This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "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, that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. 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.

Our unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

Unless otherwise specified in this quarterly report, all dollar amounts are expressed in United States dollars and all references to "common stock" refer to shares of our common stock.

As used in this quarterly report, the terms "we", "us", "our", and "our company" mean Lithium Exploration Group, Inc., unless otherwise indicated.

Corporate History

We were incorporated on May 31, 2006 in the State of Nevada under the name "Mariposa Resources, Ltd." Prior to June 25, 2009, we had the right to conduct exploration work on 20 mineral mining claims in Esmeralda County, Nevada. On July 31, 2009, we acquired an option to enter into a joint venture for the management and ownership of the Jack Creek Project, a mining project located in Elko County, Nevada. On September 25, 2009, the joint venture was terminated and we entered into an agreement with Beeston Enterprises Ltd., under which our company was granted an option to acquire an undivided 50% interest in eight mineral claims located in the Clinton Mining District of British Columbia, Canada. On March 17, 2011 we terminated the option agreement with Beeston. Effective November 30, 2010, we changed our name to "Lithium Exploration Group, Inc." by way of a merger with our wholly-owned subsidiary Lithium Exploration Group, Inc., which was formed solely for the change of name.

Our executive offices are located at 3200 N. Hayden Road, Suite 235, Scottsdale, Arizona 85251, and our telephone number is (480) 641-4790.

Other than as set out herein, we have not been involved in any bankruptcy, receivership or similar proceedings, nor have we been a party to any material reclassification, merger, consolidation or purchase or sale of a significant amount of assets not in the ordinary course of our business.

Our Current Business

We are an exploration stage company that engages principally in the acquisition, exploration, and development of resource properties.

On January 18, 2011, we entered into a purchase option agreement with Salta Water Co. and we have acquired a 60% interest on the Salta Aqua claims in Salta Province, Argentina. We have a further option to acquire the remaining 40% interest from Salta Water. On January 18, 2011, we issued 250,000 shares of common stock at a deemed price of $0.10 per share for mining expenses relating to the Salta Aqua Claims. The price of the issued shares was based on the market price of the shares on January 18, 2011.

On March 17, 2011, we entered into a letter agreement with Glottech-USA, LLC for an acquisition of one initial unit of certain proprietary and patented mechanical ultrasound technology for use in the water treatment in regards to our lithium operations in Alberta, Canada. Alexander Walsh, an office and director of our company, met the principals of Glottech-USA in 2009 in the course of operating his consulting company AW Enterprises LLC. Pursuant to the terms of the agreement, Glottech-USA will assemble and ship to our company one unit of the technology specifically designed for our water treatment purposes and will license the use of the technology. Furthermore, we have agreed that in the event that we have purchased a minimum of five technology units within twelve months from the date of execution, Glottech-USA has agreed that it will neither license nor lease the technology to any third party for the purposes of mineral extraction in the country of Canada.

On April 29, 2011, we entered into a settlement agreement with Beeston Enterprises Ltd., in regard to all of Beeston's claims against our company arising under an option agreement for the option of various mining claims from Beeston by our company dated September 25, 2009 and terminated by our company on March 17, 2011. Under the terms of the settlement Beeston received the sum of CDN$54,623.65 and 200,000 restricted shares of common stock of our company in full and complete settlement of all claims against our company including, but without limitation, all claims for the payment of various amounts due and owing to Beeston by our company under the terms of the option agreement for past and future mining claim maintenance fees, the costs for re-claiming four of the eight mining claims optioned under the option agreement and damages for the loss of four mining claims.

At our Valleyview Project in the Swan Hills and Valleyview Region of west-central Alberta, we completed a 12 week sample testing program on May 31, 2011. We are initiating the process to complete the resource estimates for the Valleyview Project, and hope to have it completed by January 31, 2012. Immediate plans include conducting bulk sampling to be utilized in the design of a separation process to produce battery-grade lithium carbonate, potash (KCl), and magnesium hydroxide. Once the bulk sampling and separation process have been completed we will raise capital to build a pilot scale plant in Valleyview to begin the production of the outlined minerals. On July 28, 2011, we staked additional lands at our Valleyview Project bringing our contiguous claim holdings at the property to 517,960 acres. Additionally, on December 15, 2011, we staked an additional 135,000 acres approximately 50 miles south of the Valleyview Property. Our total MAIM (Metallic and Industrial Mineral) claim holdings in the Swan Hills region are now over 650,000 acres.

