Lithium One Inc. (the "Company") (TSX-V: LI), is pleased to announce completion of a positive preliminary economic assessment ("PEA") for the Sal de Vida lithium and potash project at Salar del Hombre Muerto, Argentina (the "Project"). The PEA outlines an operation producing 25,000 tonnes pa lithium carbonate and 107,000 tonnes pa potash, with a 28% internal rate of return ("IRR") and a US$1.066 billion net present value ("NPV") at an 8% discount rate.

The table below summarizes the key elements of the PEA:

Preliminary Economic Assessment Highlights (All currency is US$, pre-tax)

Net Present Value ("NPV") @ 8% Discount rate	$1.066 billion
Internal Rate of Return ("IRR")	28%
Total Estimated Capital Costs	$356 million
Estimated Operating Costs (per tonne of lithium carbonate) F.O.B. Antofagasta, Chile - Port	$1,537
Estimated Operating Costs (per tonne of KCl) F.O.B. G�emes, Argentina -- Rail head	$184
Average Annual Cash Flow for Initial 20yrs Production	$139 million
Estimated Mine Life	40+ years
Inferred Resource (Lithium carbonate equivalent "LCE")	5,440,000 tonnes
Inferred Resource (Potash equivalent "KCl")	21,300,000 tonnes
Annual Production Rate Lithium Carbonate	25,000 tonnes
Annual Production Rate Potash	107,000 tonnes
Projected commencement of revenue generation	2015
Projected years to payback	<4 years

Lithium One CEO and Founding Director, Paul Matysek commented, "The Sal de Vida lithium and potash operation outlined for this PEA is one of the highest value and lowest net cost lithium development projects yet announced. The high NPV, high net cash flows and very low unit cost for lithium carbonate production result from a lithium and potash bearing brine with good supporting chemistry occurring near surface with excellent conditions for evaporation. The contribution from potash is very significant, as the annual revenue from potash alone is projected to more than cover total operating expenses. Our results to date and this engineering study make a compelling case for expediting the development of the Sal de Vida Project."

Sensitivity Analysis

Discount Rate	Pre-Tax NPV Millions	After-Tax NPV Millions	IRR (Pre-tax)	IRR (After-tax)
6%	$1,532	$1,207	28.0%	24.6%
8%	$1,066	$811	28.0%	24.6%
10%	$758	$556	28.0%	24.6%

The Project enjoys robust economics across a range of discount rates. The operation outlined for this PEA would generate over US $200 million in annual revenue, approximately 70% of which will be from lithium carbonate and 30% from potash.

While inferred resources are not mining reserves and there is no assurance that any portion of the inferred resources will be successfully upgraded to reserves, the contained lithium carbonate and potash in the inferred resource would be sufficient for a very long mine life. Assuming process recoveries of 60%, the current Sal de Vida resource would yield a project life of more than 40 years. The Company continues its drilling program to both expand the existing resource and upgrade it to reserve status.

Patrick Highsmith, Lithium One's President and COO, elaborated on the preliminary economics of the Project, "We are pleased with the level of engineering expertise and rigor behind this PEA. Through the process we gained considerable insight into opportunities for further improvement in the overall economics, such as: in situ clay liners for the ponds, the higher grade brine from the North Basin, and accelerated start-up of pumping. The major contribution of our potash production means that this operation can clearly weather any fluctuations in the lithium carbonate price as both demand and supply increase, as expected, over the next decade."

Details and Assumptions
The PEA used commodity pricing from a study commissioned from Roskill Information Services, which yielded average pricing per tonne of US $5,490 for lithium carbonate and US $620 for potash for the 2011 -- 2025 period, expressed in 2011 dollars.

Summary of Estimated Capital Costs	(US$ Millions)
Brine Extraction	15.7
Evaporation Ponds	124.3
Lithium Carbonate Plant	16.8
KCl Plant	29.8
Infrastructure, Services, Supplies	58.9
Indirect Costs	51.0
Sub Total	296.5
Contingency (20%)	59.3
Total Estimated Capital Costs	355.8

The operation outlined by ARA Worley Parsons in this PEA at Sal de Vida will consist of approximately 11 km² of evaporation ponds, approximately 21 production wells plus 3 stand-by wells and plant facilities for the production of lithium carbonate and potash. The evaporation and settling ponds represent the biggest component of the estimated capital costs, as plastic linings are assumed in the PEA for all the ponds. There is considerable natural clay occurring near surface that may be suitable for in-situ lining of a portion of the ponds, which could significantly reduce this cost. Soils engineering studies are currently underway to establish to what extent plastic linings can be replaced with natural clay.

The anticipated production rate from wells is analogous to the mining rate in a conventional hard rock mine. So it is an important determinant of the lithium and potash production levels. For the purposes of this study, the Company has used a pumping rate of approximately 20 litres/second for the production wells. The Company and its hydrogeological consultants believe this rate of production or higher is easily achievable. Preliminary pumping tests have already yielded pumping rates above 20 litres/second. The pumping tests are still being completed, so this production rate remains a variable until the pumping tests are completed and the NI 43-101 technical report has been updated accordingly. The Company anticipates publishing pumping test results before the end of 2011.

