Blue Wolf Mongolia F4 Registration of securities

As filed with the Securities and Exchange Commission on May 24, 2013

Registration No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM F-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

BLUE WOLF MONGOLIA HOLDINGS CORP.

(Exact Name of Registrant as Specified in Its Charter)

British Virgin Islands

6770

66-0762833

(Jurisdiction of Incorporation

or Organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer

Identification Number)

Suite 409, Central Tower

2 Sukhbaatar Square, Sukhbaatar District 8

Ulaanbaatar 14200, Mongolia

976-7010-0248

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Lee Kraus

c/o Blue Wolf MHC Ltd.

Two Greenwich Office Park, Suite 300

Greenwich, CT 06831

(203) 622-4903

(Name, address, including zip code, and telephone number, including area code, of agent for service)

With copies to:

Douglas S. Ellenoff, Esq.

Stuart Neuhauser, Esq.

Ellenoff Grossman & Schole LLP

150 East 42nd Street

New York, New York 10017

(212) 370-1300

(212) 370-7889 (fax)

Richard I. Anslow, Esq.

Anslow & Jaclin LLP

195 Route 9 South, Suite 204

Manalapan, New Jersey 07726

(732) 409-1212

(732) 577-1188 (fax)

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement and upon completion of the merger described in the enclosed proxy statement/prospectus.

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ¨

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) ¨

CALCULATION OF REGISTRATION FEE



Title of Each Class of Securities to be Registered	Amount to be Registered(1)	Proposed Maximum Offering Price per Share	Proposed Maximum Aggregate Offering Price(2)	Amount of Registration Fee(3)
Ordinary Shares, no par value	1,581,990	N/A	$15,819,898	$2,157.83

(1)

Represents the maximum number of ordinary shares of 1,581,990 that Blue Wolf Mongolia Holdings Corp. currently estimates to be issuable upon consummation of the merger and based on an exchange ratio of 250 ordinary shares of Blue Wolf Mongolia Holdings Corp. for each share of Li3 Energy, Inc. common stock.

(2)	Estimated solely for the purpose of calculating the registration fee required by Section 6(b) of the Securities Act of 1933, as amended, or the Securities Act, and computed pursuant to Rule 457(f)(1) and 457(c) of the Securities Act. The proposed maximum aggregate offering price of the registrant’s common shares was calculated based upon the market value of shares of Li3 Energy, Inc. common stock (the securities to be cancelled in the merger) in accordance with Rule 457(c) under the Securities Act as follows: (i) the product of (A) $0.04, the average of the high and low price per share of the Li3 Energy, Inc. common stock on the OTC Bulletin Board on May 22, 2013 and (B) 395,497,453, the maximum possible number of shares of Li3 Energy, Inc. common stock that may be cancelled and exchanged in the merger.

(3)	Determined in accordance with Section 6(b) of the Securities Act at a rate equal to $136.40 per $1,000,000 of the proposed maximum aggregate offering price.

The Registrant hereby amends this Registration Statement on such date as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

To the Stockholders of Li3 Energy, Inc.:

The board of directors of Li3 Energy, Inc. (“Li3”) has unanimously approved an agreement and plan of merger entered into by and among Blue Wolf Mongolia Holdings Corp. (“Blue Wolf”), Blue Wolf Acquisition Sub, Inc. (“Merger Sub”) and Li3 as of May 21, 2013 (the “Agreement and Plan of Merger”). Pursuant to the terms of the Agreement and Plan of Merger and the transactions contemplated thereby (the “Transaction”), among other things, Merger Sub will merge (the “Merger”) with and into Li3 with Li3 surviving the Merger as a wholly-owned subsidiary of Blue Wolf in exchange for consideration to Li3 stockholders in the form of newly-issued ordinary shares of Blue Wolf, no par value (the “Ordinary Shares”). Concurrently with the closing, the requisite parties will file articles of merger with the Secretary of State of the State of Nevada, in accordance with the relevant provisions of the Nevada Revised Statutes (the “NRS”). The time when the Transaction becomes effective is herein referred to as the “Effective Time.”

At the Effective Time, Blue Wolf will cause to be issued to the Li3 stockholders of record, consideration in the form of one Blue Wolf Ordinary Share for every 250 shares of Li3 common stock then owned by them (the “Merger Consideration”). In addition, each option and warrant to purchase shares of Li3 common stock (the “Li3 Derivatives”) which is outstanding immediately prior to the Effective Time shall be converted into a right to acquire one Ordinary Share for every 250 shares of Li3 common stock subject to such Li3 Derivatives and on the same contractual terms and conditions as were in effect immediately prior to the Effective Time.

Immediately following the closing, the board of directors of Blue Wolf shall consist of seven members (four of whom shall be independent). Four of the members of the post-closing board shall be appointed by Li3 and three members by Blue Wolf. Following the Closing, the following persons shall serve as the directors of Blue Wolf: Luis Francisco Saenz, Patrick Cussen, Patrico Compos, Harvey McKenzie, SungWon Lee, Jonathan Lee and Myron Manternach. The Ordinary Shares of Blue Wolf are listed on Nasdaq under the symbol “MNGL”. Following the closing Blue Wolf intends to change its name to “Li3 Energy Corp.”

Li3’s management believes, based upon discussions with its largest stockholders, that stockholders of Li3 holding a majority of the issued and outstanding Li3 common stock will support and agree to approve the Merger transaction, and that such stockholders will further agree to enter into lock-up and support agreements with Li3 pursuant to which such Li3 stockholders will agree to vote in favor of the Merger and be restricted from offering, issuing, granting any option on, selling, transferring or otherwise disposing of any shares of Li3 common stock or the Merger Consideration they receive until the one year anniversary of the consummation of the Merger (the “Lock-up Period”); provided, however, if the trading price of Blue Wolf Ordinary Shares reaches or exceeds $11.50 for any 20 trading days within any 30 trading day period during the Lock-Up Period and subsequent to the consummation of the Merger, 50% of each shareholder’s Merger Consideration will be released from the lock-up and, if the trading price reaches or exceeds $15.00 for any 20 trading days within any 30 trading day period during the Lock-up Period, the remaining 50% of each shareholder’s Merger Consideration shall be released from the lock-up.

Blue Wolf is providing its stockholders with the opportunity to redeem their Ordinary Shares for cash equal to their pro rata share of the aggregate amount then on deposit in a trust account holding the proceeds of Blue Wolf’s initial public offering (the “Trust Account”), including interest but less taxes payable.

Li3 will consummate the Transaction only if holders of a majority of the outstanding shares of common stock of Li3 at a duly organized meeting are voted in favor of the proposal to approve and adopt the Agreement and Plan of Merger. As further required by the terms of the Agreement and Plan of Merger, Blue Wolf cannot consummate the transaction unless it retains an amount of cash not less than $5 million after payment of the purchase price for shares validly tendered and not properly withdrawn in its tender offer and prior to payment of its fees and expenses. Therefore, if more than approximately 1,467,970 Ordinary Shares are validly tendered and not properly withdrawn in Blue Wolf’s tender offer in accordance with the terms and subject to the conditions set forth in Blue Wolf’s tender offer documents filed with the Securities and Exchange Commission, Blue Wolf will be unable to consummate the Merger.

LI3’S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTEFOR THE PROPOSAL TO APPROVE AND ADOPT THE AGREEMENT AND PLAN OF MERGER.

Information about the special meeting, the transactions contemplated by the Agreement and Plan of Merger and the other business to be considered by Li3 stockholders is contained in this document and the documents incorporated by reference, which Blue Wolf urge you to read carefully. In particular, see “Risk Factors” beginning on page 31.

Your vote is very important. Whether or not you plan to attend the special meeting of Li3 stockholders please submit a proxy to vote your shares as soon as possible to make sure your shares are represented at the special meeting. Your failure to vote will have the same effect as voting against the proposal to approve and adopt the Agreement and Plan of Merger.

Sincerely,

Luis Saenz
Chief Executive Officer and Director
Li3 Energy, Inc.

The accompanying proxy statement/ prospectus is dated July __, 2013 and is first being mailed or otherwise delivered to Li3 stockholders on or about July __, 2013.

LI3 ENERGY. INC.
Marchant Pereira 150, Of. 803
Providencia, Santiago de Chile, Chile

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To be held on July ___, 2013

To Our Stockholders:

NOTICE IS HEREBY GIVEN that a special meeting of stockholders of Li3 Energy, Inc. (“Li3”) will be held at the offices of _________________ on July __, 2013, at 10:00 a.m., Eastern time (the “special meeting”). The purposes of the special meeting are to vote on the following matters and to transact such other business that may properly come before the special meeting:

1. The Acquisition Proposal. Approve and adopt the Agreement and Plan of Merger, entered into by and among Blue Wolf Mongolia Holdings Corp. (“Blue Wolf”), Blue Wolf Acquisition Sub, Inc. (“Merger Sub”) and Li3 as of May 21, 2013 (the “Agreement and Plan of Merger”) and the transactions contemplated thereby (the “Transaction”), pursuant to which Merger Sub will merge (the “Merger”) with and into Li3 with Li3 surviving the Merger as a wholly owned subsidiary of Blue Wolf, in exchange for consideration to Li3 stockholders of record in the form of one newly issued Ordinary Share of Blue Wolf for every 250 issued and outstanding shares of Li3 common stock held by such Li3 stockholder (the “Merger Consideration”) on the effective date of the Merger (the “Effective Time”). The Agreement and Plan of Merger also provides for the conversion of each option and warrant to purchase shares of Li3 common stock (the “Li3 Derivatives”) outstanding immediately prior to the Effective Time into a right to acquire one Ordinary Share of Blue Wolf for every 250 shares of Li3 common stock subject to each Li3 Derivative. The consummation of the Merger pursuant to the Agreement and Plan of Merger, and the Transaction are referred to herein as the Acquisition Proposal. A copy of the Agreement and Plan of Merger is attached to the accompanying proxy statement/prospectus as Annex A. The board of directors of Li3 (the “Li3 board”) recommends a vote “FOR” this proposal.

2. The Adjournment Proposal. Approve one or more adjournments of the special meeting, if necessary, to permit further solicitation of proxies because there are not sufficient votes at the Li3 special meeting to approve and adopt the Acquisition Proposal. The Li3 board recommends a vote “FOR” this proposal.

3. Transact such other business that may properly come before the special meeting.

The Li3 board has fixed May __, 2013 as the record date for the determination of stockholders entitled to notice of, and to vote at, the special meeting or one or more adjournments thereof. Only holders of record of shares of Li3 common stock at the close of business on May __, 2013 are entitled to notice of, and to vote at, the special meeting or one or more adjournments or postponements thereof.

Li3 will consummate the Transaction only if holders of a majority of the outstanding shares of common stock of Li3at a duly organized meeting are voted in favor of the Acquisition Proposal and upon Blue Wolf’s successful completion of a tender offer.

Li3’s management believes, based upon discussions with its largest stockholders, that Stockholders of Li3 holding a minimum of the majority of the issued and outstanding Li3 common stock will support and agree to approve the Merger Transaction, and that such stockholders will further agree to enter into lock-up and support agreements with Li3 pursuant to which such Li3 stockholders will agree to vote in favor of the Merger and be restricted from offering, issuing, granting any option on, selling, transferring or otherwise disposing of any shares of Li3 common stock or the Merger Consideration they receive until the one year anniversary of the consummation of the Merger (the “Lock-up Period”); provided, however, if the trading price of Blue Wolf Ordinary Shares reaches or exceeds $11.50 for any 20 trading days within any 30 trading day period during the Lock-Up Period, 50% of each shareholder’s Merger Consideration will be released from the lock-up and, if the trading price reaches or exceeds $15.00 for any 20 trading days within any 30 trading day period during the Lock-up Period, the remaining 50% of each shareholder’s Merger Consideration shall be released from the lock-up.

For more information about the proposals and the special meeting, please review carefully the accompanying proxy statement/prospectus.

Your vote is important. Whether or not you expect to attend the special meeting in person, please submit a proxy by telephone or over the internet as instructed in these materials, or complete, date, sign and return the enclosed proxy card, as promptly as possible in order to ensure that Blue Wolf receive your proxy with respect to your shares of Li3 common stock. Instructions are shown on the enclosed proxy card and a return envelope (postage pre-paid if mailed in the United States) is enclosed for your convenience. If your shares are held in a stock brokerage account or by a bank or other nominee, please follow the instructions that you receive from your broker, bank or other nominee to vote your shares.

If you sign, date and mail your proxy card without indicating how you wish to vote, your proxy will be voted in favor of the adoption of the Agreement and Plan of Merger and in favor of the proposal to adjourn the meeting. If you fail to return your proxy card or fail to submit your proxy by telephone or over the internet, or fail to instruct your broker how to vote, and do not attend the special meeting in person, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the special meeting and, if a quorum is present, will have the same effect as a vote against the adoption of the Agreement and Plan of Merger. If you are a stockholder of record and you attend the special meeting and wish to vote in person, you may withdraw your proxy and vote in person.

Please do not send documents or certificates representing your ownership of Li3 common stock at this time. If the transactions contemplated by the Agreement and Plan of Merger are completed, Blue Wolf will notify you of the procedures for exchanging your shares of Li3 common stock.

Li3’s board has unanimously approved the Agreement and Plan of Merger and unanimously recommends that Li3 stockholders vote FOR adoption and approval of the Acquisition Proposal.

Thank you for your consideration of these matters.

By Order of the Board of Directors,

Secretary

Providencia, Santiago de Chile, Chile

June __, 2013

LI3 ENERGY. INC.
Marchant Pereira 150, Of. 803
Providencia, Santiago de Chile, Chile

PROXY STATEMENT

GENERAL INFORAMTION

This proxy statement/prospectus and the accompanying proxy are being furnished with respect to the solicitation of proxies by the Board of Directors (the “Board”) of Li3 Energy, Inc., a Nevada corporation (the “Company” or “Li3”) for the Special Meeting of the Stockholders to be held on _____, June __, 2013 at the office of _______________.

The approximate date on which the proxy statement and form of proxy are intended to be sent or given to the stockholders is June __, 2013. The proxy materials are also available free of charge on the internet at http://www.li3energy.com. Stockholders are invited to attend the special meeting to vote on the proposals described in this proxy statement/prospectus. However, stockholders do not need to attend the special meeting to vote. Instead, stockholders may simply complete, sign and return the executed proxy card in the postage paid envelope to vote.

THE TRANSACTION

The board of directors of Li3 has unanimously approved an agreement and plan of merger entered into by and among Blue Wolf Mongolia Holdings Corp. (“Blue Wolf”), Blue Wolf Acquisition Sub, Inc. (“Merger Sub”) and Li3 as of May 21, 2013 (the “Agreement and Plan of Merger”). Pursuant to the terms of the Agreement and Plan of Merger, among other things, Merger Sub will merge (the “Merger”) with and into Li3 with Li3 surviving the Merger as a wholly-owned subsidiary of Blue Wolf in exchange for consideration to Li3 stockholders in the form of newly-issued ordinary shares of Blue Wolf, no par value (the “Ordinary Shares”). Concurrently with the Closing, the requisite parties will file articles of merger with the Secretary of State of the State of Nevada, in accordance with the relevant provisions of the Nevada Revised Statutes (the “NRS”). The time when the Merger becomes effective is herein referred to as the “Effective Time.”

In connection with the transactions contemplated by the Agreement and Plan of Merger (the “Transaction”), at the Effective Time, Blue Wolf will cause to be issued to the Li3 stockholders of record, consideration in the form of one Blue Wolf Ordinary Share for every 250 issued and outstanding shares of Li3 common stock then owned by them (the “Merger Consideration”). In addition, each option and warrant to purchase shares of Li3 common stock (the “Li3 Derivatives”) which is outstanding immediately prior to the Effective Time shall be converted into a right to acquire one Ordinary Share for every 250 shares of Li3 common stock subject to such Li3 Derivatives and on the same contractual terms and conditions as were in effect immediately prior to the Effective Time.

REFERENCES TO ADDITIONAL INFORMATION

The accompanying proxy statement/prospectus incorporates important business and financial information about Li3 from other documents that are not included in or delivered with this proxy statement/prospectus. This information is available for you to review at the Securities and Exchange Commission’s, or SEC’s, public reference room located at 100 F Street, N.E., Room 1580, Washington, DC 20549, and through the SEC’s website,www.sec.gov. You can also obtain those documents incorporated by reference in this proxy statement/prospectus by requesting them in writing, by telephone or by email from the company at the following address, telephone number and email address:

LI3 ENERGY. INC.
Marchant Pereira 150, Of. 803
Providencia, Santiago de Chile, Chile

Attention:Luis Santillana

+56(2) 2896-9100

luis.santillana@li3energy.com

In addition, if you have questions about the transactions described herein or the special meeting, or if you need to obtain copies of the accompanying proxy statement/prospectus, proxy cards, election forms or other documents incorporated by reference in the proxy statement/prospectus, you may contact the appropriate contact listed below. You will not be charged for any of the documents you request.

Morrow & Co., LLC
470 West Avenue

Stamford, CT 06902

Telephone: (800) 662-5200

Banks and brokerage firms: (203) 658-9400

mngl.info@morrowco.com

If you would like to request documents, please do so by ________, 2013,
in order to receive them before the special meeting.

For a more detailed description of the information incorporated by reference in the accompanying proxy statement/prospectus and how you may obtain it, see “Where You Can Find More Information” beginning on page 146 of the accompanying proxy statement/prospectus.

CAUTIONARY NOTE REGARDING

FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus and the documents that are incorporated into this proxy statement/prospectus by reference may contain or incorporate by reference statements that do not directly or exclusively relate to historical facts. Such statements are “forward-looking statements.” You can typically identify forward-looking statements by the use of forward-looking words, such as “may,” “will,” “could,” “project,” “believe,” “anticipate,” “expect,” “estimate,” “continue,” “potential,” “plan,” “forecast” and other similar words. These include, but are not limited to, statements relating to the synergies and the benefits that we expect to achieve in the transactions discussed herein, including future financial and operating results, the combined company’s plans, objectives, expectations and intentions and other statements that are not historical facts. Those statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside the control of Li3 and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In addition to the risk factors described under “Risk Factors” beginning on page 31, those factors include:

possible delays in closing the business combination whether due to the inability to obtain stockholder or regulatory approval, Blue Wolf not having at least $5 million of cash immediately prior to the consummation of the Transaction held either in or outside the trust account, or otherwise;

anticipated growth and growth strategies;

the need for additional capital and the availability of financing;

the risk that governmental and regulatory review of the tender offer documents may delay the Transaction or result in the inability of the Transaction to be consummated by July 22, 2013and the length of time necessary to consummate the proposed Transaction;

the risk that a condition to consummation of the Transaction may not be satisfied or waived;

the risk that the anticipated benefits of the Transaction may not be fully realized or may take longer to realize than expected;

the risk that any projections, including earnings, revenues, expenses, margins, mineral reserve estimates or any other financial items are not realized;

changing legislation and regulatory environments including those in foreign jurisdictions in which Li3 intends to operate;

the ability to list and comply with Nasdaq’s continuing listing standards, including having the requisite number of round lot holders or stockholders and meeting the independent director requirements for the board of directors and its committees;

Li3’s mineral operations are subject to Chilean law and government regulation. Even if Li3 discovers lithium in a commercially exploitable quantity, these laws and regulations could restrict or prohibit the exploitation of lithium;

the risk that lithium, iodine and nitrates prices are subject to unpredictable fluctuations; and

the risk that Li3 may be unable to amend the mining claims that it is seeking to acquire to cover the primary minerals that Li3 plans to develop.

The forward-looking statements are based on current expectations about future events. Although Li3 believes that the expectations reflected in the forward-looking statements are reasonable, these expectations may not be achieved. Blue Wolf and Li3 are under no duty to update any of the forward-looking statements after the date of this proxy statement/prospectus to conform those statements to actual results. In evaluating these statements, you should consider various factors, including the risks outlined in the section entitled “Risk Factors.”

Table of Contents

	Page

CAUTIONARY NOTE REGARDINGFORWARD-LOOKING STATEMENTS	i

TABLE OF CONTENTS	1

QUESTIONS AND ANSWERS	6

General Questions and Answers	6

SUMMARY OF THE PROXY STATEMENT/PROSPECTUS	15

THE STOCKHOLDER PROPOSALS	15
The Special Meeting of Stockholders	20
Date, Time and Place (Page 98)	20
Record Date; Voting Power (Page 98)	20
Quorum & Vote Required	20
Recommendation of the Li3 Board and Special Committee (Page 99)	20

SELECTED HISTORICAL FINANCIAL DATA	22

Blue Wolf Mongolia Holdings Corp.	22
Li3 Energy, Inc.	23

Selected Unaudited Condensed COMBINED Pro Forma Financial Information	24

COMPARATIVE SHARE INFORMATION	26

MARKET PRICE AND DIVIDEND INFORMATION	28

Blue Wolf	28
Li3	28

RISK FACTORS	31

Risks Factors Relating to the Transaction	31
Risks Related to Blue Wolf	32
Risks Related to Li3	34

INFORMATION ABOUT LI3	42

General	42
Strategic Plan	43

Project Overviews	44
Competition	53
Compliance with Government Regulation	53
Employees	53
Subsidiaries	53
Intellectual Property	54
Properties	58
Legal Proceedings	59

Management’s Discussion and Analysis of Financial Condition	60

and Results of Operations of Li3	60

MANAGEMENT OF Li3	73

Executive Officers and Directors	73
Rights to Nominate Directors	75
Involvement in Certain Legal Proceedings	76
Board of Director Meetings	76
Board Committees	77
Shareholder Communications	78
Director Independence	78

EXECUTIVE COMPENSATION OF Li3	79

Agreements with Executive Officers	81
Compensation of Non-Employee Directors	83
Equity Compensation Plan Information	83

BUSINESS OF BLUE WOLF	85

Employees	87
Properties	88
Legal Proceedings	88

Management’s Discussion and Analysis	89

of Financial Condition and Results of Operations of Blue Wolf	89

MANAGEMENT OF BLUE WOLF	92

Directors and Executive Officers	92
Number and Terms of Office of Officers and Directors	95
Committees of the Board of Directors	95
Code of Conduct and Ethics	96
Compensation Discussion and Analysis	97
Compensation Committee Interlocks and Insider Participation and Compensation Committee Report	97

THE SPECIAL MEETING OF Li3 STOCKHOLDERS	98

Date, Time and Place of the Li3 Special Meeting	98
Purpose of the Li3 Special Meeting	98
Record Date; Outstanding Shares Entitled to Vote	98
Ownership of Li3 Shares	98

Quorum	98
Vote Required	99
Recommendation of the Li3 Board	99
How to Vote	99
Attending the Li3 Special Meeting	100
Voting of Proxies	100
Voting of Li3 Shares Held in Street Name	100
Revoking your Proxy	100
Proxy Solicitations	101
Other Business	101
Adjournments and Postponements	101

PROPOSAL NO. 1 — APPROVAL AND ADOPTION OF THE AGREEMENT AND PLAN OF MERGER	101

Recommendation of the Li3 Board	102

PROPOSAL NO. 2 — ADJOURNMENT OF SPECIAL MEETING	102

Vote Required for Approval	102
Recommendation of the Li3 Board	102

THE BUSINESS COMBINATION	103

General Description of the Transaction	103
Background of the Transaction	103
Li3’s Board of Directors’ Reasons for the Approval of the Transaction	105
Recommendation of the Li3 Board; Li3’s Reasons for the Business Combination	107
Employment Agreements: Severance Payments	107
Employment Following the Merger	108
New Directors of Blue Wolf	108
Indemnification and D&O Liability Insurance	108
Restricted Stock Ownership	108

MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS	110

THE AGREEMENT AND PLAN OF MERGER	116

Nature of Transaction	116
Structure of Transaction	116
Transaction Consideration to be Delivered	117
Closing and Effective Time of the Transaction	117
Conditions to Closing of the Transaction	117
Termination	119
Effect of Termination	119
Fees and Expenses	119
Management Following the Transaction	120
Tender Offer	120
Representations and Warranties	120
Covenants of the Parties	120
Trust Account Waiver	121
Public Announcements	121

Related Agreements	122

MANAGEMENT FOLLOWING THE TRANSACTION	123

Directors and Executive Officers	123
Board Committees	124
Code of Business Conduct and Ethics	125
Compensation of Directors	125
Compensation of Executive Officers	125

UNAUDITED CONDENSED COMBINED PRO FORMA FINANCIAL STATEMENTS UNAUDITED CONDENSED COMBINED PRO FORMA FINANCIAL STATEMENTS	126

UNAUDITED CONDENSED COMBINED PRO FORMA FINANCIAL STATEMENTS	126

BENEFICIAL OWNERSHIP OF SECURITIES	130

DESCRIPTION OF SECURITIES	133

Blue Wolf	133
Units	133
Ordinary Shares	133
Founder Shares	134
Preferred Shares	135
Warrants	135
Public Stockholders’ Warrants	135
Sponsor Warrants	138
Blue Wolf’s Transfer Agent and Warrant Agent	139
Changes in Authorized Shares	139
Pre-emption Rights	140
Variation of Rights of Shares	140
Li3	140
Authorized Capital Stock	140
Equity Securities Issued and Outstanding	140
Common Stock	140
Preferred Stock	141
Dividends	141
2009 Plan	141
Warrants	142
Convertible Securities	143
Stock Splits	143
Registration Rights	143
Rights of First Refusal and Preemptive Rights	144
Adjustments to Exercise and Conversion Prices of Outstanding Securities	144
Anti-Takeover Effects of Provisions of Nevada State Law	144
Transfer Agent	145

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	146

LEGAL MATTERS	146

EXPERTS	146

WHERE YOU CAN FIND MORE INFORMATION	146

ANNEXES	148

INDEX TO FINANCAL STATEMENTS	F-1

INDEX TO FINANCAL STATEMENTS	F-1

QUESTIONS AND ANSWERS

The following questions and answers are intended to address briefly some commonly asked questions regarding the transactions contemplated by the Agreement and Plan of Merger and the special meeting of Li3. These questions and answers may not address all questions that may be important to you as a stockholder. To better understand these matters, and for a description of the legal terms governing the transactions contemplated by the Agreement and Plan of Merger, you should carefully read this entire proxy statement/prospectus, including the annexes, as well as the documents that have been incorporated by reference in this proxy statement/prospectus. See “Where You Can Find More Information” beginning on page 146.

General Questions and Answers

Q: Why am I receiving this proxy statement/prospectus?

A: Blue Wolf Mongolia Holdings Corp. (“Blue Wolf”), Blue Wolf Acquisition Sub, Inc. (“Merger Sub”) and Li3 Energy, Inc. (“Li3”) have entered into the agreement and plan of merger, dated May 21, 2013 (“Agreement and Plan of Merger”). A copy of the Agreement and Plan of Merger is attached to this proxy statement/prospectus as Annex A. You are encouraged to read this proxy statement/prospectus, including the annexes hereto.

Stockholders are being asked to consider and vote upon a proposal to approve and adopt the Agreement and Plan of Merger and the transactions contemplated thereby (the “Transaction”), pursuant to which, among others, Merger Sub will be merged with and into Li3, with Li3 surviving the Merger and becoming a wholly owned subsidiary of Blue Wolf.

In connection with the Transaction, at the time when the Merger becomes effective (the “Effective Time”), Blue Wolf will issue consideration to Li3 stockholders in the form of newly issued ordinary shares of Blue Wolf, no par value (the “Ordinary Shares”), whereby each Li3 stockholder will receive one Ordinary Share for every 250 issued and outstanding shares of Li3 common stock held by such stockholder (the “Merger Consideration”) at the Effective Time. In addition, each option and warrant to purchase shares of Li3 common stock (the “Li3 Derivatives”) which is outstanding immediately prior to the Effective Time shall be converted into a right to acquire one Ordinary Shares for every 250 shares of Li3 common stock subject to each such Li3 Derivatives and on the same contractual terms and conditions as were in effect immediately prior to the Effective Time.This is referred to herein as the Acquisition Proposal. The Ordinary Shares of Blue Wolf are currently listed on Nasdaq under the symbol “MNGL”.

Blue Wolf does not require shareholder approval to complete the Merger. Li3 is holding a special meeting of stockholders, which we refer to as the Li3 special meeting, in order to obtain the stockholder approval necessary to approve and adopt the Agreement and Plan of Merger and the Merger contemplated thereby, which we refer to as the Acquisition Proposal. In addition, Li3 stockholders will be asked to approve the adjournment of the Li3 special meeting if we are unable to obtain the requisite stockholder approval necessary to approve the Acquisition Proposal. We will be unable to complete the Acquisition Proposal unless the Li3 stockholder approve and adopt the Agreement and Plan of Merger, Blue Wolf successfully completes its tender offer (the “Offer”), and Blue Wolf retains at least $5 million of cash after its payment of the purchase price for shares validly tendered in its Offer and after payment of Blue Wolf’s expenses associated therewith.

Your vote is important. You are encouraged to vote as soon as possible after carefully reviewing this proxy statement/prospectus.

Q: What vote is required to approve each Li3 proposal?

A: Proposal to Approve and Adopt the Agreement and Plan of Merger: The proposal to approve and adopt the Agreement and Plan of Merger and the Merger contemplated thereby, which we refer to as the Li3 Acquisition Proposal, requires the affirmative vote of holders of a majority of the shares at a duly organized meeting of Li3 common stock outstanding and entitled to vote as of the record date. Accordingly, a stockholder’s failure to submit a proxy card or to vote in person at the special meeting, an abstention from voting, or the failure of a stockholder who holds his or her shares in “street name” through a broker or other nominee to give voting instructions to such broker or other nominee, will have the same effect as a vote “AGAINST” the Acquisition Proposal.

Proposal to Adjourn the Li3 Special Meeting by Li3 Stockholders: Approving the adjournment of the special meeting (if it is necessary or appropriate to solicit additional proxies because there are not sufficient votes to approve and adopt the Agreement and Plan of Merger) requires the affirmative vote of holders of a majority at a duly organized meeting of the shares of Li3 common stock present, in person or represented by proxy, at the special meeting and entitled to vote on the adjournment proposal, regardless of whether a quorum is present. Accordingly, abstentions will have the same effect as a vote “AGAINST” the proposal to adjourn the special meeting, while broker non-votes and shares not in attendance at the special meeting will have no effect on the outcome of any vote to adjourn the special meeting.

Q: How do Li3’s stockholders intend to vote their shares?

A: Li3 management believes, based in discussions with its largest stockholders, thatstockholders of Li3 holding a majority of the issued and outstanding Li3 common stock will enter into lock-up and support agreements with Li3and Blue Wolf pursuant to which such Li3 stockholders will agree to vote in favor of the Merger and be restricted from offering, issuing, granting any option on, selling, transferring or otherwise disposing of any shares of Li3 common stock or the Merger Consideration they receive until one year after the consummation of the Merger (the “Lock-up Period”); provided, however, if the trading price of Blue Wolf Ordinary Shares reaches or exceeds $11.50 for any 20 trading days within any 30 trading day period during the Lock-Up Period, 50% of each shareholder’s Merger Consideration will be released from the lock-up and, if the trading price reaches or exceeds $15.00 for any 20 trading days within any 30 trading day period during the Lock-up Period, the remaining 50% of each shareholder’s Merger Consideration will be released from the lock-up.

Q: What are the recommendations of Li3’s board of directors?

A: Li3’s board of directors, or the Li3 board, has unanimously (i) approved the Agreement and Plan of Merger and the consummation of the transactions contemplated thereby upon the terms and subject to the conditions set forth in the Agreement and Plan of Merger, (ii) determined that the terms of the Transaction are fair to, and in the best interests of, Li3 and its stockholders, (iii) directed that the Agreement and Plan of Merger be submitted to Li3 stockholders for approval and adoption, and (iv) recommended that Li3 stockholders approve and adopt the Agreement and Plan of Merger.

The Li3 board unanimously recommends that Li3 stockholders vote:

•

“FOR” the Acquisition Proposal to approve and adopt the Agreement and Plan of Merger; and

•

“FOR” the Adjournment Proposal to approve the adjournment of the special meeting (if it is necessary or appropriate to solicit additional proxies because there are not sufficient votes to approve and adopt the Agreement and Plan of Merger).

Q. What is being voted on?

A.Li3’s stockholders are being asked to vote on the Acquisition Proposal, which would adopt the Agreement and Plan of Merger and approve the Transaction. The Acquisition Proposal will be presented at the special meeting of stockholders for a vote

It is important for you to note that in the event the Acquisition Proposal does not receive the requisite vote for approval, then Li3 and Blue Wolf will not consummate the Transaction.

Q. What will happen in the Transaction?

A.At the closing of the Transaction, Li3 will merge with and into Merger Sub, with Li3 surviving the Merger and becoming a wholly owned subsidiary of Blue Wolf.

At the closing of the Transaction, Blue Wolf will: (i) issue the Merger Consideration; (ii) convert each option and warrant to purchase shares of Li3 common stock outstanding immediately prior to the Effective Time (the “Li3 Derivatives”) into a right to acquire one Ordinary Share for every 250 shares of Li3 common stock subject to each Li3 Derivative and (iii) retain at least $5.0 million of cash after its payment of the purchase price for shares validly tendered in its Offer and after payment of Blue Wolf’s expenses associated therewith.

Q. Why is Li3 proposing the Transaction?

A. As part of this evaluation, and in consultation with Li3’s management team, the special committee formed by the board and board considered without limitation or relative order the following:

Recent Li3 corporate events/transactions that require the support of financing not previously contemplated in the budget and financial projections;

Li3’s ability to continue the advancement of Li3’s Maricunga project;

The company’s ability to satisfy past and new liabilities amounting to approximately $6 million by October 2013;

Other joint venture and M&A opportunities currently being reviewed that would also require additional funding if executed;

Li3’s current stock price and market capitalization compared to its junior lithium mining peer group and the dilutive effect of a potential traditional form of financing utilizing Li3’s common stock;

The current state of the capital markets and in particular the access to financing by junior mining companies such as Li3.

Specific to the Blue Wolf transaction, the special committee and board considered without limitation or relative order the following:

Li3’s current stock price the dilutive effect of the Blue Wolf transaction;

The dilutive impact on POSCO’s Li3 common stock holding should they elect not to participate as stipulated with their Pre-emptive Right;

Li3´s ability to obtain a support and lock-up agreement from POSCO and other shareholders holding no less than 51% of Li3´s common stock regarding the transaction;

Li3´s ability to renegotiate the POSCO IRA to satisfy a Blue Wolf condition to closing;

The impact of the proposed business combination ratio (250:1) as measured against a traditional form of recapitalization;

The risk and uncertainty of the actual amount of funding available to Li3 from the transaction giving effect to the unknown amount of redemptions from the Blue Wolf Trust Account;

The likely possible minimum and maximum funding scenarios and the impact of a minimum funding amount when measured against the fees associated with the transaction;

The merits of a successful Blue Wolf transaction that would result in a strong balance sheet for Li3.

After careful consideration, it was the unanimous opinion of the special committee that Li3 should continue with the Blue Wolf transaction, thus empowering Li3´s management to move forward with the regulatory and transaction documentation.

See the section entitled “The Stockholder Proposals—The Acquisition Proposal —Li3’s Board of Directors’ Reasons for the Approval of the Transaction”for additional information.

Q. How will Li3’s directors and officers vote?

A. Officers and Directors of Li3 will enter into Lock-Up and Support Agreements with Blue Wolf and Li3 pursuant to which such Li3 stockholders will agree to: (a) vote in favor of the Acquisition Proposal and (b) be restricted for a certain time period from offering, issuing, granting any option on, selling, transferring or otherwise disposing of any shares of Li3 common stock or the Merger Consideration they receive.

See the section entitled“Agreement and Plan of Merger”for additional information.

Q. Do I have dissenters’ rights if I object to the proposed Acquisition?

A.Yes. Under Chapter 92A of the NRS, Li3 public stockholders will have dissenters’ rights in connection with the business combination. To exercise dissenters’ rights, Li3 stockholders must strictly follow the procedures prescribed by Nevada law. These procedures are summarized under the section entitled “The Agreement and Plan of Merger — Dissenters’ Rights Under Nevada Law ” beginning on page 121, and Sections 92A.300 through 92A.500 of the NRS are attached to this proxy statement /prospectus as Annex B. Holders of shares of Li3 common stock are encouraged to read these provisions carefully and in their entirety. Due to the complexity of the procedures for exercising the right to seek appraisals, holders of shares of Li3 common stock who are considering exercising such rights are encouraged to seek the advice of legal counsel. Failure to strictly comply with these provisions will result in the loss of dissenters’ rights.

Q: What is the background of Blue Wolf?

A: Blue Wolf was formed on March 11, 2011, pursuant to the laws of the British Virgin Islands for the purpose of acquiring, engaging in a share exchange, share reconstruction and amalgamation or contractual control arrangement with, purchasing all or substantially all of the assets of, or engaging in any other similar business combination with one or more operating businesses. Blue Wolf consummated its IPO of 8,050,000 units, each unit consisting of one Ordinary Share and one warrant to purchase one Ordinary Share (a “Warrant” and, together with one Ordinary Share, a “Unit”) on July 20, 2011.The net proceeds of the IPO, together with $3,125,000from Blue Wolf’s sale of 4,166,667 Warrants (the “Sponsor Warrants”) to Blue Wolf MHC Ltd., a British Virgin Islands business company limited by shares which is owned by certain of Blue Wolf’s officers, directors, advisors and their respective affiliates (“Sponsor”), plus deferred underwriting fees in connection with Blue Wolf’s IPO for an aggregate of approximately $80 million, were deposited in the Trust Account.

On April 15, 2013, Blue Wolf’s shareholders approved the amendment of its Amended and Restated Memorandum and Articles of Association (“Charter”) to provide an extension of Blue Wolf’s corporate existence until July 22, 2013. Blue Wolf conducted a tender offer, funded with the proceeds then held in the Trust Account, in connection with the Charter amendment, pursuant to which it purchased approximately 5.8 million public shares for approximately $57.8 million. As a result, approximately $22.5 million remains in the Trust Account. If Blue Wolf does not consummate its initial business combination by July 22, 2013, it must liquidate the Trust Account to the holders of the Ordinary Shares issued in its IPO and dissolve.

Q: What equity stake will former Li3 stockholders hold in Blue Wolf?

A: The diagram below depicts Li3’s organizational structure immediately following the consummation of the Transaction. Following the closing of the Transaction, Blue Wolf intends to change its name to Li3 Energy Corp. The voting percentages provided below assume the following: (i) the issuance of 1,581,990 registered Ordinary Shares to Li3 stockholders as the Merger Consideration; (ii) that no Warrants are exercised (including the Sponsor Warrants and the Blue Wolf converted warrants); (iii) that 1,610,000 founder shares and 3,333,333 Sponsor Warrants are forfeited pursuant to the Sponsor Agreement; (iv) that no current Li3 options are exercised; and (v) that the maximum number of Ordinary Shares are validly tendered in the Blue Wolf tender offer.

Q: What conditions must be satisfied to complete the business combination?

A: Blue Wolf and Li3 are not required to complete the Merger unless a number of conditions are satisfied or waived. These conditions include, among others: (i) receipt of the Li3 business stockholder approval; (ii); absence of any injunctions, orders or laws that would prohibit, restrain or make illegal the merger and (ii) Blue Wolf’s retaining at least $5.0 million of cash immediately prior to the consummation of the Transaction. Additionally, pursuant to the Agreement and Plan of Merger, it is a condition to the consummation of the transaction that Blue Wolf shall have conducted the offer and purchased no more than 1,467,870 Ordinary Shares pursuant to the offer (as more fully set forth in the tender offer documents), and the offer is subject to the condition that the merger condition is satisfied.

For a more complete summary of the conditions that must be satisfied or waived prior to completion of the Merger, see “The Agreement and Plan of Merger — Conditions to the Closing of the Transaction” beginning on page 117.

Q: What assumptions have Blue Wolf made when disclosing ownership information?

A: Blue Wolf has made several assumptions with respect to ownership of its Ordinary Shares following the consummation of the Transaction. Unless otherwise expressly stated, all such calculations relating to beneficial ownership and voting rights post-transaction assume: (i) the issuance of 1,581,990 registered Ordinary Shares as Merger Consideration to Li3 shareholders; (ii) that no Warrants (including the Sponsor Warrants and Converted Warrants) are exercised; (iii) that 1,610,000 founder shares and 3,333,333 Sponsor Warrants are forfeited pursuant to the Sponsor Agreement; (iv) that no Converted Options are exercised; and (v) that 1,467,970 Ordinary Shares are validly tendered pursuant to the Offer.

Q: Are the Offer and the Transaction conditioned on one another?

