---

|16. | Indemnity and Site Visits: During the Due
      Diligence Period, Gareste shall permit the Corporation, or their
      representatives duly authorized in writing, to visit and inspect the
      Project at all reasonable times and intervals, and data obtained by
      Gareste as a result of its operations thereon, provided always that the
      Corporation or their representatives shall abide by the rules and
      regulations of Gareste relating to matters of safety and efficiency in its
      operations and, notwithstanding, the Corporation shall indemnify and hold
      harmless Gareste, and its directors, officers, employees, consultants,
      servants, agents and representatives, and Gareste shall be under no
      liability to the Corporation or its representatives, for any personal
      injury, including death, or any damage to property other than such as
      might be occasioned by or through any gross negligence on the part of the
      Gareste, its directors, officers, employees, consultants, servants, agents
      or representatives.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|17. | Disclosure: Except as and to the extent required
      by law or the policies of the TSXV, without the prior written consent of
      the other parties, neither party will, and each will direct its
      representatives not to make, directly or indirectly, any public comment,
      statement, or communication with respect to, or otherwise to disclose or
      to permit the disclosure of the existence of discussions regarding, a
      possible transaction between the parties or any of the terms, conditions,
      or other aspects of the transaction proposed in this letter of intent. If
      a party is required by law to make any such disclosure, it must first
      provide to the other party the content of the proposed disclosure, the
      reasons that such disclosure is required by law, and the time and place
      that the disclosure will be made.                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|18. | Expenses: Each party will be responsible for and
      bear all of its own costs and expenses incurred at any time in connection
      with pursuing or consummating the Joint Venture.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|19. | Formal Agreement: Upon execution of this binding
      letter of intent, the Corporation will arrange for the preparation of a
      draft of the formal Agreement for review by Gareste. The Formal Agreement
      may require further negotiation and may contain matters not contemplated
      in this binding letter of intent.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|20. | Good Faith Negotiations: Each of the parties will
      act honestly, diligently and in good faith in their respective endeavors
      to enter into the formal Agreement by December 31, 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
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|21. | Binding Agreement; Assignment: This letter of
      intent creates a binding contract between the parties, enforceable
      according to its terms upon the parties and their permitted assigns. This
      LOI shall not be assigned by Gareste, but shall be assignable by the
      Corporation to an affiliate without the consent of Gareste.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|22. | Proper Law: This letter of intent will be
      exclusively governed by and construed in accordance with the law of the
      State of Arizona, USA, and the parties hereby attorn to the exclusive
      jurisdiction of the Courts of competent jurisdiction of the State of
      Arizona in any proceeding hereunder.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|23. | Counterparts and Electronic Means: This letter of
      intent may be executed in several counterparts, each of which will be
      deemed to be an original and all of which will together constitute one and
      the same instrument. Delivery to us of an executed copy of this letter of
      intent by electronic facsimile transmission or other means of electronic
      communication capable of producing a printed copy will be deemed to be
      execution and delivery to us of this letter of intent as of the date of
      successful transmission to us.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

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|24. | Currency: All dollar figures referred herein mean
      the lawful currency of the United States.                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                            
|25. | Acceptance: If you are agreeable to the foregoing
      terms, please sign and return a duplicate copy of this letter of intent by
      no later than by 5:00 p.m. (Tucson time) on February ____,
  2011.

Yours truly,

PAN AMERICAN LITHIUM CORP.

|/s/ Andrew Brodkey |                  
|------------------ | -----------------
|Name:              | Andrew Brodkey   
|Title:             | President and CEO

The above terms are accepted this 14th day of February,
2011.

SOCIEDAD GARESTE LIMITADA

|Harold Gardner |                    
|-------------- | -------------------
|Name:          | Harold Gardner     
|Title:         | Co-Managing Partner

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SCHEDULE A

THE PROJECT

Tenure Number
    Claim Name
    Area (ha)
    Good To Date467
    LLANTA UNO
    300
    Date has not been set468
    LLANTA DOS
    300
    Date has not been set469
    LLANTA TRES
    300
    Date has not been set470
    LLANTA CUATRO
    300
    Date has not been set471
    LLANTA CINCO
    300
    Date has not been set472
    LLANTA SEIS
    300
    Date has not been set473
    LLANTA SIETE
    300
    Date has not been set474
    LLANTA OCHO
    300
    Date has not been set475
    LLANTA NUEVE
    300
    Date has not been set476
    LLANTA DIEZ
    300
    Date has not been set


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