Summary of Estimated Operating Costs (from first full year of production)	000 US$ / Tonne Li2CO3	000 US$ / Tonne KCl
Chemical Consumption	1,106	77
Energy	93	12
Maintenance	105	17
Manpower	91	10
Catering and Camp Services	27	3
Salt removal	21	2
Transport	60	59
Total Direct Costs	1,503	180
Indirect Costs	34	4
Total Operating Costs	1,537	184
Total Annual Operating Costs 000 US$	57,811

Among operational expenses, the Sal de Vida operation will be most sensitive to the consumption of lime and soda ash, which are used to remove impurities from the brine and precipitate lithium carbonate. The cost of lime and soda ash is included in chemicals in the estimated operating costs table above. The technical and engineering teams have identified and commenced discussions with several Argentine sources for lime, whereas, at this stage, it is contemplated that soda ash will be imported. Transport is another significant cost element. Every effort is being made to optimize transport, both inbound and outbound; however, the PEA assumes exclusively conventional truck transport.

Consistent with practice in the industry, this PEA has been prepared with an engineering accuracy of 35%. As the project progresses through the feasibility stage, advancement in basic and detailed engineering will improve the accuracy to approximately 15%.

PEA Report
The PEA was prepared in accordance with the guidelines of National Instrument 43-101 by independent engineering firm ARA Worley Parsons S.A. ("ARA"). Worley Parsons ("WP") is a leading full-service engineering firm; ARA is WP's affiliate in Chile. ARA's experience in the sector includes the design and construction supervision of many components of the world's largest and lowest cost lithium-potash brine processing facilities in Chile. The final PEA technical report will be filed on SEDAR within 45 days.

Proposed Operation
The proposed Sal de Vida lithium and potash brine operation outlined in the PEA will make use of conventional evaporation processing, similar to that employed at both the world's largest lithium brine operations at Salar de Atacama in Chile and FMC's new potash circuit at the F�nix lithium project adjacent to Sal de Vida. Much of the preliminary process design used in this PEA has been confirmed by the Company's ongoing operations at its pilot plant and from laboratory-scale test work at various facilities. The operation is expected to take approximately 9 months from the commencement of evaporation for the first production of lithium carbonate. The following is an outline of the Sal de Vida process:

The process for the Sal de Vida Project, incorporated into the PEA, involves brine being pumped from production wells to pre-treatment ponds where lime is added to remove magnesium. Pumps will then convey the brine into a series of segmented evaporation ponds, where the intense evaporative conditions of the salar concentrate the lithium and potash and remove excess halite (common salt). The final ponds further concentrate the brine to remove calcium, sulphate and other trace constituents while crystallizing a potash-dominant solid. This solid will be upgraded through a flotation process to produce muriate of potash on site. The final brine, now enriched to a design specification of more than 2% lithium, will be treated in the lithium carbonate plant to remove the remaining boron and trace magnesium and calcium and produce the final lithium carbonate product.

Summary of Sal de Vida Resource Estimate
This PEA has been prepared by ARA Worley Parsons, a fully independent international engineering firm with extensive experience in lithium and potash brine projects. The reader is cautioned that these estimates are preliminary in nature and are based on a NI-43-101 compliant inferred mineral resource. Inferred resources are considered too speculative geologically to enable them to be categorized as mineral reserves and there is no certainty the results predicted by the PEA will be realized.

As reported in the April 25, 2011 NI 43-101 technical report filed on SEDAR, the Sal de Vida Project contains a resource estimate of 5,440,000 tonnes of lithium carbonate equivalent and 21,300,000 tonnes of potash equivalent in the Inferred category. This work was completed by independent qualified person Mr. Michael Rosko of the international specialist hydrogeology firm E.L. Montgomery & Associates (M&A).

Table 1. Sal de Vida Brine Inferred Resource Statement (500 mg/L cut-off)

	Brine Volume (m3)	Avg. Li (mg/l)	In situ Li (tonnes)	Li2CO3 Equivalent (tonnes)	Avg. K (mg/l)	In situ K (tonnes)	KCl Equivalent (tonnes)
Phase I Resource	1,470,000,000	695	1,020,000	5,440,000	7,590	11,200,000	21,300,000

Lithium One is currently completing a drill program that includes infill drill holes to upgrade the resource estimate to the measured and indicated category before the end of 2011. In addition, there remains significant potential to increase the resource as drilling continues to encounter consistent, high-grade brine outside of the existing resource area, such as that outlined in the newly identified North Basin. (See August 31, 2011 news release.)