A: Yes. Pursuant to the Agreement and Plan of Merger, it is a condition to the consummation of the Transaction that Blue Wolf shall have conducted the Offer and purchased no more than the maximum number of Ordinary Shares allowable thereunder, and the Offer is subject to the condition that the merger condition (as described in “The Agreement and Plan of Merger”) is satisfied. If the merger condition is not satisfied upon a then scheduled expiration date, Blue Wolf will terminate or extend the Offer. See “The Agreement and Plan of Merger.”

Q: Are there any restrictions on the transfer of the Merger Consideration?

A:Yes. Li3 management believes, based on discussions with its largest individual stockholders, that stockholders holding a majority of the outstanding shares of Li3will support and agree to approve the Transaction and that such stockholders will further agree to lock up any Merger Consideration received by them in connection with the Transaction in accordance with the proposed terms of such an agreement (the “Lock-Up and Support Agreements”). These stockholders will agree to lock-up such shares for the earlier of (1) one year following the closing of the Transaction or (2) the date on which Blue Wolf consummate a liquidation, merger, share exchange or other similar transaction after the Transaction that results in all of Blue Wolf’s shareholders having the right to exchange their Ordinary Shares for cash, securities or other property (subject to earlier release if the stock price meets certain price targets). Pursuant to the proposed Lock-Up and Support Agreements, during this period, none of such stockholders nor any permitted transferee will be able to(i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any of the Merger Consideration, whether any such transaction is to be settled by delivery of securities, cash or otherwise, or (iii) publicly announce any intention to effect any transaction specified in clause (i) or (ii). See “Related Agreements — Lock-Up and Support Agreements.”

Q: Are there other agreements that will be entered into in connection with the business combination?

A: Yes. In addition to the Agreement and Plan of Merger, Blue Wolf and Li3 have agreed, as a closing condition to the Agreement and Plan of Merger, to enter into related agreements with certain of Li3’s shareholders, including the Lock-up and Support Agreements and the Investor Rights Agreement with POSCO (the counterparties to both of which have indicated their intention to execute the same). The terms of such agreements are described in greater detail below under the heading “The Agreement and Plan of Merger–Closing Conditions of the Transaction.”

Q: Will there be a single controlling shareholder of Blue Wolf following the completion of the Transaction?

A: No. However, immediately following the Transaction, the existing Blue Wolf shareholders will hold voting securities representing between approximately 62.7% of Blue Wolf’s voting power, in the event no Ordinary Shares are validly tendered in the Offer, and approximately 42.9% of Blue Wolf’s voting power in the event 1,467,970 Ordinary Shares are accepted for payment in the Offer (without giving effect to the exercise of any outstanding options and warrants and assuming the assumptions above regarding ownership). In addition, POSCO, an existing Li3 stockholder, will hold voting securities representing between approximately 9.5% of Blue Wolf’s voting power, in the event no Ordinary Shares are validly tendered in the Offer, and approximately 14.5% of Blue Wolf’s voting power in the event 1,467,970 Ordinary Shares are accepted for payment in the Offer.

Q: Why must Blue Wolf complete the Transaction by July 22, 2013?

A:Pursuant to Blue Wolf’s Charter, they have until July 22, 2013 to complete a business combination. If Blue Wolf does not consummate a business combination within such time, Blue Wolf (i) will distribute the Trust Account, pro rata, to holders of Blue Wolf Public Shares by way of redemption and (ii) intends to cease all operations except for the purposes of any winding up of Blue Wolf’s affairs. Consequently, if Blue Wolf does not consummate the business combination, Blue Wolf will not be able to consummate a different business combination by July 22, 2013 because they will not have enough time to identify another target, perform due diligence, negotiate a definitive agreement related to the business combination and complete a new tender offer.

Q: When do you expect the business combination to be completed?

A: Blue Wolf, Li3 and Merger Sub are working to complete the business combination as quickly as possible, and Blue Wolf anticipates that it will be completed by July 22, 2013. However, the business combination is subject to various conditions which are described in more detail in this proxy statement/prospectus, and it is possible that factors outside the control of Li3, Blue Wolf and Merger Sub could result in the business combination being completed at a later time, or not at all.

Q: What are my U.S. Federal income tax consequences as a result of the business combination?

A: It is expected by the parties to the Merger that the Merger will qualify as a “reorganization” within the meaning of Section 368(a)(2)(E) of the Internal Revenue Code, with the further expectation that Section 367(a) of the Internal Revenue Code will also apply to the Merger requiring U.S. Holders of Li3 common stock to recognize gain (but not loss) on the exchange of the Li3 shares.

You are strongly urged to consult with a tax advisor to determine the particular U.S. federal, state or local or foreign income or other tax consequences of the business combination to you. See “Material U.S. Federal Income Tax Considerations” on page 110.

Q: What happens if I sell my shares of Li3 common stock before the applicable special meeting?

A: The record date for the Li3 special meeting, which we refer to as the Li3 record date, is earlier than the date of the special meeting and the date that the Transaction is expected to be completed. If you transfer your shares after the applicable record date, but before the applicable special meeting, unless the transferee requests a proxy, you will retain your right to vote at such special meeting, but will have transferred the right to receive the Li3 merger consideration in the merger. In order to receive the Merger Consideration you must hold your shares through completion of the Merger.

Q: What happens if I sell my shares of Li3 common stock after the applicable special meeting, but before the applicable effective time?

A: If you transfer your shares after the special meeting, but before the Effective Time, you will have transferred the right to receive Merger Consideration in the Merger. In order to receive the Merger Consideration you must hold your shares of Li3 through completion of the Merger.

Q: My shares are held in “street name” by my broker. Will my broker automatically vote my shares for me?

A: No. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial holder” of the shares held for you in what is known as “street name.” If this is the case, this proxy statement/prospectus has been forwarded to you by your brokerage firm, bank or other nominee, or its agent. As the beneficial holder, you have the right to direct your broker, bank or other nominee as to how to vote your shares. If you do not provide voting instructions to your broker on a particular proposal on which your broker does not have discretionary authority to vote, your shares will not be voted on that proposal. This is called a “broker non-vote.”

Li3 believes that under the Nevada Revised Statutes, or the NRS, broker non-votes should be counted for purposes of determining both (i) the presence or absence of a quorum and (ii) the total number of votes cast with respect to a proposal (other than the election of directors). Accordingly, to the extent that there are any broker non-votes, a broker non-vote will have the same effect as a vote “AGAINST” the proposal to approve and adopt the Agreement and Plan of Merger but will have no effect on the other proposal.

Q: What do I need to do now?

A: Read and consider the information contained in this proxy statement /prospectus carefully, consider how the Acquisition Proposal will affect you as a stockholder of Li3,and then please vote your shares as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee, so that your shares may be represented at your special meeting.

Q: How do I vote?

A: You can vote by proxy before the special meeting or you can vote in person by completing a ballot at the special meeting. Even if you plan to attend Li3’s special meeting, we encourage you to vote your shares by proxy as soon as possible. After carefully reading and considering the information contained in this proxy statement/prospectus, please submit your proxy by telephone or over the Internet in accordance with the instructions set forth on the enclosed proxy card (if you are a beneficial holder), or mark, sign and date the proxy card, and return it in the enclosed postage-paid envelope as soon as possible so that your shares may be voted at your company’s special meeting. For detailed information, see “The Special Meeting of Li3 Stockholders — How to Vote” beginning on page 99. YOUR VOTE IS VERY IMPORTANT.

Q: When and where will the Li3 special meeting be held?

A: The Li3 special meeting will be held at the offices of _____________, located at __________, on July __ , 2013, at 10:00 a.m., Eastern time, unless the special meeting is adjourned or postponed.

Q: Who is entitled to vote at the Li3 special meeting?

A: Li3 has fixed May __, 2013 as the record date. If you were an Li3 stockholder at the close of business on the record date, you are entitled to vote on matters that come before the Li3 special meeting.

However, a stockholder may only vote his or her shares if he or she is present in person or is represented by proxy at the Li3 special meeting.

Q: Can I change my vote after I have submitted a proxy by telephone or over the Internet or submitted my completed proxy card?

A: Yes. If you are a stockholder of record, you can change your vote by revoking your proxy at any time before it is voted at the Li3 special meeting, as applicable. You can do this in one of four ways: (1) submit a proxy again by telephone or over the Internet prior to midnight on the night before the special meeting; (2) sign another proxy card with a later date and return it by mail prior to midnight on the night before the special meeting; (3) attend the applicable special meeting and complete a ballot; or (4) send a written notice of revocation to the secretary of Li3 so that it is received prior to midnight on the night before the Li3 special meeting.

If you have instructed a broker to vote your shares, you must follow directions received from your broker to change your vote.

Q: What should stockholders do if they receive more than one set of voting materials for a special meeting?

A: You may receive more than one set of voting materials for a special meeting, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. Please complete, sign, date and return each proxy card and voting instruction card that you receive. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card.

Q: Should I send in my share certificates now for the exchange of my Li3 shares?

A: No. As soon as practicable after the Effective Time, Blue Wolf shall cause Continental Stock Transfer & Trust Company (the “Exchange Agent”) to mail each holder of record holding an Li3 common stock certificate (the “Certificate”) a letter of transmittal as prepared by Li3 and Blue Wolf (which shall specify, among other things, that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon actual receipt of the Certificates by the Exchange Agent) and instructions for effecting the surrender of the Certificates in exchange for the Merger Consideration. Upon proper surrender to the Exchange Agent of a Certificate or Certificates for exchange, together with such properly completed letter of transmittal, duly executed, and any other documents and instruments reasonably required by the Exchange Agent, the holder of such Certificate or Certificates shall be entitled to receive in exchange therefore a certificate representing the number of whole Ordinary Shares to which such holder of Li3 common stock shall have become entitled to hereunder and in accordance with this Agreement, and the Certificate or Certificates so surrendered shall be canceled. Until so surrendered, each Certificate shall represent after the Effective Time for all purposes only the right to receive the Merger Consideration.

Q: How many votes do I have?

A: Li3 stockholders are entitled to one vote at the special meeting for each share of Li3 common stock held of record as of the record date. As of the close of business on the record date, there were ___________ issued and outstanding shares of Li3 common stock.

Q: What constitutes a quorum?

A: Holders of a majority in voting power of the Li3 common stock issued and outstanding and entitled to vote at the special meeting, present in person or represented by proxy, constitute a quorum. In the absence of a quorum, a majority of the Li3 stockholders, present in person or represented by proxy, will have power to adjourn the special meeting. As of the record date, __________ shares of Li3 common stock would be required to achieve a quorum.

Q: How will the solicitation of proxies be handled?

A: Li3 is soliciting proxies for the Li3 special meeting from Li3 stockholders. Li3 will bear the cost of soliciting proxies from Li3 stockholders. In addition to this mailing, Li3’s directors, officers and employees (who will not receive any additional compensation for such services) may solicit proxies by telephone or in-person meeting.

Li3 has also engaged the services of Morrow & Co., LLC to assist in the solicitation and distribution of the proxies. The agent will receive reasonable and customary compensation for their respective services. The agent can be contacted at(203) 658-9400 by banks and brokerage firms and at(855) 292-8186 by individual shareholders.

Li3 will reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and solicitation materials to the beneficial owners of Li3 common stock.

Q: Who should I call if I have questions about the proxy materials or voting procedures?

A: If you have questions about the Merger, or if you need assistance in submitting your proxy or voting your shares or need additional copies of this proxy statement/prospectus or the enclosed proxy card, you should contact Li3 as follows:

You should contact Luis Santillana, by email at luis.santillana@li3energy.com, or by telephone at +56 920 2896-9100.

If your shares are held in a stock brokerage account or by a bank or other nominee, you should contact your broker, bank or other nominee for additional information.

SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

The following summary highlights only selected information contained elsewhere in this proxy statement/prospectus and may not contain all the information that may be important to you. To better understand the Transaction and proposals to be considered at the special meeting, you are encouraged to read this proxy statement/prospectus carefully and in its entirety, including its annexes and the documents incorporated by reference in this proxy statement/prospectus. See the section entitled “Where You Can Find More Information” on page 146.

This proxy statement/prospectus is:

•

a proxy statement of Li3 for use in the solicitation of proxies for its special meeting of stockholders; and

•

a prospectus of Blue Wolf relating to the issuance of Ordinary Shares as Merger Consideration.

THE STOCKHOLDER PROPOSALS

THE ACQUISITION PROPOSAL

The Parties

Blue Wolf

Blue Wolf, incorporated in the British Virgin Islands on March 11, 2011, is organized as a blank check business company with limited liability (meaning the public shareholders have no liability, as members of Blue Wolf, for the liabilities of Blue Wolf) formed for the purpose of acquiring, engaging in share exchange, share reconstruction and amalgamation or contractual control arrangement with, purchasing all or substantially all of the assets of, or engaging in any other similar business combination with one or more businesses or assets.

If Blue Wolf does not consummate an initial business combination by July 22, 2013, it (i) will distribute the aggregate amount then on deposit in the Trust Account (less up to $50,000 of the net interest earned thereon to pay dissolution expenses), pro rata, to holders of the Public Shares by way of redemption and (ii) intends to cease all operations except for the purposes of any winding up of its affairs.

Blue Wolf’s Ordinary Shares, Warrants and Units are currently traded on Nasdaq under the symbols “MNGL,” “MNGLW” and “MNGLU,” respectively. See “Price Range of Securities and Dividends – Blue Wolf.”

Blue Wolf’s executive offices are located at Suite 409, Central Tower, 2 Sukhbaatar Square, Sukhbaatar District 8, Ulaanbaatar 14200, Mongolia, and its telephone number is 976-7010-0248.

Following the closing Blue Wolf intends to change its name to “Li3 Energy Corp.”

Li3

Li3 (OTCBB: LIEG), a Nevada corporation, is a South America-based exploration stage company in the lithium mining and energy sector which files public reports with the SEC. Li3 aims to acquire, develop and commercialize a significant portfolio of lithium brine deposits in the Americas. It is currently focused on exploring, developing and commercializing its 60% controlling interest in its flagship Maricunga Project located in the northeast section of the Salar de Maricunga in Region III of Atacama, in northern Chile. See “Information About Li3.”

Li3’s corporate office is located at Marchant Pereira 150, Of. 803, Providencia, Santiago de Chile, Chile, and its telephone number is +56 (2) 2896-9100.

Li3 will cease to be a public reporting company upon the closing of the Merger.

Merger Sub

Blue Wolf Acquisition Sub, Inc. (“Merger Sub”) is a Nevada corporation and wholly owned subsidiary of Blue Wolf. Merger Sub will be organized solely for the purpose of effecting the business combination. Merger Sub will be merged with and into Li3 and, as a result, Li3 will survive the Merger and become a wholly owned subsidiary of Blue Wolf.

The Agreement and Plan of Merger

On May 21, 2013, Blue Wolf, Merger Sub and Li3 entered into the Agreement and Plan of Merger pursuant to which Blue Wolf will acquire Li3. The Agreement and Plan of Merger is described in greater detail under “The Agreement and Plan of Merger.” Pursuant to the terms of the Agreement and Plan of Merger, Merger Sub will merge with and into Li3 with Li3 surviving as a wholly-owned subsidiary of Blue Wolf. Concurrently with the Closing, the parties will file articles of merger with the Secretary of State of the State of Nevada, in accordance with the relevant provisions of the NRS.

Prior to and/or concurrently with the closing of the Transaction, Blue Wolf will have:

(i)

completed the Offer pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act. Through the tender offer, stockholders of Blue Wolf will be provided with the opportunity to redeem their Ordinary Shares for cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account, upon the consummation of the Transaction; and

(ii)

filed a registration statement with the SEC to register the Merger Consideration and such registration statement shall have been declared effective on or prior to the Effective Time.

In connection with the Transaction, at the Effective Time, Blue Wolf shall cause the Merger Consideration to be issued to the stockholders of record of Li3. In addition, each option and warrant to purchase shares of Li3 common stock which is outstanding immediately prior to the Effective Time shall be converted into a right to acquire one Ordinary Share for every 250 shares of Li3 common stock subject to each such Li3 option or warrant and on the same contractual terms and conditions as were in effect immediately prior to the Effective Time. Any fractional shares shall be rounded up to the nearest whole number.

Board of Directors of Blue Wolf (post Transaction) (Page 123)

Under the Agreement and Plan of Merger, the board of directors of Blue Wolf shall consist of seven members, four of whom shall be appointed by Li3 and three of whom shall be appointed by Blue Wolf. Following the closing, the following persons shall serve as the directors of Blue Wolf: Luis Francisco Saenz, Patrick Cussen, Patrico Compos, Harvey McKenzie, SungWon Lee, Jonathan Lee and Myron Manternach. See“Management Following the Transaction”for more information.

Tax Considerations (Page 110)

It is expected by the parties to the Merger that the Merger will qualify as a “reorganization” within the meaning of Section 368(a)(2)(E) of the Internal Revenue Code, with the further expectation that Section 367(a) of the Internal Revenue Code will also apply to the Merger requiring U.S. Holders of Li3 common stock to recognize gain (but not loss) on the exchange of the Li3 shares.

You are strongly urged to consult with a tax advisor to determine the particular U.S. federal, state or local or foreign income or other tax consequences of the mergers to you. See “Material U.S. Federal Income Tax Consequences” on page 110.

For a description of the material federal income tax consequences of the Transaction, please see the information set forth in“Material U.S Federal Income Tax Considerations.”

Anticipated Accounting Treatment (Page 106)

Li3’s management has concluded that Li3 will be the accounting acquirer and the Transaction will be accounted for as a recapitalization by Li3 based on the evaluation of the facts and circumstances of the Transaction. Li3 is the larger of the two entities and is the operating company within the combining companies. Following the Transaction, the board of directors of Blue Wolf shall consist of seven members, four of whom shall be appointed by Li3 and three of whom shall be appointed by Blue Wolf. Although, depending on the amount of shares tendered, there is a possibility that a larger portion of the voting rights in the combined entity is likely to be held by pre-Transaction Blue Wolf shareholders, this was not considered determinative, as all other important elements considered in determining which party has control, including board of directors representation and management continuity, were not aligned with this voting interest. Additionally, the Blue Wolf shareholders are expected to represent a diverse group of shareholders at completion of the Transaction and Blue Wolf are not aware of any voting or other agreements that suggest that they can act as one party.

Dissenters’ Rights (Page 121)

Under Chapter 92A of the NRS, Li3 public stockholders will have dissenters’ rights in connection with the business combination. To exercise dissenters’ rights, Li3 stockholders must strictly follow the procedures prescribed by Nevada law. These procedures are summarized under the section entitled “The Agreement and Plan of Merger —Dissenters’ Rights Under Nevada Law” beginning on page 121, and Sections 92A.300 through 92A.500 of the NRS are attached to this proxy statement /prospectus as Annex B. Holders of shares of Li3 common stock are encouraged to read these provisions carefully and in their entirety. Due to the complexity of the procedures for exercising the right to seek appraisals, holders of shares of Li3 common stock who are considering exercising such rights are encouraged to seek the advice of legal counsel. Failure to strictly comply with these provisions will result in the loss of dissenters’ rights.

Proxies (Page 101)

Proxies may be solicited by mail, telephone or in person. Li3’s proxy solicitor is Morrow & Co., LLC, who can be reached at 470 West Avenue, Stamford, CT 06902. Their telephone number is(203) 658-9400 for banks and brokerage firms and(855) 292-8186 for individual shareholders.

If you grant a proxy, you may still vote your shares in person if you revoke your proxy before the Special Meeting of Stockholders. You may also change your vote by submitting a later-dated proxy as described in the section entitled“Special Meeting of Li3Stockholders— Revoking Your Proxy.”

Reasons for the Transaction (Page 105)

Based upon its evaluation, Li3’s Board of Directors and special committee formed on May 6, 2013 (the “Special Committee”) unanimously approved the Transaction with Blue Wolf and determined that it is in the best interests of Li3and its stockholders.

Li3’s Board of Directors and Special Committee considered a wide variety of factors in connection with its evaluation of the Transaction. In light of the complexity of those factors, its board of directors, as a whole, did not consider it practicable to, nor did it attempt to, quantify or otherwise assign relative weights to the specific factors it considered in reaching its decision. Individual members of Li3s board of directors may have given different weight to different factors.

Li3’s Board of Directors and Special Committee considered the factors below, in addition to the various risks discussed in the section entitled “Risk Factors” beginning on page 31, in reaching its determination that the Transaction is in the best interests of Li3and its stockholders and to approve the Transaction.

In considering the Transaction, Li3’s Board of Directors and Special Committee gave consideration to the following positive factors (although not weighted or in any order of significance):

•

Current capital market conditions provide very few financing alternatives in the mineral resource and lithium sectors. As such, the Transaction represents a unique opportunity to obtain required financing for the company.

Funding vehicle that could simultaneously accomplish a complete recapitalization and when closed improve the company’s listing (NASDAQ Capital Markets vs. OTC BB)

•

Funding that upon closing, strengthen Li3’s balance sheet and allow for payment of near and intermediate liabilities.

•

Depending on the level of cash at closing, provide funding allowing the company to advance its Maricunga and Cocina Projects towards Feasibility Study and commercial scale;

•

Depending on the level of cash at closing, provide funding allowing the company to explore other joint venture lithium projects within Maricunga to consolidate the Salar.

In addition, Li3’s Board of Directors and Special Committee also gave consideration to the following negative factors (although not weighted or in any order of significance):

•

The dilutive effect of the Transaction;

•

The fees associated with a minimum closing of net $5 million of funds after giving effect to redemptions and other expenses.

•

The ownership levels maintained by existing Blue Wolf management and affiliated sponsor upon closing

Certain Benefits of Li3’s Directors and Officers and Others in the Transaction (Page 106)

When you consider the recommendation of Li3s board of directors in favor of approval of the Transaction, you should keep in mind that Li3’s directors and officers have interests in the Transaction that are different from, or in addition to, your interests as a stockholder or warrant holder. These interests include, among other things:

•

Li3’s existing management team remains and will lead the company moving forward.

•

Li3 will retain majority control of the board of directors with four (4) nominated directors.

Voting Agreement (Page 122)

Li3 management believes, based on discussions with its largest stockholders, that stockholders of Li3 holding a majority of the issued and outstanding Li3 common stock will support and agree to approve the Merger transaction, and that such stockholders will further agree to enter into lock-up and support agreements with Li3 and Blue Wolf pursuant to which such stockholders will agree to vote in favor of the Merger.

For more information, see the description of the Lock-Up and Support Agreement in the section entitled“Agreement and Plan of Merger.”

Regulatory Matters

The Transaction contemplated by the Agreement and Plan of Merger are not subject to any additional federal or state regulatory requirements or approvals, except for the SEC declaring effective Blue Wolf’s registration statement of which this proxy statement/prospectus is a part, the SEC advising Blue Wolf that it has no further comment on its concurrent tender offer, and filings with the State of Nevada necessary to effectuate the Merger.

The Agreement and Plan of Merger is attached as Annex A to this proxy statement/prospectus. You are encouraged to read the Agreement and Plan of Merger in its entirety.

The Special Meeting of Stockholders

Date, Time and Place(Page 98)

A special meeting of the stockholders of Li3 will be held at the offices of __________, located at _____________, on ______, 2013, at 10:00 a.m., Eastern time, unless the special meeting is adjourned or postponed.

Record Date; Voting Power (Page 98)

Holders of shares of Li3 common stock as of the close of business on _______ 2013, or the Li3 record date, are entitled to notice of, and to vote at, the special meeting or one or more adjournments thereof. Each share of Li3 common stock is entitled to one vote.

As of the Li3 record date, __________ shares of Li3 common stock were outstanding and entitled to vote at the Li3 special meeting.

Quorum & Vote Required

A quorum of Li3stockholders is necessary to hold a valid meeting. A quorum will be present at the Special Meeting of Stockholders if a majority of the outstanding shares of Li3at the Special Meeting of Stockholders is represented in person or by proxy. Abstentions and broker non-votes will count as present for the purposes of establishing a quorum.

Proposal to Approve and Adopt the Agreement and Plan of Merger by Li3 stockholders: Approving and adopting the Agreement and Plan of Merger requires the affirmative vote of holders of a majority of the shares at a duly organized meeting of Li3 common stock outstanding and entitled to vote.Accordingly, an Li3 stockholder’s failure to submit a proxy card or to vote in person at the special meeting, an abstention from voting, or the failure of an Li3 stockholder who holds his or her shares in “street name” through a broker or other nominee to give voting instructions to such broker or other nominee, will have the same effect as a vote “AGAINST” the proposal to approve and adopt the Agreement and Plan of Merger.

Proposal to Approve the Adjournment of the Li3 Special Meeting by Li3 stockholders: Approving the adjournment of the special meeting (if it is necessary or appropriate to solicit additional proxies because there are not sufficient votes to approve and adopt the Agreement and Plan of Merger) requires the affirmative vote of holders of a majority at a duly organized meeting of the shares of Li3 common stock present, in person or represented by proxy, at the special meeting and entitled to vote on the adjournment proposal, regardless of whether a quorum is present.Accordingly, abstentions will have the same effect as a vote “AGAINST” the proposal to adjourn the special meeting, while broker non-votes and shares not in attendance at the special meeting will have no effect on the outcome of any vote to adjourn the special meeting.

Recommendation of the Li3 Board and Special Committee (Page 99)

The Li3 board and Special Committee has unanimously (i) approved the Agreement and Plan of Merger and the consummation of the transactions contemplated thereby upon the terms and subject to the conditions set forth in the Agreement and Plan of Merger, (ii) determined that the terms of the business combination are fair to, and in the best interests of, Li3 and its stockholders, (iii) directed that the Agreement and Plan of Merger be submitted to Li3 stockholders for approval and adoption, and (iv) recommended that Li3 stockholders approve and adopt the Agreement and Plan of Merger.

THE LI3 BOARD AND SPECIAL COMMITTEE UNANIMOUSLY RECOMMENDS THAT LI3 STOCKHOLDERS VOTE:

•

“FOR” THE PROPOSAL TO APPROVE AND ADOPT THE AGREEMENT AND PLAN OF MERGER;

•

“FOR” THE PROPOSAL TO APPROVE THE ADJOURNMENT OF THE SPECIAL MEETING (IF IT IS NECESSARY OR APPROPRIATE TO SOLICIT ADDITIONAL PROXIES BECAUSE THERE ARE NOT SUFFICIENT VOTES TO APPROVE AND ADOPT THE AGREEMENT AND PLAN OF MERGER).

We refer to the recommendation that Li3 stockholders vote“FOR” the proposal to approve and adopt the Agreement and Plan of Merger as the Li3 recommendation. See “The Business Combination — Recommendation of the Li3 Board; Li3’s Reasons for the Business Combination” beginning on page 107.

RISK FACTORS (Page 31)

In evaluating the proposals set forth in this proxy statement/prospectus, you should carefully read this proxy statement/prospectus, including the annexes and especially consider the factors discussed in the section titled “Risk Factors.”

SELECTED HISTORICAL FINANCIAL DATA

Blue Wolf Mongolia Holdings Corp.

Blue Wolf is providing the following selected financial information to assist you in your analysis of the financial aspects of the Transaction. The statement of operations data for the four months ended June 30, 2012 and the period from March 11, 2011 (date of inception) through February 29, 2012 and the balance sheet data as of June 30, 2012 and February 29, 2012 have been derived from Blue Wolf’s audited financial statements included elsewhere in this proxy statement/prospectus. The statement of operations data for the nine months ended March 31, 2013 and the balance sheet data as of March 31, 2013 have been derived from Blue Wolf’s unaudited financial statements included elsewhere in this proxy statement/prospectus. The selected financial information set forth below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Blue Wolf” and Blue Wolf’s financial statements and related notes to those financial statements included elsewhere in this proxy statement/prospectus.

							March 11, 2011
	Nine months			Four months			(date of inception)
	ended March 31,			Ended June 30,			To February 29,
	2013			2012			2012
Statement of Operations Data (unaudited):
Revenue	$	-		$	-		$	-

General and administrative expenses		607,559			166,702			401,940
Loss from operations		(607,559	)		(166,702	)		(401,940	)
Interest income		4,595			2,660			4,287
Change in fair value of warrant liability		2,443,333			855,167			977,333
Net loss	$	1,840,369		$	691,125		$	579,680

Weighed average number of ordinary shares, excluding shares subject to possible redemption – basic and diluted		3,234,334			3,531,758			3,020,601

Net income per ordinary share, excluding shares subject to possible redemption - basic and diluted	$	0.57		$	0.20		$	0.19

Balance Sheet Data (at end of period) (unaudited):
Cash (including investments held in trust account)	$	80,298,131		$	80,475,848		$	80,634,412
Total assets (including investments held in trust account)	$	80,305,098		$	80,537,893		$	80,722,741
Total shareholders' equity	$	5,000,010		$	5,000,004		$	5,000,010

Li3 Energy, Inc.

Li3 is providing the following selected financial information to assist you in your analysis of the financial aspects of the Transaction. The statement of operations data for each of the years ended June 30, 2012, 2011, 2010, 2009 and 2008 and the balance sheet data as of June 30, 2012, 2011, 2010, 2009 and 2008 have been derived from Li3’s audited financial statements included elsewhere in this proxy statement/prospectus. The statement of operations data for the nine months ended March 31, 2013 and 2012 and the balance sheet data as of March 31, 2013 and 2012 have been derived from Li3’s unaudited financial statements included elsewhere in this proxy statement/prospectus. The selected financial information set forth below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Li3” and Li3’s financial statements and related notes to those financial statements included elsewhere in this proxy statement/prospectus.

	(unaudited)
	For the Nine Months Ended March 31,				For the Year Ended June 30,
	2013		2012		2012		2011		2010			2009			2008
	(Dollars in thousands, except for share data)
SELECTED BALANCE SHEET DATA
Assets:
Total current assets	$	2,450	$	47	$	37	$	1,097	$	359		$	10		$	25

Mineral rights		63,741		64,041		63,741		64,041		340			-			-

Total assets		66,339		64,547		63,963		65,138		703			18			37
Liabilities:
Accounts payable and accruals		1,815		2,604		3,949		803		1,650			9			5
Convertible debt		1,779		1,615		1,783		373		-			-			.
Notes payable		95		395		1,245		95		95			95			50
Derivative liabilities – warrant instruments		5,849		10,597		7,654		15,245		8,030			-			-
Total liabilities		9,539		15,211		14,631		16,516		9,775			104			55
Total equity of Li3 Energy, Inc		33,865		25,883		26,212		23,126		(9,072	)		(86	)		(18	)
Non-controlling interests		22,933		23,453		23,121		25,496		-			-			-
Total equity	$	56,798	$	49,336	$	49,332	$	48,622	$	(9,072	)	$	(86	)	$	(18	)

	(unaudited)
	For the Nine Months Ended March 31,						For the Year Ended June 30,
	2013			2012			2012			2011			2010			2009			2008
	(Dollars in thousands, except for share data)
SELECTED INCOME STATEMENT DATA	$			$			$			$			$			$			$
Exploration expenses		(457	)		(5,609	)		(6,194	)		(560	)		(2,336	)		-			-
Mineral rights impairment expense		-			-			(300	)		(4,120	)		(4,719	)		-			-
General and administrative expenses		(3,700	)		(4,988	)		(6,996	)		(5,449	)		(2,762	)		(63	)		(96	)
Change in fair value of derivative liability – warrant instruments		6,454			7,838			10,780			(6,116	)		(6,224	)		-			-
Interest expense, net		(299	)		(880	)		(1,151	)		(410	)		(3	)		(5	)		(0	)
Net income (loss)		1,804			(4,448	)		(4,687	)		(19,219	)		(16,049	)		(68	)		(96	)
Net loss attributable to non-controlling interests		188			2,043			2,375			-			-			-			-
Net income (loss) attributable to Li3 Energy, Inc		1,991			(2,405	)		(2,312	)		(19,219	)		(16,049	)		(68	)		(96	)

PER COMMON SHARE DATA
Basic earnings per share	$	0.01		$	(0.01	)	$	(0.01	)	$	(0.16	)	$	(0.19	)	$	(0.01	)	$	(0.01	)
Diluted earnings per share	$	0.01		$	(0.01	)	$	(0.01	)	$	(0.16	)	$	(0.19	)	$	(0.01	)	$	(0.01	)
Basic weighted average common shares		380,373,535			310,810,095			313,997,372			123,690,841			83,014,592			121,052,721			7,645,677
Diluted weighted average common shares		395,841,166			310,810,095			313,997,372			123,690,841			83,014,592			121,052,721			7,645,677

SELECTED UNAUDITED CONDENSED COMBINED PRO FORMA FINANCIAL INFORMATION

The following unaudited condensed combined pro forma balance sheet data as of March 31, 2013 and the unaudited condensed combined pro forma statements of operations data for the nine months ended March 31, 2013 are based on the separate historical financial statements of Blue Wolf and Li3, included elsewhere in this proxy statement/prospectus, after giving effect to the Transaction.

The unaudited condensed combined pro forma statement of operations for the nine months ended March 31, 2013 gives pro forma effect to the Transaction as if it had occurred on July 1, 2012, and the unaudited condensed combined pro forma statement of operations for the year ended June 30, 2012 gives pro forma effect to the Transaction as if it had occurred on July 1, 2011. The unaudited condensed combined pro forma balance sheets as of March 31, 2013 and June 30, 2012 give pro forma effect to the Transaction as if it had occurred on each such date, respectively.

Blue Wolf’s management has concluded that Li3 will be the accounting acquirer and the Transaction will be accounted for as a recapitalization by Li3 based on the evaluation of the facts and circumstances of the Transaction. Li3 is the larger of the two entities and is the operating company within the combining companies. Following the Transaction, the board of directors of Blue Wolf shall consist of seven members, four of whom shall be appointed by Li3 and three of whom shall be appointed by Blue Wolf. Although, depending on the amount of shares tendered, there is a possibility that a larger portion of the voting rights in the combined entity is likely to be held by pre-Transaction Blue Wolf shareholders, this was not considered determinative, as all other important elements considered in determining which party has control, including board of directors representation and management continuity, were not aligned with this voting interest. Additionally, the Blue Wolf shareholders are expected to represent a diverse group of stockholders at completion of the Transaction and Blue Wolf are not aware of any voting or other agreements that suggest that they can act as one party. See the section entitled “The Transaction — Accounting Treatment” for more information.

The historical financial information has been adjusted to give effect to pro forma events that are related and/or directly attributable to the Transaction, are factually supportable and, in the case of the unaudited condensed combined pro forma statement of operations data, are expected to have a continuing impact on the combined results. The adjustments presented on the unaudited condensed combined pro forma financial information have been identified and presented in “Unaudited Condensed Combined Pro Forma Financial Data” to provide relevant information necessary for an accurate understanding of the combined company upon consummation of the Transaction.

This information should be read together with the financial statements of Blue Wolf and Li3 and the respective notes thereto, “Unaudited Condensed Combined Pro Forma Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Blue Wolf,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Li3” included elsewhere in this proxy statement/prospectus.

The unaudited condensed combined pro forma financial statements have been prepared assuming (a) the issuance of 1,581,990 registered Ordinary Shares as Merger Consideration and (b) if 1,467,970 Ordinary Shares are validly tendered and not properly withdrawn, and are purchased by Blue Wolf, and, with respect to the number of outstanding Ordinary Shares, the following:

Assuming No Tender of Ordinary Shares: This presentation assumes that no Blue Wolf shareholders validly tender their Ordinary Shares pursuant to the Offer.

Assuming Maximum Allowable Tender of Ordinary Shares: This presentation assumes that Blue Wolf shareholders validly tender and do not properly withdraw, and that Blue Wolf purchases, 1,467,970 Ordinary Shares at a price of $9.97 per Ordinary Share pursuant to the Offer.

The unaudited condensed combined pro forma financial information is presented for informational purposes only and is subject to a number of uncertainties and assumptions and do not purport to represent what the combined companies’ actual performance or financial position would have been had the Transaction occurred on the dates indicated and does not purport to indicate the financial position or results of operations as of any future date or for any future period.

Blue Wolf Mongolia Holdings Corp. and Li3 Energy, Inc.

Unaudited Condensed Combined Pro Forma Balance Sheet Data

As of March 31, 2013

	Combined Pro Forma (Assuming No Tender)		Combined Pro Forma (Assuming Maximum Tender)

Cash and cash equivalents	$	21,288,339	$	6,908,044
Total assets		85,284,971		70,904,676
Total current liabilities		3,776,346		3,776,346
Total long-term liabilities		10,735,890		10,735,890
Common stock subject to rescission		3,041		3,041
Total non-controlling interest		22,932,695		22,932,695
Total stockholders' equity		70,769,694		56,389,399
Total liabilities and stockholders' equity	$	85,284,971	$	70,904,676

Blue Wolf Mongolia Holdings Corp. and Li3 Energy, Inc.

Unaudited Condensed Combined Pro Forma Statements of Operations Data

For the Nine Months Ended March 31, 2013

	Combined Pro Forma (Assuming No Tender)			Combined Pro Forma (Assuming Maximum Tender)

Operating expenses	$	(4,163,090	)	$	(4,163,090	)
Loss from operations		4,163,090			4,163,090

Other income (expense)		8,410,007			8,410,007
Net income before taxes		4,246,917			4,246,917

Less: net loss attributable to the non-controlling interest		187,898			187,898
Net income attributable to stockholders	$	4,434,815		$	4,434,815

Weighted Average common shares outstanding - Basic		4,179,875			2,711,905
Weighted Average common shares outstanding - Diluted		4,241,746			2,773,776
Earnings per share attributable to stockholders - Basic	$	1.06		$	1.64
Earnings per share attributable to stockholders - Diluted	$	1.05		$	1.60

COMPARATIVE SHARE INFORMATION

The following table sets forth selected historical equity ownership information for Blue Wolf and Li3 and unaudited condensed combined pro forma per share ownership information after giving effect to the Transaction, assuming (a) the issuance of 1,581,990 registered Ordinary Shares as Merger Consideration, and (b) 4,240,371 Ordinary Shares issued and outstanding if no Ordinary Shares are validly tendered in the Offer or 2,772,401 Ordinary Shares issued and outstanding if 1,467,970 Ordinary Shares are validly tendered and not properly withdrawn, and are purchased by Blue Wolf, and, with respect to the number of outstanding Ordinary Shares, the following:

Assuming No Tender of Ordinary Shares: This presentation assumes that no Blue Wolf shareholders validly tender their Ordinary Shares pursuant to the Offer.

Blue Wolf is providing this information to aid you in your analysis of the financial aspects of the Transaction. The historical information should be read in conjunction with “Selected Historical Financial Information” included elsewhere in this proxy statement/prospectus, the historical financial statements of Blue Wolf and the related notes thereto and the historical financial statements of Li3 and the related notes thereto each included elsewhere in this proxy statement/prospectus. The unaudited pro forma per share information is derived from, and should be read in conjunction with, the unaudited condensed combined pro forma financial data and related notes included elsewhere in this proxy statement/prospectus.

The unaudited condensed combined pro forma per share information reflects the Transaction being accounted for as a as a recapitalization by Li3. See “The Transaction — Accounting Treatment” for more information.

Unaudited Condensed Combined Pro Forma Per Share Information

	Li3 Energy, Inc.		Blue Wolf Holdings Corp. and Subsidiary		Consolidated Pro Forma (Assuming Minimum Tender)		Consolidated Pro Forma (Assuming Maximum Tender)

Book value per share at March 31, 2013(2)(3)	$	0.09	$	7.22	$	11.28	$	12.07
Nine months ended March 31, 2013
Basic earnings (loss) per share	$	0.00	$	0.57	$	1.05	$	1.60
Diluted earnings (loss) per share	$	0.00	$	0.57	$	1.05	$	1.60

(1)

As of March 31, 2013, Li3 had 394,041,586 outstanding shares of common stock that were used to calculate both the book value per share and the basic and diluted earnings per share.

(2)

Book value per share of Blue Wolf is computed by dividing the sum of total shareholders’ equity plus Ordinary Shares subject to possible redemption by the 10,062,500 Ordinary Shares (which includes 1,467,970 Ordinary Shares subject to possible redemption and 2,012,500 Ordinary Shares currently held by Blue Wolf’s Sponsor) outstanding at the balance sheet date.

(3)

Book value per share for the pro forma columns is computed by dividing the sum of total shareholders’ equity by the Ordinary Shares assumed to be outstanding after the Transaction. Combined Pro Forma (assuming no tender of Ordinary Shares) assumes 4,240,371 shares are outstanding and equals the sum of 4,268,381 Ordinary Shares currently outstanding and 1,581,990 Ordinary Shares to be issued to Li3’s stockholders, less 1,610,000 Ordinary Shares forfeited bythe Sponsor. Combined Pro Forma (assuming maximum allowable tender of Ordinary Shares) assumes 2,772,401 shares are outstanding and is (i) the sum of 4,268,381 Ordinary Shares currently outstanding and 1,581,990 Ordinary Shares to be issued to Li3’s stockholders less (ii) the maximum allowable tender of 1,467,970 Ordinary Shares and 1,610,000 Ordinary Shares forfeited bythe Sponsor.