On June 29, 2011 we entered into a securities purchase agreement with one investor. Pursuant to the terms of the agreement, the investor acquired convertible debentures with an aggregate total of $1,500,000. $1,000,000 was paid on June 29, 2011 and $500,000 was paid on July 12, 2011.

The initial debenture for $1,000,000 is due on December 28, 2012. The release of the full $1,500,000 to us is governed by the terms of an escrow agreement entered into on the same day.

The debenture initially carries an interest rate of 12% per annum and is convertible at $0.83 per share subject to various prescribed conditions. Along with the debentures, we have issued warrants to acquire a total of 1,204,819 shares of our common stock for a period of five years at a price of $0.913. The warrants also include cashless exercise provisions in the event that the registration statement is not effective.

Also on June 29, 2011, Alexander Walsh, an officer and director of our company, entered into a guaranty and pledge agreement whereby he pledged 25,000,000 shares of our common stock currently held by him, as collateral and guaranty for our obligations under the securities purchase agreement and the debentures.

On July 12, 2011 we received the remaining $500,000 from the investor and entered into a $500,000 convertible debenture. The debenture is due on December 28, 2012 and carries an interest rate of 12% per annum. The debenture is also convertible at $0.83 per share, subject to various prescribed conditions. Along with the debentures, we have issued warrants to acquire a total of 602,410 shares of our common stock for a period of five years at a price of $0.913. The warrants also include cashless exercise provisions in the event that a registration statement covering it is not effective. The debenture and warrants were entered into on July 12, 2011.

On November 22, 2011, we issued 2,000,000 shares of our common stock, at $0.2925 per share, upon receiving a notice of conversion from an investor converting $585,000 of a total $1,000,000 debt owed, pursuant to the securities purchase agreement entered into on June 29, 2011. The balance of debt remaining to the investor is $915,000.

APEX Geoscience Ltd., with whom we entered into a consulting agreement in August 2011, will assist us in furthering the Valleyview Project by completing a NI43-101 compliant technical report and resource estimate. The substantive steps and timeline of this project are as follows:

º July 20 to September 1, 2011: Download and prepare downhole GeoScout geological, geophysical, water chemistry and water production data required and forward to hydrogeological consultant. This part of the project has been completed.

º September 1 to October 30th, 2011: The water data from the testing program has been sent to the hydrogeological consultant and they have commenced downhole geological modeling of the pertinent reservoir geology in Micromine. Their report gave hydrogeological characteristics for the entire aquifer covering the 517,960 contiguous acres that we hold MAIM rights to at our Valleyview Project. A meeting between the hydrogeological consultant and Apex Geoscience took place on November 10, 2011 where they discussed the initial findings of the hydrogeological characteristics and how best to incorporate the findings into the technical report.

º October 30 to January 15, 2012: Receive and integrate aquifer data into Micromine. Start wire-framing aquifer data into a 3D model that will include porosity, effective porosity, permeability and potential flow dynamics. Once aquifer model is created and checked, integrate into some sort of basic formation water flow simulation model. Commence block modeling and in-situ resource estimate. The draft of the hydrogeological report arrived on January 15, 2012 and is being incorporated into the Resource Technical Report.

º January 16 to February 15, 2012: Complete resource estimation and create preliminary draft of Resource Technical Report, and upon review complete resource Technical Report. The report will only measure a resource estimate for the area from which we have received test sampling in the past and will be prepared to meet the NI43-101 technical report guidelines.

Our total budget for this project is $139,825. $60,500 is budgeted for reservoir characterization; $28,500 is budgeted for oilfield geological modeling; $18,075 is budgeted for formation water and reservoir geological modeling; $15,500 is budgeted for Li and other metal resource modeling; and $17,250 is budgeted for the 43-101 report preparation. Exploration work will be led by Mike Dufresne, President of APEX Geoscience Ltd.

We have also initiated our exploration efforts at the Salta Project. On July 11, 2011 we contracted a firm to produce high resolution imaging of both sets of cateos to show road access to the properties and provide our exploration team the information they need to target the areas of the property that could produce the best early exploration results. On September 12, 2011 we engaged Montgomery & Associates to send a team to both properties associated with our Salta Project to get on site photographs and hand auger testing of the ground water. On December 27-29, 2011 they traveled to the properties taking photos of the surrounding area and collected 15 samples. The samples taken from our property have been sent to a local laboratory for testing. From these samples we have determined that a commercially viable economic mineral deposit was not found on the property and accordingly, on January 18, 2012, our company abandoned the Salta Project.

