ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q contains forward-looking statements relating to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "intends", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential", or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors which may cause our or our industry's actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements.

Such factors include, among others, the following: international, national and local general economic and market conditions: demographic changes; the ability of the Company to sustain, manage or forecast its growth; the ability of the Company to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other factors referenced in this and previous filings.

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

Given these uncertainties, readers of this Quarterly Report on Form 10-Q and investors are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.

All dollar amounts stated herein are in US dollars unless otherwise indicated.

The management's discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The following discussion of our financial condition and results of operations should be read in conjunction with our audited financial statements for the year ended July 31, 2010, together with notes thereto.

As used in this quarterly report, the terms "we", "us", "our", and the "Company" mean First Liberty Power Corp.

Material Changes in Financial Condition

Liquidity & Capital Resources

As of April 30, 2011, our cash balance was $99,412, which is a decrease from our cash balance of $179,791 at July 31, 2010. The Company received a total of $225,000 of additional investment capital or loans during the nine month period from August 1st through April 30, 2011.

As of April 30, 2011, our total current assets are $351,412 ($301,206 - July 31, 2010). Our current liabilities are $489,328 ($376,003 - July 31, 2010). This results in a working capital position of ($137,916) ( ($74,797) - July 31, 2010). This decrease in working capital is primarily as a result of a decrease in prepaid consulting to $2,000 and the increase in investment with NECA of $250,000 ($121,415 - July 31, 2010) due to services by a Director of the Company having been fulfilled, and the above noted decrease in cash. Furthermore, there was a significant increase in accounts payable - trade, to $193,233, from $33,572 as at July 31, 2010, largely as a result of obligations incurred under our mineral property agreements and costs associated with the preparation and review of regulatory filings.

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While our cash position is sufficient to meet our current obligations through to the end of the fiscal year, July 31, 2011, as we are not currently generating any revenues, over the 12 months, we will require additional funds to meet our operating obligations, loan payment requirements, and property payment / work program obligations. At present, we anticipate our funding requirements to be approximately $1,200,000. This estimate is comprised of $500,000 for required and additional exploration and maintenance expenditures on our Lithium property, a further $100,000 acquisition payment on same, $300,000 for principal and accrued interest on our loan payable, and a further $300,000 to cover operating and overhead costs. Additional amounts will be required if we identify additional acquisition targets, or determine that additional exploration on the Lithium property are required to accelerate its development. Furthermore, under the option assignment agreement we have entered into with New America, if New America does not meet its obligations under the agreement, we would assume all costs thereunder, as further identified in Note 3 to the financial statements.

This amount may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. There is still no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on his investment in our common stock. We need to raise additional funds in the near future in order to proceed with our exploration program, as our available cash is insufficient.

There is no assurance we will be able to identify or acquire those funds on a commercially reasonable basis.

Material Changes in Results of Operations

We are an exploration stage company engaged in the exploration of mineral properties. To date, we have not generated any revenues.

Our expenses for the three-month period ending April 30, 2011, were $177,800 ($55,746 - April 30, 2010). This increase in expenses was primarily attributable to our having entered into two purchase agreements with GeoXplor Corp. The ongoing costs of developing these properties ($57,800 in the current quarter compared to $9,494 in the comparable period in 2010), and the associated increase in consulting costs related to the management of the exploration and development process ($90,936 in the current quarter compared to $25,651 in the comparable period in 2010), involves substantially increased costs compared to the prior period where these agreements had only just commenced.

The total net loss for the current three month period was $104,494, compared to $61,732. Our net loss was reduced in the current period as a result of an $80,000 gain on the transfer of the property option to New America.

Our net loss for the nine-month period ending April 30, 2011 was $449,248 ($86,878 - April 30, 2010), with the increases being attributable to the same reasons as per the three month period above. Most significantly, exploration costs for the nine month period increased to $113,300 ($9,494 - April 30, 2010), consulting fees increased to $302,040 ($35,651 - April 30, 2010), and investor relations / news costs were $24,965 ($nil - April 30, 2010).

Off- Balance Sheet Arrangements

The Company presently does not have any off-balance sheet arrangements.

Going Concern

In their audit report relating to our financial statements for the period ended July 31, 2010, our independent accountants indicated that there are a number of factors that raise substantial doubt about our ability to continue as a going concern. Such factors identified in the report are our lack of revenue resulting in a net loss position and insufficient funds to meet our business objectives. All of these factors continue to exist and raise doubt about our status as a going concern.

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

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