(4)

Basic earnings (loss) per share in the pro forma columns is computed using the following weighted average shares: 4,240,371 Ordinary Shares (assuming no tender of Ordinary Shares), and 2,772,401 Ordinary Shares (assuming maximum allowable tender of Ordinary Shares), as presented in the Unaudited Condensed Combined Pro Forma Statements of Operations for the nine months ended March 31, 2013 included elsewhere in this proxy statement/prospectus.

(5)

Diluted earnings (loss) per share in the pro forma columns is computed using the following weighted average shares: 4,240,371 Ordinary Shares (assuming no tender of Ordinary Shares), and 2,772,401 Ordinary Shares (assuming maximum allowable tender of Ordinary Shares), as presented in the Unaudited Condensed Combined Pro Forma Statements of Operations for the nine months ended March 31, 2013 included elsewhere in this proxy statement/prospectus.

MARKET PRICE AND DIVIDEND INFORMATION

Blue Wolf

Price Range of Blue Wolf Securities

The Units, Ordinary Shares and Warrants of Blue Wolf are listed on Nasdaq under the symbols “MNGU,” “MNGL” and “MNGLW,” respectively. The Units commenced public trading on July 15, 2011, and the Ordinary Shares and Warrants commenced separate trading on August 3, 2011.

The following table sets forth the high and low sales prices on Nasdaq for Blue Wolf’s Units, Ordinary Shares and Warrants for the periods indicated.

	Units				Ordinary Shares				Warrants
Quarter Ended	Low		High		Low		High		Low		High
March 31, 2013	$	10.10	$	10.38	$	9.87	$	9.99	$	0.29	$	0.40
December 31, 2012	$	10.01	$	10.41	$	9.80	$	10.34	$	0.00	$	0.40
September 30, 2012	$	10.10	$	10.30	$	9.50	$	9.90	$	0.00	$	0.60
June 30, 2012	$	10.11	$	10.94	$	9.60	$	10.10	$	0.60	$	0.72
March 31, 2012	$	10.05	$	10.37	$	9.50	$	10.08	$	0.00	$	0.72
December 31, 2011	$	10.05	$	10.33	$	9.49	$	9.62	$	0.00	$	0.80
September 30, 2011	$	10.03	$	10.49	$	9.58	$	10.10	$	0.65	$	0.87

On May 17, 2013, the last reported closing prices of Blue Wolf’s Units, Ordinary Shares and Warrants were $10.10, $10.75 and $0.10.

Holders

As of the date of this proxy statement/prospectus, there were two holders of record of Blue Wolf’s Ordinary Shares, two holders of record of Blue Wolf’s Warrants and one holders of record of Blue Wolf’s Units.

Dividends

Blue Wolf has not paid any cash dividends on its Ordinary Shares to date and does not intend to pay cash dividends prior to the completion of a business combination. The payment of any cash dividends subsequent to the initial business combination will be within the discretion of Blue Wolf board of directors at such time and subject to the Companies Act. The Companies Act provides that, subject to Blue Wolf’s Charter the directors may, by resolution, authorize a distribution to stockholders at such time and of such an amount as they think fit, if they are satisfied on reasonable grounds that Blue Wolf will immediately after the distribution, satisfy the ‘solvency test’. A company will satisfy the solvency test if (i) the value of the company’s assets exceeds its liabilities; and (ii) the company is able to pay its debts as they fall due. Where a distribution is made to a shareholder at a time when the company did not, immediately after the distribution, satisfy the solvency test, it may be recovered by the company from the shareholder unless (i) the shareholder received the distribution in good faith and without knowledge of the company’s failure to satisfy the solvency test; (ii) the shareholder has altered his position in reliance on the validity of the distribution; and (iii) it would be unfair to require repayment in full or at all.

In addition, Blue Wolf’s board of directors is not currently contemplating and does not anticipate declaring any share dividends in the foreseeable future. Further, if Blue Wolf incurs any indebtedness in connection with its initial business combination, Blue Wolf’s ability to declare dividends may be limited by restrictive covenants Blue Wolf may agree to in connection therewith.

Li3

Price Range of Li3 Common Stock

Li3’s common stock trades on the OTCBB under the symbol “LIEG”. The OTCBB is a quotation service that displays real-time quotes, last-sale prices, and volume information in over-the-counter equity securities. An OTCBB equity security generally is any equity that is not listed or traded on a national securities exchange. The following table shows, for the periods indicated, the high and low bid prices per share of the Li3 common stock as reported by the OTCBB quotation service. These bid prices represent prices quoted by broker-dealers on the OTCBB quotation service. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions, and may not represent actual transactions.

	Fiscal Year Ending June 30, 2013				Fiscal Year Ending June 30, 2012				Fiscal Year Ending June 30, 2011
	High		Low		High		Low		High		Low

First Quarter (July 1 - September 30)	$	0.10	$	0.06	$	0.23	$	0.10	$	0.42	$	0.18
Second Quarter (October 1 – December 31)	$	0.08	$	0.05	$	0.13	$	0.06	$	0.32	$	0.10
Third Quarter (January 1 – March 31)	$	0.06	$	0.03	$	0.14	$	0.07	$	0.51	$	0.21
Fourth Quarter (April 1 – June 30) (through May 17, 2013)	$	0.06	$	0.03	$	0.10	$	0.06	$	0.45	$	0.19

On May 17, 2013, the last reported closing prices of Li3’s common stock on the OTCBB was $0.04.

Holders of Common Stock

As of May 8, 2013, there were approximately 188 Li3 stockholders of record. Because shares of Li3’s common stock are held by depositaries, brokers and other nominees, the number of beneficial holders of such shares is substantially larger than the number of stockholders of record. On May 17, 2013, the last reported sale price per share for the Li3 common stock as reported by the OTCBB quotation service was $0.04 per share.

Dividends

Li3 has never declared any cash dividends with respect to its common stock. Future payment of dividends is within the discretion of its board of directors and will depend on our earnings, capital requirements, financial condition and other relevant factors. Li3 presently intends to retain future earnings, if any, for use in its business and it has no present intention to pay cash dividends on its common stock.

Securities Authorized for Issuance under Equity Compensation Plans

The Li3 board of directors adopted, and its stockholders approved, the 2009 Equity Incentive Plan (the “2009 Plan”) on October 19, 2009. The 2009 Plan reserves a total of 5,000,000 shares of common stock for issuance pursuant to awards granted thereunder. If an incentive award granted under the 2009 Plan expires, terminates, is unexercised or is forfeited, or if any shares are surrendered to us in connection with an incentive award, the shares subject to such award and the surrendered shares will become available for further awards under the 2009 Plan.

As of March 31, 2013, Li3 has outstanding 1,450,000 nonqualified stock options under the 2009 Plan, with a weighted average exercise price of approximately $0.22 per share, of which options for 1,200,000 are currently vested. In addition, Li3 has granted (a) an award of 2,500,000 shares of restricted stock under the 2009 Plan, of which 2,500,000 shares are currently issued and vested, and (b) awards of restricted stock units with respect to 950,000 shares of common stock, 550,001 of which are currently issued and vested. For all option grants, the board of directors has set (or will set) the exercise price of the options at a price equal to or greater than the fair market value of the common stock on the date of grant of the options. Of the outstanding options under the 2009 Plan, 1,200,000 have vested. 200,000 of such options vested immediately and have a five year term, 1,000,000 options were fully vested as of December 31, 2012 and have a five year term, and the remaining 250,000 options vest on September 1, 2013 and have a five year term. Furthermore, Li3 has committed to grant Restricted Stock Units with respect to an aggregate of 900,000 shares; however, it does not currently have enough shares authorized for issuance under the 2009 Plan to satisfy all of these obligations.

The following table provides information as of March 31, 2013,with respect to the shares of common stock that may be issued under existing Li3 equity compensation plans:

Weighted-

average

Number of securities

Exercise price of

remaining available for

to be issued upon

Outstanding

future issuance under equity

exercise of

options,

compensation plans

outstanding options,

Warrants and

(excluding securities reflected

warrants and rights

rights

in column (a))

(a)

(b)

(c)

Plan Category

Equity compensation plans approved by security holders (1)

1,450,000

0.22

1,050,000

(2)

Equity compensation plans not approved by security holders

Total

1,450,000

0.22

1,050,000

(2)

(1) Represents the 2009 Equity Incentive Plan.

(2) 950,000 of such shares are reserved for issuance pursuant to Restricted Stock Units granted under the 2009 Plan, of which 550,001 shares have vested.

See “Executive Compensation of Li3” for information regarding individual equity compensation arrangements received by Li3’s executive officers pursuant to their employment agreements with Li3. See “The Agreement and Plan of Merger — Transaction Consideration to be Delivered” for a description of the treatment of Li3’s outstanding options and warrants in the Transaction.

Dividend Policy Following the Transaction

Future payment of dividends is within the discretion of our board of directors and will depend on our earnings, capital requirements, financial condition and other relevant factors. We presently intend to retain future earnings, if any, for use in our business and have no present intention to pay cash dividends on our common stock.

RISK FACTORS

In addition to the other information contained in or incorporated by reference into this proxy statement/prospectus, you should carefully consider the following risk factors in deciding whether to vote or instruct your vote to be cast to approve the proposals described in this proxy statement/prospectus.

Risks Factors Relating to the Transaction

Certain Li3 stockholders have indicated their intention to vote in favor of the Acquisition Proposal.

Based on Li3’s discussions with its largest individual stockholders holding a majority of the issued and outstanding Li3 common stock, Li3 believes that such stockholders will agree to enter into lock-up and support agreements with Li3and Blue Wolf subsequent to the execution of the Agreement and Plan of Merger, pursuant to which such Li3 stockholders will agree to vote in favor of the Merger and be restricted from offering, issuing, granting any option on, selling, transferring or otherwise disposing of any shares of Li3 common stock or the Merger Consideration they receive until one year after the consummation of the Merger (the “Lock-up Period”); provided, however, if the trading price of Blue Wolf Ordinary Shares reaches or exceeds $11.50 for any 20 trading days within any 30 trading day period during the Lock-Up Period, 50% of each shareholder’s Merger Consideration will be released from the lock-up and, if the trading price reaches or exceeds $15.00 for any 20 trading days within any 30 trading day period during the Lock-up Period, the remaining 50% of each shareholder’s Merger Consideration will be released from the lock-up.Accordingly, the Transaction may be approved by these certain stockholders even if our remaining public stockholders do not approve the Transaction.

There may be tax consequences of the merger that may adversely affect Li3 stockholders.

The Li3 board did not obtain a fairness opinion in determining whether or not to proceed with the Transaction and, as a result, the terms may not be fair from a financial point of view to Li3’s stockholders.

In analyzing the business combination, the Li3 board conducted significant due diligence on Blue Wolf. The Li3 board believes because of the financial skills and background of its directors, it was qualified to conclude that the business combination was fair from a financial perspective to its stockholders. Notwithstanding the foregoing, the Li3 board did not obtain a fairness opinion to assist it in its determination. Accordingly, the Li3 board may be incorrect in its assessment of the transaction.

If the Transaction’s benefits do not meet the expectations of investors and/or stockholders, the market price of Blue Wolf’s securities may decline.

The market price of Blue Wolf’s securities, including its Ordinary Shares, prior to the consummation of the Transaction or the market price of Blue Wolf’s securities following the consummation of the Transaction may decline as a result of the Transaction if Blue Wolf does not achieve the perceived benefits of the Transaction as rapidly, or to the extent anticipated by investors and/or stockholders. Accordingly, stockholders may experience a loss as a result of a decline in the market price of Blue Wolf’s securities prior to or following the consummation of the Transaction. A decline in the market price of Blue Wolf’s securities also could adversely affect Blue Wolf’s ability to issue additional securities and Blue Wolf’s ability to obtain additional financing in the future.

Risks Related to Blue Wolf

An active market for Blue Wolf’s securities may not develop following the Transaction, which would adversely affect the liquidity and price of Blue Wolf’s securities.

An active trading market for Blue Wolf’s securities may never develop following the Transaction or, if developed, it may not be sustained. Additionally, if Blue Wolf’s securities are delisted from Nasdaq, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities not listed on a national exchange, the liquidity and price of Blue Wolf’s securities may be more limited than if it were listed on Nasdaq or another national or foreign exchange. You may be unable to sell your securities unless a market can be established and sustained.

As a foreign private issuer, Blue Wolf is permitted to rely on exemptions from certain NASDAQ corporate governance standards and other Exchange Act requirements applicable to U.S. issuers. This may afford less protection to holders of Blue Wolf’s securities.

As a foreign private issuer, Blue Wolf is permitted to follow home country corporate governance practices instead of certain corporate governance rules of the Nasdaq Capital Market. The corporate governance practice in Blue Wolf’s home country, the British Virgin Islands, does not require the implementation of various Nasdaq Capital Market corporate governance rules. Accordingly, Blue Wolf intends to rely on its home country corporate governance practice including, among other things, the composition and responsibilities of its board of directors and board committees (including the audit, compensation and nominating committees), the participation of independent directors in the determination of executive compensation and the nomination of directors, the requirement of annual meetings of shareholders, the review and oversight of related-party transactions, the scheduling of executive sessions, the availability and content of a code of conduct, the number of shareholders representing a quorum at shareholders’ meetings and any other home country practice that would be permitted by the Nasdaq Capital Market under its rules from time to time. Furthermore, Blue Wolf intends to follow home country practice instead of Rule 5635 of the Nasdaq Capital Market, which requires shareholder approval for certain issuances of securities, including acquisitions of stock or assets of third parties resulting in the issuance of 20% or more of an issuer’s outstanding shares, issuances resulting in a change of control of an issuer and certain equity compensation plans.

As a foreign private issuer, Blue Wolf will also be exempt from those rules and regulations under the Exchange Act related to the furnishing and content of proxy statements, selective disclosure rules pursuant to Regulation FD and Blue Wolf’s officers, directors and principal shareholders will be exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, Blue Wolf will not be required under the Exchange Act to file periodic and current reports with the SEC as frequently or as promptly as U.S. issuers. Because of these exemptions, Blue Wolf’s shareholders are not afforded the same protections or information generally available to investors holding shares in public companies organized in the United States.

Blue Wolf does not currently intend to hold an annual meeting of sthareholders until after its consummation of a business combination.

Blue Wolf is not required under BVI law to hold an annual meeting of shareholders and Blue Wolf does not currently intend to hold an annual meeting of shareholders until after Blue Wolf consummates its initial business combination. If Blue Wolf’s shareholders want Blue Wolf to hold a meeting prior to such consummation, they may requisition the directors to hold one upon the written request of members entitled to exercise at least 30 percent of the voting rights in respect of the matter for which the meeting is requested. Under British Virgin Islands law, Blue Wolf may not increase the required percentage to call a meeting above such 30 percent level. Until Blue Wolf holds an annual meeting of shareholders, public shareholders may not be afforded the opportunity to elect directors and to discuss company affairs with management.

Blue Wolf’s securities may not continue to be listed on Nasdaq in the future, which could limit investors’ ability to make transactions in Blue Wolf’s securities and subject Blue Wolf to additional trading restrictions.

Blue Wolf’s securities are listed on Nasdaq. In order to maintain that listing, Blue Wolf must satisfy minimum financial and other requirements. If and when Blue Wolf consummate the Transaction, Blue Wolf will be required to comply with Nasdaq’s initial listing standards, which are more rigorous than Nasdaq’s continued listing requirements. Blue Wolf may not be able to meet those listing requirements.

If Blue Wolf fails to meet all applicable Nasdaq requirements and Nasdaq delists its securities from trading on its exchange, Blue Wolf expects its securities could be quoted on the OTC Bulletin Board or the “pink sheets.” If this were to occur, Blue Wolf could face significant material adverse consequences, including:

limited availability of market quotations for Blue Wolf’s securities;

reduced liquidity of Blue Wolf’s securities;

a determination that Blue Wolf’s shares are a “penny stock” which will require brokers trading in Blue Wolf’s shares to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for Blue Wolf’s shares;

a limited amount of news and analyst coverage for Blue Wolf; and

a decreased ability to issue additional securities or obtain additional financing in the future.

Furthermore, The National Securities Markets Improvement Act of 1996 (“NSMIA”) is a federal statute which prevents or preempts states from regulating the sale of certain securities, which are referred to as “covered securities.” Because Blue Wolf’s securities are listed on Nasdaq, they are covered securities for the purpose of NSMIA. If Blue Wolf’s securities were no longer listed on Nasdaq and therefore not “covered securities,” Blue Wolf would be subject to regulation in each state in which Blue Wolf offers its securities.

You may face difficulties in protecting your interests, and your ability to protect your rights through the United States federal courts may be limited, because Blue Wolf are incorporated under British Virgin Islands law.

Blue Wolf is a company incorporated under the laws of the British Virgin Islands. As a result, it may be difficult for investors to enforce judgments obtained in the United States courts against Blue Wolf’s directors or officers.

Blue Wolf’s corporate affairs will be governed by its Charter, theBVI Business Companies Act, 2004 of the British Virgin Islands (the “Companies Act”) and the common law of the British Virgin Islands. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of Blue Wolf’s directors to Blue Wolf under British Virgin Islands law are governed by the Companies Act and the common law of the British Virgin Islands. The common law of the British Virgin Islands is derived from English common law, and while the decisions of the English courts are of persuasive authority, they are not binding on a court in the British Virgin Islands. The rights of Blue Wolf’s shareholders and the fiduciary responsibilities of Blue Wolf’s directors under British Virgin Islands law may not be as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as compared to the United States, and some states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law. In addition, while statutory provisions exist in British Virgin Islands law for derivative actions to be brought in certain circumstances, shareholders in BVI companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstances in which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights of shareholders of a BVI company being more limited than those of shareholders of a company organized in the United States. Accordingly, shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred.

The British Virgin Islands courts are also unlikely:

to recognize or enforce against Blue Wolf judgments of courts of the United States based on certain civil liability provisions of U.S. securities laws where that liability is in respect of penalties, taxes, fines or similar fiscal or revenue obligations of the company; and

to impose liabilities against Blue Wolf, in original actions brought in the British Virgin Islands, based on certain civil liability provisions of U.S. securities laws that are penal in nature.

There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands will in certain circumstances recognize such a foreign judgment and treat it as a cause of action in itself which may be sued upon as a debt at common law so that no retrial of the issues would be necessary provided that:

the U.S. court issuing the judgment had jurisdiction in the matter and the company either submitted to such jurisdiction or was resident or carrying on business within such jurisdiction and was duly served with process;

the U.S. judgment is final and for a liquidated sum;

the judgment given by the U.S. court was not in respect of penalties, taxes, fines or similar fiscal or revenue obligations of the company;

in obtaining judgment there was no fraud on the part of the person in whose favor judgment was given or on the part of the court;

recognition or enforcement of the judgment would not be contrary to public policy in the British Virgin Islands; and

the proceedings pursuant to which judgment was obtained were not contrary to natural justice.

In appropriate circumstances, a British Virgin Islands court may give effect in the British Virgin Islands to other kinds of final foreign judgments such as declaratory orders, orders for performance of contracts and injunctions.

As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a U.S. company.

Blue Wolf’s Charter permits the board of directors to create additional classes of securities, including shares with rights, preferences, designations and limitations as they determine which may have an anti-takeover effect.

Blue Wolf’s Charter permits its board of directors to designate rights, preferences, designations and limitations attaching to the preferred shares as they determine in their discretion, without shareholder approval with respect to the terms or the issuance. If issued, the rights, preferences, designations and limitations of the preferred shares would be set by its board of directors and could operate to the disadvantage of the outstanding ordinary shares. Such terms could include, among others, preferences as to dividends and distributions on liquidation, or could be used to prevent possible corporate takeovers.

Risks Related to Li3

Li3 is an exploration stage company and currently has no revenues. Its business plan depends on its ability to explore for and develop mineral reserves and place any such reserves into extraction. Because Li3 has a limited operating history, it is difficult to predict its future performance.

Although Li3 was formed in June 2005, it has been and continues to be an exploration stage company. Therefore, it has limited operating and financial history available to help potential investors evaluate its past performance and the risks of investing in Li3. Moreover, Li3’s limited historical financial results may not accurately predict its future performance. Companies in their initial stages of development present substantial business and financial risks and may suffer significant losses. As a result of the risks specific to Li3’s business and companies with limited operating histories in general, it is possible that Li3 may not be successful in implementing its business strategy.

Li3 has generated no revenues to date and does not anticipate generating any revenues in the near term. Li3’s activities to date have been limited to capital formation, organization, acquisition of interests in mining properties and limited exploration on its projects, including digging and sampling of test pits and brine analysis on its Maricunga property. Li3 has yet to generate positive earnings and there can be no assurance that it will ever operate profitably. Li3’s success is significantly dependent on a successful exploration, mining and production program. Its operations will be subject to all the risks inherent in the establishment of a developing enterprise and the uncertainties arising from the absence of a significant operating history. Li3 may be unable to locate exploitable quantities of mineral resources or operate on a profitable basis. Li3 is in the exploration stage and potential investors should be aware of the difficulties normally encountered by enterprises in the exploration stage. If Li3’s business plan is not successful, and it is not able to operate profitably, investors may lose some or all of their investment.

Li3’s past losses raise doubt about its ability to continue as a going concern.

Li3’s consolidated financial statements contained herein have been prepared assuming Li3 will continue as a going concern. As of March 31, 2013, Li3 had no source of current revenue, a cash balance of $2,349,834, negative working capital of $1,240,015 and cumulative negative cash flows from operations of $21,477,783 during the period from June 24, 2005 (inception) through March 31, 2013. Li3 had negative cash flows from operations of $5,906,682 during the nine months ended March 31, 2013. On August 17, 2012, Li3 received $9,499,990 in net funding from POSCO Canada Ltd. (“POSCAN”). On April 16, 2013, the Company made a $2,000,000 initial cash payment to acquire additional property in the Maricunga Salar.

Li3 does not believe its cash on hand is sufficient to maintain its basic operations, which do not include future exploration and acquisition activities, and requires immediate cash flow for which it is seeking interim funding.

Li3 has sustained and continues to sustain losses as a result of its operations and cannot predict if and when it may generate profits. In the event Li3 identifies commercial reserves of lithium or other minerals, it will require substantial additional capital to develop those reserves. Li3 expects to finance its future operations primarily through future equity or debt financings. However, as discussed in Li3’s consolidated financial statements, there exists substantial doubt about Li3’s ability to continue as a going concern because there is no assurance that it will be able to obtain such capital through an equity or debt financing, or any combination thereof, on satisfactory terms or at all. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Mineral operations are subject to applicable law and government regulation, which could restrict or prohibit the exploitation of that mineral resource.

Both mineral exploration and extraction in Chile require obtaining mining concessions as well as permits from various foreign, federal, state, provincial and local governmental authorities, as the case may be, and are governed by laws and regulations, including those with respect to prospecting, mine development, mineral production, transport, export, taxation, labor standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters. There can be no assurance that Li3 will be able to obtain or maintain any of the mining rights and permits required for the continued exploration of its mineral properties or for the construction and operation of a mine on its properties (especially but not limited to extracting lithium) nor that it will be able to obtain or maintain any of such rights and permits at economically viable costs.

In Chile, the Chilean Organic Law on Mining Concessions (“LOCM”) and the Chilean Mining Code (“CMC”) provide that lithium may not be granted in a mining concession without prejudice of the mining concessions validly granted before lithium was declared as a mineral the exploration and exploitation of which could not be the object of a mining concession. As a result, only mining exploitation concessions initiated before January 1, 1979 are authorized for the exploitation of lithium. For all other cases, the CMC establishes the reserve of lithium to Chile and expressly provides that the exploration or exploitation of “non-concessible” substances (including lithium) can be performed only directly by the State of Chile, or its companies, or by means of administrative concessions or special operation contracts, fulfilling the requirements and conditions set forth by the President of Chile for each case. Additionally, Law 16,319, which created the Chilean Nuclear Energy Commission (the “NEC”), provides in its article 8^th that, for reasons of national interest, any act or contract in connection with lithium will require the previous authorization of NEC (or have NEC as a party thereto). NEC is entitled to subject any such authorization to the fulfillment by the applicant of certain conditions. Once any such authorization is granted, NEC is not authorized to amend it or terminate it, nor the applicant to resign it, for reasons other than those set forth in the resolution granting it.

Since the constitution process of the Litio 1-6 Mining Concessions was initiated in 2000, the Maricunga Companies are not authorized to exploit lithium in the area covered by such concessions, unless they also obtain a CEOL authorizing such exploitation. Since the constitution process of the Cocina Mining Concessions was initiated in 1937, Minera Li (a wholly-owned subsidiary of Li3), as the owner of the Cocina Mining Concessions, is authorized to exploit lithium in the area covered by the Cocina Mining Concessions.

Lithium exploitation both in the area covered by the Cocina Mining Concessions as well as in the area covered by the Litio 1-6 Mining Concessions (in case in the future it becomes legally possible to exploit lithium in this latter area) shall require the NEC authorization. To the best of our understanding (i) NEC provided its authorization when requested to do so in the past, subjecting the applicant to commercially reasonable production quotas; and (ii) the third party whose option to acquire the Cocina Mining Concessions (via acquiring 100% shares of the Cocina Company) recently expired obtained a NEC authorization for the exploitation of lithium from the area covered by such concessions subject to a production quota of 50,000 tons; and (iii) NEC granted an authorization to whomever were awarded with the CEOL public offer, provided that such entity informs the NEC on the price, purchaser, volume and use of each sale of lithium; informs the NEC, on an annual basis, on the volume sold, the amount of metallic lithium, the volume of extracted brine to produce the volume of lithium sold as well as the density and lithium volume in the brine; and sells or otherwise commercializes all the lithium produced in the best market conditions.

Even though the authorization that NEC granted to the third party is not transferable and the authorization that NEC granted to whomever were awarded with the CEOL public offer should be considered extinguished as a consequence of the ineffectiveness of the CEOL public offer (and for as long as it remains ineffective), those authorizations shed light on the type of conditions that NEC may impose on Minera Li or the Maricunga Companies should any of them request an authorization from NEC to extract lithium from the area covered by the Cocina Mining Concessions or the Litio 1-6 Mining Concessions (in case lithium exploitation from these latter concessions is authorized). Moreover, the granting of the NEC authorization (as well as the conditions such authorization could be subject to) should be decided exclusively on the grounds that it is related to the “production, acquisition, transfer, transport, and specific use of atomic energy and fertile fissionable and radioactive materials”, since that is the purpose of the NEC, which, in turn, determines NEC’s scope of authority.

The Chilean Government’s Ministry of Mining established its first ever auction for the award of lithium, production quotas and licenses (Special Lithium Operations Contracts, or “CEOL”) which would permit the exploitation of an aggregate of 100,000 tons of lithium metal (approximately 530,000 tons of lithium carbonate equivalent) over a 20 year period, subject to a seven percent royalty (in addition to paying taxes in accordance with the ordinary Chilean tax regime. In September 2012, Li3 formed a consortium consisting of Li3, POSCO, Daewoo International Corp, and Mitsui & Co. (the ��Consortium”) for the purpose of participating in such CEOL auction. As required under the rules established by the Ministry of Mining, on September 14, 2012, the Consortium submitted its bid for the CEOLs.

On September 24, 2012, the Ministry of Mining opened the bids and informed Li3 that the Consortium’s bid was not the winning bid. The Consortium made the second highest offer.

On September 25, 2012, the Ministry of Mining issued a resolution awarding the CEOL public offer to the highest bidder.

On September 28, 2012, the Consortium filed a petition to the Ministry of Mining requesting (i) to exclude the highest bidder from the CEOL bidding process since it did not comply with certain of the requirements set forth in the CEOL public offer in order to participate in such process (ii) and to award the CEOL public offer to the Consortium instead.

On October 1, 2012, the Ministry of Mining resolved (i) to invalidate the September 25, 2012 resolution since the highest bidder had not complied with the rules of the CEOL public offer; and (ii) not to award the CEOL public offer to any of the other bidders.

On October 5, 2012, Li3 submitted a “Request for Reconsideration” to the Chilean Government, requesting it to reconsider the invalidation of the CEOL public offer and award the CEOL to the Consortium as the second highest bidder during the September 2012 bidding process.

On October 17, 2012, the Chilean Government ratified its decision to invalidate the CEOL process and not to accept any of the bids.

On October 22, 2012, Li3 submitted another “Request for Reconsideration” to the Chilean Government. The Chilean Government had 30 days to answer Li3´s request.

On November 19, 2012, the Ministry of Mining ratified its decision to invalidate the September 25, 2012 resolution and rejected Minera Li’s request that the CEOL public offer should be awarded to the Consortium.

On January 16, 2013, Li3 submitted a letter to the Chilean Comptroller requesting to review the CEOL process. This is deemed to be the last administrative recourse before pursuing judicial remedies. Li3 is awaiting a response from the Chilean Controller to its letter. A negative response would imply that Li3 is not authorized to exploit lithium from the area covered by the Litio 1-6 Mining Concessions since such concessions do not authorize to exploit lithium. Accordingly, there can be no assurance that Li3 will be able to obtain the permits necessary to exploit any minerals that its exploration activities discover in a timely manner or at all. Any such delay or failure would have a material adverse effect on the development horizon for Maricunga and its prospects.

Li3’s option on the Alfredo Property has expired, and Li3 may have a continuing obligation in the event Li3 develops future iodine nitrate properties in Chile.

On August 3, 2010, Li3 signed an agreement to acquire Alfredo Holdings, Ltd. which held an option to acquire six mining concessions in Pozo Almonte, Chile. Li3 allowed the option to expire because Li3 determined that the project was not economically viable. Pursuant to an amendment to the agreement with the Alfredo Sellers, if and when certain milestones are achieved with respect to any future Li3 Chilean iodine nitrate project, Li3 must make additional payments to the Alfredo Sellers in an aggregate amount of up to $5.5 million. There can be no assurance that financing sufficient to make such payments will be available to Li3 when needed. Li3 is not currently planning to explore, exploit or develop any iodine nitrate project in Chile.

All of Li3’s properties are in the exploration stage. Investment in exploration projects increases the risks inherent in its mining activities. There is no assurance that Li3 can establish the existence of any mineral resource on any of its properties in commercially exploitable quantities, and its mining operations may not be successful.

Li3 has not established that any of its mineral properties contains any meaningful levels of mineral reserves. There can be no assurance that future exploration and mining activities will be successful.

A mineral reserve is defined by the SEC in its Industry Guide 7 (which can be viewed at http://www.sec.gov/divisions/corpfin/forms/industry.html.secguide7) as that part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination. Li3 may never establish any mineral reserves.

Even if Li3 does eventually discover a meaningful mineral reserve on one or more of its properties, Li3 may not be able to develop its properties into producing mines and extract those resources. Both mineral exploration and development involve a high degree of risk and few properties which are explored are ultimately developed into producing mines. Furthermore, Li3 cannot be sure that an overall exploration success rate or extraction operations within a particular area will ever come to fruition and, in any event, production rates inevitably decline over time. The commercial viability of an established mineral deposit will depend on a number of factors including, by way of example, the size, grade and other attributes of the mineral deposit, the proximity of the resource to infrastructure such as a smelter, roads and a point for shipping, government regulation and market prices. Most of these factors will be beyond Li3’s control, and any of them could increase costs and make extraction of any identified mineral resource unprofitable.

Li3 has limited financial resources and may not be able to fund its anticipated exploration activities. If Li3 is unable to fund its exploration activities, its potential profitability will be adversely affected.

Li3’s anticipated exploration activities will require financial resources substantially in excess of its current working capital. If Li3 is not able to finance its exploration activities, then Li3 will be unable to identify commercially exploitable resources even if present on its properties. If Li3 fails to adequately support its exploration activities, it could have a material adverse effect on its results of operations. There can be no assurance that capital will be available to Li3 when needed, on favorable terms or at all.

If Li3 establishes the existence of a mineral resource on any of its properties in a commercially exploitable quantity, Li3 will require additional capital in order to develop the property into a producing mine. If Li3 is unable to obtain additional funding, its business operations will be harmed and if Li3 does obtain additional financing, existing stockholders may suffer substantial dilution.

If Li3 does discover mineral resources in commercially exploitable quantities on any of its properties, Li3 will be required to expend substantial sums of money to establish the extent of the resource, develop processes to extract it and develop extraction and processing facilities and infrastructure. Although Li3 may derive substantial benefits from the discovery of a major deposit, there can be no assurance that such a resource will be large enough to justify commercial operations, nor can there be any assurance that Li3 will be able to raise the funds required for development on a timely basis.

Li3 currently does not have any contracts or firm commitments for additional financing. There can be no assurance that additional financing will be available in amounts or on terms acceptable to Li3, if at all. An inability to obtain additional capital would restrict Li3’s ability to grow and could diminish its ability to continue to conduct its business operations. If Li3 is unable to obtain additional financing, Li3 will likely be required to curtail exploration and development plans and possibly cease operations. Any additional equity financing may involve substantial dilution to then existing stockholders.

Newer battery and/or fuel cell technologies could decrease demand for lithium over time which could significantly impact Li3’s prospects and future revenues.

Many materials and technologies are being researched and developed with the goal of making batteries lighter, more efficient, faster charging and less expensive. Some of these technologies could be successful and could impact demand for lithium batteries in personal electronics, electric and hybrid vehicles and other applications. Advances in nanotechnology, in particular, offer the prospect of significantly better batteries in the future. For example, researchers at Stanford University have recently demonstrated ultra-lightweight, bendable batteries and super capacitors made from paper coated with ink made of carbon nanotubes and silver nanowires; the material charges and discharges very quickly, making it potentially useful in hybrid and electric vehicles, which need rapid power for acceleration and would benefit from quicker charging than is available with current technologies. Li3 cannot predict which new technologies may ultimately prove to be commercializable and on what time horizon. While lithium battery technology is currently among the best available for electronics, vehicles and other applications, commercialized battery technologies that offer superior weight, capacity, charging time and/or cost could significantly adversely affect the demand for lithium in the future and thus could significantly adversely impact Li3’s prospects and future revenues.

Mineral exploration and development is subject to extraordinary operating risks. Li3 does not currently insure against these risks. In the event of a cave-in or similar occurrence, Li3’s liability may exceed its resources, which could have an adverse impact on Li3.

Mineral exploration, development and production involve many risks which even a combination of experience, knowledge and careful evaluation may not be able to overcome. Li3’s operations will be subject to all the hazards and risks inherent in the exploration for mineral resources and, if Li3 discovers a mineral resource in commercially exploitable quantity, its operations could be subject to all of the hazards and risks inherent in the development and production of resources, including liability for pollution, cave-ins or similar hazards against which Li3 cannot insure or against which Li3 may elect not to insure. Any such event could result in work stoppages and damage to property, including damage to the environment. Li3 does not currently maintain any insurance coverage against these operating hazards. The payment of any liabilities that arise from any such occurrence would have a material adverse impact on Li3.

Lithium, iodine and nitrates prices are subject to unpredictable fluctuations, making it difficult to predict the economic viability of Li3’s exploration properties and projects.

Li3 may derive revenues, if any, either from the extraction and sale of lithium, iodine and potassium nitrate, as well as other potentially economic salts produced from the lithium salar brines, or from the sale of our mineral resource properties. The price of these commodities may fluctuate widely, and is affected by numerous factors beyond Li3’s control, including international, economic and political trends, expectations of inflation, currency exchange fluctuations, interest rates, global or regional consumptive patterns, speculative activities, increased production due to new extraction developments and improved extraction and production methods and technological changes in the markets for the end products. The effect of these factors on the price of these minerals, and therefore the economic viability of any of Li3’s exploration properties and projects, cannot accurately be predicted.

The mining industry is highly competitive, and Li3 faces competition from many established global companies. Li3 may not be able to compete effectively with these companies which may adversely affect Li3’s prospects.

The markets in which Li3 operates are highly competitive. The mineral exploration, development, and production industry is largely un-integrated. Li3 competes against numerous well-established national and foreign companies in every aspect of the mineral mining industry. Some of Li3’s competitors have longer operating histories and greater technical facilities, and significantly greater recognition in the market and financial and other resources, than Li3. Li3 may not compete effectively with other exploration companies in locating and acquiring mineral resource properties, and customers may not buy any or all of the mineral products that Li3 expects to produce.

Li3 owes certain of its shareholders approximately $630,000 in cash as a result of certain registration rights penalties. While Li3 intends to obtain waivers from each of these shareholders to ameliorate this debt, there is no guarantee that Li3 will be able to do so in terms that are favorable to Li3.

On March 22, 2011, Li3’s board of directors approved a private placement offering with respect to an aggregate of 23,920,071 units of its securities, for aggregate gross proceeds of approximately $6,458,189 ($5,720,918 net after offering expenses and placement agent fees). Li3 also issued to placement agents and finders warrants to purchase an aggregate of 1,913,606 shares of common stock at an exercise price of $0.27 per share and exercisable for a period of three years. Pursuant to a registration rights agreement for this offering, Li3 agreed to file a registration statement with the SEC within 75 days after the closing date to register the shares of common stock and the shares of common stock underlying the warrants under the Securities Act, and to use its best efforts to cause such registration statement to become effective within 150 days after the filing date, all at Li3’s expense. Pursuant to the registration rights agreement, in the event Li3 did not meet these deadlines, Li3 agreed to pay the investors monetary penalties of 2% of their investment per month until such failures are cured (up to an aggregate maximum penalty of 10%, or $645,819).Li3 was required to file the registration statement by June 21, 2011, however the registration statement was not filed until July 1, 2011, and Li3 recorded a monetary penalties accrual of $38,750, which has not yet been paid as of March 31, 2013. Li3 was required to cause the registration statement to become effective by November 28, 2011, however the registration statement was not effective until March 19, 2012, and Li3 increased the monetary penalties accrual to $518,243, (plus accrued interest of $111,401, included in accrued expenses, which is calculated at 18% per annum for registration rights penalties considered past due), and the penalty has not yet been paid as of March 31, 2013. Although Li3 intends to seek a waiver for these monetary penalties, there is no assurance Li3 will be successful in obtaining a waiver.

If Li3 is unable to make payments due on July 16, 2013 to the sellers of SLM Cocina Diecinueve de la Hoyada de Maricunga, a Chilean based company (“SLM”) and the owner of certain mining concessions in Chile, the sellers could execute on their mortgage and retain the concessions.

On April 16, 2013, Li3 entered into a purchase agreement with Jose Resk Nara and Carlos Alfonso Iribarren to purchase all of the outstanding shares of SLM, which became become a wholly owned subsidiary of Li3. SLM owns the group of mining concessions “Cocina 19 through 27”.

Pursuant to the purchase agreement, Li3 agreed to pay the sellers $7.3 million, of which $2.0 million was paid on the closing date, $2.0 million is to be paid 90 days following the closing date or July 16, 2013, $1.8 million is to be paid 180 days after the closing date, and $100,000 is to be paid annually on the anniversary of the closing date for fifteen years beginning in 2014.If Li3 is unable to make the July 16, 2013 payment, or any of the other payments due to the sellers, the sellers could execute on their mortgage. At execution, the concession could go to public auction and could be acquired by a third party, or retained by the seller if nobody offers the minimum auction price.

Because Li3 is small and has limited capital, Li3 may have to limit its exploration and developmental mining activity which may adversely affect Li3’s prospects.

Because Li3 is a small exploration stage company and does not have much capital, Li3 may have to limit its exploration and production activity. As such, Li3 may not be able to complete an exploration program that is as thorough as Li3 would like. In that event, existing reserves may go undiscovered. Without finding reserves, Li3’s ability to generate revenues and its prospects will be adversely affected.

Compliance with environmental and other government regulations could be costly and could negatively impact production and adversely affect Li3’s operating results.

Li3’s operations are subject to numerous federal, state and local laws and regulations governing the operation and maintenance of our facilities and the discharge of materials into the environment or otherwise relating to environmental protection. These laws and regulations:

require that Li3 acquire permits before commencing extraction operations, including, but not limited to, the approval of the pertinent project’s environmental impact study (as applicable). With respect to mineral extracting activities taking place within the area of the Salar de Maricunga, this approval will probably be particularly difficult to obtain since that area is part of a Zone of National Touristic Interest denominated Salar de Maricunga-Volcán Ojos del Salado;

restrict the substances that can be released into the environment in connection with mining and extraction activities;

limit or prohibit mining activities on protected areas such as wetland or wilderness areas; and

require remedial measures to mitigate pollution from former operations, such as dismantling abandoned production facilities.

