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, 2011, 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 October 31, 2011, our cash balance was $15,300, which is a decrease from our cash balance of $74,576 at July 31, 2011. The Company did not receive any investment capital or loans during the three month period from August 1, 2011 through October 31, 2011.

As of October 31, 2011, our total current assets are $596,289 ($690,518 - July 31, 2011). Our current liabilities are $467,670 ($439,009 - July 31, 2011). This results in a working capital position of $128,619 ($251,509 - July 31, 2011). This increase in working capital is primarily as a result of an increase in available for sale securities of $170,000 and a decrease in prepaid expense to $410,989 from $440,942 and some small increases in accounts payable trade and related parties, and accrued liabilities. The decrease in prepaid expense was due to services being rendered by consultants that had been paid for through the issuance of stock.

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At present, the Company's cash position is insufficient to meet its obligations through to the end of the fiscal year, as we are not currently generating any revenues, and, over the next 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 (due December 2011), $300,000 for principal and accrued interest on our loan payable (due December 2011), 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.

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 operating expenses for the three-month period ending October 31, 2011, were $195,477 ($195,505 - October 31, 2010). While our operating costs decreased somewhat, and our exploration costs were reduced to $10,125 ($47,272 - October 31, 2010), our professional fees increased to $39,852 ($1,488 - October 31, 2010). This increase in professional fees was a result of additional costs in the amending of Company's 10-K from 2010, the filing of the 10-K for 2011, and legal costs associated with the negotiation on a potential financing.

The total net loss for the current three month period was $204,140, compared to $201,806 in the same period in the prior year, resulting in part from a write down on the valuation of the New America stock by $5,000 at the end of the period.

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, 2011; 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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