Feasibility Study
The Lithium One team continues to advance multiple aspects of the development program at Sal de Vida, working towards completing a feasibility study by the middle of 2012. The Company expects to complete pumping tests, a resource upgrade and certain refinements to the process flowsheet before the end of the year.

Permitting
Lithium One has completed an environmental and communities baseline study for the Sal de Vida Project which did not identify any major environmental liabilities or conflicts with local communities and stakeholders. This baseline study will be a key component of the environmental impact study for the proposed co-product lithium and potash project. The project team is working closely with the authorities in the mining-friendly provinces of Catamarca and Salta to complete the environmental impact study, which is the fundamental document in the mine permitting process.

Off-take, Marketing and Debt Facility Agreements
Lithium One's partners, KORES, LG International and GS Caltex, (the Korea Consortium, "KC") are funding the feasibility program up to US$15m to earn a 30% project interest. As part of the joint venture agreement, the KC will have the right and obligation to purchase 30% of the lithium products produced from Sal de Vida at market prices, as well as a right of first offer to purchase an additional 20%. The KC will have the right to market the lithium products in the Chinese, Japanese and Korean markets, while Lithium One will have the right to market the potash and any boron by-products worldwide. Furthermore, under the agreement, the KC will provide a project completion guarantee and arrange the debt component of the entire capital development costs.

Qualified Person
Roger Kelley is the independent qualified person contracted by ARA Worley Parsons on this PEA who has reviewed and approved the technical contents of this release. Mr. Kelley is a metallurgical engineer with more than 40 years experience, a fellow of the South African Institute of Mining and Metallurgy (SAIMM), and a qualified person as defined by NI 43-101.

About Lithium One:
Lithium One Inc. is well positioned to be a next-generation low cost producer of lithium and potash. The Company has two major projects funded through feasibility by earn-in partners: the Sal de Vida lithium and potash brine project in Argentina and the James Bay bulk tonnage spodumene project in Quebec. KC are earning a maximum 30% project equity in Sal de Vida by funding the feasibility study expected in 2012, providing an off-take agreement for up to 50% of the lithium production and a completion guarantee for the debt component of the capital development costs. Galaxy Resources is earning a maximum 70% project equity in the James Bay Project through an earn-in agreement that includes delivery of a feasibility study by early 2013. The Company's strategy is to draw upon its quality team and employ best practice to develop its projects into leading suppliers of low-cost, high quality lithium products to the global market.

ON BEHALF OF THE BOARD OF DIRECTORS,
Paul Matysek,
Chief Executive Officer

Lithium One Inc.
1010-130 Adelaide Street West,
Toronto, ON M5H 3P5 Canada
Email: info@lithium1.com

Website: www.lithium1.com

FOR FURTHER INFORMATION, PLEASE CONTACT


Christine Norcross
Telephone: 604-928-1436

Email: info@lithium1.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Note
The PEA was prepared to broadly quantify the Sal de Vida project's capital and operating cost parameters and to provide guidance on the type and scale of future project engineering and development work that will be needed to ultimately define the project's likelihood of a positive feasibility determination and optimal production rate. It was not prepared to be used as a valuation of the project nor should it be considered to be a final feasibility study on which a commercial production decision could be made as mineral resources that are not mineral reserves do not have demonstrated economic viability. The Preliminary Economic Assessment includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the results predicted by the Preliminary Economic Assessment will be realized. The capital and operating cost estimates which were used have been developed only to an approximate order of magnitude based on generally understood capital cost to production level relationships, and although they are based on engineering studies, these are preliminary so the ultimate costs may vary widely from the amounts set out in the PEA. This could materially adversely impact the projected economics of the project. As is normal at this stage of a project, data in some areas was incomplete and estimates were developed based solely on the expertise of the Company's employees and consultants. At this level of engineering, the criteria, methods and estimates are preliminary and result in a high level of subjective judgment being employed. There can be no assurance that the potential results contained in the PEA will be realized.

Forward-Looking Statements
This document may contain "forward-looking information" within the meaning of Canadian securities legislation (hereinafter referred to as "forward-looking statements"). All statements, other than statements of historical fact, included herein including, without limitation statements relating to the Preliminary Economic Assessment, estimated capital and operating costs, productions rates, cash flows, rates of return, mine life or mineral resources, securing of debt for future project construction, purchase of future mine production, the timing for completion of an NI 43-101 resource and other matters related to the exploration and development of the Project, are forward-looking statements. These forward-looking statements are made as of the date of this document and the Company does not intend, and does not assume any obligation, to update these forward-looking statements. Forward-looking statements relate to future events or future performance and reflect management's expectations or beliefs regarding future events. By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include unsuccessful exploration results, changes in metals prices, changes in the availability of funding for mineral exploration, unanticipated changes in key management personnel and general economic conditions, title disputes as well as those factors detailed from time to time in the Company's interim and annual financial statements and management's discussion and analysis of those statements, all of which are filed and available for review on SEDAR at www.sedar.com. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" or the negative of these terms or comparable terminology. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking statements.