Under these laws and regulations, Li3 could be liable for personal injury and clean-up costs and other environmental and property damages, as well as administrative, civil and criminal penalties. Li3 does not believe that insurance coverage for environmental damages that occur over time is available at a reasonable cost, and Li3 does not maintain any such insurance. Also, Li3 does not believe that insurance coverage for the full potential liability that could be caused by sudden and accidental environmental damages is available at a reasonable cost. Accordingly, Li3 may be subject to liability or Li3 may be required to cease production (subsequent to any commencement) from properties in the event of environmental damages.

The Maricunga Project requires, as a condition precedent for commencing any extracting activity, the approval by the Chilean environmental authorities of its environmental impact study. The process to obtain the approval of an environmental impact study includes, among other things, requiring the opinion of all relevant authorities with environmental powers. Once the environmental impact study is approved, no sectional environmental permit can be denied.

The developer of the Maricunga Project also needs to obtain all non-environmental permits necessary to carry out exploration and exploitation mining activities in the area. The environmental impact assessment system regulated in law 19 300 considers the inclusion of the mitigation measures to protect the habitat of vulnerable animals in the area which should be included by Li3 in the environmental impact study or statement, as applicable.

Li3 may be legally required to obtain water rights as a condition precedent to commencing any extraction of minerals from the Maricunga Project.

The Maricunga Project, if successful, involves extracting mineral (lithium and potash) from the Salar de Maricunga. The Salar de Maricunga has a high presence of semi superficial water. Li3 may be legally required to obtain water rights as a condition precedent to commencing any extraction of minerals from the Maricunga Project.

Li3 may be unable to amend the mining claims that Li3 is seeking to acquire to cover the primary minerals that Li3 plans to develop.

Li3’s business plan includes acquisition, exploration and development of lithium brine properties. However, Li3 may pursue this goal by acquiring salt-mining claims and/or options or other interests in salt-mining claims or other types of claims, which Li3 intends to seek to have amended to cover lithium extraction. There can be no assurance that Li3 will be successful in amending any such claims timely, economically or at all. See Risk Factors - “Mineral operations are subject to applicable law and government regulation” above.

Li3 may have difficulty managing growth in its business which could have a material adverse effect on Li3’s business, financial condition and results of operations and its ability to timely execute its business plan.

Because of the relatively small size of Li3’s business, growth in accordance with its long-term business plans, if achieved, will place a significant strain on its financial, technical, operational and management resources. As Li3 increases its activities and the number of projects Li3 is evaluating or in which Li3 participates, there will be additional demands on its financial, technical, operational and management resources. The failure to continue to upgrade its technical, administrative, operating and financial control systems or the occurrence of unexpected expansion difficulties, including the recruitment and retention of required personnel could have a material adverse effect on Li3’s business, financial condition and results of operations and its ability to timely execute its business plan.

If Li3 is unable to keep its key management personnel, then Li3 is likely to face significant delays at a critical time in its corporate development and its business is likely to be damaged which could have a material adverse affect on Li3’s business, financing condition and operations.

Li3’s success depends upon the skills, experience and efforts of its management and other key personnel, including its Chief Executive Officer. As a relatively new company, much of Li3’s corporate, scientific and technical knowledge is concentrated in the hands of a few individuals. Li3 does not have employment agreements with any of its employees other than its Chief Executive Officer, Chief Financial Officer and Vice President. Li3 does not maintain key-man life insurance on any of its management or other key personnel. The loss of the services of one or more of its present management or other key personnel could significantly delay its exploration and development activities as there could be a learning curve of several months or more for any replacement personnel. Furthermore, competition for the type of highly skilled individuals Li3 require is intense and Li3 may not be able to attract and retain new employees of the caliber needed to achieve its objectives. Failure to replace key personnel could have a material adverse effect on Li3’s business, financial condition and operations.

Difficult conditions in the global capital markets may significantly affect Li3’s ability to raise additional capital to continue operations.

The ongoing worldwide financial and credit upheaval may continue indefinitely. Because of reduced market liquidity, Li3 may not be able to raise additional capital when Li3 needs it. Because the future of Li3’s business will depend on its ability to explore and develop the mineral resources on its existing properties and to complete the acquisition of one or more additional mineral resource properties for which, most likely, Li3 will need additional capital, Li3 may not be able to complete such development and acquisition projects or develop or acquire revenue producing assets. As a result, Li3 may not be able to generate income and, to conserve capital, Li3 may be forced to curtail its current business activities or cease operations entirely.

INFORMATION ABOUT LI3

General

Li3 Energy, Inc. is a South America based and U.S. listed exploration company in the lithium and mining sector. Li3 aims to acquire, develop and commercialize a significant portfolio of lithium brine deposits in the Americas. Li3 is currently focused on further exploring, developing and commercializing its 60% controlling interest in its flagship Maricunga Project, located in the northeast section of the Salar de Maricunga in Region III of Atacama, in northern Chile. The recently completed technical report produced in accordance with National Instrument 43 101 of the Canadian Securities Administrator proves Maricunga’s attractive lithium and potassium grades and recommends the project to advance to the Feasibility Study stage. Li3 is seeking to be a low cost producer of lithium, potassium nitrate and other mineral products.

In Chile, Li3’s assets consist of 1,888 hectares located within the Salar de Maricunga as well as 4,900 hectares of other prospective land holdings that are strategically located within close proximity to the Salar de Maricunga that could serve as potential processing sites for the project. Together, its total Chilean land holdings consist of 6,788 hectares, and to the best of Li3’s knowledge, it is one of the only companies with an advanced stage lithium and potassium project within the Salar de Maricunga. Li3 plans to continue exploring other synergistic opportunities to further augment and strengthen this property and its land portfolio throughout the region.

Through its strategic partners, Li3 has been evaluating the use of advanced process technologies that may further improve upon the economics and shorten the commercial production timeline of its Maricunga Project. Li3 plans to further evaluate these technologies in pilot/demonstration and test facilities that will measure both effectiveness and economic feasibility when measured against the conventional lithium commercialization process.

Upon Li3 obtaining the necessary permits to exploit lithium, its goals are to:

advance the Maricunga project to the Feasibility Study stage;

support the global implementation of clean and green energy initiatives;

meet growing lithium market demand; and

become a mid-tier, low cost secondary supplier of lithium, potassium nitrate, and other strategic minerals, serving global clients in the energy, fertilizer and specialty chemical industries.

A summary of Li3’s key recent activities is found below:

May 2011 - Completed acquisition of 60% Controlling Interest in Maricunga Project.

June 2011 - Maricunga identified as “Top 11 Lithium Projects in the World” - signumBOX.

August 2011 - Strategic Partnership with POSCO Canada Ltd., a wholly owned subsidiary of POSCO (NYSE: PKX), which established an $18 million Exploration and Development program for Maricunga, among other things.

September 2011 - Completed $8 million funding tranche with POSCAN and launched $8 million Phase One Plan.

March 2012 - MOU with POSCO to construct Test Facility (advanced process technology).

April 2012 - As required by POSCAN, Li3 issued a technical report, which was prepared in accordance with National Instrument 43-101 of the Canadian Securities Administrators validating its earlier exploration campaign at Maricunga recommending the project to advance to the Feasibility Study stage.

August 2012 - Completed a $10 million funding tranche from POSCAN.

Sept 2012 - Organized a consortium to bid on auction for lithium exploitation permit.

Participated in government auction for lithium exploitation permit in September 2012, and initially have been unsuccessful.

December 2012 – Evaluating the production of potassium and other bi-products from the Maricunga properties.

March 2013 – Executed MOU with Blue Wolf Mongolia Holdings Corp. to explore a possible business combination.

April 2013 – Acquired 100% of SLM Cocina Diecinueve de la Hoyada de Maricunga, a Chilean based company.

Li3 believes that if it is successful in (i) advancing the Maricunga Project through the Feasibility Study stage, (ii) obtaining the government of Chile to either reconsider its decision to cancel the 2012 CEOL public offer and instead awards it to the Consortium or adjudicates a new CEOL public offer issued by the government to the Consortium (or any other Li3 entity); (iii) obtaining all other necessary Chilean government approvals/licenses, (iv) closing and acquiring additional land acreage to support further development of the Maricunga project, (v) achieving a Definitive Feasibility Study, and (vi) raising the necessary capital, it could begin commercial production and begin generating revenues by the end of calendar year 2015. However, there can be no assurance that Li3 will achieve its stated objectives. Li3 is led by a management team of seasoned industry veterans with extensive exploration, mining, minerals, finance and commercialization expertise and a board of directors which includes global industry leaders who have advised, led and operated numerous mining entities and an experienced technical team, many of whom have worked on other junior lithium projects.

Li3 is an exploration stage company and as such, it has never generated revenues from operations and currently does not expect to generate any such revenues in the near term.

Strategic Plan

Part of Li3’s strategic plan is to explore and develop its existing projects as well as to identify other synergistic opportunities with new projects with production potential that that could also be advanced in an accelerated manner, with the goal of becoming a company with valuable lithium and other industrial minerals properties. Li3’s primary objective is to become a low cost lithium producer as well as a significant producer of potassium nitrate. Management believes the key to achieving this objective is to become an integrated chemical company through the strategic acquisition and development of lithium assets as well as other assets that have by-product synergies. The third leg of Li3’s strategic plan is to develop improved technologies for the extraction of lithium from brines.

Acquisition of Additional Accretive Land Acreage for Potential Processing Facility

On May 11, 2012, Li3 signed an agreement to receive 100% ownership from a group of 18 concessions, named Verde 1, 2, 3, 4, 5, 6, 7, and Amarillo 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12. These concessions are located in Region III of Atacama in northern Chile, 55km northeast of the city of Copiapo and 70 km west of the Maricunga Project. Collectively, these concessions cover a total area of 4,900 hectares. Li3 paid approximately $10,000 to acquire the property concessions. Li3 is evaluating Llano de Varas as a potential site for processing facilities.

Value added Nitrate Project

Li3 believes that Maricunga, when combined with a potential nitrate acquisition, would create the following rooted synergies:

Based on preliminary chemical analysis, the Maricunga Project has the potential to produce lithium as well as a significant amount of potassium chloride. Li3 believes that production of potassium would significantly improve the economics of any potential Nitrate Acquisition, as sodium nitrate from the caliche deposit can be reacted with potassium chloride (potash) to produce a value added potassium nitrate (KNO3). Potassium nitrate is a valuable product used in fertilizers, which could create additional revenue.

A stand-alone potential Nitrate project would produce iodine and a sodium sulfate byproduct, which is needed to remove magnesium from brines in order to purify the lithium product. The sodium sulfate can then be used as a low cost raw material which can be employed in Maricunga, subsequently improving its economics. This would generate a credit for the lithium carbonate (Li2CO3) produced at Maricunga.

Evaluation of Advanced Process Technologies

As such, the third aspect of Li3’s strategic plan involves exploring the use of technologies that, when measured against the conventional approach to lithium commercialization could possibly improve the project economics and shorten time to market. Li3 believes that the lithium industry (specifically the juniors) has not embarked upon much R&D efforts addressing several critical areas that it hopes to gain a competitive edge if it can improve upon:

1) The approximately 60% lithium yield loss from brine to end-product;

2) The land and capital intensive (CAPEX) foot-print necessary for solar evaporation ponds; and

3) The typical 4 year speed to market of a typical lithium project from start to commercial production.

In the current lithium market, in which three large global companies supply 80% of the world’s lithium with few mid-tier producers, Li3’s management believes that in order to compete it must address these critical areas. Accordingly, Li3 has sought strategic partners who it believes are capable of deploying both the intellectual and financial capital necessary to assist it in these initiatives.

Project Overviews

Chile - Maricunga Project

Location

The Salar de Maricunga is located in Region III of northern Chile at an elevation of approximately 3,750 m. It is classified as a mixed type of salar of the Na-Cl-Ca/SO4 system. The Salar de Maricunga was originally sampled by CORFO (the Chilean governmental organization that promotes economic growth in Chile) in the early 1980s. Based on the due diligence conducted in connection with the acquisition of Li3’s Maricunga interest and on its recently issued technical report, which was prepared in accordance with National Instrument 43-101 of the Canadian Securities Administrator (“NI 43-101 report”), Li3’s management believes the local brine contains high grades of lithium and potassium with reasonable magnesium levels and low sulphate content and the salar had a highly productive aquifer system within the extensive colluvial/alluvial sediments surrounding the salar.

Location of the Salar de Maricunga

Maricunga Project within the Salar

The Maricunga property is undeveloped and covers an area of approximately 1,888 hectares comprising six exploitation mining concessions granted by the Chilean government, each held by one of the Maricunga Companies, and is located in the northeast section of the Salar de Maricunga in Region III of Atacama in northern Chile. Each mining concession grants the owner the right to explore and develop commercially, mineral deposits at the Maricunga property, except for lithium, and hydrocarbons (liquid or gas). These mining properties are not subject to royalties or other agreements. However, Li3 must pay annual licenses in March of each year, aggregating approximately $15,000 per year for exploration and exploitation concessions.

On May 20, 2011, Li3 and the Maricunga Sellers signed the Framework Contract of Mining Project Development and Buying and Selling of Shares of Sociedades Legales Mineras Litio 1 a 6 de la Sierra Hoyada de Maricunga, (the “Acquisition Agreement”) whereby Li3, through its Chilean subsidiary, Minera Li Energy SPA (“Minera Li”), acquired from the Maricunga Sellers a 60% interest in each of the Maricunga Companies. The purchase price was $6,370,000 in cash, including amounts paid to agents, and Li3’s 127,500,000 restricted shares of common stock (the “Maricunga Purchase Price Shares”), 50% of which was restricted from sale for nine months and the remainder of which is restricted from sale for 18 months as provided in the Acquisition Agreement (the “Lock-Up”). Li3 has registered all of the Maricunga Purchase Price Shares.

As part of the acquisition, Li3 agreed with the Maricunga Sellers: (a) to increase the number of directors constituting Li3’s board of directors to seven; (b) that the Maricunga Sellers will have the right to nominate three of Li3’s directors and that a fourth director (who shall hold the position of Chairman of the Board) will be jointly nominated by the Maricunga Sellers and by Li3’s management (such persons, or any successors thereto nominated by the Maricunga Sellers or by the Maricunga Sellers and management, as the case may be, the “Nominees”), and that the Board shall appoint such Nominees to fill vacancies created in the board of directors by the increase in the number of directors and by resignations, to serve until the next annual meeting of stockholders; (c) that the Nominees shall continue to be nominated as directors by Li3’s management at the next and subsequent annual meetings of its stockholders, and at any special meeting of the stockholders at which directors are to be elected (collectively, a “Meeting”), during the period of the Lock-Up (but the Nominees will be subject to reelection by the stockholders as provided in Li3’s by-laws); and (d) that if any Nominee is not elected by the stockholders pursuant to the by-laws, the Maricunga Sellers, or the Maricunga Sellers and management, as the case may be, will have the right to designate the same or another person as their Nominee at the next Meeting, provided it is within the Lock-Up period. Pursuant to these provisions, Li3’s board of directors was expanded and Messrs. De Aguirre, Campos and Fraser were appointed to the board as Nominees of the Maricunga Sellers. While the Lock-Up period has ended, the Nominees will remain as directors until the next shareholder meeting, at which point the Company will not be required to re-nominate them.

Li3 currently maintains 60% ownership of the Maricunga project, with minority stockholders owning the remaining 40%. The Chilean Mining Code (sometimes referred to as “CMC”) requires stockholders of legal mining companies (such as the Maricunga Companies) to contribute their pro rata portion of exploration and exploitation expenses that are established at a stockholders meeting (“Required Contributions”).

At stockholders meetings held on October 6, 2011, the Maricunga Companies established Required Contributions that were to be funded by the stockholders on or prior to January 4, 2012. The minority stockholders of each Maricunga Company defaulted on their obligations to fund such Required Contributions.

The Chilean Mining Code permits any legal mining company to initiate an executive trial, the final resolution of which would state that shares held by stockholders who fail to make any Required Contribution must be sold at a public auction. The Chilean Mining Code establishes that the minimum bid in such auction shall be the amount of the Required Contribution that the defaulting stockholders failed to contribute (the “Default Amount”). The proceeds of such auction shall go first to the relevant legal mining company in the amount of the Default Amount, and any proceeds in excess thereof shall be paid to the defaulting stockholders. If the minimum bid is not achieved in the auction, then the defaulting stockholders’ shares in the legal mining company will be cancelled and each non-defaulting shareholder’s funding obligations will increase proportionally. The defaulting stockholders may cancel this procedure by paying the Default Amount plus expenses at any time before the sale in the public auction.

As the majority shareholder, each of the Maricunga Companies has filed lawsuits distributed to four civil courts of Copiapo, third Region of Atacama, Chile, against each of the minority stockholders seeking either payment of their pro rata portion of costs or an auction of their share of the properties. The minority stockholders have not paid their contributions to the costs of conservation and exploration, which were agreed upon at the stockholders’ meeting on October 6, 2011. Mainly because they are subject to the jurisdiction of four different courts, not all said law suits are in the same procedural stage. Except for one of those law suits, in which no defense was filed, in all the other of those law suits the minority stockholders filed substantially the same defenses. The resolution of those defenses is still pending in 29 of those law suits, while in six of them the court already rejected them. As of today, no court has accepted any defense. The sale in public auction of the shares of each minority shareholder in each Maricunga Company shall take place once and if the defenses filed in the corresponding law suit are finally rejected.

As indicated above, the shares of the minority stockholders of the Maricunga Companies will be cancelled in the scenario where the minimum bid is not achieved in the public auctions of all the law suits. If this scenario occurred, Minera Li would become the exclusive shareholder of each of the Maricunga Companies thereby absorbing them as a matter of law. Note however that (i) the shares of the minority stockholders are subject to pledges, injunction orders and judicial liens created in favor of third parties before the initiation of the above referred law suits; and (ii) there is no legal norm regulating how (i) would impact the absorption outcome.

Finally, in order to prevent the Maricunga Companies from collecting the pro rata share of the minority stockholders in the Required Contributions, groups of minority stockholders filed law suits (12) to obtain the annulment of the six stockholders meetings whereby the Required Contributions were decided. These actions are subject to the Chilean regular civil procedure and all of them are still in the first stage of such procedure (discussion stage).

Under Article 189 of the CMC, the transfer of the mining concession(s) which caused the legal mining company to exist requires the vote of 2/3 of the legal mining company’s shares. The legal mining company requires the same majority for entering into a promise (or equivalent) to totally or partially sell such concession(s). Accordingly and as of today, Minera Li’s rights in the Maricunga Companies are not sufficient to have the Maricunga Companies transfer the Litio 1-6 Concessions or promise to sell them.

The mining industry in Chile is regulated by the Political Constitution of Chile (“Constitution”), the Constitutional Organic Mining Law (“COM”) and the Chilean Mining Code along with other general and special regulations. Specifically, the Constitution provides that the national government is the owner of all mines, although it also states that any individual or company may apply for an Exploration Concession or Exploitation Concession to explore or mine mineral deposits, respectively; the COM regulates all concessions and claims; and the MC elaborates on the provisions of the Constitution and the COM. The civil courts receive applications for concessions, grant concessions, terminate and resolve issues arising with respect to concessions. The National Geology and Mining Service (“NGMS”) within the Chilean Ministry of Mining is responsible for approving the technical requirements related to the form, boundary and location of concessions. The NGMS also maintains a public record of concessions and supervises technical compliance with mining regulations. There is no binding legal code for reporting on mineral resources and reserves The right to explore or exploit a designated area, and apply for concessions is on a first come first served basis, subject to an Exploration concession holder's exclusive right to file for an exploitation concession in respect of their concession area. Concessions can be freely assigned or transferred, mortgaged, and in general subject to any legal contracts. The ownership rights of a concession can be enforced against the government of Chile or any other party.

The ownership rights of a concession holder differ from the ownership rights of a surface title holder in that a concession holder has the right to:

upon providing the agreed indemnity payment to the surface land holder, occupy as much of the surface land as is necessary for the exploration or exploitation works;

impose an easement on an unwilling surface land holder through a simple and summary procedure before the relevant civil court. Certain restrictions will apply where surface land is covered by dwellings and/ or is land where vineyards and fruit trees are planted. The respective surface land holder is entitled to compensation equivalent to the damage effectively suffered as a consequence of the easement, fixed by mutual agreement or judicial resolution, as requested.

The significant differences between an Exploration Concession and an Exploitation Concession are summarized below:

An exploration concession:

is granted by the competent Chilean Civil Court for an initial period of two years with a right to apply for a further two year period prior upon expiry of the initial concession. Where an extension is granted, the concession holder must relinquish half of the original designated area;

requires annual payment;

entitles the owner to explore for minerals in that concession area and to exclude anybody else from doing so;

provides a right to file for an exploitation concession in respect of all or part of a concession area;

must be greater than 100 hectares and less than or equal to 15,000 hectares in area;

does not require an environmental authorization for exploration works unless the exploration involves mining prospecting;

does not require work to be undertaken on the concession area in order to maintain interest in that concession; and

does not authorize its owner to exploit the minerals in that concession.

An exploitation concession:

is of unlimited duration;

requires annual payment;

involves a more onerous process for filing and higher costs for filing and compliance;

does not require work to be undertaken on the concession in order to maintain interest in that concession;

must be greater than 1 hectare and less than or equal to 5,000 hectares in area;

does not require an environmental authorization for exploration works unless the exploration involves mining prospecting;

grants mining rights which prevail over third party claims; and

entitles the owner to exploit the minerals in that concession area and to exclude anybody else from doing so.

Li3’s Lithium exploitation mining concessions have the following grant numbers:

Litio 1- 1/29 is registered in folio 478 overleaf N° 158 year 2004 of the Property Registry kept by the Mine Registrar of Copiapo.

Litio 2- 1/29 is registered in folio 485 overleaf N° 159 year 2004 of the Property Registry kept by the Mine Registrar of Copiapo.

Litio 3- 1/58 is registered in folio 491 overleaf N° 160 year 2004 of the Property Registry kept by the Mine Registrar of Copiapo.

Litio 4- 1/60 is registered in folio 498 N° 161 year 2004 of the Property Registry kept by the Mine Registrar of Copiapo.

Litio 5- 1/60 is registered in folio 504 N° 162 year 2004 of the Property Registry kept by the Mine Registrar of Copiapo.

Litio 6- 1/60 is registered in folio 511 N° 163 year 2004 of the Property Registry kept by the Mine Registrar of Copiapo.

The area of each of such concessions is:

Litio 1- 1/29 - 130 hectares.

Litio 2- 1/29 - 143 hectares.

Litio 3- 1/58 - 286 hectares.

Litio 4- 1/60 - 297 hectares.

Litio 5- 1/60 - 300 hectares.

Litio 6- 1/60 - 282 hectares.

Acquisition of “Grandfathered” Lithium Properties

Upon expiry of an option granted by the Sellers in favor of a third party, on April 16, 2013, Minera Li (a 100% wholly-owned subsidiary of Li3) entered into a purchase agreement (the “Purchase Agreement”) with Jose Resk Nara and Carlos Alfonso Iribarren (the “Sellers”) whereby it purchased all of the outstanding shares of SLM Cocina Diecinueve de la Hoyada de Maricunga, a Chilean legal mining company (the “Cocina Company”). Cocina Company is the sole owner of a group of mining concessions named “Cocina 19 through 27” (the “Cocina Mining Concessions”).

Pursuant to the Purchase Agreement, Minera Li agreed to pay the Sellers $7.3 million, of which $2.0 million was paid on the Closing Date, $2.0 million is to be paid 90 days following the Closing Date, $1.8 million is to be paid 180 days after the Closing Date and $100,000 is to be paid annually on the anniversary of the Closing Date for fifteen years beginning in 2014. After the initial $2.0 million payment, Minera Li´s cash balance was approximately $100,000.

The transfer of the shares sold therein is currently in process and once it is completed, Minera Li will absorb, as a matter of law, the Cocina Company. As a consequence thereof, Minera Li will become the sole owner of the Cocina Mining Concessions.

The Cocina Mining Concessions were mortgaged in favor of a third party as a security of the Sellers’ obligations under the option agreement with the third party. The lifting of such mortgages is currently in process.

The Cocina Mining Concessions are located within the northern section of Salar de Maricunga in Region III of Atacama in northern Chile. They are comprised of 450 hectares, increasing Li3’s land holdings within Maricunga to 1,888 hectares. The Cocina Mining Concessions adjoin the company´s existing Litio 1-6 Mining Concessions and were constituted prior to the 1979 Lithium Exploitation Restrictions, meaning that, from a mining law point of view, their holder is authorized (having a constitutionally protected ownership right) to exploit lithium in the area covered by those concessions. It is, however, subject to obtain the NEC authorization as explained above. Also, the exploitation of the Cocina Mining Concessions is not subject to obtaining a CEOL for the exploitation of lithium in the area covered by those concessions; however, and as any mineral exploitation in Chile, it requires, as a condition precedent, all other permits which according to Chilean law are necessary to exploit minerals.

2011 Maricunga Project Exploration and Drilling Campaign

Li3 plans to utilize co-by-product credits in the commercialization of its Maricunga Project. The Maricunga project is being explored as a source of lithium carbonate and potassium chloride, with co-product boric acid. Lithium carbonate would be sold in the open market as battery grade material. Potassium chloride production is planned to be used in the production of potassium nitrate from a potential sodium nitrate/iodine project. If Li3 is successful in acquiring it, or another sodium nitrate/iodine project, a portion of the by-product sodium sulphate production from any iodine operation that Li3 may have, could be returned to Maricunga to adjust the sulphate balance for calcium removal in the lithium brine.

In December 2011, Li3 completed on schedule, the $8 million Phase One of the $18 million Exploration and Development Program established in August 2011. Li3 reported the initial results from brine samples taken during the sonic and reverse circulation well drilling program initiated in October 2011. The drilling contractors used by Li3 in Maricunga are leading Sonic Drilling Contractors and leading Reverse Circulation Well Drilling Contractors. Li3 carried out sonic drilling for the collection of undisturbed samples from continuous core for porosity determinations and brine samples for laboratory chemical analyses. Six sonic boreholes for a total of 900 meters were drilled and completed to a depth of 150 meters each. Li3 carried out reverse circulation well drilling with isolated brine sampling. A total of 884 meters of 6-inch monitoring wells were drilled and a total of 300 meters of 17 inch production wells were drilled.

From the Phase One Program, a total of 431 samples were taken during the drilling and were submitted to the University of Antofagasta in Antofagasta, Chile for analysis. The preliminary laboratory analysis of the 431 Maricunga brine samples, demonstrated the following values and characteristics:

MARICUNGA											Ratio		Ratio		Ratio
(mg/l)	K		Li		Mg		Ca		SO4		K/Li		Mg/Li		SO4/Li
Average		8,988		1,240		8,284		12,417		718		7.2		6.7		0.6
Maximum		14,669		2,050		15,100		31,600		2,960		7.2		7.4		1.4

Other Properties

Li3 acquired other interest in certain Peruvian and Argentina properties during 2010. Li3 has determined that these properties were not economically feasible, and as a result, Li3 has impaired any investment in these properties and will not be pursuing them any further. Li3 has recorded an impairment of $300,000 in fiscal 2012 and $50,000 in fiscal 2011 relating to these properties.

Strategic Partners

POSCO / POSCAN

On August 24, 2011, Li3 entered into a Securities Purchase Agreement (the “SPA”) and an Investor Rights Agreement (the “IRA” and, together with the SPA, the “POSCAN Agreements”) with POSCO Canada Ltd. (“POSCAN”), a wholly owned subsidiary of POSCO. Pursuant to the POSCAN Agreements, on September 14, 2011, POSCAN purchased 38,095,300 Units of Li3’s securities for approximately $8 million, with each “Unit” consisting of one share of common stock and a three-year warrant to purchase one share of common stock at an exercise price of $0.40 per share.

The SPA further provided that POSCAN would purchase an additional 47,619,000 Units at the same $0.21 price per Unit (for an aggregate additional purchase price of approximately $10 million) upon satisfaction of certain conditions, including: (i) completion of a resource report prepared in accordance with National Instrument 43-101 of the Canadian Securities Administrators, that concludes that the Maricunga property meets certain technical requirements and that proceeding to the feasibility study phase for the Maricunga project is warranted; (ii) completion of a work program agreed to by Li3 and POSCAN; and (iii) having the necessary permits and approvals in place for building and operating a brine test facility on the Maricunga property. In addition to being the relevant milestone under the agreement with POSCAN, Li3 believe that the Canadian standards for Resource Reports are generally perceived as the industry standard, having marketability worldwide. The SPA provides that Li3 is to use the proceeds from such investments exclusively for activities related to the development of the Maricunga project, pursuant to budgets mutually agreeable to Li3 and POSCAN. However, Li3 and POSCAN ultimately modified the terms of POSCAN’s second tranche investment as described below.

The SPA includes provisions for POSCAN to purchase brine from the Maricunga property and test it at POSCAN’s test facility in Korea. In addition, the SPA provides that Li3 and POSCAN will discuss and evaluate the development, financing and construction of a brine testing facility on the Maricunga property, and that if such facility is built, Li3 would (i) supply the test facility with brine and other materials and utilities and (ii) assist POSCAN in obtaining any rights, licenses and permits required to build and operate such facility.

The securities purchased by POSCAN will be locked up and may not be sold (subject to customary exceptions) until the earlier of nine months from their issuance and November 20, 2012. Pursuant to the IRA, Li3 has granted POSCAN the right to demand registration of the common stock included in the Units, and issuable upon exercise of the Warrants included in the Units, commencing 12 months after the date of issuance of the Units and ending five years after the date of the IRA. As of the date of this proxy statement/prospectus, POSCAN has not required a registration of such shares. The obligation to register any such shares shall terminate once they may be sold without registration in any 30 day period pursuant to Rule 144 under the Securities Act. Upon a registration demand made by POSCAN pursuant to the IRA, Li3 must file a registration statement covering the relevant shares within 75 calendar days of such demand, and use best efforts to have it declared effective within 120 calendar days of filing. If Li3 do not meet these deadlines, Li3 must pay liquidated damages of 2% of the purchase price of the relevant securities per month until such failures are cured (up to an aggregate maximum of 10%). POSCAN will also have “piggy-back” registration rights with respect to such shares.

The IRA provides that Li3 will appoint a director nominated by POSCAN to Li3’s board of directors, and will continue to nominate a POSCAN-designee at each annual meeting for as long as POSCAN owns not less than 10% of the issued and outstanding shares of common stock. So long as POSCAN holds any shares of common stock (subject to customary exceptions), Li3 shall not issue any new securities to any person unless Li3 has also offered to POSCAN the right to purchase its pro rata share of such securities on the same terms and conditions as are offered, as to maintain its then percentage interest in Li3 outstanding capital. The IRA also provides that, until the earlier of (i) POSCAN owning less than 10% of the issued and outstanding common stock and (ii) Li3’s aggregate market capitalization exceeding $250 million, Li3 may not undertake certain actions without the approval of POSCAN (which approval may be evidenced by the affirmative vote or consent of POSCAN’s director nominee), including: a liquidation, merger or reorganization; a sale of all or substantially all of Li3’s assets; incurring indebtedness in excess of $1,000,000 (subject to certain exceptions); create or take any action that results in Li3 holding the capital stock of any subsidiary that is not wholly owned (with certain exceptions); transfer or license Li3’s proprietary technology to a third party; substantially change the scope of its business; or amend or waive any non-competition or non-solicitation provision applicable to Li3’s Chief Executive Officer or Chief Operating Officer.

Subsequent to the execution of the Agreement and Plan of Merger, Blue Wolf and Li3 intend to enter into an investor rights agreement with POSCO, pursuant to which POSCO will be entitled to certain rights as a shareholder of combined company, including without limitation, preemptive rights, consent rights, information rights and the right to nominate one director to the board of directors.

POSCO (with its subsidiaries) is a diversified company, with operations in energy, chemicals and materials and is one of the largest steel manufacturers in the world. There can be no assurance that any final agreement will be reached with POSCAN with respect to a pilot plant, a commercial plant, any further investment by POSCAN, any purchase by POSCAN of Li3’s production, or otherwise.

On February 23, 2012, POSCO announced that it has developed technology that may improve lithium recovery from brine and shorten processing times compared to the conventional processes currently being use in the lithium market. On March 7, 2012, Li3 and POSCO executed a Non-Binding Memorandum of Understanding to construct a test facility for the recovery of lithium and other products at POSCO’s expense, with technical support from Li3 as necessary. The parties expect that products from the test facility will not be commercialized and will be for testing purposes only. Upon successful completion of the test facility, evaluating the merits and validation of the technology, the parties may discuss commercialization of the products in detail, including off-take agreements between the parties.

On August 17, 2012, Li3 entered into an Additional Agreement to Stock Purchase Agreement (the “Additional Agreement”) with POSCAN which, among other things, modified certain provisions of the SPA. Also on August 17, 2012, Li3 closed on POSCAN’s second tranche of investment under the SPA, selling 62,499,938 Units to POSCAN for $9,999,990, with each “Unit” consisting of one share of common stock and a three-year warrant to purchase one share of common stock for $0.21 per share.

The Additional Agreement reduced POSCAN’s purchase price per Unit for the second tranche of investment from $0.21 per share to $0.16 per share, and reduced the exercise price of all of the warrants sold under the SPA (the “POSCAN Unit Warrants”) from $0.40 per share to $0.21 per share. Pursuant to the Additional Agreement, Li3 also agreed to issue to POSCAN a two-year warrant (the “POSCAN Bonus Warrant”) to purchase 5,000,000 shares of common stock at an exercise price of $0.15 per share. Furthermore, the Additional Agreement provides that, subject to certain exceptions, Li3 must issue additional shares of common stock to POSCAN in the event that Li3 issues or sells any such shares to third parties for a price of less than $0.16 per share at any time during the 18 months immediately following August 17, 2012.

The Additional Agreement provides restrictions on Li3’s use of the proceeds from the Second Closing, and includes Li3’s agreement to use its best efforts to obtain a Chilean lithium production concession and to take certain steps towards commercialization of the flagship Maricunga property. Other than having the right to participate in future fundings, POSCAN has no current commitments to provide Li3 with any additional funding in the future.

Lithium Exploitation Permitting in Chile

The mining industry is heavily regulated and changes in international laws and regulations can be significant. Both mineral exploration and extraction require permits from various foreign, federal, state, provincial and local governmental authorities and are governed by laws and regulations, including those with respect to prospecting, mine development, mineral production, transport, export, taxation, labor standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters.

In Chile, lithium is not exploitable via regular mining concessions. The Chilean Mining Code establishes the reserve of lithium to the State of Chile and expressly provides that the exploration or exploitation of “non-concessible” substances (including lithium) can be performed only directly by the State of Chile, or its companies, or by means of administrative concessions or special operation contracts, fulfilling the requirements and conditions set forth by the President of the Republic of Chile for each case. Currently neither Li3 nor its subsidiaries have sufficient authority (or permits) to exploit lithium in Chile.

The government of Chile introduced a process to increase the exploitation of lithium in Chile. In February 2012, the Chilean Government outlined plans to improve its worldwide competiveness. The Boost Competitive Agenda (a package of reforms intended to remove regulatory red tape, to encourage entrepreneurship, innovation, competition and boost productivity of the economy), is coordinated by the Office of Competiveness of the Ministry of Economy and was initiated in August 2011. In February 2012, the Office of Competitiveness introduced ten new measures to extend the government’s commitment to ensure that development continues to reach Chile, including “Re-launching the Chilean Lithium Industry”, which Chile’s Minister of Economy stated seeks to lift restrictions and implement mechanisms to improve competitiveness within the industry, promote further investment and protect the country’s market share and standing in the world lithium market. In light of the events described in the following paragraphs, it remains to be seen whether the Chilean government is still interested in re-launching the Chilean lithium industry in the manner indicated above.

The Chilean Government’s Ministry of Mining established its first ever auction for the award of lithium, production quotas and licenses (Special Lithium Operations Contracts, or “CEOL”) which would permit the exploitation of an aggregate of 100,000 tons of lithium metal (approximately 530,000 tons of lithium carbonate equivalent) over a 20 year period, subject to a seven percent royalty. In September 2012, Li3 formed a consortium consisting of Li3, POSCO, Daewoo International Corp, and Mitsui & Co. (the “Consortium”) for the purpose of participating in such CEOL auction. As required under the rules established by the Ministry of Mining, on September 14 2012, the Consortium submitted its bid for the CEOLs.

On September 24, 2012, the Ministry of Mining opened the bids and informed Li3 that the Consortium’s bid was not the winning bid. The Consortium made the second highest offer.

On September 25, 2012, the Ministry of Mining issued a resolution awarding the CEOL public offer to the highest bidder.

On October 1, 2012, the Ministry of Mining resolved (i) to invalidate the September 25, 2012 resolution since the winner had not complied with the rules of the CEOL public offer; and (ii) not to award the CEOL public offer to any of the other bidders.

On October 17, 2012, the Chilean Government ratified its decision to invalidate the CEOL process and not to accept any of the bids.

On October 22, 2012, Li3 submitted another “Request for Reconsideration” to the Chilean Government. The Chilean Government had 30 days to answer Li3´s request.

On January 16, 2013, Li3 submitted a letter to the Chilean Comptroller requesting to review the CEOL process. This is deemed to be the last administrative recourse before pursuing judicial remedies. Li3 is awaiting a response from the Chilean Controller to its letter. A negative response would imply that Li3 is not authorized to exploit lithium from the area covered by the Litio 1-6 Mining Concessions. Accordingly, there can be no assurance that Li3 will be able to obtain the permits necessary to exploit any minerals that its exploration activities discover in a timely manner or at all. Any such delay or failure would have a material adverse effect on the development horizon for Maricunga and its prospects.

On April 16, 2013, Minera Li (a 100% wholly-owned subsidiary of Li3) acquired a group of mining concessions named “Cocina 19 through 27” (the “Cocina Mining Concessions”). Cocina Mining Concessions are not subject to obtaining a CEOL for the exploitation of lithium in the area covered by those concessions; however, and as any mineral exploitation in Chile, it requires, as a condition precedent, all other permits which according to Chilean law are necessary to exploit minerals.

Other Permits

Li3’s operations are subject to numerous Chilean and international laws and regulations governing the operation and maintenance of its facilities and the discharge of materials into the environment or otherwise relating to environmental protection. These laws and regulations may:

Require that Li3 acquire permits before commencing extraction operations;

Restrict the substances that can be released into the environment in connection with mining and extraction activities;

Limit or prohibit mining activities on protected areas such as wetland or wilderness areas; and

Require remedial measures to mitigate pollution from former operations, such as dismantling abandoned production facilities.

Companies must meet, maintain and abide by strict environmental regulations in accordance with Chilean and international laws and regulations. Li3 will also have to abide and comply with national labor laws that protect and govern its employees. Additionally, Li3 believes that between its management team, the consultants and experts Li3 has hired, it will be able to satisfy any and all regulatory and compliance requirements.

Brine Exploration Phases

The life cycle of a brine mining operation can be divided into five phases:

Mining activity begins with the “exploration phase,” in which one seeks to define the type, extent, location and value of deposits and to estimate the grade and size of the deposits;

The “feasibility phase” then ensues to address the financial viability of the project (including any permitting requirements) and to determine whether or not to proceed to development - the end of the feasibility stage is marked by the conclusion of a feasibility study;

If the decision is made to move forward after the feasibility stage, then the “development phase” follows, in which the infrastructure needed to begin operations is constructed;

Upon completion of such infrastructure, a project enters the “production phase,” during which the applicable minerals are extracted, produced and sold; and

Once all economically extractable minerals have been produced, a mine is closed and it enters the “reclamation phase,” in which the area is made suitable for future uses.

Li3 is currently in the exploration phase, seeking to define the type, extent, location and value of deposits.

Competition

Li3 is currently categorized as a junior mineral resource exploration company that competes with other mineral resource exploration companies for financing, personnel and equipment and for the acquisition of mineral properties. Although Li3 commissioned report which was prepared in accordance with National Instrument 43-101 of the Canadian Securities Administrators completed by Hains Technology and Associates deemed Maricunga suitable to advance to the Feasibility Study stage and a Chilean based independent research firm signumBOX listed Maricunga as one of the top lithium salars in the world, many of the mineral resource exploration companies with whom Li3 competes have greater financial and technical resources than those available to Li3. Accordingly, these competitors may be able to spend greater amounts on acquisitions of mineral properties of merit, on exploration of their mineral properties and on development of their mineral properties and on exploration and development. This competition could result in competitors having mineral properties of greater quality and interest to prospective investors who may finance additional exploration and/or development. This competition could adversely impact on Li3’s ability to finance further exploration and to achieve the financing necessary for it to develop its mineral properties.