On September 30, 2011 we invested CAD$100,000 in an exploration well at our Valleyview Project. The well is to be drilled to a total depth of 3500 meters taking core samples from multiple zones that have been targeted for hydrocarbon production. We made this investment because of our interest in the potential mineral production from these targeted zones and will have access to all data associated with the project. In return for our investment we also received 400,000 shares of working interest in the well valued at CAD$0.25 and will financially benefit from any value derived from the project if they find economically viable levels of oil and gas production. Drilling began on October 9, 2011 and was completed in November 2011. The operator identified 4 potentially producible zones for oil and gas. Subsequent to identifying producible zones for oil and gas, on November 28, 2011 we invested an additional CAD$100,000 to fund the completion of the well and maintain our 3.5% working interest in the well. The operator has perforated the well and should begin producing oil and gas from it in the first quarter of 2012. Our geological team at Apex Geoscience is reviewing the core samples to analyze the aquifers of interest to our lithium production and from the initial tests of the well we were able to recover 3 water samples to test for mineral content. We will begin doing additional testing of the content of the water after the well has been completed and is producing.

On November 18, 2011, we entered into another letter agreement with Glottech-USA, LLC, which will govern distribution rights, exclusivity and royalty provisions as they relate to Glottech's proprietary and patented mechanical ultrasound technology for use in water purification in the process of separation of salt and other minerals from lithium bearing brine produced from oil and gas operations. This letter replaces all agreements previously entered into between our company and Glottech.

Pursuant to the terms of the agreement, we are granted an exclusive license to use and distribute the technology within the Swan Hills region of Alberta as well as the non-exclusive right to distribute the technology within Canada. Glottech has agreed not to distribute, or license, this product within Canada for the term of the agreement to any entities involved in the business of mineral exploration or production. Our distribution rights will be subject to a distribution agreement to be entered into by the two parties.

We will be subject to royalty payments on any revenue created by the use or distribution of the acquired technology. We have applied to the Securities and Exchange Commission for confidential treatment pursuant to Rule 26b-2 of the Securities Exchange Act of 1934 regarding the particulars of the royalty payments and distribution contract. We believe that public disclosure of these terms could potentially damage the ability of Glottech and our company to distribute the technology to other users.

Pursuant to the terms of the agreement we will acquire one initial unit of Glottech's technology for operations in the Swan Hills region of Alberta. The use of this unit will be subject to a license and lease agreement to be entered into by both parties.

A. $25,000 on March 21, 2011 in consideration for entering into the letter agreement dated March 17, 2011;
B. $75,000 on May 27, 2011; and
C. $700,000 on May 27, 2011.

The term of the letter agreement and consequently our ability to distribute the unit of Glottech's technology shall be for an initial period of five years, automatically renewable thereafter for successive five year periods of time so long as we, directly or indirectly through third party purchasers, have licensed five technology units from Glottech per year.

Additionally, as part of the letter agreement, Alexander Walsh, an officer and director of our company, upon the delivery of an operational unit to us will also provide Glottech with the option, for a period of 12 months to acquire 2,000,000 shares of our common stock currently held by him, for a total price of $1 per share. If, for any reason, Mr. Walsh fails to deliver the 2,000,000 shares of our common stock to Glottech, it will be our responsibility to issue the shares from treasury.

Glottech-USA's technology is designed to separate suspended solids from water
(brine), which is one step in the process that we are taking to produce commercially viable minerals. The technology produces extremely high temperatures which destroy organic substances such as bacteria and other toxic agents. We believe that Glottech-USA's technology can provide lower costs of operation as well as reduced time for site clean-up than traditional methods of water treatment. We anticipate using this application to extract dissolved solids like lithium, potassium, and magnesium from oil field brine. The disposal of produced water (brine) from oil and gas production in Alberta is a significant environmental issue for the province and presents a considerable economic issue for producers. We intend to partner with the use of the technology on our Valleyview Property in Alberta, in cooperation with oil and gas producers, to treat and dispose of their produced water while monetizing the minerals that are contained within that produced water stream that is being brought to the surface during the oil and gas production process. As we own the MAIM (Metallic and Industrial Mineral) claims to the minerals on the Valleyview Property, the minerals contained in their produced water stream fall under our rights. While we have had discussions with oil and gas consultants and oil operators regarding their difficulties in treating the brine at some of their fields, we have no formal agreements in place.