Compliance with Government Regulation

Li3 is committed to complying with and is, to its knowledge, in compliance with, all governmental and environmental regulations applicable to Li3 and its properties. Permits from a variety of regulatory authorities are required for many aspects of mine operation and reclamation. Li3 cannot predict the extent to which these requirements will affect it or its properties if Li3 identifies the existence of minerals in commercially exploitable quantities. In addition, future legislation and regulation could cause additional expense, capital expenditure, restrictions and delays in the exploration of its properties.

Employees

Li3 has eight full-time employees and/or contract employees, including its Chief Executive Officer, Chief Financial Officer, and Executive Vice President. In addition, Li3 engages several advisors and consultants.

Li3 engages contractors from time to time to consult with it on specific corporate affairs or to perform specific tasks in connection with its exploration programs.

Subsidiaries

Li3 currently has six wholly owned subsidiaries:

Li3 Energy Peru SRL, a private limited company organized under the laws of Peru;

Minera Li Energy SPA, a wholly owned subsidiary in Chile;

Alfredo Holdings, Ltd., an exempted limited company incorporated under the laws of the Cayman Islands;

Pacific Road Mining Chile, S.A. a Chilean corporation, which is a subsidiary of Alfredo;

Noto Energy S.A., an Argentinean corporation; and

Li3 Energy Caymans, Inc., an exempted limited company incorporated under the laws of the Cayman Islands.

Li3 also owns 60% of each of Sociedades Legales Mineras Litio 1 a 6 de la Sierra Hoyada de Maricunga, a group of six Chilean mining companies, which are wholly owned by Minera Li Energy SPA.

Intellectual Property

Li3 does not own, either legally or beneficially, any patent or trademark nor any material intellectual license, and is not dependent on any such rights. Li3 has trademarked Li3 Energy, its logo and registered the domain name www.li3energy.com. Li3 considers many of its lithium mining site evaluation, exploration and development techniques to be proprietary, and periodically evaluates whether to seek protection for any such techniques.

Lithium and Lithium Mining

Lithium is the lightest metal in the periodic table of elements. It is a soft, silver white metal and belongs to the alkali group of elements, which includes sodium, potassium, rubidium, cesium and francium. The chemical symbol for lithium is “Li,” and its atomic number is 3.

Like the other alkali metals, lithium has a single valence electron that is easily given up to form a cation (positively charged ion). Because of this, it is a good conductor of both heat and electricity and highly reactive, though it is the least reactive of the alkali metals. Lithium possesses a low coefficient of thermal expansion (which describes how the size of an object changes with a change in temperature) and the highest specific heat capacity (a measure of the heat, or thermal energy, required to increase the temperature of a given quantity of a substance by one unit of temperature) of any solid element.

No other metal is as lightweight, better at holding a charge or as good at dissipating heat as lithium. These properties make lithium an excellent material for manufacturing batteries (lithium-ion batteries). According to the U.S. Geological Survey’s (“USGS”) “Mineral Commodity Summaries 2011,” batteries accounted for 23% of lithium end-usage globally, and Li3 expects demand for lithium from the battery segment to grow along with demand for such batteries. Although lithium markets vary by location, global end-usage was estimated by the USGS as follows: ceramics and glass, 31%; batteries, 23%; lubricating greases, 10%; air treatment, 5%; continuous casting, 4%; primary aluminum production, 3%; and other uses, 24%. Lithium use in batteries expanded significantly in recent years, because rechargeable lithium batteries are being used increasingly in portable electronic devices and electrical tools.

As mentioned earlier, lithium belongs to the alkali group of metals. This group of metals is typically extracted from solutions called brines, which are associated with evaporite deposits. Lithium is also contained in the mineral spodumene, which occurs in a rock called pegmatite. To a lesser extent lithium occurs as a component of certain clay minerals.

Historically, and especially during the period leading up to and during World War II, lithium was designated a strategic metal, heavily used in the aircraft industry because it is light and strong. During this period the mineral spodumene (a lithium aluminum silicate) was mined by open pit hard rock mining methods and processed to recover the lithium. During the post-war period, lithium production from the higher cost hard rock mines was replaced by the lower cost extraction of lithium from the mineral rich brines associated with evaporite deposits. Evaporite deposits occur in environments characterized by arid conditions with extremely high evaporation rates. This environment typically occurs at high altitudes, greater than 12,000 feet above sea level, so evaporite deposits occur in only a very few locations in the world, including China (the province of Qinghai and the Autonomous Region of Tibet); the Puna Plateau, a high altitude plateau covering part of Argentina, Chile, Bolivia and the southern portion of Peru; and in a small region in Nevada, which is the core of what is called the Great Basin of the western United States. Over 70% of the world’s lithium is produced from the brines associated with the evaporite deposits on the Puna Plateau of South America.

Brine extraction (mining) and the recovery of lithium and other economic compounds is analogous to pumping water from an aquifer, but instead of fresh water, the water contains a variety of mineral salts in solution, including lithium, potassium (K), magnesium (Mg) and sodium (Na). This form of “mining” is much more efficient, cost effective and environmentally friendly than open pit mining. Lithium production from spodumene can typically cost in the range of $4,300 to $4,800 per metric ton of lithium carbonate and is a process that is highly sensitive to energy costs. On the other hand, lithium production from brines can be accomplished at costs in the range of $2,200 to $2,600 per metric ton of lithium carbonate. However, the processing cost can vary by a wide range, depending largely on:

lithium concentration in the particular brine;

evaporation rates at the site, which determine how quickly the brine can be concentrated; and

the balance of other minerals in the brine, which affects the degree of processing needed to remove impurities.

Lithium use in Batteries

Lithium demand is being driven by its increasing use in the batteries of portable consumer electronics, including mobile phones and laptop computers, and in a range of industrial applications including ceramics and lubricants. The most dramatic increase in demand is being spurred by auto makers racing to bring lithium-ion battery powered and hybrid electric cars to market, as major automobile manufacturers are forming partnerships with established battery manufacturers to build battery plants for their mass production. In addition, lithium-ion batteries used in transportation is expected to increase to approximately $8 billion by 2015 from $876 million in 2010, largely fueled by government subsidies and incentives.

A lithium-ion battery (Li-ion battery) is a type of rechargeable battery in which lithium ions move from the anode (negative terminal) to the cathode (positive terminal) during discharge, and from the cathode to the anode when charging. Lithium-ion batteries are one of the most popular types of battery, because they have one of the best energy-to-weight ratios, no memory effect (the effect in which certain other rechargeable batteries lose their maximum energy capacity if they are repeatedly recharged after being only partially discharged) and a slow loss of charge when not in use.

Rechargeable battery materials used in electric vehicles include lead-acid (traditional “wet” and gel or “valve regulated”), nickel-cadmium, nickel-metal-hydride, lithium-ion, lithium-ion polymer, and, less commonly, zinc-air and molten salt. Ideally, a battery for an electric car needs to be light, small, energy dense, quick to recharge, relatively inexpensive, long lasting, and safe. Today’s electric and hybrid vehicles are primarily powered by nickel-metal-hydride (NiMH) batteries. NiMH batteries are safe, abuse-tolerant and offer much longer life cycles than older lead-acid batteries, while providing reasonable energy density. However, NiMH batteries are more expensive than lead-acid batteries, as a result of the high nickel content.

Li-ion batteries have a higher energy density than most other types of rechargeable batteries. A Li-ion battery can achieve power density of 100-170 watt hours (Wh) per kilogram (kg) of weight, versus NiMH’s 30-80 Wh/kg. This means that for their size or weight they can store more energy than other rechargeable batteries. Li-ion batteries also operate at higher voltages than other rechargeable batteries, typically about 3.7 volts for Li-ion vs. 1.2 volts for NiMH or NiCd. This means a single cell can often be used rather than multiple NiMH or NiCd cells.

Finally, Li-ion batteries have a lower self-discharge rate than other types of rechargeable batteries. This means that once they are charged they will retain their charge for a longer time than other types of rechargeable batteries. NiMH and NiCd batteries can lose anywhere from 1-5% of their charge per day (depending on the storage temperature) even if they are not installed in a device. Li-ion batteries, on the other hand, can retain most of their charge even after months of storage.

Ideal Brine Conditions

The most important metrics when evaluating lithium brine resources are:

lithium content;

evaporation rate;

magnesium to lithium ratio;

potassium content; and

sulphate to lithium ratio.

The boron content is also important, as it allows for the production of another saleable product, boric acid.

The lithium concentration in the brines is typically measured in parts per million (ppm) or weight percentages. The higher the lithium concentration, the better. However, high local evaporation rates can compensate for lower lithium concentrations.

Providing that lithium contents are high enough, the magnesium to lithium (Mg:Li) ratio is another important chemical feature in assessing favorable brine chemistry and the ultimate economic viability of a site at an early stage. The lower the ratio the better, as a high ratio means that, during the evaporation process, an increasing amount of lithium will be trapped (“entrained”) in the magnesium salts when they crystallize early. This will ultimately lead to a lower lithium recovery rate and thus less profitability. High Mg:Li ratios also generally mean that more soda ash (Na 2 CO 3) reagent is required during the processing of the brine (as described below) and, therefore, may add significantly to costs.

The potassium (K) concentration in the brines is typically measured as a weight percentage.

The lower the sulphate (SO4) to lithium ratio in the final lithium brine pond, the more the brine will be amenable to lithium extraction via the conventional solar evaporation process. This is because lithium sulphate (Li 2 SO 4) is highly soluble and so, to the extent that it is able to form, the lithium recovery will suffer.

Key Stages of Lithium Recovery

Currently the most economical way to recover lithium from a salar (a dry lake or salt flat) is by solar evaporation. However, the process is subject to natural conditions, and the evaporation rate, relative humidity, wind velocity, temperature and brine composition have a tremendous influence on the solar pond requirements and in turn on pumping and settling rates to meet production quotas.

Each lithium recovery process has a unique design based on the concentrations of Li, Na, K, Mg, calcium (Ca) and SO4 in the brine, and, although there may be some similarities, each salar has its own customized methodology for optimum recovery due to the varying ionic concentrations. Wells are drilled, and the mineral rich brine is pumped to the surface into a series of large shallow ponds of increasing concentration. As water evaporates, the concentration of minerals in solution increases. Typically the brine evaporates over an 18-24 month period until it has a sufficient concentration of lithium salts. At that point, the concentrate is shipped by truck or pipelined to processing plants where it is converted to usable salt products. In the plant, sodium carbonate (soda ash) is added to precipitate lithium carbonate, which is dried and shipped to end users to be further processed into pure lithium metal. The by-products such as potassium chloride (potash), sodium borate (borax) and other salts may also be recovered and sold to end users.

The primary reagents used to produce lithium from brine are lime and soda ash. Both substances are natural materials, commonly used in many processes and have no detrimental environmental effect when used properly. Other than solar energy, only minor amounts of fuels are consumed in the production process (pumping the brines into the ponds, etc.).

Potentially economic salts produced from the salar brine are NaCl, carnallite, sylvinite and bischoffite, as well as the final end-point brine. The chemical pond to pond process from the brine feed from the salar to the end-point brine ready for the processing plant is as follows:

Calcium Chloride (CaCl2) is added at the beginning in the first pond in order to precipitate out most of the sulphate (SO 4) in the form of gypsum (CaSO 4). Removal of the sulphate is important, as it is detrimental in downstream processing. Furthermore, the gypsum itself has multiple uses from agriculture to construction.

In the next two ponds and after solar evaporation, sylvinite will begin to precipitate, which is a combination of table salt and potash (KCl). The sylvinite can be harvested and sent to a froth flotation circuit to produce potash.

Finally, the sequential ponding process moves to the lithium ponds until the end-point brine is sufficiently rich in lithium. The lithium is still largely in the final ponds, because it is extremely soluble (likes to stay dissolved in solution), although there will be some lithium entrained in Mg and K salts in previous ponds.

Global Market

Based on the most recent available information from the United States Geological Survey (“USGS”), market conditions improved for lithium-based products in 2012. Worldwide lithium production increased in 2012. Production volumes of two major lithium producers in Australia and Chile increased moderately through the third quarter of 2012. Argentina’s major lithium producer experienced weather-related complications during the year, which reduced production and delayed efforts to increase production capacity. Industry analysts and the major lithium producers expected worldwide consumption of lithium in 2012 to be between 25,900 and 28,200 tons, increasing by 7.5% to 10% from that of 2011. All of the major brine and mineral-based lithium producers increased their lithium prices in 2012. Many emerging companies continued exploring for lithium on claims worldwide. Numerous claims in Nevada, as well as in Argentina, Australia,, Bolivia, and Canada, have been leased or staked.

Subsurface brines have become the leading raw material for lithium carbonate production worldwide because of lower production costs compared with the mining and processing costs for hard-rock ores. Owing to growing spodumene demand from China in the last several years, however, mineral-sourced lithium has gained market share on brine-sourced lithium. Two brine operations in Chile dominate the world market, and a facility at a brine deposit in Argentina produced lithium carbonate and lithium chloride. One new brine operation in Argentina began limited commercial production in 2012, and several additional brine operations were under development. Brine operations in China produced lithium carbonate, lithium chloride, and lithium hydroxide. Lithium minerals were used directly as ore concentrates in ceramics and glass applications worldwide and, increasingly, as feedstock for lithium carbonate and other lithium compounds in China.

Owing to China’s growing demand for high-quality spodumene by its chemical companies, Australia’s leading lithium ore miner doubled its production capacity, raising its total lithium carbonate equivalent production capacity to 110,000 tons per year. A major lithium brine producer agreed to acquire the Australian lithium ore miner in 2012 to diversify its supply of lithium. An emerging Australian lithium ore producer continued lithium concentrate production in Western Australia and opened a lithium carbonate plant in China, where the lithium concentrate was to be converted to battery-grade lithium carbonate and supplied to the Aisian market. Utilizing a unique reverse-osmosis process, a California company began producing high-purity lithium carbonate from geothermal brines. The reverse osmosis process eliminates the need for solar evaporation, a crucial and lengthy procedure in common brine operations. Initial lithium carbonate production was 500 tons per year.

Batteries, especially rechargeable batteries, are the uses for lithium compounds with the largest growth potential. Demand for rechargeable lithium batteries exceeds that of rechargeable non lithium batteries for use in cellular telephones, cordless tools, MP3 players, and portable computers and tablets. Major automobile companies were developing lithium batteries for electric motor. Non rechargeable lithium batteries were used in calculators, cameras, computers, electronic games, watches and other devices.

Lithium supply security has become a top priority for Asian technology companies. Strategic alliances and joint ventures have been, and are continuing to be, established with lithium exploration companies worldwide to ensure a reliable, diversified supply of lithium for Asia’s battery suppliers and vehicle manufactures.

The increase in 2011 production was due primarily to the increase of the lithium-ion battery market, as global sales were $13.9 billion during 2011. These sales are projected to rise to $16.1 billion in 2012, $18.6 billion in 2013, $23.6 billion in 2015, and $34.3 billion in 2020. Other lithium end uses have increased, but not at the same rates as lithium-ion batteries. According to Roskill Information Services Ltd., lithium-ion batteries were the largest single end use for lithium in 2011 (22% of total end use) , but glass & ceramics were still important (21% of total use in 2011).

According to the USGS, Chile is the leading lithium producer in the world. Argentina, Australia, China, and the United States are also major producers. The 2012 edition of the USGS Mineral Commodity Summaries gives the following estimated world lithium mine production (in metric tons of lithium content):

	Mine production
	2012 (est.)			2011
Chile		13,000			12,900
Australia		13,000			12,500
China		6,000			4,144
Argentina		2,700			2,950
Portugal		820			820
Zimbabwe		500			470
Brazil		490			320
United States		Withheld			Withheld
World total (rounded)		37,000	¹		34,100	¹

1. Excludes U.S. production.

Substitution for lithium compounds is possible in batteries, ceramics, greases, and manufactured glass. Examples are calcium and aluminum soaps as substitutes for stearates in greases; calcium, magnesium, mercury, and zinc as anode material in primary batteries; and sodic and potassic fluxes in ceramics and glass manufacture. Lithium carbonate is not considered to be an essential ingredient in aluminum potlines. Substitutes for aluminum-lithium alloys in structural materials are composite materials consisting of boron, glass, or polymer fibers in engineering resins.

Nitrate Market and Production

Potassium nitrate is a chemical compound with the formula KNO3. It occurs as a mineral niter and is a natural solid source of nitrogen. Its common names include saltpeter and nitrate of potash. Major uses of potassium nitrate are in fertilizers, rocket propellants and fireworks. When used as a food additive in the European Union, the compound is referred to as E252.

Potassium nitrate can be produced through various chemical reactions, including:

NH4NO3 (ammonium nitrate) + KCl (potash) NH4Cl (ammonium chloride) + KNO3

NH4NO3 + KOH (potassium hydroxide) NH3 (ammonia) + KNO3 + H2O

NaNO3 (sodium nitrate) + KCl NaCl (table salt) + KNO3

Potassium nitrate is mainly used in fertilizers, as a source of nitrogen and potassium, two of the macro nutrients for plants. Potassium nitrate is also one of the three components of black powder (gunpowder), along with powdered charcoal (substantially carbon) and sulfur, where it acts as an oxidizer.

In the process of food preservation, potassium nitrate, more commonly known as saltpeter, has been a common ingredient of salted meat since the middle ages, but its use has been mostly discontinued due to inconsistent results compared to more modern nitrate and nitrite compounds. Even so, saltpeter is still used in some food applications, such as charcuterie and the brine used to make corned beef.

Potassium nitrate is an efficient oxidizer, which produces a lilac flame upon burning due to the presence of potassium. It is therefore used in amateur rocket propellants and in fireworks. It is also added to pre-rolled cigarettes to maintain an even burn of the tobacco.

Potassium nitrate is the main component (usually about 98%) of tree stump remover, as it accelerates the natural decomposition of the stump. It is also commonly used in the heat treatment of metals as a solvent in the post-wash. The oxidizing, water solubility and low cost make it an ideal short-term rust inhibitor.

Potassium nitrate can also be found in some toothpastes for sensitive teeth. Recently, the use of potassium nitrate in toothpastes for treating sensitive teeth (dentine hypersensitivity) has increased dramatically, even though studies to this effect have been inconclusive.

World population growth and its effects on the scarcity of water and increased competition on land use for living, industry, nature and agriculture, increase the need for agriculture efficiency. The amount of land in agriculture per capita will further decrease in the future as world population is expected to grow faster than the growth of arable land. Therefore, crop productivity has to increase in order to provide the same amount of food in relation to the growing world population. The growing importance of specialty plant nutrition products, such as potassium nitrate, has been driven by these factors as one of its main uses is for premium crops.

Properties

The information set forth above under “Business—Project Overviews” relating to Li3’s exploration properties (primarily Maricunga) is incorporated herein by reference.

Li3 previously leased approximately 800 square feet of office space in Lima, Peru, on which its lease payments were $48,262 for fiscal year 2012. Li3 no longer maintains a property in Peru. Li3 also leases approximately 1,500 square feet of office space in Santiago, Chile, with monthly rent of approximately $3,800. This lease commenced on July 1, 2011, and Li3 paid rent during fiscal year 2012 amounting to $36,762. This lease expires June 30, 2014. Li3 believes its leased facilities are adequate for its needs at present.

Legal Proceedings

From time to time, Li3 may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm business.

Except as described below, Li3 is currently not aware of any pending legal proceedings to which Li3 are a party or of which any of its property is the subject, nor is Li3 aware of any such proceedings that are contemplated by any governmental authority.

As the majority shareholder, Li3 has filed lawsuits distributed to four civil courts of Copiapo, third Region of Atacama, Chile, against the minority stockholders seeking either payment of their pro rata portion of costs or an auction of their share of the properties. The minority stockholders have not paid their contributions to the costs of conservation and exploration, which were agreed upon at the stockholders’ meeting on October 6, 2011. In November 2012, Li3 received a favorable decision from one of the civil courts to auction approximately 8% of the shares once the judgment is executed. Chilean law gives Li3 a preference in that auction. The other civil courts have not reached a final decision yet.

Certain minority stockholders have filed counterclaims against Li3 to declare, among other things, the invalidation of such stockholders’ meeting at which required contributions were established that such minority stockholders failed to make. Li3 filed dilatory defenses because Li3 was not served according to law and also filed a complaint against the officer serving the process. This process is on hold because the minority stockholders have not filed a new claim, as requested by the court. Li3’s future plans are not dependent on the outcome of this matter with respect to the development of the Maricunga project.

Management’s Discussion and Analysis of Financial Condition

and Results of Operations of Li3

You should read the following discussion in conjunction with the sections of this proxy statement/prospectus entitled “Risk Factors — Risks Related to the Business of Li3,” “Forward-Looking Statements,” “Business of Li3” and Li3’s financial statements and the related notes thereto included elsewhere in this proxy statement/ prospectus. This discussion contains forward-looking statements reflecting current expectations that involve risks and uncertainties. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed in the section entitled “Risk Factors” and elsewhere in this proxy statement/prospectus.

Li3 Energy, Inc (“Li3” or the “Company”) is a South America based and United States listed exploration company in the lithium and mining sector. We aim to acquire, develop and commercialize a significant portfolio of lithium brine deposits in the Americas.

The Company owns (a) a 60% interest in the Maricunga project, which consists of mining concessions covering an area of approximately 3,553 acres (1,438 hectares) prospective for lithium and potassium brines, and is located in the Salar de Maricunga in northern Chile; and (b) a mining concession on 2,995 acres (1,212 hectares) situated on brine salars in Argentina, known as Cauchari. We are currently evaluating additional exploration and production opportunities. In April 2013, the Company acquired a mining concession on 450 hectares which corresponds to a strategic lithium asset and is located adjacent to the existing Maricunga project.

Going Concern

As of March 31, 2013, the Company had no source of current revenue, a cash balance on hand of $2,349,834, negative working capital of $1,240,015 and cumulative negative cash flows from operations of $21,477,783 during the period from June 24, 2005 (inception) through March 31, 2013. The Company had negative cash flows from operations of $5,906,682 during the nine months ended March 31, 2013. On August 17, 2012, the Company received $9,499,990 in net funding from POSCO Canada Ltd. (“POSCAN”) a wholly owned subsidiary of POSCO (a South Korean company).

On April 16, 2013, the Company entered into a purchase agreement (the “Purchase Agreement”) with Jose Resk Nara and Carlos Alfonso Iribarren (the “Sellers”) to purchase all of the outstanding shares of SLM Cocina Diecinueve de la Hoyada de Maricunga, a Chilean based company (“SLM”), which will become a wholly owned subsidiary of the Company. SLM owns the group of mining concessions “Cocina 19 through 27”. Pursuant to the Purchase Agreement, the Company paid the Sellers $7.3 million, of which $2.0 million was paid on the Closing Date, $2.0 million to be paid 90 days following the Closing Date, $1.8 million to be paid 180 days after the Closing Date and $100,000 to be paid annually on the anniversary of the Closing Date for fifteen years beginning in 2014. After such payment, the Company´s cash balance was approximately $100,000.

The Company does not believe its cash on hand is sufficient to maintain its basic operations, which do not include future exploration and acquisition activities, for 12 months. The Company requires immediate cash flow for which it is seeking interim funding.

On March 18, 2013, the Company signed a Memorandum of Understanding with Blue Wolf Mongolia Holdings Corp (“BW”). If successful, the transaction could provide Li3 with additional funding allowing the Company to continue advancing the Maricunga project. Under the proposed terms of the merger, BW would establish a new subsidiary which would merge into the Company, with Li3 remaining as the surviving entity as a wholly-owned subsidiary of BW (the “Transaction”). Each shareholder of Li3 would receive 1 share of common stock in BW for every 250 shares of common stock held in Li3. The closing of the proposed transaction with BW is subject to a number of closing conditions, including further due diligence, final approval by the board of Directors of both companies, regulatory and court approvals, shareholder approvals and the execution of a definitive agreement.

In the course of our exploration activities, we have sustained and continue to sustain losses. We cannot predict if and when we may generate profits. In the event we identify commercial reserves of minerals, we will require substantial additional capital to develop those reserves and permits from the Chilean government to exploit the mineral reserves, neither of which is assured (See Operational Update below).

To take us into the operational stage and to begin generating revenues, we will require a substantial injection of funds to progress development of our properties. We expect to finance our future growth primarily through equity and debt financings. However, there exists substantial doubt about our ability to continue as a going concern because there is no assurance that we will be able to obtain such capital. Additionally, no assurance can be given that any such financing, if obtained, will be adequate to meet our ultimate capital needs and to support our growth. If adequate capital cannot be obtained on a timely basis and on satisfactory terms, then our operations would be materially negatively impacted.

Our ability to complete additional equity or debt offerings is dependent on the state of the debt and/or equity markets at the time of any proposed offering, and such market’s reception of us and the offering terms. In addition, our ability to complete an offering may be dependent on the status of our exploration activities, which cannot be predicted. There is no assurance that capital in any form would be available to us, and if available, on terms and conditions that are acceptable.

These conditions raise substantial doubt about our ability to continue as a going concern. Our continuation as a going concern is dependent on our ability to meet our obligations, to obtain additional financing as may be required until such time as we can generate sources of recurring revenues and to ultimately attain profitability. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Operational Update

Maricunga

On May 20, 2011, we, through our Chilean subsidiary, Minera Li, acquired a 60% interest in each of Sociedades Legales Mineras Litio 1 a 6 de la sierra Hoyada de Maricunga.

The Maricunga property is an exploration property and covers an area of approximately 3,553 acres (1,438 hectares), comprising six concessions and is located in the northeast section of the Salar de Maricunga in Region III of Atacama in northern Chile. Each concession grants the owner the right to explore for mineral deposits at the Maricunga property.

In September 2011, in order to provide funding to begin the initial assessments of producible minerals from the Maricunga Project, we entered into a subscription agreement with POSCO Canada Ltd. (“POSCAN”), a wholly owned subsidiary of POSCO (a South Korean company). In accordance with the subscription agreement, POSCAN purchased 38,095,300 Units of our securities for approximately $8 million, with each “Unit” consisting of one share of our common stock for $0.21 per share and a three-year warrant to purchase one share of our common stock at an exercise price of $0.40 per share.

In December 2011, we completed our phase one exploration work on Maricunga with the $8 million funding from POSCAN. In April 2012, we reported the completion of the NI 43-101 of the Canadian Securities Administrators (NI 43-101) that summarizes and validates the results of our $8 million Phase One Exploration and Development Program on our Maricunga Project in Chile, completed in December 2011. The Technical Report was prepared by Donald H. Hains, P. Geo., Principal of Hains Technology Associates, who is a Qualified Person as defined by NI 43-101. The key highlights of the Compliant Measured Report include:

·	Further exploration work and expenditures are warranted to advance the Maricunga Project to the Feasibility Stage (economic assessment);
·	The property holds significant potential for development as a source of lithium, potassium and boron;
·	Exploration work indicates that the brines in the property are enriched in lithium and potassium and that the brine has a sufficient Mg/Li ratio permitting lithium recovery.

On August 17, 2012, (the “Second Closing”), POSCAN purchased an additional 62,499,938 Units of our securities for gross proceeds of $9,999,990, with each “Unit” consisting of one share of common stock for $0.16 per share and a three-year warrant to purchase one share of common stock for $0.21 per share. In connection with the transaction, we agreed to reduce the exercise price of all of the warrants previously sold to POSCAN from $0.40 per share to $0.21 per share and issued to POSCAN a two-year warrant (the “Bonus Warrant”) to purchase 5,000,000 shares of our common stock at an exercise price of $0.15 per share.

Furthermore, subject to certain exceptions, we must issue additional shares of our common stock to POSCAN in the event that we issue or sell any such shares to third parties for a price of less than $0.16 per share at any time during the 18 months immediately following the Second Closing. During September 2012, the Company entered into settlement agreements providing for the Company to issue one share of the Company’s common stock for every $0.067 of obligations released by the receivable holder. As a result, this provision was triggered and the Company is seeking a waiver.

Due to the uncertainty regarding the lithium permit in Chile, we are evaluating the Maricunga project as a potential producer of potash or potassium nitrate. Our NI 43-101 of the Canadian Securities Administrators (NI 43-101) shows that potassium resources are available in the Maricunga properties. The majority of the past and current technical work performed on the project is applicable to the production of lithium and/or potassium. Potassium exploitation does not require special permits and it is exploitable via regular mining concessions, according to the Chilean Mining Code.

Initial estimations suggest that a potash project is economically feasible. We are evaluating the next steps that would allow us to maximize shareholder value from the Maricunga properties. However, there can be no assurance that we will be able to do so in the near future or at all. The Company will evaluate any future impairment based on consideration of economic and operational feasibility and a continuing assessment of its rights to exploit minerals under Chilean laws and regulations.

To produce potassium nitrate, the Company will be required to obtain a source of sodium nitrate which could come from either 1) developing a sodium nitrate and iodine project; or 2) buying the sodium nitrate from different producers in the north of Chile.

We may also seek to acquire additional properties for any processing site and we also plan to make improvements to the Maricunga site infrastructure, camp, and property.

In March 2013 the Company obtained approval of the Environmental Impact Declaration for the Maricunga project from the Chilean Environmental Authority. The Company is currently in discussions with consultants regarding the next steps to be taken in order to allow on-site work to continue in October 2013, after the winter season.

Also in March 2013, POSCO announced that it has developed a chemical lithium extraction technology that reduces recovery time from around 12 months to just eight hours. The technology increases the lithium recovery rate from a maximum of 50% using traditional evaporation ponds to more than 80%, and the lithium carbonate produced is more than 99.9% pure. If the Company is able to obtain the necessary lithium permit, it will pursue utilizing this technology as the means of extraction in order to gain efficiencies.

Lithium Permit Update

In 2012, the Chilean Government’s Ministry of Mining established its first ever auction for the award of lithium production quotas and licenses (Special Lithium Operations Contracts, or CEOLs), which would permit the exploitation of an aggregate of 100,000 tons of lithium metal (approximately 530,000 tons of lithium carbonate equivalent) over a 20 year period, subject to a seven percent royalty.

In September 2012, we formed a consortium consisting of us, POSCO, Daewoo International Corp, and Mitsui & Co. (the “Consortium”) for the purpose of participating in such CEOL auction. As required under the rules established by the Ministry of Mining, the Consortium submitted its bid for the CEOLs, and in September, 2012, the Company was informed that the Consortium’s bid was not the winning bid.

The Chilean government has since decided to invalidate the CEOL process due to an administrative error, as well as rescinding the CEOL Basis, which defined the regulations of the CEOL process. The Company submitted two appeals to the Chilean government, requesting it to reconsider the invalidation and award the CEOL to the second highest bidder - the Consortium. The appeals have been rejected by the Chilean government.

On January 16, 2013, we submitted a letter to the Chilean Comptroller requesting to review the CEOL process. This is deemed to be the last administrative recourse before pursuing legal remedies. The Company is waiting for an answer.

Maricunga Stockholders’ Lawsuit Update

As the majority shareholder, we have filed lawsuits distributed to four civil courts of Copiapo, third Region of Atacama, Chile, against the minority stockholders seeking either payment of their pro rata portion of costs or an auction of their share of the properties. The minority stockholders have not paid their required contributions to the costs of conservation and exploration, which were agreed upon at the stockholders’ meeting on October 6, 2011. In December 2012, we received a favorable decision from one of the civil courts to auction approximately 4% of the shares once the judgment is executed. This is being opposed by the stockholders, and we are awaiting the court’s decision after which the second court of Copiapo should set a date and time for the auction. Evidence is currently being presented in the lawsuits in the other civil courts, after which a final decision should be issued.

Certain minority stockholders have filed counter claims against us, in two civil courts of Santiago, to declare, among other things, the invalidation of such stockholders’ meeting at which required contributions were established that such minority stockholders failed to make. In one of the courts, the process is on hold because the minority stockholders have not filed a new claim, as requested by the court. In the other court, we have filed our defense claiming that the lawsuits should be dismissed on the basis that the decision made in the stockholders´ meeting on October 6, 2011 was made in accordance with Chilean law, and that the amounts are necessary for the conservation and exploration of the mining property. This lawsuit is still in the discovery stage.

Strategic Plan

Part of our strategic plan is to explore and develop our existing projects as well as to identify other synergistic opportunities with new projects with production potential that could also be advanced in an accelerated manner, with the goal of becoming a company with valuable lithium, potassium, nitrates and other industrial minerals properties. Our primary objective is to become a low cost lithium producer as well as a significant producer of potassium nitrate. The key to achieving this objective is to become an integrated chemical company through the strategic acquisition and development of lithium assets as well as other assets that have by-product synergies. The third leg of our strategic plan is to develop improved technologies for the extraction of lithium from brines.

We have acquired a 60% interest in the Maricunga project, an advanced lithium and potassium chloride project in Chile, and we continue to explore other lithium and industrial minerals prospects in the region.

Our current strategy principally involves the exploration of the Maricunga property and the acquisition of a source of iodine and nitrate. On the Maricunga project, we initially received $8 million of funding from POSCAN, which was spent to complete our Phase One Exploration and Development Plan. Such plan has been completed, and we have successfully produced a technical report in accordance with National Instrument 43-101 of the Canadian Securities Administrators for Maricunga. Upon achieving the NI 43-101 compliant resource, we satisfied the conditions to receive an additional $10 million of funding from POSCAN. In August 2012, we received the $10 million second tranche funding as committed by POSCAN.

Since then, we have continued our efforts to advance the Maricunga project. However, a key element in advancing the project lies in securing a special permit to exploit lithium in Chile. We participated in an international auction for the award of lithium production quotas and licenses (Special Lithium Operations Contracts, or CEOLs) to obtain this permit but we were not successful.

In the event that we ultimately do not obtain the necessary permits for lithium exploitation for our current Maricunga properties, we will likely pursue a strategy for the production of potassium from those properties. Our Technical Report in accordance with National Instrument 43-101 of the Canadian Securities Administrators (“NI 43-101”) shows that potassium resources are available in the Maricunga properties. As part of our strategic plan, we always had plans to produce a potassium by-product alongside the lithium.The majority of the past and current technical work performed on the project is applicable to the production of lithium and/or potassium. Potassium exploitation does not require special permits and is exploitable via regular mining concessions, according to the Chilean Mining Code.

In the event we develop a potash production operation on the Maricunga properties, we would complete a feasibility study of the economics of the project and would be required to raise approximately $100 million to $130 million to bring the project into production.

Another alternative would be producing potash that in combination with sodium nitrates will mix to produce potassium nitrate (KNO3). Potassium nitrate is a valuable product used in fertilizers. Potassium nitrate is used extensively as a fertilizer. Its advantage over commodity based fertilizers such as potash is that it provides two essential elements (nitrogen and potassium) in a single product. Because it has no sodium chloride content, it does not rot or damage delicate plants such as tobacco or the roots of fruit trees. As it is totally water soluble, naturally-derived potassium nitrate is especially suitable for use in organic farming and in hydroponic (soil free) agriculture. There is an increase in demand for this product, particularly in China, India, and Brazil. Chile is today the largest producer of potassium nitrate.

To produce potassium nitrate, we will also be required to obtain a source of sodium nitrate which could come from either 1) developing a sodium nitrate and iodine project; or 2) buying the sodium nitrate from different producers in the north of Chile. The Atacama Desert in the north of Chile is rich in sodium nitrate. The Company previously had an option on the Alfredo iodine and nitrates project. At the time we decided not to pursue that option because we were focused on pursuing the Maricunga properties as a lithium project. This property as well as a number of other projects in the north of Chile with the similar characteristics that we have evaluated in the past may continue to be available. Also, there are a number of producers of iodine in the north of Chile that have nitrates stockpiled which, as nitrates by themselves, are not economically profitable. There would be opportunities for us to acquire these to complement our potash production.

In parallel to these efforts, we continue to consider various alternatives to continue to pursue our lithium strategy. These include the acquisition and/or joint venture of nearby properties within the same Maricunga Salar that do not require special lithium permits for exploitation. On this basis, on April 16, 2013, the Company acquired the exploitation mining concession “Cocina 19 through 27” by the acquisition of 100% of the shares of SLM Cocina Diecinueve de la Hoyada de Maricunga, a Chilean based Company. This exploitation mining concession corresponds to a strategic lithium asset and is located within the northern section of Salar de Maricunga in Region III of Atacama in northern Chile. It is comprised of 450 hectares, increasing the Company´s land holdings within Maricunga to 1,888 hectares. The acquired “Cocina 19 through 27” mining concession adjoins the Company´s existing Litio 1-6 properties and there is no need to apply for a special contract with the State of Chile in order to exploit the lithium of the Cocina 19 through 27 concession. For further clarity, the exploitation of this concession is not subject to obtaining a CEOL permit; however, the acquisition does not provide the necessary permits to exploit lithium from our existing Maricunga property.

Results of Operations

Three Months Ended March 31, 2013 Compared with Three Months Ended March 31, 2012

Revenues

We had no revenues during the three months ended March 31, 2013 and 2012.

Exploration expenses

During the three months ended March 31, 2013 and 2012, we incurred exploration expenses of $79,336 and $2,156,317, respectively. The expenses incurred during the three months ended March 31, 2013 relate to our efforts to obtain the environmental permits that will allow us to take the project to a feasibility stage.

General and administrative expenses

Our general and administrative expenses for the three months ended March 31, 2013 and 2012 consisted of the following:

					Increase
	March 31, 2013		March 31, 2012		(Decrease)
Salaries and wages	$	217,589	$	257,760	$	(40,171	)
Legal fees		239,402		307,876		(68,474	)
Accounting and finance fees		63,960		81,424		(17,464	)
Audit fees		44,015		12,000		32,015
Other professional fees		76,162		248,774		(172,612	)
Marketing and investor relations		2,971		165,842		(162,871	)
Travel expenses		35,707		277,692		(241,985	)
Board of Directors expense		61,000		151,935		(90,935	)
Rent		3,720		25,755		(22,035	)
Communications		11,468		15,871		(4,403	)
Office expenses		4,505		53,785		(49,280	)
Relocation expenses		24,414		-		24,414
Bank fees		1,767		4,674		(2,907	)
Other		8,218		12,158		(3,940	)
Stock-based compensation		489,705		221,554		268,151
Depreciation and amortization		7,027		13,196		(6,169	)
Registration rights penalties		-		337,776		(337,776	)
	$	1,291,630	$	2,188,072	$	(896,442	)

We incurred total general and administrative expenses of $1,291,630 for the three months ended March 31, 2013 compared to $2,188,072 for the three months ended March 31, 2012, a $896,442 decrease, which is comprised mainly of:

·	Other professional fees decreased by $172,612 primarily due to a reduction in the use of outside professionals and the efforts of the Company to reduce costs;

·	Marketing and investor relations and travel expenses decreased by $162,871 and $241,985, respectively, as a result of the decrease in investor relations activities and the efforts of the Company to reduce costs;

·	Stock-based compensation increased by $268,151 as a result of accrual for $468,931 in relation to POSCO anti-dilution provisions which may have been triggered during the current year. This has been partially offset by stock issued in settlement of liabilities of $135,000 during the three months ended March 31, 2012 along with reduced amortization of stock based compensation as the stock units and options granted reach their vesting date;

·	Registration rights penalties decreased by $337,776 as there were no penalties incurred during the three months ended March 31, 2013.

Other income/expense

Other income for the three months ended March 31, 2013, was $155,463 compared to other expense in the amount of $3,873,785 for the three months ended March 31, 2012. The decrease in other income and expense was primarily due to our recognition of an unrealized gain from the change in fair value of the derivative liability related to our outstanding warrant instruments of $213,163 during the three months ended March 31, 2013 compared to a loss of $3,765,995 during the three months ended March 31, 2012.

Net interest expense amounted to $57,274 and $182,048 during the three months ended March 31, 2013 and 2012, respectively. The decrease in interest expense was primarily a result of the decrease in amortization of discount on notes payable, which was $50,037 for the three months ended March 31, 2013, compared to $167,194 for the three months ended March 31, 2012.

During the three months ended March 31, 2013, we recorded a loss on foreign currency transactions of $426 compared to a gain on foreign currency transactions of $74,258 for the three months ended March 31, 2012. Such activity was related to our operations in Peru and Chile.

Nine Months Ended March 31, 2013 Compared with Nine Months Ended March 31, 2012

Revenues

We had no revenues during the nine months ended March 31, 2013 and 2012.

Exploration expenses

During the nine months ended March 31, 2013 and 2012, we incurred exploration expenses of $456,945 and $5,608,579, respectively. The expenses incurred during the nine months ended March 31, 2013 relate to our efforts to obtain the environmental permits that will allow us take the project to a feasibility stage.

General and administrative expenses

Our general and administrative expenses for the nine months ended March 31, 2013 and 2012 consisted of the following:

					Increase
	March 31, 2013		March 31, 2012		(Decrease)
Salaries and wages	$	1,046,200	$	627,304	$	418,896
Legal fees		590,779		802,288		(211,509	)
Accounting and finance fees		252,575		294,491		(41,916	)
Audit fees		178,640		111,943		66,697
Other professional fees		209,816		633,841		(424,025	)
Marketing and investor relations		26,946		288,894		(261,948	)
Travel expenses		139,645		777,128		(637,483	)
Board of Directors expense		183,000		151,935		31,065
Rent		71,179		97,540		(26,361	)
Communications		46,105		51,646		(5,541	)
Office expenses		32,119		107,152		(75,033	)
Relocation expenses		40,479		-		40,479
Bank fees		6,012		5,703		309
Other		25,917		13,279		12,638
Stock based compensation		819,804		529,937		289,867
Depreciation and amortization		31,113		15,579		15,534
Registration rights penalties		-		479,776		(479,776	)
	$	3,700,329	$	4,988,436	$	(1,288,107	)

We incurred total general and administrative expenses of $3,700,329 for the nine months ended March 31, 2013 compared to $4,988,436 for the nine months ended March 31, 2012, a $1,288,107 decrease, which is comprised mainly of:

·	Salaries and wages increased by $418,896 mainly due to hiring a full-time CFO and Vice President in March 2012, redundancy payments and bonus payments, partially offset by reduced salaries in Peru due to office closure and the resignation of the COO in December 2012;

·	Legal fees decreased by $211,509 due to reduced legal activity. For the period ended March 31, 2012, significant legal fees were incurred in relation to financing and capital raising, potential transactions, structures, tax issues and equity incentive plans;

·	Other professional fees decreased by $424,025 primarily due to a reduction in the use of outside professionals and the efforts of the Company to reduce costs;

·	Marketing and investor relations and travel expenses decreased by $261,948 and $637,483, respectively, as a result of the decrease in investor relations activities and the efforts of the Company to reduce costs;

·	Stock-based compensation increased by $289,867 as a result of accrual for $468,931 in relation to POSCO anti-dilution provisions which may have been triggered during the current year. This has been partially offset by stock issued in settlement of liabilities of $135,000 during the nine months ended March 31, 2012 compared with $20,700 during the nine months ended March 31, 2013, along with reduced amortization of stock based compensation as the stock units and options granted reach their vesting date;
·	Registration rights penalties decreased by $479,776 as there were no penalties incurred during the nine months ended March 31, 2013.

Loss on settlements, net

The Company recorded a loss on settlements of $5,816 as a result of settlement agreements with respect to an aggregate of $390,336 of obligations, under which the Company issued an aggregate of 5,825,761 shares of the Company’s common stock, valued at $396,152.

Other income

Other income for the nine months ended March 31, 2013, was $5,966,674 compared to $6,148,875 for the nine months ended March 31, 2012. The decrease in other income was primarily due to the change in loss on debt extinguishment, recognition of change in fair value of warrant derivative liabilities, warrant modification expense, and the change in interest expense.

We recognized a loss on debt extinguishment of $37,235 compared with a loss on debt extinguishment of $841,752 for the nine months ended March 31, 2013 and 2012, respectively. The differences related to the difference in the terms of existing debt compared to debt under the modified terms of the debt agreements.

We recognized an unrealized gain from the change in the fair value of the derivative liability related to our outstanding warrant instruments of $6,453,869 during the nine months ended March 31, 2013 compared to $7,837,564 during the nine months ended March 31, 2012. The change in fair value of our derivative warrant liability has no impact on our cash flows from operations.

We recognized warrant modification expense in conjunction with the closing of POSCAN’s second tranche of investment on August 17, 2012, when the Company adjusted the exercise price of the warrants previously issued to POSCAN from $0.40 to $0.21 per share. The incremental value of the warrants before and after the modification was $171,150 and was reported as current period expense.

Net interest expense amounted to $298,533 and $880,332 during the nine months ended March 31, 2013 and 2012, respectively. The decrease in interest expense was primarily a result of the decrease in amortization of discount on notes payable and deferred financing costs, which was $827,032 during the nine months ended March 31, 2012 and $109,534 during the nine months ended March 31, 2013, and interest income of $35,000 earned on funds on deposit during the nine months ended March 31, 2013. This decrease in interest expense has been partially offset by an increase in interest expense for the nine months ended March 31, 2013 on: registration rights penalties of $69,963, notes payable entered into during 2012 of $57,760, and interest related to late payment of supplier invoices of $37,710.

During the nine months ended March 31, 2013 and 2012, we recorded gains on foreign currency transactions of $19,723 and $33,395, respectively, and such activity was related to our operations in Peru and Chile.

Fiscal Year Ended June 30, 2012 Compared with Fiscal Year Ended June 30, 2011

Revenues

We had no revenues during the years ended June 30, 2012 and 2011.

Exploration Expenses

During the years ended June 30, 2012 and 2011, we incurred exploration expenses of $6,193,533 and $560,075, respectively. The expenses incurred during the year ended June 30, 2012, relate to our efforts to begin exploration activities on our Maricunga project in Chile and principally include drilling expenses and other related expenses. The expenses incurred during the year ended June 30, 2011, relate primarily to our other properties which we no longer are exploring.

Mineral Rights Impairment Expense

During the years ended June 30, 2012 and 2011, we incurred impairment expenses of $300,000 and $4,120,000, respectively. Mineral rights impairment expense for the year ended June 30, 2012, is a result of the impairment of the Noto properties. Mineral rights impairment expense recorded during the year ended June 30, 2011 is a result of the impairments of the Alfredo property ($4,070,000) and the Peru property ($50,000). We determined that these projects did not meet our requirements for additional mining development activities.

Loss on Settlements, Net

During the year ended June 30, 2011, we recorded a loss on settlement of $1,920,000 as a result of issuing 6,000,000 shares of our common stock in connection with a settlement related to the Puna property obligation. In addition, we recorded a gain on settlement of $422,500 as a result of a settlement with Lacus (payment of $150,000 in cash and 500,000 shares of the Company’s common stock), which was less than we had accrued for these expenses as of June 30, 2010. The Puna and Lacus settlements were related to the Argentinean properties that were terminated. There were no similar transactions during the year ended June 30, 2012.

General and Administrative Expenses

Our general and administrative expenses for the years ended June 30, 2012 and 2011 consisted of the following:

					Increase
	June 30, 2012		June 30, 2011		(Decrease)
Professional fees-legal	$	1,210,123	$	1,021,198	$	188,925
Wages and salaries		1,115,824		571,337		544,487
Travel expenses		896,898		697,729		199,169
Stock based compensation		649,580		1,941,862		(1,292,282	)
Registration rights penalties		479,777		38,750		441,027
Write-offs of deposits on potential acquisitions		400,000		-		400,000
Marketing and investor relations		395,416		232,289		163,127
Professional fees-others		375,881		45,868		330,013
Professional fees-finance/accounting		330,798		414,804		(84,006	)
Office expenses		307,320		91,864		215,456
Board of Directors expenses		215,935		-		215,935
Professional fees-audit		205,273		150,710		54,563
Insurance		100,079		63,828		36,251
Filing fees		99,791		57,536		42,255
Other		213,348		120,892		92,456
	$	6,996,043	$	5,448,667	$	1,547,376

We incurred total general and administrative expenses of $6,996,043 for the year ended June 30, 2012 compared to $5,448,667 for the year ended June 30, 2011, a $1,547,376 increase, which comprised of:

	·	Professional fees-legal increased by $188,925 due to due diligence expenses in connection to potential acquisitions and the POSCAN funding;
	·	Wages and salaries expense increased by $544,487 due to the increase in hiring of new employees, including a CEO, a full time CFO, and office staff;
	·	Travel expenses increased by $199,169 due to investor relations activities in relation to seeking sources of funding;
	·	Registration rights penalties increased by $441,027 due to penalties incurred in connection with the failure to file a timely registration statement;
	·	Write-offs of deposits on potential acquisitions increased by $400,000 due to write-offs of payments to New World Resource Corp. and to the Claritas and Bongos properties;
	·	Marketing and investor relations increased by $163,127 due to activities for actively seeking various sources of funding;
	·	Professional fees-others increased by $330,013 due to consulting fees related to the acquisition and development of the Maricunga project;
	·	Office expenses increased by $215,456 mainly due to the opening of our new office in Chile;
	·	Board of Directors fees increased by $215,935 due to the approval of fees to be paid to the Board of Directors in 2012;
	·	Professional fees-audit increased by $54,563 due to higher activity as a result of the development of the Maricunga project;
	·	Insurance increased by $36,251 mainly due to insurance costs related to the new Chile location;
	·	Filing fees increased by $42,255 mainly due to the Form S-1 filings during the year 2012, XBRL requirements which started during 2012 and an increase in press release activities in 2012;
	·	Other expenses increased by $92,456 mainly due to the higher activity as result of the development of the Maricunga project.
	·	These increases were partially offset by an $84,006 decrease in professional fees-finance/accounting due to the hiring of new employees during 2012 and a $1,292,282 decrease in stock compensation to as a result of fewer services paid for with stock.

Other (Income) Expense

Loss on Debt Extinguishment

We incurred a loss on debt extinguishment of $841,752 during the year ended June 30, 2012 as a result of entering into a waiver agreement with the lenders whereby the terms of the notes were extended and the conversion price was reduced from $0.40 per share to $0.12 per share, which resulted in us expensing all unamortized deferred financing costs and recording the difference between the carrying value of the notes and the estimated fair value of the post-modification notes as expense. There were no similar transactions during the year ended June 30, 2011.

Change in Fair Value of Derivative Liability - Warrant Instruments

During the year ended June 30, 2012, we recorded a gain of $10,780,342 on the change in fair value of derivative liability - warrant instruments, compared to a loss of $6,116,147 during the year ended June 30, 2011. The change in fair value of our derivative warrant liability has no impact on our cash flows from operations and was primarily a result of the decrease in our stock price during the year ended June 30, 2012.

Warrant Modification Expense

During the year ended June 30, 2011, we modified certain warrants by which new warrants were issued in exchange for the exercise of previously issued warrants. The newly issued warrants were treated as derivatives as they contain certain anti-dilution features. We valued the new warrants issued as a result of the modification using a modified lattice model and recorded expense of $1,068,320 during the year ended June 30, 2011. There were no similar transactions during the year ended June 30, 2012.

Interest Expense

During the years ended June 30, 2012 and 2011, interest expense was $1,150,634 and $410,056, respectively. The increase in interest expense was a result of interest and amortization of the debt discount on the $1.5 million zero coupon convertible notes issued in May 2011, and interest on new promissory notes issued during the second half of fiscal year 2012.

Gain on Foreign Currency Transactions

During the years ended June 30, 2012 and 2011, gain on foreign currency transactions amounted to $14,142 and $1,383, respectively.

Net Loss

Net loss for the year ended June 30, 2012 was $4,687,478 compared to a net loss of $19,219,382 for the year ended June 30, 2011. The decrease is primarily due to an unrealized gain on the change in fair value of derivative liabilities - warrant instruments of $10,780,342 in 2012 compared to an unrealized loss of $6,116,147 in 2011. This decrease was partially offset by a $1,863,334 increase in our total operating expenses in 2012, compared to the prior year.

Net Loss Attributable to Non-Controlling Interest

During the years ended June 30, 2012 and 2011, the net loss attributable to non-controlling interests was $2,375,407 and $-0-, respectively. This represents the non-controlling interest’s 40% share of expenses relating to the exploration of the Maricunga Property.

Liquidity and Capital Resources

We are primarily engaged in exploration and acquisition of new properties and do not generate income from operations currently. Our primary source of liquidity has been debt and equity financing.

Although we have begun the acquisition of certain mining properties, any of such properties that we may acquire will require exploration and development that could take years to complete before it begins to generate revenues. There can be no assurances that we will be successful in acquiring such properties or that if we do complete acquisitions, properties acquired will be successfully developed to the revenue producing stage. If we are not successful in our proposed mining operations, our business, results of operations, liquidity and financial condition will suffer materially.

Various factors outside of our control, including the price of lithium, potassium nitrate and other minerals, overall market and economic conditions, the volatility in equity markets may limit our ability to raise the capital needed to execute our plan of operations. These or other factors could adversely affect our ability to raise additional capital. As a result of an inability to raise additional capital, our short-term or long-term liquidity and our ability to execute our plan of operations could be significantly impaired.

As of March 31, 2013, the Company had a cash balance on hand of $2,349,834, which is not sufficient to maintain its basic operations, which do not include future exploration and acquisition activities, for 12 months. We have implemented a cost reduction program and we are taking the necessary actions to preserve cash. We are in progress of evaluating the total costs and activities that a potassium project requires. The Company has no source of revenue; however management is actively seeking additional funding in the form of equity and/or debt from potential investors.

On April 16, 2013, the Company made a $2,000,000 initial cash payment to acquire additional property in the Maricunga Salar. After such payment, the Company´s cash balance was approximately $100,000.

On March 18, 2013, the Company signed a Memorandum of Understanding with BW. If successful, the transaction could provide Li3 with additional funding allowing the Company to continue advancing the Maricunga project. Under the proposed terms of the merger, BW would establish a new subsidiary which would merge into the Company, with Li3 remaining as the surviving entity as a wholly-owned subsidiary of BW. Each shareholder of Li3 would receive 1 share of common stock in BW for every 250 shares of common stock held in Li3. The Company´s existing warrants will exchange in the same ratio. The closing of the proposed transaction with BW is subject to a number of closing conditions, including further due diligence, final approval by both board of Directors of both companies, regulatory and court approvals, shareholder approvals and the execution of a definitive agreement.

POSCAN funding

In September 2011, POSCAN purchased 38,095,300 Units of our securities for approximately $8 million (or $0.21 per Unit), with each “Unit” consisting of one share of our common stock and a three-year warrant to purchase one share of our common stock at an exercise price of $0.40 per share.

In August 2012, we received the second tranche of funding by POSCAN. We issued 62,499,938 Units to POSCAN for gross proceeds of $9,999,990 (or $0.16 per Unit), with each “Unit” consisting of one share of common stock and a three-year warrant to purchase one share of common stock for $0.21 per share.

Pursuant to the Additional Agreement, we reduced POSCAN’s purchase price per Unit for the second tranche from $0.21 per share to $0.16 per share, and reduced the exercise price of all of the warrants sold under the POSCAN SPA from $0.40 per share to $0.21 per share.

Pursuant to the Additional Agreement, we also agreed to issue to POSCAN a two-year Bonus Warrant to purchase 5,000,000 shares of our common stock at an exercise price of $0.15 per share. Furthermore, subject to certain exceptions, we must issue additional shares of our common stock to POSCAN in the event that we issue or sell any such shares to third parties for a price of less than $0.16 per share at any time during the 18 months immediately following the Second Closing.

POSCAN has no current commitments to provide us with funding in the future.

Shares for Debt Settlement

In addition to utilizing our capital to acquire properties and pay other corporate costs, we periodically issue shares of our common stock as consideration in lieu of cash to conserve our cash and meet our obligations. We likely will continue to issue common stock for these purposes where feasible, if we determine that it is in our economic best interests. In September 2012, we issued 5,825,761 shares of our common stock for the settlement of $390,336 relating to certain outstanding liabilities at June 30, 2012. In April and May 2013, we issued 1,372,533 shares of our common stock for the settlement of $91,960 relating to certain outstanding liabilities at March 31, 2013.

Convertible Notes

In September 2012, the Company entered into a Second Amendment and Waiver Agreement with the holders of the zero-coupon convertible notes (the “Second Waiver Agreement”). Pursuant to the Second Waiver Agreement, the zero-coupon convertible notes maturity date was extended to September 28, 2013, and the aggregate principal amount thereof was increased to $1,880,000, which includes an Original Issue Discount of 12.1% or $202,926. The Waiver Agreement also reduced the conversion price of the zero-coupon bridge notes from $0.12 to $0.095 per share.

Common Stock Subject to Rescission

On March 19, 2012, the Securities and Exchange Commission declared effective a registration statement that we had filed to cover the resale of shares previously issued and sold (or to be issued upon the exercise of warrants). On March 1, 2013, we filed a post-effective amendment for that registration statement that included our audited financial statements as of and for the year ended June 30, 2012 as had been filed on our Annual Report on Form 10-K for the year ended June 30, 2012 (the “2012 Annual Report”). We believe that the filing of the post-effective amendment fulfilled our obligation to update the registration with current financial information pursuant to Section 10(a)(3) of the Act. However, there were approximately three months when our registration statement contained financial information that was not current. During that period, 65,000 shares sold pursuant to that prospectus in open market transactions which may have violated Section 5 of the Securities Act of 1933, as amended, and, as a result, the purchasers of those shares may have rescission rights or claims for damages. Accordingly, we have reduced stockholders’ equity at March 31, 2013 by $3,041, the total amount that we would have to refund if all the purchasers of those shares exercised their rescission right.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

MANAGEMENT OF Li3

Executive Officers and Directors

Below are the names and certain information regarding Li3’s current executive officers and directors:

Name	Age	Title	Date First Appointed
Luis Francisco Saenz	41	President, Chief Executive Officer and Director	October 19, 2009
Luis Santillana	37	Chief Financial Officer, Secretary and Treasurer	July 1, 2012
Patrick Cussen	63	Chairman of the Board	December 5, 2011
Alan S. Fraser	50	Director	October 23, 2011
Patricio A. Campos	66	Director	October 23, 2011
Eduardo G. de Aguirre	65	Director	October 23, 2011
SungWon Lee	46	Director	December 19, 2012
Harvey McKenzie	66	Director	June 27, 2011
David G. Wahl	68	Director	February 18, 2010

Directors are elected to serve until the next annual meeting of stockholders and until their successors are elected and qualified. Executive officers are appointed by the board of directors and serve at its pleasure.

Certain biographical information for each of the executive officers and directors is set forth below.

Luis Francisco Saenz joined Li3’s board of directors on October 19, 2009. Mr. Saenz has been its Chief Executive Officer since October 19, 2009 and President since September 14, 2011. He is currently, and has been since July 21, 2008, the President and a Director of the publicly traded Loreto Resources Corporation (LRTC.OB), and he also served as their Chief Executive Officer from July 21, 2008 until August 25, 2011. Mr. Saenz was formerly employed at Standard Bank (“Standard”) with Standard’s investment banking unit, Standard Americas, Inc. Mr. Saenz joined Standard in New York in 1997 and relocated to Peru in 1998 to establish Standard’s Peru representative office. While in Peru, Mr. Saenz led Standard’s mining and metals organization effort in the Latin America region. Mr. Saenz returned to New York in 2007 to head Standard’s mining and metals team in the Americas. Mr. Saenz previously worked for Pechiney World Trade in the base metals trading area before joining Merrill Lynch as Vice-President for Commodities in Latin America. Mr. Saenz graduated from Franklin and Marshall College in 1991 with a Bachelor of Arts degree in economics and international affairs.

Luis Santillanabecame Vice President of Finance on March 1, 2012, and has been Chief Financial Officer, Treasurer and Secretary of Li3 since July 1, 2012. Mr. Santillana strengthens the existing management team and brings additional domain expertise, having over 13 years of experience in the mining industry, specifically in finance, fund raising, debt facilities, deal negotiation and execution, strategic and financial planning, financial valuations, treasury management, and improvement of management reporting. Prior to joining Li3, Mr. Santillana held the position of Strategic Planning Manager for ENRC plc,, a $7 billion revenue, diversified mining company listed on the London Stock Exchange (FTSE 100). Based in London, he was involved in strategic and financial planning and management reporting for ENRC. From September 2008 to June 2010, Mr. Santillana was responsible for the financial planning and treasury functions at London Mining plc, an iron-ore mining company listed on the London Stock Exchange (AIM). Prior to joining London Mining plc, Mr. Santillana worked for Hochschild Mining plc, a Peruvian gold and silver producer, where he was part of the core management team that led Hochschild Mining’s successful IPO and listing on the London Stock Exchange (FTSE 250). Mr. Santillana holds an MBA from IESE Business School (Spain) and a Bachelor’s Degree in Industrial Engineering from Universidad de Lima (Peru).

Patrick Cussenjoined Li3 as Chairman of the board of directors in September 2011. Mr. Cussen brings us 40 years of mineral and mining expertise and is currently the President of Celta, a Chilean mining consulting and service company to the Latin American mining industry advising global clients including: Antofagasta Minerals, Vale, Phelps Dodge (Freeport), Placer Dome (Barrick), Codelco, Citibank, LS-Nikko Copper and Royal Gold. From 1972 - 1985, Mr. Cussen held numerous positions within Codelco, the world’s largest copper producer, culminating as Managing Director, Chile Copper Ltd., a London based Codelco subsidiary. From 1985 - 1990, Mr. Cussen was VP Sales, Empresa Minera de Mantos Blancos S.A. (subsidiary of Anglo American Chile). Mr. Cussen is currently Chairman of the Board of the Center for Copper and Mining Studies, Cesco, the Chilean think-tank on mining. Mr. Cussen is also a former member of the board of the Chilean Copper Commission. Mr. Cussen is an industrial civil engineer and holds an MA in economics from the University of Chile.

Mr. Cussen’s qualifications to serve on the board of directors include his experience with the mining industry.

Patricio Camposjoined Li3’s board of directors in September 2011. Mr. Campos brings valuable domain expertise having over 39 years’ experience in the mining industry, specifically in project exploration, evaluation, technical and economic preparation. His mineral and mining experience includes copper, gold and non-metallic (coal, phosphate, limestone, nitrate and iodine, lithium (brines) minerals, boron and potassium chloride projects. Mr. Campos has also acted as a consultant in the evaluation of ore deposit reserves, copper, gold, iodine, nitrate, coal, phosphate, lithium salars, boron, potassium chloride and potassium sulphate projects. Prior to joining Li3, Mr. Campos previously led and supervised the construction of several plants (iodine, bagging) for Chemical & Mining Co. of Chile Inc. (NYSE: SQM), a multi-national global producer and seller of fertilizers and specialty chemicals and Bifox Ltd. (phosphoric acid, grinding, crushing). Additionally, Mr. Campos has worked as a consultant spanning 30 years for companies such as Anglo American (Salar de Atacama Project), SQM (Salar de Atacama Project), Falcon Mines, MAGSA, ACF Minera S.A., SCM Montevideo & Montecristo, and Sociedad Minera Isla Riesco. Mr. Campos has also actively participated in due diligence processes and negotiations for assets such as Algorta Norte S.A.’s iodine project, SQM’s Salar de Atacama and Antucoya copper projects, Codelco´s El Hueso gold mine and other exploration projects, Phelp Dodge’s Safford project, among others. Mr. Campos is a former Professor of Mining Economy at the Mining Department, Universidad de Chile and a former Professor for due diligence, Mining Department, Escuela de Ingenieria, Unversidad de Chile and Instituto de Indenieros de Minas de Chile. Currently Mr. Campos is a member of the Comité de Recursos Mineros del IIMCh (Mining Resources Committee, Chile). Mr. Campos received his Civil Mining Engineering degree from Universidad de Chile and Graduated in economic evaluation and project preparation, Bid-Odeplan-Universidad Católica de Chile.

Mr. Campos’s qualifications to serve on the board of directors include his experience with the mining industry.

Alan S. Fraserjoined Li3’s board of directors in September 2011 and brings over 24 years of experience in Engineering Business Development specifically for Mining Projects, Mining Project Evaluations, Due Diligence Studies, Process Plants, Power Plants, Petrochemical Process Plants, Sulphuric Acid Plants, Infrastructure and Environmental Assessments. Currently, Mr. Fraser is the Managing Director and shareholder of P3 Consultores S.A, a Project Management Services Company providing risk administration to clients including Anglo American, Colahuasi and others. From 2001 to 2009, Mr. Fraser held numerous positions, culminating as the Director, Business Development for Fluor, Chile S.A. servicing global clients including BHP Billiton Base Metals, Rio Tinto, Anglo American, Xstrata, Codelco, Antofagasta Minerals, Southern Peru Copper Corporation, General Atomics. While in this capacity, Mr. Fraser actively participated in numerous resource projects including; winning the Gaby SX-EW EPCM Project for Codelco, ($900 million), Pascua Lama EPC Project for Barrack Gold ($2.3 billion), Gold Mill EPCM Project for Minera Yanacocha ($240 million), Sulphide Leach EPCM Project of Minera Escondida Ltda. ($780 million), Ilo Smelter Modernization EPCM Project ($400 million), and engineering studies as Codelco Minco 230 k tpd, Salobo Feasibility Study for CVRD (Brazil), additional work for Newmont/Minera Yanacocha including the Gold Mill Project, Collahuasi SX/EW expansion studies and Material Handling support, Minera Escondida Water Supply Studies. Also recent detail engineering services for the expansion of Lomas Bayas ($47 million) and the Feasibility Study of the El Morro project ($1.5 billion). Mr. Fraser is a Civil Mining Engineer, Universidad de Chile, Santiago, Chile.

Mr. Fraser’s qualifications to serve on the board of directors include his experience with the mining industry.

Eduardo de Aguirrejoined Li3’s board of directors in October 2011. Mr. de Aguirre brings over 35 years' experience in business development, project management and finance. Since 2007, Mr. de Aguirre has served as Legal Representative to General Dynamics Installation Services Inc., Chile who are building and commissioning radio telescopes for the ALMA Project for a total value of about $150MMUS. ALMA is the largest astronomical project in existence in the world, now in construction in the Atacama desert in Chile and will be fully operational in 2013. Its total cost is in the range of billions of dollars. In addition, since 2005, he has acted as Consultant and Sales Representative for Latin America to General Dynamics SATCOM Technologies Inc. Prior to that, from 2000 - 2011, he acted as a consultant for various Chilean entities including Target-DDI, AACA, ASL, Filmosonido and ViaSat. From 1989 - 2000, Mr. de Aguirre served as Regional Manager in South America and as General Manager of the Chilean Subsidiary of Scientific Atlanta, Inc. Mr. de Aguirre is a Civil Industrial Engineer and attended Engineering School at the Catholic University, Santiago, Chile.

Mr. de Aguirre’s qualifications to serve on the board of directors include his experience in business development, project management and finance.

SungWon Lee, PhD. was appointed to Li3’s board of directors on December 19, 2012, in connection with the closing of POSCAN’s initial investment in Li3’s securities. Dr. Lee is a metallurgist with vast knowledge in aluminum forming and superplasticity. Dr. Lee joined POSCO in 2000 and has held various roles including Team Leader of the New Business Development Department where his activities included sourcing and reviewing numerous investment projects, joint ventures and organic growth projects. Dr. Lee led the development of the Magnesium Coil Project and the Fe-Mn Alloy Joint Venture both of which are operating units within POSCO Group. Dr. Lee has been serving as the Director of the Lithium Project Department within POSCO since 2010. Dr. Lee graduated with a Bachelor of Science from Yonsei University, Korea, M.S. Metallurgical Engineering, Yonsei University, Korea and PhD. Materials Science and Engineering, University of Southern California, USA.

Dr. Lee’s qualifications to serve on the board of directors include his experience with metallic minerals.

Harvey McKenziewas appointed to Li3’s board of directors on June 27, 2011. Mr. McKenzie is a Chartered Accountant and has been the CFO and corporate secretary of Anconia Resources Corp. (TSXV: ARA.V) since June 2011 and the CFO and a director of Martina Minerals Corp. (TSXV: MTN.V) (formerly Manor Global Inc., a capital pool company), since February 2005. Prior thereto, Mr. McKenzie served as the CFO of several Canadian publicly listed exploration, development and producing mining companies, including Eurotin Inc. from May 2011 to September 2011, Sino Vanadium Inc. from May 2010 to March 2011, Iberian Minerals Corp. from July 2007 to June 2009, Carlisle Goldfields Limited from September 2006 to July 2007, and Asian Mineral Resources Limited from July 2006 to January 2008. From August 2005 to July 2007, he was the CFO and a director of Card One Plus, Ltd., an electronic payment solutions company. Prior thereto he was the CFO of Thistle Mining Inc. from March 1999 to August 2005 (TSXV: TMG.V). He has also served as a consultant for several private companies and on the boards of several junior Canadian natural resource companies for over a decade. Prior thereto, he was in the financial services sector from 1987 to 1995; and from 1983 to 1987 he served as Director of Information Services of Ernst & Young, Chartered Accountants, in Toronto. From 1977 to 1983, he provided management and controllership functions for various financial institutions. From 1970 to 1977, he served as an Auditor for PricewaterhouseCoopers, Chartered Accountants. Mr. McKenzie obtained his Diploma in Alternate Dispute Resolution from the University of Toronto in 2001. He obtained his C.A. from the Institute of Chartered Accountants of Ontario in 1973 and his B.Sc. (Hons.) in Mathematics from the University of Toronto in 1970.

Mr. McKenzie’s qualifications to serve on the board of directors include his experience with companies involved in the mining and mineral industry.

David G. Wahl, P. Eng., P.Geo. ICD.D was appointed to Li3’s Board of Directors on February 18, 2010. From 2005 to the present, Mr. Wahl has been the President and CEO of Southampton Associates - Consulting Engineers & Geoscientist, a private consulting concern specializing in mining and technical issues for corporate clients, financial institutions and governments. Mr. Wahl is a Director of Renforth Resources Inc. (TSX-V) and Femin Inc (Frankfurt). Mr. Wahl also has served in a technical advisory capacity to certain financial institutions, government agencies, and national legal and accounting firms. As a past director of the Prospectors and Developers Association, Mr. Wahl provided independent peer review of the OSC/TSE Mining Standard Task Force and for Canadian National Instrument 43-101. Mr. Wahl contributed to a similar review process as co-chair of the Professional Engineers of Ontario Review Committee. Mr. Wahl is a graduate of the Colorado School of Mines and received a degree as an Engineer of Mines in 1968.

Mr. Wahl’s qualifications to serve on the board of directors include his experience with companies involved in the mining and mineral industry.

Rights to Nominate Directors

Li3 has agreed with the Maricunga Sellers: (a) to increase the number of directors constituting its board of directors to seven; (b) that the Maricunga Sellers will have the right to nominate three of Li3’s directors and that a fourth director (who shall hold the position of Chairman of the Board) will be jointly nominated by the Maricunga Sellers and by Li3’s management (such persons, or any successors thereto nominated by the Maricunga Sellers or by the Maricunga Sellers and management, as the case may be, the “Nominees”), and that the board of directors shall appoint such Nominees to fill vacancies created in the board by the increase in the number of directors and by resignations, to serve until the next annual meeting of stockholders; (c) that the Nominees shall continue to be nominated as directors by Li3’s management at the next and subsequent annual meetings of stockholders, and at any special meeting of the stockholders at which directors are to be elected (collectively, a “Meeting”), during the Lock-Up period (but the Nominees will be subject to reelection by the stockholders as provided in Li3’s by-laws); and (d) that if any Nominee is not elected by the stockholders pursuant to the by-laws, the Maricunga Sellers, or the Maricunga Sellers and management, as the case may be, will have the right to designate the same or another person as their Nominee at the next Meeting, provided it is within the period of the Lock-Up. To date, the Maricunga Sellers have exercised their right to nominate the following board members: Eduardo de Aguirre, Patricio Campo, and Alan Fraser. All three Nominees were appointed to Li3’s Board of Directors on October 23, 2011. Thereafter, Li3’s Chairman of the Board, Patrick Cussen, was appointed to the board on December 5, 2011.

Pursuant to the Investor’s Rights Agreement between POSCAN and Li3, dated as of August 24, 2011, Li3 was required to appoint a director nominated by POSCAN to the board of directors, and we must continue to nominate a POSCAN-designee at each annual meeting for as long as POSCAN owns not less than 10% of the issued and outstanding shares of common stock. Li3 appointed Mr. SungWon Lee to the board of directors on December 19, 2012.

Involvement in Certain Legal Proceedings

To the best of Li3’s knowledge, other than as disclosed below, none of its directors or executive officers has, during the past ten years:

●

been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

●

had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;

●

been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;

●

been found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

●

been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

●

been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Harvey McKenzie was the Chief Financial Officer of Thistle Mining Inc. when, on January 7, 2005, Thistle Mining obtained protection from creditors pursuant to the Companies’ Creditors Arrangement Act, (Canada). The restructuring was completed on June 30, 2005.

Board of Director Meetings

Li3’s business is under the general oversight of the board of directors as provided by the laws of Nevada and its by-laws. During the fiscal year ended June 30, 2012, the board of directors held seven meetings and took action by unanimous written consent in lieu of a meeting two times. Except as set forth below, each incumbent director attended at least 75% of the board of directors meetings and the meetings of the committees on which he served during fiscal 2012 (or the portion thereof during which he has been a director).

Director	Percentage of meetings attended
Hyundae Kim		11	%
Patricio Campos		50	%
David Wahl		57	%
Eduardo Aguirre		63	%

Board Committees

Until December 5, 2011, Li3 had not established any committees of its board of directors. The entire board of directors has historically performed all functions that would otherwise be performed by committees, including audit and nominating committees. Effective December 5, 2011, the board of directors formed an Audit Committee, a Compensation Committee, a Health, Safety, Environment and Community Committee and a Nominating and Corporate Governance Committee. It has subsequently adopted charters for all such committees.

Audit Committee

The purpose of the Audit Committee of the board of directors is to represent and assist the board in monitoring (i) accounting, auditing, and financial reporting processes; (ii) the integrity of the financial statements; (iii) Li3’s internal controls and procedures designed to promote compliance with accounting standards and applicable laws and regulations; and (iv) the appointment of and evaluating the qualifications and independence of the independent registered public accounting firm. The Audit Committee’s responsibilities are set forth in its formal charter. The Audit Committee consists of Mr. McKenzie (Chairperson) and Messrs. Cussen and Fraser. The Audit Committee was formed on December 5, 2011, and has met two times during fiscal 2012.

Li3’s board of directors has determined that all Audit Committee members are financially literate under the Nasdaq listing rules. The board also determined that Mr. McKenzie qualifies as an “audit committee financial expert” within the meaning of Item 407 of Regulation S-K promulgated under the Exchange Act.

Compensation Committee

The purpose of the Compensation Committee of Li3’s board of directors is to (i) assist the board in discharging its responsibilities with respect to compensation of executive officers, (ii) evaluate the performance of executive officers, and (iii) administer the stock and incentive compensation plans and recommend changes in such plans to the board as needed. The Compensation Committee’s specific responsibilities are set forth in its formal charter. The Compensation Committee currently consists of Mr. De Aguirre (Chairman) and Messrs. Cussen and Saenz. Mr. Saenz, as Chief Executive Officer, is not independent within the meaning of the Nasdaq rules; nonetheless, Li3 believes that his presence on the Compensation Committee is productive, given the size and history of Li3. The Compensation Committee was formed on December 5, 2011, and has met two times during fiscal 2012.

Health, Safety, Environment and Community Committee

The purpose of the Health, Safety, Environment and Community Committee of Li3’s board of directors is to assist the board in discharging its responsibilities with respect to (i) employee health and safety, (ii) the protection of the environment, and (iii) the relationship to the local communities affected by its operations. The Health, Safety, Environment and Community Committee’s specific responsibilities are set forth in its formal charter. The Health, Safety, Environment and Community Committee currently consists of Mr. Campos (Chairman) and Messrs. Fraser and Wahl. The Health, Safety, Environment and Community Committee was formed on December 5, 2011, and has not met during fiscal 2012.

Nominating and Corporate Governance Committee

The purpose of the Nominating and Corporate Governance Committee of the board of directors is to assist the board in identifying qualified individuals to become board members, in determining the composition of the board and its committees, in monitoring a process to assess board effectiveness and in developing and implementing corporate procedures and policies. The Nominating and Corporate Governance Committee’s specific responsibilities are set forth in its formal charter. The Nominating and Corporate Governance Committee currently consists of Mr. Cussen (Chairman) and Messrs. McKenzie and Saenz. Mr. Saenz, as Chief Executive Officer, is not independent within the meaning of the Nasdaq rules; nonetheless, we believe that his presence on the Nominating and Corporate Governance Committee is productive, given the size and history of Li3. The Nominating and Corporate Governance Committee was formed on December 5, 2011, and has not met during fiscal 2012.

Shareholder Communications

Currently, Li3 does not have a policy with regard to the consideration of any director candidates recommended by security holders. To date, no security holders have made any such recommendations.

Director Independence

Because the common stock is not currently listed on a national securities exchange, Li3 has used the definition of “independence” of The Nasdaq Stock Market to make this determination. Nasdaq Listing Rule 5605(a)(2) provides that an “independent director” is a person other than an officer or employee of Li3 or any other individual having a relationship which, in the opinion of Li3’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Nasdaq listing rules provide that a director cannot be considered independent if:

●

the director is, or at any time during the past three years was, an employee of Li3;

●

the director or a family member of the director accepted any compensation from the company in excess of $120,000 during any period of 12 consecutive months within the three years preceding the independence determination (subject to certain exclusions, including, among other things, compensation for board or board committee service);

●

a family member of the director is, or at any time during the past three years was, an executive officer of Li3;

●

the director or a family member of the director is a partner in, controlling stockholder of, or an executive officer of an entity to which Li3 made, or from which Li3 received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenue for that year or $200,000, whichever is greater (subject to certain exclusions); and

●

the director or a family member of the director is employed as an executive officer of an entity where, at any time during the past three years, any of the executive officers of Li3 served on the compensation committee of such other entity; or the director or a family member of the director is a current partner of the company’s outside auditor, or at any time during the past three years was a partner or employee of Li3’s outside auditor, and who worked on Li3’s audit.

The board of directors has determined that each of Messrs. De Aguirre, Campos, Cussen, Fraser, Lee, McKenzie and Wahl- is an “Independent Director” within the meaning of the rules of the Nasdaq Stock Market. Furthermore, the board has determined that each member of the Audit Committee is “independent” within the meaning of Rule 10A-3(b)(1) under the Exchange Act.

EXECUTIVE COMPENSATION OF Li3

The following table sets forth information concerning the total compensation paid or accrued by Li3 during the last two fiscal years ended June 30, 2012 and June 30, 2011 to (i) all individuals that served as principal executive officer or acted in a similar capacity for Li3 at any time during the fiscal year ended June 30, 2012; and (ii) all individuals that served as executive officers at any time during the fiscal year ended June 30, 2011 that received annual compensation during such fiscal year in excess of $100,000.

Summary Compensation Table

													Change
													in
													Pension
													Value
													and Non-
											Non-Equity		qualified
											Incentive		Deferred
Name and							Stock		Option		Plan		Compensation		All Other
Principal			Salary		Bonus		Awards		Awards		Compensation		Earnings		Compensation
Position	Year		($)		($)		($)		($)		($)		($)		($)		Total ($)
Luis Francisco Saenz		2012		225,000		200,000		-		-		-		-		19,070		444,070
Chief Executive Officer (1)		2011		75,000		-		154,000		-		-		-		-		229,000

Thomas E. Currin		2012		212,500		-		-		-		-		-		-		212,500
Chief Operating Officer (2)		2011		75,000		100,000		1,232,500		343,310		-		-		-		1,750,810

Luis Santillana		2012		61,667		20,000		34,500		30,725		-		-		-		146,892
Chief Financial Officer (3)		2011		-		-		-		-		-		-		-		-

Eric E. Marin		2012		201,772		-		-		-		-		-		-		201,772
Interim Chief Financial Officer (4)		2011		10,000		-		-		-		-		-		-		10,000

(1)

Mr. Saenz was appointed Chief Executive Officer as of October 19, 2009. Mr. Saenz has an employment agreement as described below. Li3 granted Mr. Saenz 1,500,000 shares of restricted common stock upon his initial hire and 700,000 restricted stock units on June 27, 2011, which had a grant date fair value of $154,000. Li3 has been paying Mr. Saenz at the rate of $100,000 per annum for the first calendar quarter of 2011 and $200,000 per annum thereafter. On May 2, 2012, the board of directors approved a cash bonus of $200,000 for Mr. Saenz’ achievements for fiscal years 2010 and 2011 and an increase to Mr. Saenz’ compensation from $200,000 per annum to $250,000 per annum, retroactive as of January 1, 2012. In December 2011, Li3 paid approximately $19,070 for Mr. Saenz’ rental expenses for an apartment located in Chile.

(2) Mr. Currin was appointed Chief Operating Officer on August 11, 2010. Li3 granted 2,500,000 shares of restricted stock to MIZ under the 2009 Plan, which vest upon the achievement of certain milestones, and the grant date fair value of which is $950,000. During the year ended June 30, 2011, Li3 also granted to MIZ 736,842 shares of common stock outside of the 2009 Plan with a grant date fair value of $282,500. In connection with the hiring of Mr. Currin, Li3 granted 1,000,000 stock options under the 2009 Plan to MIZ, having a grant date fair value of $343,310. Mr. Currin’s base salary was $200,000 per annum. However, pursuant to an amendment to the Employment Services Agreement with MIZ, Li3 issued an aggregate of 500,000 shares of common stock in lieu of (i) all base salary earned in calendar year 2010 and (ii) one-half of the base salary for the first calendar quarter of 2011. On May 2, 2012, the board of directors approved an increase to Mr. Currin’s compensation from $200,000 per annum to $225,000 per annum, retroactive as of January 1, 2012. On December 5, 2012, Mr. Currin submitted a letter of resignation to Li3, effective immediately. He will continue providing services for Li3 as an independent consultant.