The technical process is based on the use of mechanical ultrasound generated through the production of a series of cavitations. Mechanical ultrasound is a machine-produced sound of a frequency above the upper limit of the normal range of human hearing. Cavitations are the rapid formation and collapse of bubbles in liquids, caused by the movement of something such as a propeller or by waves of high-frequency sound. The production of mechanical ultrasound allows Glottech-USA's technology to distil the fluid stock. Using mechanical ultrasound for distillation has been attempted before, but the external energy requirement needed to produce the mechanical ultrasound was far too expensive to make it commercially viable. Glottech-USA's technology uses the energy released during the cavitations in order to make it commercially viable from an economic perspective. During these cavitations, a millisecond of energy is released. During this release temperatures can reach 5000 degrees centigrade. As this is a pilot unit, no other units are currently in production.

This initial unit was projected to be completed September 30, 2011 but has experienced delays due to modifications in the design of the generator and a hurricane in September impacting the production times for various part manufacturers. The generator is the critical component to the technology because the internal workings are where the cavitations are produced causing excitation of the molecules and heat which are the critical initial step to the separation of the suspended solids in the fluid stock. The final generator manufacturer was selected in the summer and after many design meetings with their team a decision was made in August to modify the design of the generator to make the components 40% larger, and configuring it vertically instead of horizontally. These adjustments were made to provide greater efficiency of the generator and the overall unit. They were collaboratively made and agreed upon by the scientist and engineers at Glottech and the engineers at the generator manufacturer. This modification to the generator design caused a material delay in the production but it also delayed the ordering of the other parts to the unit because each of the other components could not be designed and ordered until the generator design was finalized due to different size valves, different weight limits, and flow rates. The hurricane that caused flooding and power outages across the east coast in September also caused the generator manufacturer to be closed for nearly 2 weeks, delaying the ordered components for our generator.

On January 12, 2012 we entered into an employment agreement with Alexander Walsh, for services provided by Mr. Walsh as an officer and director of our company. The employment agreement is effective for a period of twenty four months from January 12, 2012 at an annual salary of $120,000 payable in monthly cash installments or, in the event cash is unavailable, in shares of our company's common stock. The employment agreement also provides for liability insurance and reimbursement of any travel and out-of-pocket expenses incurred and approved by our company.

Also on January 12, 2012, we entered into consulting agreements with Brandon Colker and Jonathan Jazwinski for services provided by them as members of our board of directors in regards to its management and operations for a period of twenty four months from April 27, 2011. Pursuant to the terms of the consulting agreements, Mr. Colker and Mr. Jazwinski will each receive compensation payable in 150,000 shares of our company's common stock issuable at the beginning of every year served during the term of their agreements, with 150,000 for the first year having previously been issued.

Results of Operations

We have generated no revenues since inception and have incurred $382,403 and $1,135,103, respectively, in operating expenses for the three and six month periods ended December 31, 2011.

The following provides selected financial data about our company for the three and six month periods ended December 31, 2011 and 2010.

Three months ended December 31, 2011 and 2010.

                       Three months     Three months
                          ended            ended
                       December 31,     December 31,
                           2011             2010
  Revenue            $          Nil   $          Nil
  Operating Expenses $      382,403   $       94,671
  Net Loss           $   (1,620,441 ) $      (94,671 )

Operating expenses for the three months ended December 31, 2011 increased as a result of an increase in our operations and commencement of exploration and raising capital, including $14,484 in advertising expenses, $48,000 in consulting fees, $9,018 in general and administrative expenses, $130,400 in investor relations; $94,558 in mining expenses, $36,976 in professional fees, $7,598 in travel expenses and $41,369 in wages.

                        Six months       Six months
                          ended            ended
                       December 31,     December 31,
                           2011             2010
  Revenue            $          Nil   $          Nil
  Operating Expenses $    1,135,103   $      101,527
  Net Loss           $   (1,818,746 ) $     (101,527 )

Operating expenses for the six months ended December 31, 2011 increased as a result of an increase in our operations and commencement of exploration and raising capital, including $25,272 in advertising expenses, $141,675 in consulting fees, $25,695 in general and administrative expenses, $581,600 in investor relations; $171,604 in mining expenses, $68,548 in professional fees, $22,390 in travel expenses and $98,319 in wages.

Liquidity and Capital Resources

The following table provides selected financial data about our company as of
December 31, 2011, and June 30, 2011, respectively.

Working Capital

. . .