(3) Mr. Santillana served as Vice President of Finance from March 1, 2012 until June 30, 2012, when he was appointed Chief Financial Officer. Mr. Santillana has an employment agreement with Li3 as described below. Li3 agreed to grant Mr. Santillana restricted stock units under the 2009 Plan with respect to 250,000 shares of common stock and options under the 2009 Plan to purchase another 250,000 shares of common stock. Li3 paid Mr. Santillana a $20,000 bonus during fiscal year 2012, and it has been paying Mr. Santillana at the rate of $185,000 per annum for the entire period of his employment.

(4) Mr. Marin was appointed Interim Chief Financial Officer on January 13, 2010. On November 23, 2011, Li3 entered into a Contractor Services Agreement (the “R&M Agreement”) with R&M Global Advisors, Inc., an entity controlled by Mr. Marin, pursuant to which Li3 retained Mr. Marin’s services as Interim Chief Financial Officer for a term beginning on September 15, 2011, and continuing for six months thereafter with provision for automatic renewal for successive six month periods unless either provides notice of non-renewal. Under the R&M Agreement, Li3 paid an initial fee of $15,000 plus a monthly fee of $15,000 per month, commencing retroactively on September 15, 2011. The amounts for the fiscal year 2012 represent billings for professional services by R&M Global Advisors. Mr. Marin resigned at the close of business on June 30, 2012.

Outstanding Equity Awards at Fiscal Year-End

Li3 has not issued any stock options or maintained any stock option or other incentive plans other than the 2009 Equity Incentive Plan. (See “Market Price and Dividend Information – Li3 - Securities Authorized for Issuance under Equity Compensation Plans,” above).

The following tables set forth information regarding stock options held by the Li3 Named Executive Officers at March 31, 2013.

Option Awards
					Equity incentive
					plan awards:
	Number of		Number of		Number of
	securities		securities		securities
	underlying		underlying		underlying
	unexercised		unexercised		unexercised		Option plan
	options		options		unearned		exercise		Option
Name	exercisable (#)		unexercisable (#)		options (#)		price ($)		expiration date
Luis Saenz (2)		-		-		-		-		-
Luis Santillana (3)		-		250,000		250,000	$	0.40		3-1-2017
Thomas Currin (4)		1,000,000		-		-	$	0.16		8-11-2017
Eric E. Marin		-		-		-		-		-

Stock Awards
Name	Number of Shares or Units of Stock That Have Not Vested (#)		Market Value of Shares or Units of Stock That Have Not Vested ($)		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (#) (1)
Luis Saenz (2)		-		-		233,333	$	13,533
Luis Santillana(3)		-		-		166,666	$	9,667
Thomas Currin (4)		-		-		-		-
Eric E. Marin		-		-		-		-

(1)

Value is based on last sale price of the common stock on March 31, 2013, which was $0.058 per share.

(2)

In May 2011, Mr. Saenz received a grant of 700,000 restricted stock units (each unit is equivalent to one common share) under the 2009 Plan of which 466,667 units were vested on March 31, 2013 and the remaining 233,333 units will vest on January 15, 2014.

(3)

Pursuant to an Employment Agreement, Li3 agreed to grant Mr. Santillana 250,000 restricted stock units under the 2009 Equity Incentive Plan, which shall vest in three equal installments on each of March 1, 2013, 2014 and 2015. Li3 also agreed to grant Mr. Santillana an option under the 2009 Equity Incentive Plan to purchase an aggregate of 250,000 shares of common stock, exercisable for a term of five years at an exercise price of $0.40 per share, which option shall vest in its entirety on September 1, 2013. In April 2013, Li3 issued 83,334 shares of common stock in respect to the restricted stocks units that vested in March 2013.

(4)

Consists of awards granted to MIZ Comercializadora, S. de R.L. (“MIZ”), a corporation owned in part by Mr. Currin. Mr. Currin was granted 2,500,000 restricted common shares under the 2009 Plan subject to vesting upon achievement of various milestones. 800,000 shares vested as of June 30, 2012. Also includes options granted under the 2009 Plan to purchase 1,000,000 shares of common stock which vests in three equal installments on each of August 10, 2011, 2012 and 2013. Pursuant to a termination agreement dated December 5, 2012, the remaining 1,700,000 restricted stocks units were deemed fully vested and issued. The options to purchase 1,000,000 shares of common stock were also deemed fully vested and the exercise price of the options was adjusted to $0.16 per share.

Li3 has no plans in place and have never maintained any plans that provide for the payment of retirement benefits or benefits that will be paid primarily following retirement, including, but not limited to, tax qualified deferred benefit plans, supplemental executive retirement plans, tax-qualified deferred contribution plans and nonqualified deferred contribution plans.

Agreements with Executive Officers

Li3 has an employment agreement with each of its Chief Executive Officer, Chief Financial Officer and Executive Vice President. Each of the former Interim Chief Financial Officer and former Chief Operating Officer is compensated through an agreement between Li3 and his affiliate.

Employment Agreement with Luis Saenz

Li3 has entered into an Employment Services Agreement with its Chief Executive Officer, Luis Saenz, effective as of August 24, 2011. Under the Employment Services Agreement Li3 will pay Mr. Saenz such base salary as may be determined by the board of directors, which is currently $250,000. The Employment Services Agreement has an initial term of one year and is automatically renewed for successive one-year terms unless either party delivers timely notice of its intention not to renew. Li3 may also pay Mr. Saenz an annual bonus at such time and in such amount as may be determined by the board of directors in its sole discretion.

Mr. Saenz’s employment by remains “at-will” and terminable at any time for any reason or for no reason. If Mr. Saenz’s employment is terminated without Cause, Li3 must continue to pay him any base salary at the rate then in effect for a period of 18 months. If Mr. Saenz terminates the Employment Services Agreement for Good Reason, or in the event of a termination of employment due to a permanent disability, Li3 will continue to pay him any base salary at the rate then in effect for a period of 18 months.

For the duration of the employment period and, unless Li3 terminates Mr. Saenz’s employment without Cause, for a period of 18 months thereafter, Mr. Saenz has agreed not to directly or indirectly compete with any business engaged in by Li3 or proposed to be engaged in by it during the period of his employment anywhere within the countries in which Li3 is then operating.

The foregoing is a summary of the principal terms of the Employment Services Agreement and is qualified in its entirety by the detailed provisions of the actual agreement, which is incorporated by reference as an exhibit to this Report and is incorporated herein by reference.

Employment Services Agreement with MIZ Comercializadora

Mr. Currin formerly served as Chief Operating Officer from August 11, 2010 until December 5, 2012. During this period Mr. Currin and his consulting firm MIZ Comercializadora, S. de R.L. received compensation starting at a base fee of $200,000 per year and including the ability to participate in the 2009 Plan. Following his resignation on December 5, 2012, Li3 and Mr. Currin entered into a termination agreement,pursuant to which all previous awards granted under the 2009 Plan vested immediately. Mr. Currinwill continue providing services for Li3 as an independent consultant.

Employment Services Agreement with Luis Santillana

Li3 and Minera Li have entered into separate Employment Services Agreements with Mr. Santillana, dated as of December 1, 2011, amended as of March 1, 2012 and dated July 12, 2012, respectively (the “Employment Agreements”). Under the Employment Agreements, Mr. Santillana shall devote his full-time efforts to Li3, and Li3 has been paying Mr. Santillana an annual base salary of $185,000. The Employment Agreements have each an initial term of one year and are automatically renewed for successive one-year terms unless either party delivers timely notice of its intention not to renew. Pursuant to the Employment Agreements, Li3 has agreed to pay Mr. Santillana an initial bonus of $40,000, and it may also pay Mr. Santillana an annual bonus of up to 50% of his base salary, at such time and in such amount as may be determined by the board of directors in its sole discretion. Li3 has agreed to grant Mr. Santillana 250,000 restricted stock units under the 2009 Equity Incentive Plan, which shall vest in three equal installments on each of March 1, 2013, 2014 and 2015. Li3 has also agreed to grant Mr. Santillana an option under the 2009 Equity Incentive Plan to purchase an aggregate of 250,000 shares of common stock, exercisable for a term of five years at an exercise price of $0.40 per share, which option shall vest in its entirety on September 1, 2013. In April 2013, Li3 issued 83,334 shares of common stock in respect to the restricted stock units that vested in March 2013.

Mr. Santillana’s employment is “at-will” and terminable at any time for any reason or for no reason. If Mr. Santillana’s employment is terminated without Cause or in connection with a Change of Control (as such terms are defined in the Employment Agreements) or if he terminates his employment for Good Reason (as defined in the Employment Agreements), his restricted stock units and options will vest immediately and expire nine months after such termination. If Li3 terminates Mr. Santillana’s employment without Cause, or in connection with a Change of Control, or if Mr. Santillana terminates his employment for Good Reason, or in the event of a termination of employment due to a permanent disability, Li3 will continue to pay Mr. Santillana his base salary at the rate then in effect for a period of nine months.

For the duration of the employment period and, unless Li3 terminates Mr. Santillana’s employment without Cause, for a period of nine months thereafter, Mr. Santillana has agreed not to directly or indirectly compete with any business engaged in by Li3 or proposed to be engaged in by Li3 during the period of his employment anywhere within the countries in which Li3 is then operating.

The foregoing is a summary of the principal terms of the Employment Agreements and is qualified in its entirety by the detailed provisions of the actual agreements, which are filed as exhibits to Li3’s Annual Report and are incorporated herein by reference.

Compensation of Non-Employee Directors

On May 2, 2012, the Li3 board adopted a plan of compensation for its non-employee directors’ services to Li3, pursuant to which each current and former non-employee director shall be paid cash (the “Cash Director Compensation”) at the greatest of the following annual rates that applies to such director during the relevant time periods: $64,000 for the Chairman of the board; $40,000 for the Audit Committee Chairman; $34,000 for the Chairman of any other standing board committee; and $24,000 for directors who do not chair any committees. The Cash Director Compensation shall be deemed to begin to accrue retroactively for each non-employee director on the later of such director’s initiation of substantial involvement with the board, as determined in good faith by the Chief Executive Officer, and July 1, 2011 (each such director’s “Compensation Start Date”). The increased rates of Cash Director Compensation for the Chairman of the board and committee chairmen shall only apply to the period of time that the relevant director served in such capacity.

The board also determined to grant to each of its non-employee directors other than the Chairman of the board 100,000 Restricted Stock Units under the 2009 Plan, which shall vest in three equal installments on each of the first three anniversaries of such director’s Compensation Start Date. Finally, the board determined to grant to the Chairman of the board 300,000 Restricted Stock Units under the 2009 Plan, which shall vest in three equal installments on each of the first three anniversaries of his becoming Chairman of the board. Such restricted stock units have not yet been granted, as Li3 does not have sufficient shares authorized at this time for issuance pursuant to awards under the 2009 Plan to accommodate all of such restricted stock units.

Equity Compensation Plan Information

On October 19, 2009, the board of directors adopted, and our stockholders approved, the 2009 Equity Incentive Plan (the “2009 Plan”), which reserved a total of 5,000,000 shares of common stock for issuance under the 2009 Plan (3,050,001 shares of which have been issued and the restrictions thereon lapsed). If an incentive award granted under the 2009 Plan expires, terminates, is unexercised or is forfeited, or if any shares are surrendered in connection with an incentive award, the shares subject to such award and the surrendered shares will become available for further awards under the 2009 Plan.

In addition, the number of shares of common stock subject to the 2009 Plan, any number of shares subject to any numerical limit in the 2009 Plan, and the number of shares and terms of any incentive award are expected to be adjusted in the event of any change in outstanding common stock by reason of any stock dividend, spin-off, split-up, stock split, reverse stock split, recapitalization, reclassification, merger, consolidation, liquidation, business combination or exchange of shares or similar transaction.

Administration

It is expected that the Compensation Committee of the board of directors, or the board of directors in the absence of such a committee, will administer the 2009 Plan. Subject to the terms of the 2009 Plan, the Compensation Committee would have complete authority and discretion to determine the terms of awards under the 2009 Plan.

Grants

The 2009 Plan authorizes the grant to participants of nonqualified stock options, incentive stock options, restricted stock awards, restricted stock units, performance grants intended to comply with Section 162(m) of the Internal Revenue Code (as amended, the “Code”) and stock appreciation rights, as described below:

●

Options granted under the 2009 Plan entitle the grantee, upon exercise, to purchase a specified number of shares at a specified exercise price per share. The exercise price for shares of common stock covered by an option cannot be less than the fair market value of the common stock on the date of grant unless agreed to otherwise at the time of the grant.

●

Restricted stock awards and restricted stock units may be awarded on terms and conditions established by the compensation committee, which may include performance conditions for restricted stock awards and the lapse of restrictions on the achievement of one or more performance goals for restricted stock units.

●

The compensation committee may make performance grants, each of which will contain performance goals for the award, including the performance criteria, the target and maximum amounts payable, and other terms and conditions.

●

The 2009 Plan authorizes the granting of stock awards. The compensation committee will establish the number of shares of common stock to be awarded and the terms applicable to each award, including performance restrictions.

●

Stock appreciation rights (“SARs”) entitle the participant to receive a distribution in an amount not to exceed the number of shares of common stock subject to the portion of the SAR exercised multiplied by the difference between the market price of a share of common stock on the date of exercise of the SAR and the market price of a share of common stock on the date of grant of the SAR.

Duration, Amendment and Termination

The Board has the power to amend, suspend or terminate the 2009 Plan without stockholder approval or ratification at any time or from time to time. No change may be made that increases the total number of shares of common stock reserved for issuance pursuant to incentive awards or reduces the minimum exercise price for options or exchange of options for other incentive awards, unless such change is authorized by our stockholders within one year. Unless sooner terminated, the 2009 Plan would terminate ten years after its adoption.

Grants to Officers and Directors

On December 9, 2009, the board approved non-incentive stock option grants under the 2009 Plan to the individual non-employee directors, and in the amounts, listed in the table below. These options can be exercised at a price of $0.25 per share, the fair market value of common stock on the date of grant, as determined by the Board, based on the offering price of common stock sold in relatively contemporaneous private placement transactions, vest in three equal installments on each of the first, second and third anniversaries of the date of grant and expire after ten years.

Name of Optionee	Number of Shares
Douglas Perkins		50,000
Anthony Hawkshaw		50,000
Kjeld Thygesen		500,000

In connection with Mr. Perkins’s departure from the board on February 18, 2010, the options granted to him on December 9, 2009, terminated. At such time, Mr. Perkins entered into a consulting arrangement, and the board granted him non-statutory stock options under the 2009 Plan to purchase 50,000 shares of common stock at an exercise price of $1.00 per share, which option vested immediately and expires after two years.

In addition, the Chief Executive Officer gave Anthony Hawkshaw 50,000 of his common stock for services rendered during the year ended June 30, 2010.

Upon Mr. Thygesen’s resignation from the board of directors on September 14, 2011, his options, to the extent unvested, terminated immediately. Accordingly, only 166,667 of his options remained outstanding following such resignation, and they expired unexercised on December 14, 2011. Upon Mr. Hawkshaw’s resignation from the board of directors on October 14, 2011, his options, to the extent unvested, terminated immediately. Accordingly, only 16,667 of his options remain outstanding following such resignation, and they expired on January 14, 2012.

As noted above, pursuant to the Employment Services Agreement, Li3 has granted to MIZ an option to purchase an aggregate of 1,000,000 shares of common stock under the 2009 Plan, exercisable at $0.16 per share. All of the options have a five year term and are fully vested.

The Board granted 700,000 restricted stock units to Luis Saenz, which vest in three equal installments on January 15, 2012, 2013 and 2014.

Pursuant to an Employment Agreement, Li3 agreed to grant Mr. Santillana 250,000 restricted stock units under the 2009 Plan, which shall vest in three equal installments on each of March 1, 2013, 2014 and 2015. Li3 also agreed to grant Mr. Santillana an option under the 2009 Plan to purchase an aggregate of 250,000 shares of common stock, exercisable for a term of five years at an exercise price of $0.40 per share, which option shall vest in its entirety on September 1, 2013.

BUSINESS OF BLUE WOLF

Introduction

Blue Wolf is a blank check company incorporated as a British Virgin Islands, or BVI, business company limited by shares and formed for the purpose of acquiring, engaging in a share exchange, share reconstruction and amalgamation, purchasing all or substantially all of the assets of, or engaging in any other similar business combination with one or more businesses or assets. While Blue Wolf intended to focus on operating businesses that had their primary operations in Mongolia, Blue Wolf also considered other geographic regions or industries if it believed those regions or industries were better able to provide attractive financial returns to Blue Wolf investors.

To date Blue Wolf’s efforts have been limited to organizational activities, activities relating to Blue Wolf’s IPO and activities relating to identifying and evaluating prospective acquisition candidates. The registration statement for the IPO was declared effective July 14, 2011. Blue Wolf consummated the IPO of 8,050,000 Units on July 20, 2011 (including the underwriters’ exercise of their over-allotment option in full). Simultaneously with the consummation of the IPO, Blue Wolf consummated the private sale to Blue Wolf’s Sponsor of 4,166,667 Sponsor Warrants at $0.75 per Warrant (for an aggregate purchase price of $3,125,000). Upon the closing of the IPO and the private placement, $80,237,500 ($9.97 per share) was placed in the Trust Account, including $2,415,000 in deferred underwriting commissions, payable only upon the consummation of Blue Wolf’s business combination. In April 2013 Blue Wolf and the underwriters agreed to a modification of such deferred commissions, such that, in lieu of payment of $2.4 million upon consummation of the business combination, the underwriters will receive an amount equal to the sum of (i) $1.0 million and (ii) (a) $1.4 million multiplied by (b) the quotient of (x) the amount of cash remaining in the Trust Account at the closing of the Business Combination after payment of the aggregate Purchase Price to holders of Public Shares that have tendered such shares to Blue Wolf, divided by $80,237,500.

Blue Wolf has not generated any revenues, other than interest income earned on the proceeds held in the Trust Account from Blue Wolf’s IPO. As of April 30, 2013 approximately $22,470,123 was held in the Trust Account and Blue Wolf had cash outside of the Trust Account of $76,125 (which amounts reflect the balance of loan proceeds received from the Sponsor).Through April 30, 2013, Blue Wolf have withdrawn $11,040 of interest earned on the funds held in the Trust Account.Other than the deferred underwriting commissions, no amounts are payable to the underwriters of Blue Wolf’s IPO in the event of a business combination.

In January 2013, Blue Wolf issued a non-interest bearing unsecured promissory note (the “January Note”) in the amount of $200,000 to Blue Wolf’s Sponsor in consideration for the payment by the Sponsor of various expenses. In March 2013, Blue Wolf issued a non-interest bearing unsecured promissory note (the “March Note”) in the amount of $100,000 to Blue Wolf’s Sponsor in consideration for the payment by the Sponsor of various expenses. In April 2013, Blue Wolf issued a non-interest bearing unsecured promissory note (the “April Note”) in the amount of $100,000 to Blue Wolf’s Sponsor in consideration for the payment by the Sponsor of various expenses. The January Note, March Note and April Note are due upon consummation of the business combination. They do not have a claim against the Trust Account and will not reduce the per-share redemption price to below $9.97.

Redemption of Public Shares and Liquidation If No Initial Business Combination

Blue Wolf’s Sponsor, officers and directors have agreed that Blue Wolf must complete its initial business combination by July 22, 2013. Blue Wolf may not be able to find a suitable target business and consummate Blue Wolf’s initial business combination within such time period. If Blue Wolf is unable to consummate its initial business combination by July 22, 2013, Blue Wolf will, as promptly as reasonably possible but no later than five business days thereafter, distribute the aggregate amount then on deposit in the Trust Account (less up to $50,000 of the net interest earned thereon to pay dissolution expenses), pro rata to Blue Wolf’s public shareholders by way of redemption and cease all operations except for the purposes of winding up of Blue Wolf’s affairs. This redemption of Public Shares from the Trust Account shall be done automatically by function of Blue Wolf’s Charter and prior to any voluntary winding up, although at all times subject to the Companies Act.

The redemption will trigger automatic distribution procedures and any subsequent necessary action by Blue Wolf in the discretion of Blue Wolf’s directors, resulting in Blue Wolf’s voluntary liquidation and subsequent dissolution. In connection with such a voluntary liquidation, the liquidator would give notice to creditors inviting them to submit their claims for payment, by notifying known creditors (if any) who have not submitted claims and by placing a public advertisement locally in the British Virgin Islands and in Blue Wolf’s principal place of business or in the place the liquidator believes such advertising is most likely to come to the attention of Blue Wolf’s creditors, and taking any other steps he considers appropriate to identify Blue Wolf’s creditors, after which Blue Wolf’s assets would be distributed. As soon as Blue Wolf’s affairs are fully wound-up, the liquidator must complete his statement of account and make a notificational filing with the Registrar. Blue Wolf would be dissolved once the Registrar issues a Certificate of Dissolution.

Blue Wolf will instruct the trustee to distribute the aggregate amount then on deposit in the Trust Account (less up to $50,000 of the net interest earned thereon to pay dissolution expenses), pro rata, to Blue Wolf’s public shareholders. Blue Wolf’s Sponsor has agreed to waive its redemption rights with respect to its founder shares if blue Wolf fails to consummate its initial business combination by July 22, 2013. However, to the extent Blue Wolf’s Sponsor, or any of Blue Wolf’s officers, directors or affiliates acquire Public Shares in the open market, they will be entitled to redemption rights with respect to such Public Shares if Blue Wolf fails to consummate its initial business combination by July 22, 2013. There will be no redemption rights or liquidating distributions with respect to Blue Wolf’s Warrants, which will expire worthless in the event Blue Wolf does not consummate its initial business combination by July 22, 2013. Blue Wolf will pay the costs of Blue Wolf’s liquidation of the Trust Account from Blue Wolf’s remaining assets outside of the Trust Account. However, if those funds are not sufficient to cover these costs and expenses, Blue Wolf may request the trustee to release to Blue Wolf an amount of up to $50,000 of such accrued interest to pay those costs and expenses. However, the liquidator may determine that he or she requires additional time to evaluate creditors’ claims (particularly if there is uncertainty over the validity or extent of the claims of any creditors). Also, a creditor or shareholder may file a petition with the BVI court which, if successful, may result in Blue Wolf’s liquidation being subject to the supervision of that court. Such events might delay distribution of some or all of Blue Wolf’s assets to Blue Wolf’s public shareholders.

Additionally, in any liquidation proceedings under British Virgin Islands law, the funds held in Blue Wolf’s Trust Account may be included in Blue Wolf’s estate and subject to the claims of third parties with priority over the claims of Blue Wolf’s shareholders. To the extent any such claims deplete the Trust Account Blue Wolf may not be able to return to Blue Wolf’s public shareholders the liquidation amounts payable to them.

If Blue Wolf were to expend all of the net proceeds of Blue Wolf’s IPO, other than the proceeds deposited in the Trust Account, and without taking into account interest, if any, earned on the Trust Account, the per-share redemption amount received by shareholders upon Blue Wolf’s dissolution would be approximately $9.97. The proceeds deposited in the Trust Account could, however, become subject to the claims of Blue Wolf’s creditors which would have higher priority than the claims of Blue Wolf’s public shareholders. The actual per-share redemption amount received by shareholders may be less than $9.97 (net of any taxes payable).

Although Blue Wolf seeks to have all vendors, service providers, prospective target businesses or other entities with which Blue Wolf does business execute agreements with Blue Wolf waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of Blue Wolf’s public shareholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the Trust Account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against Blue Wolf’s assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, Blue Wolf’s management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to Blue Wolf than any alternative. Examples of possible instances where Blue Wolf may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with Blue Wolf and will not seek recourse against the Trust Account for any reason. In order to protect the amounts held in the Trust Account, Messr. Kraus and Edwards have agreed that they will be jointly and severally liable to Blue Wolf, if and to the extent any claims by a vendor for services rendered or products sold to Blue Wolf, or a prospective target business with which Blue Wolf has discussed entering into a transaction agreement, reduce the amounts in the Trust Account to below approximately $9.97 per share, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under Blue Wolf’s indemnity of the underwriters of Blue Wolf’s IPO against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, Messr. Kraus and Edwards will not be responsible to the extent of any liability for such third party claims. However, Messr. Kraus and Edwards may not be able to satisfy those obligations. None of Blue Wolf’s officers will indemnify Blue Wolf for claims by third parties including, without limitation, claims by vendors and prospective target businesses. Blue Wolf have not independently verified whether such persons have sufficient funds to satisfy their indemnity obligations and, therefore, Blue Wolf’s existing shareholders may not able to satisfy those obligations. Blue Wolf believes the likelihood of Blue Wolf’s existing shareholders having to indemnify the Trust Account is limited because Blue Wolf endeavors to have all vendors and prospective target businesses as well as other entities execute agreements with Blue Wolf waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

In the event that the proceeds in the Trust Account are reduced below approximately $9.97 per share and Messrs. Kraus or Edwards assert that he is unable to satisfy any applicable obligations or that it has no indemnification obligations related to a particular claim, Blue Wolf’s independent directors would determine whether to take legal action against such person to enforce its indemnification obligations. While Blue Wolf currently expects that its independent directors would take legal action on Blue Wolf’s behalf against such person to enforce his indemnification obligations to Blue Wolf, it is possible that Blue Wolf’s independent directors in exercising their business judgment may choose not to do so in any particular instance. Accordingly, due to claims of creditors, the actual value of the per-share redemption price may be less than $9.97 per share.

Blue Wolf will seek to reduce the possibility that Messr. Kraus and Edwards will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which Blue Wolf does business execute agreements with Blue Wolf waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. Messr. Kraus and Edwards will also not be liable as to any claims under Blue Wolf’s indemnity of the underwriters of Blue Wolf’s IPO against certain liabilities, including liabilities under the Securities Act. If Blue Wolf is deemed insolvent for the purposes of the BVI Insolvency Act, 2003 (the “Insolvency Act”) (i.e. (i) Blue Wolf fails to comply with the requirements of a statutory demand that has not been set aside under section 157 of the Insolvency Act; (ii) execution or other process issued on a judgment, decree or order of a British Virgin Islands court in favor of a creditor of blue Wolf’s is returned wholly or partly unsatisfied; or (iii) either the value of Blue Wolf’s liabilities exceeds its assets, or Blue Wolf are unable to pay its debts as they fall due), then there are very limited circumstances where prior payments made to shareholders or other parties may be deemed to be a “voidable transaction” for the purposes of the Insolvency Act. A voidable transaction would include, for these purposes, payments made as “unfair preferences” or “transactions at an undervalue.” A liquidator appointed over an insolvent company who considers that a particular transaction or payment is a voidable transaction under the Insolvency Act could apply to the British Virgin Islands courts for an order setting aside that payment or transaction in whole or in part.

Additionally, if Blue Wolf enters insolvent liquidation under the Insolvency Act, the funds held in Blue Wolf’s Trust Account will likely be included in Blue Wolf’s estate and subject to the claims of third parties with priority over the claims of Blue Wolf’s shareholders. To the extent any insolvency claims deplete the Trust Account you may not be able to return to Blue Wolf’s public shareholders the liquidation amounts due them.

Blue Wolf’s public shareholders will be entitled to receive funds from the Trust Account only in the event of a redemption to public shareholders prior to any winding up in the event Blue Wolf does not consummate its initial business combination or Blue Wolf’s liquidation or if Blue Wolf redeems its shares in connection with an initial business combination that Blue Wolf consummates. In no other circumstances shall a shareholder have any right or interest of any kind to or in the Trust Account. In the event Blue Wolf seeks shareholder approval in connection with Blue Wolf’s initial business combination, a shareholder’s voting in connection with the business combination alone will not result in a shareholder’s redeeming its shares to Blue Wolf for an applicable pro rata share of the Trust Account. Such shareholder must have also exercised its redemption rights described above.

Employees

Blue Wolf currently has two executive officers. These individuals are not obligated to devote any specific number of hours to Blue Wolf’s matters but they intend to devote as much of their time as they deem necessary to Blue Wolf’s affairs until it has completed Blue Wolf’s initial business combination. The amount of time they will devote in any time period will vary based on whether a target business has been selected for Blue Wolf’s initial business combination and the stage of the business combination process Blue Wolf is in. Blue Wolf does not intend to have any full time employees prior to the consummation of its initial business combination.

Properties

Blue Wolf currently maintains its executive offices in Ulaanbaatar, Mongolia. The cost for this space is included in the $10,000 per month fee that Blue Wolf pays its sponsor for office space, utilities and secretarial and administrative services. Blue Wolf considers its current office space adequate for its current operations until consummation of the Transaction.

Legal Proceedings

There are no legal proceedings pending against Blue Wolf.

Management’s Discussion and Analysis

of Financial Condition and Results of Operations of Blue Wolf

The following discussion should be read in conjunction with Blue Wolf’s financial statements, together with the notes to those statements, included elsewhere herein. Blue Wolf’s actual results may differ materially from those discussed in these forward-looking statements because of the risks and uncertainties inherent in future events.

Overview

Blue Wolf is a blank check company formed on March 11, 2011 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. While Blue Wolf’s efforts in identifying prospective target businesses were initially focused on businesses within Mongolia, Blue Wolf also considered opportunities in other business sectors or geographic regions. Blue Wolf intends to effectuate its initial business combination using cash from the proceeds of its IPO and the private placement of the Sponsor Warrants, Blue Wolf’s shares, debt or a combination of cash, shares and debt. In addition, Blue Wolf will not effect a business combination with another blank check company or a similar company with nominal operations.

Results of Operations

Blue Wolf’s efforts have been limited to organizational activities, activities relating to Blue Wolf’s IPO, activities relating to identifying and evaluating prospective acquisition candidates and activities relating to general corporate matters. Blue Wolf has not generated any revenues, other than interest income earned on the proceeds held in the Trust Account. As of March 31, 2013, $80,248,791 was held in the Trust Account (including $2.415 million of deferred underwriting commissions, $3.125 million from the sale of the Sponsor Warrants and $11,543 in accrued interest) and Blue Wolf had cash outside of the Trust Account of $49,340 (which amounts reflect the balance of loan proceeds received from the Sponsor). Interest income on the balance of the Trust Account (net of taxes payable) may be available to Blue Wolf to fund Blue Wolf’s working capital requirements but given the current interest rates, it is doubtful that Blue Wolf will earn a significant amount of interest. The current low interest rate environment has made it more difficult for such investments to generate sufficient funds, together with the amounts available outside the Trust Account, to locate, conduct due diligence, structure, negotiate and close Blue Wolf’s initial business combination. Through March 31, 2013, Blue Wolf had not withdrawn any funds from interest earned on the trust proceeds. Other than the deferred underwriting commissions, no amounts are payable to the underwriters of Blue Wolf’s Public Offering in the event of a business combination.

For the nine months ended March 31, 2013, Blue Wolf had net income of $1,840,369 ($607,559 of expenses, $2,443,333 of gain from the change in the fair value of the warrant liability and earned $4,595 of interest income). For the period from March 11, 2011 (date of inception) to March 31, 2013, Blue Wolf had a net income of $3,111,174 ($1,176,202 of expenses, $4,275,833 of gain from the change in fair value of the warrant liability and earned $11,543 in interest income, of which none had been withdrawn as of March 31, 2013.Blue Wolf incurred offering costs of approximately $4,980,000 (including $2,012,500 of underwriting fees paid at closing and $2,415,000 of deferred underwriting commissions), which were charged to shareholders’ equity upon the completion of the IPO.All of Blue Wolf’s funds in the Trust Account are invested in U.S. government treasury bills with a maturity of 180 days or less.

Liquidity and Capital Resources

On July 20, 2011, Blue Wolf consummated Blue Wolf’s IPO of 8,050,000 units at a price of $10.00 per unit. Simultaneously with the consummation of Blue Wolf’s IPO, Blue Wolf consummated the private sale of 4,166,667 Sponsor Warrants to Blue Wolf’s Sponsor for $3,125,000. Blue Wolf received net proceeds from Blue Wolf’s IPO and the sale of the Sponsor Warrants of $80,237,500 (including the deferred portion of the underwriting commission of $2.415 million) net of the non-deferred portion of the underwriting commissions of approximately $2.013 million and other offering costs of approximately $665,000 and cash deposited outside of Blue Wolf’s Trust Account. As of March 31, 2013, Blue Wolf had cash of $49,340, including loans in the amount of $400,000.

Public shareholders of Blue Wolf were afforded the opportunity concurrent with the proxy solicitation with respect to the extension of time to consummate Blue Wolf’s initial business combination to redeem their Public Shares through a tender offer. On April 16, 2013, the expiration date for the tender offer, an aggregate of 5,794,119 Ordinary Shares had been validly tendered and were accepted for purchase pursuant to the tender offer for an aggregate purchase price of approximately $57.8 million. Consequently, approximately $22.5 million remains in the Trust Account. As a result, the amount of deferred underwriting commissions payable to Blue Wolf’s IPO underwriters has been modified to provide for a minimum fee of $1.0 million and a maximum fee of up to approximately $1.4 million payable upon consummation of Blue Wolf’s initial business combination.

Blue Wolf will depend on sufficient interest being earned on the proceeds held in the Trust Account to provide Blue Wolf with additional working capital to identify one or more target businesses, conduct due diligence and complete Blue Wolf’s initial business combination, as well as to pay any taxes that Blue Wolf may owe. The amounts in the Trust Account may be invested only in U.S. government treasury bills with a maturity of 180 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act. The current low interest rate environment has made it more difficult for such investments to generate sufficient funds, together with the amounts available outside the Trust Account, to locate, conduct due diligence, structure, negotiate and close Blue Wolf’s initial business combination. As a result, Blue Wolf may need to seek additional capital to continue its operations. In such event, Blue Wolf intends to borrow sufficient funds from its Sponsor or management team to operate until Blue Wolf closes its initial business combination. Neither Blue Wolf’s Sponsor nor Blue Wolf’s management team is under any obligation to advance funds to Blue Wolf. If Blue Wolf’s Sponsor or its affiliate or Blue Wolf’s management team loans Blue Wolf any funds, they may, at their option, convert up to $500,000 of those loans into warrants at $0.75 per warrant. These warrants would have the same terms as the Sponsor Warrants. Any such loans would be repaid only from funds held outside the Trust Account or from funds released to Blue Wolf upon completion of Blue Wolf’s initial business combination. If Blue Wolf is unable to complete Blue Wolf’s initial business combination because it does not have sufficient funds available to Blue Wolf, Blue Wolf will cease operations and liquidate the Trust Account. As of March 31, 2013, loans in the aggregate amount of $400,000 were outstanding, none of which are convertible to warrants.

For the period from July 20, 2011 (consummation of Blue Wolf’s IPO) through March 31, 2013, Blue Wolf disbursed an aggregate of approximately $980,000 out of the proceeds of Blue Wolf’s IPO held outside the trust, for legal expenses, accounting expenses and filing fees relating to Blue Wolf’s SEC reporting obligations, general corporate matters, and miscellaneous expenses.

Off-balance Sheet Financing Arrangements

Blue Wolf has no obligations, assets or liabilities which would be considered off-balance sheet arrangements. Blue Wolf does not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements.

Blue Wolf has not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or entered into any non-financial assets.

Contractual Obligations

Blue Wolf does not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities other than a monthly fee of $10,000 payable to Blue Wolf’s Sponsor, for office space, utilities, secretarial and administrative services.

Blue Wolf began incurring these fees on July 15, 2011 (the date Blue Wolf’s securities were first listed on Nasdaq) and will terminate upon the earlier of (i) the consummation of an initial business combination or (ii) the liquidation of Blue Wolf. Blue Wolf had a balance outstanding of $60,000 for unpaid fees as of March 31, 2013.

Critical Accounting Policies

The preparation of interim financial statements and related disclosures in conformity with generally accepted accounting principles in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the interim financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. Blue Wolf has identified the following as its critical accounting policies:

Cash Equivalents

Blue Wolf considers all highly liquid investments with original maturities of three months or less to be cash equivalents.

Development Stage Company

Blue Wolf is considered to be in the development stage as defined by FASB ASC 915, “Development Stage Entities,” and is subject to the risks associated with activities of development stage companies. Blue Wolf’s efforts to date have been limited to organizational activities, activities relating to its IPO, activities relating to identifying and evaluating prospective acquisition candidates and activities relating to general corporate matters. Blue Wolf has not generated any revenues, other than interest income earned on the proceeds held in the Trust Account. Blue Wolf will not generate any operating revenues until after completion of an initial business combination, at the earliest. Blue Wolf will continue to generate non-operating income in the form of interest income on the designated Trust Account until the earlier of Blue Wolf’s initial business combination or Blue Wolf’s liquidation.

Redeemable Ordinary Shares

All of the Ordinary Shares sold as part of the Units in the IPO contain a redemption feature which allows for the redemption of Ordinary Shares under Blue Wolf's liquidation or tender offer/stockholder approval provisions. In accordance with ASC 480, redemption provisions not solely within the control of Blue Wolf require the security to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity's equity instruments, are excluded from the provisions of ASC 480. Although Blue Wolf does not specify a maximum redemption threshold, Blue Wolf’s Charter provides that in no event will Blue Wolf redeem its Public Shares in an amount that would cause its net tangible assets (shareholders' equity) to be less than $5,000,001.

Blue Wolf recognizes changes in redemption value immediately as they occur and will adjust the carrying value of the security to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable Ordinary Shares shall be affected by charges against paid-in capital.

Accordingly, at March 31, 2013, 6,782,032 of the 10,062,500 Public Shares are classified outside of permanent equity at their redemption value. The redemption value is equal to the pro rata share of the aggregate amount then on deposit in the Trust Account, including interest but less taxes payable (approximately $9.97 as of March 31, 2013).

Net Income/(Loss) Per Ordinary Share

Net income/(loss) per share is computed by dividing net income/(loss) applicable to ordinary shareholders by the weighted average number of Ordinary Shares outstanding for the period. The 12,216,667 shares issuable upon exercise of the Warrants related to Blue Wolf’s IPO and the private placement of the Sponsor Warrants are contingently issuable shares and are excluded from the calculation of diluted earnings per share because they are anti-dilutive.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncements:

Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on Blue Wolf’s interim financial statements.

Off-Balance Sheet Arrangements

None.

Quantitative and Qualitative Disclosures About Market Risk

Market risk is the sensitivity of income to changes in interest rates, foreign exchanges, commodity prices, equity prices and othermarketdriven rates or prices. Blue Wolf is not presently engaged in and, if Blue Wolf does not consummate a suitable business combination prior to the prescribed liquidation date of the Trust Account, Blue Wolf may not engage in, any substantive commercial business. Accordingly, Blue Wolf is not and, until such time as it consummates a business combination, Blue Wolf will not be, exposed to significant risks associated with foreign exchange rates, commodity prices, equity prices or other market driven rates or prices. The net proceeds of Blue Wolf’s IPO held in the Trust Account may be invested by the trustee only in U.S. Treasuries with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act. Given Blue Wolf’s limited risk in Blue Wolf’s exposure to government securities and money market funds, Blue Wolf does not view the interest rate risk to be significant.

MANAGEMENT OF BLUE WOLF

Directors and Executive Officers

Blue Wolf’scurrent directors and executive officers are as follows:

Name	Age	Position
Lee Kraus	57	Chief Executive Officer and Chairman of the Board

Paul (Nicholas) Edwards	51	President and Chief Financial Officer

John A. Shapiro	61	Director

George Ireland	56	Director

Koji Fusa	53	Director

Stephen Quin	53	Director

Giacomo E. Di Mase	34	Director

Buyankhishig Ishdorj	33	Vice President, Business Development

Elena Bagayeva	32	Vice President, Finance

Lee Kraus has been Blue Wolf’s Chief Executive Officer and Chairman of the Board since inception. Mr. Kraus is co-founder of Composite Capital, LLC, an investment management and financial advisory firm with a particular focus on the natural resources sector. In February 2007, he founded the predecessor firm to Composite Capital Advisors, LLC (an affiliate of Composite Capital, LLC), a natural resources financial advisory firm focused principally on activities in Central Asia, including Kazakhstan and Uzbekistan. In February 2011, Mr. Kraus co-founded Blue Wolf Fund L.P., a Cayman Islands exempted limited partnership which makes private and public equity investments in Asia, including Mongolia. All investment decisions of Blue Wolf Fund L.P. are made by Composite Capital, LLC. In March 2011, he co-founded Blue Wolf MHC Ltd., Blue Wolf’s Sponsor, and has served as a director since inception. In Mr. Kraus has in-depth experience in the natural resources area, and has been actively involved in mergers and acquisitions, restructurings, and debt and equity capital raising for this class of assets on a global basis for three decades. From June 2007 to December 2012, Mr. Kraus served as a director of Max Petroleum, Plc, or Max, an exploration and production company with assets in Kazakhstan and listed on the London Stock Exchange and the Frankfurt Stock Exchange. From September 2007 to January 2008, Mr. Kraus also served as interim Chief Operating Officer of Max. Mr. Kraus is also a member of the board of directors of Duraseal Holding S.r.l., a nanotechnology-based coatings company focused on the oil and gas, aerospace and automotive sectors. From January 2005 until January 2007, Mr. Kraus served as Managing Director and Head of Natural Resources at Dresdner Kleinwort. From 2000 through 2004, he was involved as a venture investor in software startups. From 1991 to 2000, Mr. Kraus worked at Lazard Frères & Co. in mergers and acquisitions. From 1998 to 2000, Mr. Kraus was a Managing Director and served on the Board of Directors of Lazard Moscow. From 1984 to 1991, Mr. Kraus was in Morgan Stanley’s Natural Resources Group. He also served as a field engineer with Schlumberger in Venezuela and as a systems design consulting engineer on refining and petrochemicals projects before studying for his MBA. He received his Bachelors degree in Electrical Engineering from Stanford University and his Masters of Business Administration from the University of Chicago.

Blue Wolf believes Mr. Kraus is well qualified to serve as Blue Wolf’s Chief Executive Officer and Chairman of the Board due to his public company experience as well as his experience in operations, financing and natural resources. Blue Wolf believes Mr. Kraus’s access to a network of contacts and sources, ranging from private and public company contacts, private equity groups and investment bankers will allow Blue Wolf to generate acquisition opportunities and identify suitable acquisition candidates. Blue Wolf believes Mr. Kraus’s strategic experience and background in negotiating, structuring and consummating numerous business combinations over career spanning four decades will further Blue Wolf’s purposes of consummating a business combination.

Nicholas Edwardshas been Blue Wolf’s President and Chief Financial Officer since inception. From inception to December 30, 2012, he also served as a director of Blue Wolf. Mr. Edwards is co-founder of Composite Capital LLC, an investment management and financial advisory firm with a particular focus on the natural resources sector. In February 2011, he co-founded Blue Wolf Fund L.P., a Cayman Islands exempted limited partnership which makes private and public equity investments in Asia, including Mongolia. All investment decisions of Blue Wolf Fund L.P. are made by Composite Capital, LLC. In March 2011, Mr. Edwards co-founded Blue Wolf MHC Ltd., Blue Wolf’s Sponsor, and has served as a director since inception. Since 2003, Mr. Edwards has been the Managing Partner of Nicholas Edwards Investments LLC, a Japan-focused investment management company. From 1995 until 2001, Mr. Edwards was the partner in charge of the Japanese equity business at Warburg Pincus and opened Warburg Pincus’ Tokyo office in 1996. Subsequently, he founded Nicholas Edwards Investments, Japan, a Japan-focused investment management company. At Warburg Pincus, Mr. Edwards’s other areas of responsibility included the firm’s technology investments elsewhere in Asia, specifically in Taiwan, Korea, and Thailand, and mining investments in Latin America, specifically in Mexico, Chile and Peru. From July 1991 until July 1995, Mr. Edwards worked as a portfolio manager in Jardine Fleming in Tokyo. From January 1989 to June 1991, he worked at Robert Fleming in New York, where he ran the Japan equity research sales desk, including the specialist smaller company mandates and the Japan Technology Fund. From July 1984 to January 1989, Mr. Edwards worked as an analyst covering a variety of sectors, including technology and basic raw materials, at Jardine Fleming in Tokyo. He received a First Class Honors degree in Oriental Studies from Oxford University and his Masters degree equivalent from Hiroshima University. Mr. Edwards is fluent in English, Japanese, French and Spanish.

John A. Shapirohas served as a Director since July 2211. Mr. Shapiro has served as a director of Blueknight Energy Partners, L.P., a service provider for companies engaged in the production, distribution and marketing of crude oil and asphalt product, since November 2009. He retired as an officer at Morgan Stanley & Co. in 2008 where he had served for more than 24 years in various capacities, most recently as Global Head of Commodities. While an officer at Morgan Stanley, Mr. Shapiro participated in the successful acquisitions of TransMontaigne Inc. and Heidmar Inc. and served as a member of the board of directors of both companies. Prior to joining Morgan Stanley & Co., Mr. Shapiro worked for Conoco, Inc. and New England Merchants National Bank. Mr. Shapiro has been a lecturer at Princeton University, Harvard University School of Government, HEC Business School (Paris, France) and Oxford University Energy Program (Oxford, UK). In addition, he serves on the board of directors of Citymeals-on-Wheels and holds an MBA from Harvard University and a Bachelors degree in Economics from Princeton University.

Blue Wolf believes Mr. Shapiro is well-qualified to serve as Blue Wolf’s Director due to his commodity and finance experience. Blue Wolf believes Mr. Shapiro’s access to a network of contacts and sources, ranging from private and public company contacts, private equity groups, and investment bankers will allow Blue Wolf to generate attractive acquisition opportunities and identify suitable acquisition candidates. Blue Wolf believes Mr. Shapiro’s background in commodities, finance and investing will further Blue Wolf’s purpose of consummating Blue Wolf’s initial business combination.

George Irelandhas served as a Director since May 2011. Mr. Ireland is the Chief Executive Officer and Managing Member of Geologic Resource Partners, LLC and Portfolio Manager of the associated Geologic Resource Funds. Mr. Ireland has over 30 years of experience in most aspects of the mining sector, ranging from field geology to banking and venture capital. Mr. Ireland founded Geologic Resource Partners LLC in 2004. From 2000 to 2004, he was the general partner of Ring Partners, LP, an investment partnership that later merged with the Geologic Resource Fund. From 1991 to 2000, he was an analyst for Knott Partners LP. Mr. Ireland graduated from Phillips Academy and the University of Michigan with a Bachelors degree from the School of Natural Resources. Mr. Ireland also serves on the board of directors of Kiska Metals Corporation (TSX.V: KSK), a mineral exploration company primarily engaged in the exploration and development of mineral properties primarily in the United States and Canada, and Merrill & Ring Inc., a private timber company in the United States. Mr. Ireland served as a director of Uranium Resources, Inc. from 1995 to 2008.

Blue Wolf believes Mr. Ireland is well qualified to serve as Blue Wolf’s Director due to his public company experience as well as his experience in operations, finance and natural resources. Blue Wolf believes Mr. Ireland’s access to a network of contacts and sources, ranging from private and public company contacts, private equity groups and investment bankers will allow Blue Wolf to generate acquisition opportunities and identify suitable acquisition candidates.

Koji Fusa has served as a Director since July 9, 2012. He served as the Chief Executive Officer and a Director of Sandringham Capital Partners Limited, an investment manager and advisory company in the United Kingdom, since September 2004. Since February 2012, he has also served as chief executive officer and director of Collabrium Japan Acquisition Corporation (Nasdaq: JACQ) a blank check company formed for the purpose of consummating a business combination with one or more businesses or entities. From July 2003 to August 2004, Mr. Fusa served as a Managing Director at Credit Suisse First Boston Ltd. based in London. From July 2200 to June 2003, he served as Head of Investment Banking at Credit Suisse First Boston Ltd. in its Japanese office.

Blue Wolf believes Mr. Fusa is well-qualified to serve as Blue Wolf’s Director due to his commodity and finance experience. Blue Wolf believes Mr. Fusa’s access to a network of contacts and sources, ranging from private and public company contacts, private equity groups, and investment bankers will allow Blue Wolf to generate attractive acquisition opportunities and identify suitable acquisition candidates. Blue Wolf believes Mr. Fusa’s background in commodity and finance will further Blue Wolf’s purpose of consummating Blue Wolf’s initial business combination.

Stephen Quinhas served as a Director since August 27, 2012. He is a professional geologist registered with the Association of Professional Engineers and Geoscientists of BC, and a Fellow of the Geologic Association of Canada and Society of Economic Geologists. Mr. Quin has more than 30 years of international experience in exploration, mine development and operations and corporate development. Since January 2011, he has served as President and Chief Executive Officer of Midas Gold Corp. (TSE:MAX), a Canadian company involved in exploration and evaluation of the Golden Meadows Project in Idaho. From November 2008 to December 2010, Mr. Quin served as President and Chief Operating Officer of Capstone Mining Corp. (TSE: CS), a Canadian mining company. From September 2005 until November 2008, Mr. Quin served as President and Chief Executive Officer of Sherwood Copper Corp., where he led the acquisition and subsequent feasibility, financing and development of the Minto Mine in Yukon and, subsequently, its merger with Capstone Mining Corp. Prior to his employment at Sherwood Copper Corp., Mr. Quin served as Executive Vice President (January 1994 to August 2005) and director (May 1987 to June 2002) of Miramar Mining Corporation, where he participated in the acquisition of the Con Mine in the Northwest Territories of Canada and in the acquisition and exploration of the Hope Bay project in Nunavut, Canada. In parallel, Mr. Quin led the acquisition and subsequent exploration of copper and gold properties for Miramar’s affiliate, Northern Orion Exploration, including the giant Agua Rica copper-gold-molybdenum deposit in Argentina. Mr. Quin currently serves as a director of the following Canadian companies: Mercator Minerals Ltd. (TSE: ML), Troon Ventures Ltd. (CVE:TVN) and Chalice Gold Mines Ltd. (TSE:CXN). From May 2005 to July 2011, Mr. Quin served as a director of Rare Element Resources Ltd. (NYSE MKT:REE).

Blue Wolf believe Mr. Quin is well qualified to serve as Blue Wolf’s Director due to his public company experience as well as his experience in operations, finance and natural resources. Blue Wolf believes Mr. Quin’s access to a network of contacts and sources, ranging from private and public company contacts, private equity groups and investment bankers will allow Blue Wolf to generate acquisition opportunities and identify suitable acquisition candidates.

Giacomo E. Di Mase has served as a Director since December 30, 2012. Mr. Di Mase has served as chief executive officer and a director of Orange Park Records srl, an independent record label and music publishing company in Rome, Italy, since March 2007. From May 2000 to March 2012, Mr. Di Mase served in various capacities including business analyst, business development, and strategic management at Piaggio Aero Industries, an aircraft manufacturing company in Genoa, Italy, which is family owned in partnership with Mubadala and Tata Group. He also serves as a director of Xurex Inc., a company that develops anti-corrosion and anti-abrasion chemicals, Duraseal Coatings Company, a company that produces coatings for drilling and extraction pipes, and Universal Nanotech Ltd., a marketing and public relations company for nanotechnology coating products. Mr. Di Mase received his B.A. in Business Administration from John Cabot University in Rome, Italy.

Blue Wolf believes Mr. Di Mase is well qualified to serve as Blue Wolf’s Director due to his experience in operations and finance. Blue Wolf believes Mr. Di Mase’s access to a network of contacts and sources, ranging from private and public company contacts, private equity groups and investment bankers will allow Blue Wolf to generate acquisition opportunities and identify suitable acquisition candidates.

Buyankhishig Ishdorj has been Blue Wolf’s Vice President, Business Development since December 30, 2012. Mr. Ishdorj has served as a Vice President of Composite Capital, LLC, an investment management and financial advisory firm with a particular focus on the natural resources sector, since December 2011 and as an Associate from March 2011 to December 2011. From September 2009 to March 2011, he served as General Manager of Monet Capital Investment, an investment bank in Mongolia. Mr. Ishdorj served as the Head of Marketing and the Chief Operating Officer of Altai Cashmere LLC, a garment manufacturing company, from November 2007 to September 2009. From September 2007 to November 2007, he served as the Chief Executive Officer of UBOS LLC, a trading company owned by Just Group LLC. Mr. Ishdorj served as Manager of Business Development for Just Group LLC, a diversified holding company, from May 2006 to September 2007, and as the Chief Executive Officer of MTML LLC, a trading company, from January 2004 to May 2006. He has served as a board member of the Mongolia-Turkey Association of Mongolia since 2008 and as a member of the Association of New Market since 2011. Mr. Ishdorj received his B.A. in International Relations and Economics at the University of Uludag in Turkey and a M.B.A. in International Relations and Economics at the University of Ankara in Turkey.

Elena Bagayevahas been Blue Wolf’s Vice President, Finance since December 30, 2012. Ms. Bagayeva has served as project manager at Composite Capital, LLC, an investment management and financial advisory firm with a particular focus on the natural resources sector, since September 2012. From November 2011 to June 2012, she served as manager of corporate development and investor relations of Xanadu Mines Ltd. (ASX:XAM). From October 2009 to November 2011, Ms. Bagayeva served as business development manager and projects coordinator of Wardell Armstrong International Ltd., a United Kingdom consulting company serving the international mineral industry. From February 2006 to September 2009, she served in various capacities at Sary Kazna LLC, an operating subsidiary of Central Asia Metals PLC (AIM:CAML). Ms. Bagayeva received a B.A. in Linguistics from Kazakh State University and is studying for her MBA at the London School of Business and Finance.

Number and Terms of Office of Officers and Directors

Blue Wolf’s board of directors is divided into three classes with only one class of directors being elected in each year and each class (except for those directors appointed prior to Blue Wolf’s first annual meeting of shareholders) serving a three-year term. The term of office of the first class of directors, consisting of Messr. Shapiro and Quin, will expire at Blue Wolf’s first annual meeting of shareholders. The term of office of the second class of directors, consisting of Messr. Ireland and Fusa, will expire at the second annual meeting of shareholders. The term of office of the third class of directors, consisting of Messr. Kraus and Di Mase, will expire at the third annual meeting of shareholders. Blue Wolf’s officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Blue Wolf’s board of directors is authorized to appoint persons to the offices set forth in Blue Wolf’s Charter as it deems appropriate. Blue Wolf’s Charter provide that Blue Wolf’s officers may consist of a chairman of the board, chief executive officer, president, chief financial officer, vice presidents, secretary, treasurer and such other offices as may be determined by the board of directors.

See “Management Following the Transaction” for a description of the officers and directors of Blue Wolf following the Transaction.

Committees of the Board of Directors

The Board of Directors has established an audit committee and a corporate governance and nominating committee, each of which is comprised of directors who are independent under the Nasdaq listing standards.

Audit Committee

The audit committee of the board of directors consists of Mr. Shapiro (chairman), Mr. Fusa and Mr. Quin. The audit committee’s duties, which are specified in Blue Wolf’s Audit Committee Charter, include, but are not limited to:

reviewing and discussing with management and the independent auditor the annual audited financial statements, and recommending to the board whether the audited financial statements should be included in Blue Wolf’s Form 10-K;

discussing with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of Blue Wolf’s financial statements;

discussing with management major risk assessment and risk management policies;

monitoring the independence of the independent auditor;

verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law;

reviewing and approving all related-party transactions;

inquiring and discussing with management Blue Wolf’s compliance with applicable laws and regulations;

pre-approving all audit services and permitted non-audit services to be performed by Blue Wolf’s independent auditor, including the fees and terms of the services to be performed;

appointing or replacing the independent auditor;

determining the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work;

establishing procedures for the receipt, retention and treatment of complaints received by Blue Wolf regarding accounting, internal accounting controls or reports which raise material issues regarding Blue Wolf’s financial statements or accounting policies; and

approving reimbursement of expenses incurred by Blue Wolf’s management team in identifying potential target businesses.

Financial Expert on Audit Committee

The audit committee will at all times be composed exclusively of directors who are “financially literate” as defined under the Nasdaq listing standards. The Nasdaq listing standards define “financially literate” as being able to read and understand fundamental financial statements, including a company’s balance sheet, income statement and cash flow statement.

In addition, Blue Wolf must certify to Nasdaq that the committee has, and will continue to have, at least one member who has past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background that results in the individual’s financial sophistication. The board of directors has determined that Mr. Shapiro satisfies Nasdaq’s definition of financial sophistication and also qualifies as an “audit committee financial expert,” as defined under rules and regulations of the SEC.

Corporate Governance and Nominating Committee

The corporate governance and nominating committee is responsible for overseeing the selection of persons to be nominated to serve on Blue Wolf’s board of directors. The corporate governance and nominating committee considers persons identified by its members, management, shareholders, investment bankers and others. Each of Messr. Ireland and Shapiro serve on the committee, with Mr. Ireland serving as its chair.

Guidelines for Selecting Director Nominees

The guidelines for selecting nominees, which are specified in the Corporate Governance and Nominating Committee Charter, generally provide that persons to be nominated:

should have demonstrated notable or significant achievements in business, education or public service;

should possess the requisite intelligence, education and experience to make a significant contribution to the board of directors and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and

should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the shareholders.

The corporate governance and nominating committee will consider a number of qualifications relating to management and leadership experience, background and integrity and professionalism in evaluating a person’s candidacy for membership on the board of directors. The corporate governance and nominating committee may require certain skills or attributes, such as financial or accounting experience, to meet specific board needs that arise from time to time and will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of board members. The corporate governance and nominating committee does not distinguish among nominees recommended by shareholders and other persons.

Code of Conduct and Ethics

Blue Wolf has adopted a code of conduct and ethics applicable to Blue Wolf’s directors, officers and employees in accordance with applicable federal securities laws.

Compensation Discussion and Analysis

None of Blue Wolf’s executive officers or directors has or will receive any cash compensation for services rendered prior to the consummation of Blue Wolf’s initial business combination. Commencing on July 15, 2011, the date that Blue Wolf’s securities were first listed on Nasdaq, through the earlier of consummation of Blue Wolf’s initial business combination and Blue Wolf’s liquidation, Blue Wolf will pay Blue Wolf’s Sponsor, an entity controlled by Blue Wolf’s officers and directors, a total of $10,000 per month for office space, utilities and secretarial and administrative services. Other than this $10,000 per month fee, no compensation of any kind, including finder’s and consulting fees, will be paid to Blue Wolf’s Sponsor, executive officers and directors, or any of their respective affiliates, for services rendered prior to or in connection with the consummation of Blue Wolf’s initial business combination. However, these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities on Blue Wolf’s behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Blue Wolf’s independent directors will review on an ongoing basis all material payments to Blue Wolf’s Sponsor, officers, directors or Blue Wolf’s or their affiliates.

After the completion of Blue Wolf’s initial business combination, Blue Wolf’s directors and/or members of Blue Wolf’s management team who remain with Blue Wolf may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to shareholders, to the extent then known, in the tender offer materials or proxy solicitation materials furnished to Blue Wolf’s shareholders in connection with a proposed business combination. However, it is unlikely the amount of such compensation will be known at such time, as executive and director compensation will be determined by the directors of the post-combination company. Any compensation to be paid to Blue Wolf’s officers will be determined, or recommended to the board of directors for determination, either by a compensation committee constituted solely by independent directors or by a majority of the independent directors on Blue Wolf’s board of directors.

Blue Wolf does not intend to take any action to ensure that members of Blue Wolf’s management team maintain their positions with Blue Wolf after the consummation of Blue Wolf’s initial business combination, although it is possible that some or all of Blue Wolf’s executive officers and directors may negotiate employment or consulting arrangements to remain with Blue Wolf after the initial business combination. The existence or terms of any such employment or consulting arrangements to retain their positions with Blue Wolf may influence Blue Wolf’s management’s motivation in identifying or selecting a target business but Blue Wolf does not believe that the ability of Blue Wolf’s management to remain with Blue Wolf after the consummation of Blue Wolf’s initial business combination will be a determining factor in Blue Wolf’s decision to proceed with any potential business combination. Blue Wolf is not party to any agreements with its executive officers and directors that provide for benefits upon termination of employment.

Compensation Committee Interlocks and Insider Participation and Compensation Committee Report

Blue Wolf does not presently have a compensation committee of Blue Wolf’s board of directors. Blue Wolf’s board of directors intends to establish a compensation committee upon the consummation of an initial business combination and, at that time, adopt a charter for such committee. Blue Wolf does not believe a compensation committee is necessary prior to the consummation of an initial business combination because there will be no salary, fees or other compensation paid to Blue Wolf’s officers or directors prior to such time other than as disclosed herein. All members of Blue Wolf’s board of directors reviewed the “Compensation Discussion and Analysis” and agreed that it should be included in Blue Wolf’s public reports.

THE SPECIAL MEETING OF Li3 STOCKHOLDERS

Date, Time and Place of the Li3 Special Meeting

The special meeting of Li3 stockholders, or the Li3 special meeting, is scheduled to be held at the offices of ____________, located at __________________, on June ___, 2013, at 10:00 a.m., Eastern time.

Purpose of the Li3 Special Meeting

At the Li3 special meeting, Li3 stockholders will be asked to:

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consider and act on a proposal to approve and adopt the Agreement and Plan of Merger;

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consider and act on a proposal to approve the adjournment of the Li3 special meeting, if necessary, to permit the further solicitation of proxies because there are not sufficient votes at the Li3 special meeting to vote in favor of the approval and adoption of the Agreement and Plan of Merger; and

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transact any other business that may properly come before the Li3 special meeting or any reconvened meeting following an adjournment or postponement of the Li3special meeting.

Record Date; Outstanding Shares Entitled to Vote

The Li3 board has fixed May ___, 2013, as the record date for the Li3 special meeting, or the Li3 record date. If you were a holder of record of shares of Li3 common stock at the close of business on the Li3 record date, you are entitled to vote your Li3 shares of common stock held on the li3 record date at the Li3 special meeting.

As of the Li3 record date, there were ___________ shares of Li3 common stock outstanding and entitled to vote at the Li3 special meeting.

Ownership of Li3 Shares

If your Li3 shares are registered directly in your name with Li3’s transfer agent, Continental Stock Transfer & Trust Company, you are considered, with respect to those Li3 shares, the “stockholder of record.” This proxy statement/prospectus and the enclosed proxy card have been sent directly to you by Li3.

If your Li3 shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of Li3 shares held in “street name.” This proxy statement/prospectus has been forwarded to you by your broker, bank or nominee who is considered, with respect to those Li3 shares, the stockholder of record. As the beneficial owner of Li3 shares held in street name, you have the right to direct your broker, bank or nominee how to vote your Li3 shares by using the voting instruction card included in the mailing or by following their instructions for voting by telephone or the Internet.

Quorum

In order to transact business at the Li3 special meeting, a quorum of Li3 stockholders must be present. A quorum will exist if holders of a majority of the outstanding shares of Li3 common stock entitled to vote on a matter are present in person, or represented by proxy, at the Li3 special meeting. Accordingly, the presence at the Li3 special meeting, either in person or by proxy, of holders of at least a majority of the outstanding shares of Li3 common stock will be required to establish a quorum. If a quorum is not present, the Li3 special meeting may be adjourned, pending stockholder approval, to a later date.

Holders of shares of Li3 common stock present in person at the Li3 special meeting but not voting, and shares of Li3 common stock for which Li3 has received proxies indicating that their holders have abstained, will be counted as present at the Li3 special meeting for purposes of determining whether a quorum is established.

Vote Required

Under Nevada law and Li3’s bylaws, a majority of the outstanding shares of the corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of stockholders. If a quorum exists, a majority vote of those shares present and voting at a duly organized meeting shall suffice to defeat or enact any proposal.

The affirmative vote of the holders of at least a majority of the outstanding shares of Li3 common stock who are present at the meeting, in person or by proxy, and entitled to vote on the applicable matter is required to:

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approve and adopt the Agreement and Plan of Merger;

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approve an adjournment, if any, of the special meeting; and

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approve such other business that may properly come before the Li3 special meeting.

Because approval and adoption of the Agreement and Plan of Merger requires the affirmative vote of the majority of the outstanding shares of common stock of Li3 at a duly organized meeting, if you mark “abstain” or fail to vote on the proposed merger, it will have the same effect as a vote “AGAINST” the approval and adoption of the Agreement and Plan of Merger. If you fail to vote in person or by proxy with respect to any LI3 shares for which you are the record owner or fail to instruct your broker or other nominee on how to vote the LI3 shares you hold in street name with respect to the Adjournment Proposal, your Li3 shares will not be voted, or treated as present at the special meeting and entitled to vote, on each proposal, and as such, your failure to vote or to instruct your broker or nominee how to vote will not have the effect of a “FOR” or “AGAINST” vote with respect to either proposal.

Recommendation of the Li3 Board

Proposal No. 1: The Li3 board unanimously determined that the Agreement and Plan of Merger and consummation of the transactions contemplated thereunder are advisable, fair and in the best interests of Li3 and its stockholders and unanimously approved the Agreement and Plan of Merger. The Li3 board recommends that the stockholders of Li3 vote “FOR” the proposal to approve and adopt the Agreement and Plan of Merger. Additional information on the recommendation of the Li3board is set forth in “The Business Combination — Recommendation of the Li3 Board; Li3’s Reasons for the Business Combination” beginning on page 107.

Li3 stockholders should carefully read this proxy statement /prospectus in its entirety for additional information concerning the Agreement and the Plan of Merger and the Transaction. In addition, Li3 stockholders are directed to the Agreement and Plan of Merger, which is attached as Annex A to this proxy statement/prospectus.

Proposal No. 2: The Li3 board unanimously recommends that the stockholders of Li3 vote “FOR” the adjournment of the Li3 special meeting to permit further solicitation of proxies because there are not sufficient votes at the Li3 special meeting to approve and adopt the Agreement and Plan of Merger.

How to Vote

After reading and carefully considering the information contained in this proxy statement/prospectus, please vote promptly. In order to ensure your vote is recorded, please submit your proxy or voting instructions as instructed below as soon as possible, even if you plan to attend the special meeting.

Internet. If you are a beneficial holder of Li3 common stock, you can vote over the Internet by following the instructions included with your proxy card. If you vote over the Internet, do not return your proxy card. The availability of Internet voting for beneficial owners holding Li3 shares in street name will depend on the voting process of your broker, bank or nominee. Please follow the voting instructions in the materials you receive from your broker, bank or nominee.

Telephone. If you are a beneficial holder of Li3 common stock, you can vote by telephone by following the instructions included with your proxy card. You will then be prompted to enter the control number printed on your proxy card and to follow subsequent instructions. Telephone voting is available 24 hours a day. If you vote by telephone, do not return your proxy card. The availability of telephone voting for beneficial owners holding Li3 shares in street name will depend on the voting process of your broker, bank or nominee. Please follow the voting instructions in the materials you receive from your broker, bank or nominee.

Mail. You can vote by mail by simply completing, signing, dating and mailing your proxy card or voting instruction card in the postage-paid envelope included with this proxy statement/prospectus. In addition, all stockholders may vote in person at the special meeting. You may also be represented by another person at the meeting by executing a proper proxy designating that person. If you are a beneficial owner of shares held in street name, you must obtain a legal proxy from your broker, bank or nominee and present it to the inspectors of election with your ballot when you vote at the meeting.

Attending the Li3 Special Meeting

All Li3 stockholders as of the record date may attend the special meeting. If you are a beneficial owner of Li3 shares held in street name, you may request to attend the meeting by writing to___________________, or by emailing your request to _______________. You must provide evidence of your ownership of Li3 shares, which you can obtain from your broker, banker or nominee.

Voting of Proxies

If you vote by Internet, telephone or by completing, signing, dating and mailing your proxy card or voting instruction card, your Li3 shares will be voted in accordance with your instructions. If you are a stockholder of record and you sign, date and return your proxy card but do not indicate how you want to vote or do not indicate that you wish to abstain, your Li3 shares will be voted “FOR” the approval and adoption of the Agreement and Plan of Merger and “FOR” the approval of the adjournment proposal.

Voting of Li3 Shares Held in Street Name

Li3 stockholders who hold Li3 shares of common stock in a stock brokerage account or through a bank, broker or other nominee (referred to in this proxy statement /prospectus as “street name” stockholders) who wish to vote at the Li3 special meeting should be provided a voting instruction card by the institution that holds their li3 shares. If this has not occurred, contact the institution that holds your shares. A number of banks and brokerage firms participate in a program that also permits stockholders whose Li3 shares are held in “street name” to direct their vote by telephone or over the Internet. If your shares are held in an account at a bank or brokerage firm that participates in such a program, you may direct the vote of these shares by telephone or over the Internet by following the voting instructions enclosed with the proxy form from the bank or brokerage firm. The Internet and telephone proxy procedures are designed to authenticate stockholders’ identities, to allow stockholders to give their proxy voting instructions and to confirm that those instructions have been properly recorded. Votes directed by telephone or over the Internet through such a program must be received by 11:59 p.m. Eastern time on ___________, 2013. Directing the voting of your Li3 shares will not affect your right to vote in person if you decide to attend the special meeting; however, you must first obtain a signed and properly executed legal proxy from your bank, broker or other nominee to vote your shares held in “street name” at the special meeting. Requesting a legal proxy prior to the deadline described above will automatically cancel any voting directions you have previously given by telephone or over the Internet with respect to your shares.

Revoking your Proxy

If you are a stockholder of record you can revoke your vote at any time before your proxy is voted at the special meeting. You can do this in one of three ways:

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you can send a signed notice of revocation to the Corporate Secretary of Li3;

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you can submit a revised proxy bearing a later date by Internet, telephone or mail as described above; or

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you can attend the Li3 special meeting and vote in person, which will automatically cancel any proxy previously given, or you may revoke your proxy in person, though your attendance alone will not revoke any proxy that you have previously given.

If you choose either of the first two methods, you must submit your notice of revocation or your new proxy no later than the beginning of the special meeting. If you are a beneficial owner of shares held in street name, you may submit new voting instructions by contacting your broker, bank or nominee. You may also vote in person at the special meeting if you obtain a legal proxy from your broker, bank or nominee and present it to the inspectors of election with your ballot when you vote at the meeting.

Proxy Solicitations

Li3 is soliciting proxies for the special meeting from Li3 stockholders. Li3 will bear the cost of soliciting proxies from stockholders. In addition to this mailing, Li3’s directors, officers and employees (who will not receive any additional compensation for such services) may solicit proxies by telephone or in-person meeting.

Li3 has also engaged the services of Morrow & Co., LLC to assist in the solicitation and distribution of the proxies. The agent will receive reasonable and customary compensation for their respective services, Li3 will reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and solicitation materials the beneficial owners of common stock.

Other Business

The Li3 board is not aware of any other business to be acted upon at the Li3 special meeting.

Adjournments and Postponements

Adjournments or postponements may be made for the purpose of, among other things, soliciting additional proxies. One or more adjournments may be made from time to time with the approval of a majority of the votes present in person at the special meeting or represented by proxy at the time of the vote, whether or not a quorum exists. Li3 is not required to notify stockholders of one or more adjournments if the time and place of the adjourned meeting are announced at the meeting at which the adjournment is taken, unless after the adjournment a new record date is fixed for the adjourned meeting.

In addition, at any time prior to convening the special meeting, the Li3 special meeting may be postponed without the approval of Li3 stockholders. If postponed, Li3 will publicly announce the new meeting date.

At any adjourned or postponed meeting, Li3 may transact any business that it might have transacted at the original meeting, provided that a quorum is present at such adjourned or postponed meeting. Proxies submitted by stockholders for use at the special meeting will be used at one or more adjournments or postponement of the meeting. References to the special meeting in this proxy statement/statement are to the Li3 special meeting as adjourned or postponed.

PROPOSAL NO. 1 — APPROVAL AND ADOPTION OF THE AGREEMENT AND PLAN OF MERGER

As discussed in the proxy statement/prospectus, Li3 is asking its stockholders to approve and adopt the Agreement and Plan of Merger. Li3 stockholders should read carefully this proxy statement/prospectus in its entirety for more detailed information concerning the Agreement and Plan of Merger, which is attached as Annex A to this proxy statement/prospectus. Please see the section entitled “Agreement and Plan of Merger” beginning on page 116 for additional information and a summary of certain terms of the Agreement and Plan of Merger. You are urged to read carefully the entire Agreement and Plan of Merger before voting on this proposal.

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Approval of this proposal is a condition to the completion of the business combination. If the proposal is not approved, the business combination will not occur.

Recommendation of the Li3 Board

THE LI3 BOARD UNANIMOUSLY RECOMMENDS THE LI3 STOCKHOLDERS VOTE “FOR” THE APPROVAL AND ADOPTION OF THE AGREEMENT AND PLAN OF MERGER.

PROPOSAL NO. 2 — ADJOURNMENT OF SPECIAL MEETING

Li3 is requesting the Li3 stockholders’ approval on a proposal to adjourn the Li3 special meeting, if necessary, to permit further solicitation of proxies because there are not sufficient votes at the li3 special meeting to approve and adopt the Agreement and Plan of Merger.

Vote Required for Approval

The vote to adjourn the Li3 special meeting, if necessary, to permit the further solicitation of proxies because there are not sufficient votes at the Li3 special meeting to approve and adopt the Agreement and Plan of Merger will be approved if the holders of at least a majority of the outstanding shares of Li3 common stock who are present at the meeting, in person or by proxy, and entitled to vote on this proposal vote “FOR” this proposal.

Recommendation of the Li3 Board

THE Li3 BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE ADJOURNMENT OF THE SPECIAL MEETING, IF NECESSARY, TO PERMIT FURTHER SOLICITATION OF PROXIES BECAUSE THERE ARE NOT SUFFICIENT VOTES AT THE SPECIAL MEETING TO APPROVE AND ADOPT THE AGREEMENT AND PLAN OF MERGER.

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THE BUSINESS COMBINATION

The following is a description of certain material aspects of the business combination. While Blue Wolf believes that the following description covers the material terms of the business combination, the description may not contain all of the information that may be important to you. The discussion of the business combination in this proxy statement/prospectus is qualified in its entirety by reference to the Agreement and Plan of Merger, which is attached to the proxy statement/prospectus as Annex A, , which is provided for the purpose of providing you with information regarding their terms and are incorporated by reference into this proxy statement/prospectus. Blue Wolf encourages you to read carefully this entire proxy statement/prospectus, including the Agreement and Plan of Merger for a more complete understanding of the Merger.

General Description of the Transaction

Blue Wolf has formed Merger Sub, a wholly-owned subsidiary of Blue Wolf.

Blue Wolf and Li3 have agreed to combine their business under the terms of the Agreement and Plan of Merger. Pursuant to the Agreement and Plan of Merger, at the effective time of the merger, Merger Sub will merge with and into Li3, with Li3 surviving as a wholly owned subsidiary of Blue Wolf. Also at the Effective Time, the outstanding shares of Li3 common stock (excluding dissenting shares) will be converted automatically into the right to receive an aggregate of up to 1,581,990 Ordinary Shares of Blue Wolf.

At the Effective Time, Merger Sub will merge with and into Li3, with Li3 surviving as a wholly owned subsidiary of Blue Wolf, and, as a result, Blue Wolf shall cause the Merger Consideration to be issued to the stockholders of record of Li3. In addition, each option and warrant to purchase shares of Li3 common stock (the “Li3 Derivatives”) which is outstanding immediately prior to the Effective Time shall be converted into a right to acquire one Ordinary Share for every 250 shares of Li3 common stock subject to such Li3 Derivatives and on the same contractual terms and conditions as were in effect immediately prior to the Effective Time.

Upon consummation of the Merger, the funds then held in the Blue Wolf Trust Account will be released to Blue Wolf as promptly as practicable (less any fees paid to the trustee or to third parties who rendered services to Blue Wolf in connection with the Agreement and Plan of Merger, amounts paid to stockholders who exercise their redemption rights or amounts paid for filings or other action required under the Agreement and Plan of Merger.

Background of the Transaction

The terms of the Agreement and Plan of Merger are the result of negotiations between the representatives of Blue Wolf and Li3. The following is a brief description of the background of these negotiations and the related transactions.

On February 1, 2013, Myron Manternach, an investor in Blue Wolf’s Sponsor, called Marc Lubow, Executive Vice President of Li3, to discuss a possible transaction with Li3 and at a board meeting of Li3, management noted the need for potential financing given the strategic corporate initiatives the company was undertaking.

On February 4, 2013, Mr. Manternach attended a conference call with Li3’s management team, including Mr. Lubow, Luis Saenz, CEO, and Luis Santillana, CFO. Later that day, Mr. Manternach and Li3 management attended a conference call with legal counsel of Blue Wolf and Li3. After the call, Mr. Manternach emailed a draft non-disclosure agreement and a preliminary letter of intent and pro forma analysis for a merger.

On February 5, 2013, Blue Wolf executed the non-disclosure agreement with Li3. Blue Wolf began conducting due diligence and was given access to Li3’s online data room. Later that day, a conference call was held between Mr. Manternach, Li3 management, Blue Wolf legal counsel and Li3 legal counsel to discuss the letter of intent and the structure and process for a potential merger. After the call, Mr. Manternach emailed the group a brief presentation that included information about Blue Wolf, a preliminary pro forma analysis for a potential merger between Blue Wolf and Li3, and a preliminary timeline for a merger.

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On February 6, 2013, Mr. Saenz sent an email to Mr. Manternach and stated that Li3 held a board call to discuss a potential merger between Blue Wolf and Li3 and that the board did not reach a consensus in favor of the merger on the terms shown in the preliminary letter of intent and pro forma analyses.

In a memorandum dated February 18, 2013, management evaluated the various financial requirements of Li3 as well as the alternatives explored to date to obtain said financing. The conclusion and recommendation by management was to advance the Blue Wolf transaction while continuing to explore potential financing alternatives.

On March 3, 2013, Mr. Saenz sent an email to Mr. Manternach and stated that Li3 had gained support of additional directors for a merger with Blue Wolf and that Li3 wanted to move forward with a merger in anticipation that all Li3 directors will ultimately support a merger on the terms shown in the preliminary letter of intent.

On March 4, 2013, Lee Kraus, Chairman and CEO of Blue Wolf, called Mr. Saenz to discuss the terms of the preliminary letter of intent and to gauge Li3’s level interest and ability to pursue a merger with Blue Wolf. Later that day, a conference call was held with Mr. Kraus, Mr. Manternach, Li3 management, and legal counsel of Blue Wolf and Li3.

On March 7, 2013, after a series of communications with Li3 management and their legal counsel, Blue Wolf executed a non-binding letter of intent for a merger with Li3.

On March 11, 2013, Mr. Manternach sent to Li3 management a preliminary draft Memorandum of Understanding (“MOU”) for a merger between Blue Wolf and Li3. The MOU was similar to the letter of intent, except that it included additional exclusivity and termination provisions allowing for Blue Wolf to conduct a tender offer and convene a meeting of its shareholders to vote on certain amendments to its charter, including an extension of Blue Wolf’s corporate existence.

On March 14, 2013, Nicholas Edwards, President of Blue Wolf, Mr. Kraus and Mr. Manternach attended a lunch in New York City with Harvey McKenzie, an Li3 director, Mr. Santillana, Mr. Lubow and Li3’s legal counsel.

On March 18, 2013, after a series of communications and negotiations with Li3 management and their legal counsel, Blue Wolf executed an MOU for a merger with Li3.

On March 21, 2013, Li3 announced that it had entered into a Memorandum of Understanding with Blue Wolf to explore a possible business combination. This was after careful consideration of the alternatives available in the capital markets for financing for Li3.

On April 9, 2013, Mr. Kraus and Mr. Saenz attended meetings and conference calls with investors in New York City to discuss the proxy solicitation and tender offer. The meetings were arranged by representatives of Deutsche Bank Securities.

Subsequent to the approval of the charter amendments and the completion of the tender offer, Blue Wolf, Li3 and their respective counsels negotiated the terms of a definitive agreement.

On May 6, 2013, at the Li3 board of directors meeting of Li3, its Chairman, Patrick Cussen, requested that a special committee (the “Special Committee”) be formed to review the merits of the Blue Wolf transaction proposal, evaluate and compare other possible financing alternatives, and to approve the execution of the Transaction. The special committee consisted of Luis Saenz, Li3’s CEO, Harvey McKenzie and Alan Fraser, both of whom are independent directors of Li3’s Board of Directors.

On May 9, 2013, Li3 filed its Form 10-Q for the quarter ended March 31, 2013. Mr. Manternach sent Li3 management a revised pro forma merger analysis reflecting updated information from the Form 10-Q and Li3 management estimates of cash, debt and remaining acquisition related liabilities for the period ending July 22, 2013.

On May 15, 2013, Blue Wolf and Li3 completed negotiations of the definitive agreement.

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On May 21, 2013 the Special Committee held a conference call to review the Blue Wolf transaction and consider the definitive agreement for the Transaction. After weighing the positives and negatives, as described below, and the Special Committee approved the Agreement and Plan of Merger and the Transaction.

Li3’s Board of Directors’ Reasons for the Approval of the Transaction

As part of the this evaluation, Li3’s special committee after consultation with Li3’s management team considered without limitation or relative order the following;

As part of this evaluation, and in consultation with Li3’s management team, the special committee and board considered without limitation or relative order the following: