Assets

Current assets

Cash

Prepaid expenses, deposits and other receivables

Total current assets

Mineral rights

Reclamation bonds (note 3)

Total assets

Liabilities

Current liabilities

Accounts payable (note 6)

Accrued liabilities (note 6)

Stock option and warrant liability (note 5(a)(b))

Total current liabilities

Asset retirement obligation

Total liabilities

Commitments and contingencies (note 4)

Stockholders' equity

Preferred stock, no par value, 10,000,000 authorized, none issued or outstanding

Common stock, no par value, 250,000,000 authorized, 50,045,750 issued and outstanding

Additional paid-in capital

Deficit accumulated during the exploration stage

Total stockholders' equity

Total liabilities and stockholders' equity

Operating expenses

Management and consulting fees (note 6)

Drilling

Geological consulting fees

Office and general

Professional fees

Foreign exchange loss

Change in warrant liability (note 5(b))

Stock-based compensation (note 5(a))

Fees, licenses and permits

Transfer agent and filing fees

Lease expense

Interest and accretion expense

Gain on disposition of equipment

Travelling

Amortization of equipment

Financing costs

Less: Other income

Dividend income

Net loss for the period

Net loss per share - basic

Weighted average number of shares outstanding - basic

  50,045,750

  32,945,000

Cash flow from operating activities

Net loss for the period

Adjustments to reconcile net loss to net cash used in operating activities:

Stock-based compensation

Change in warrant liability

Foreign exchange loss

Common shares issued for services

Common shares issued for interest in exploration property

(Gain) on disposition of equipment

Accretion of asset retirement obligation

Amortization of equipment

Write off of prior year's deferred costs

Increase in asset retirement obligation

Changes in operating assets and liabilities:

Decrease (increase) in prepaid expenses, deposits and other receivables

(Increase) in reclamation bonds

Increase in accounts payable and accrued liabilities

Net cash used in operating activities

Cash flow from investing activities

Purchase of mineral rights

Purchase of equipment

Proceeds from sale of equipment

Net cash used in investing activities

Cash flow from financing activities

Issuance of common shares

Cost of issue

Proceeds from exercise of options

Proceeds from exercise of warrants

Deferred transaction costs

Cash provided by GWE to fund exploration operations

Net cash provided by financing activities

(Decrease) increase in Cash

Cash, beginning of period

Cash, end of period

SUPPLEMENTARY INFORMATION

Non-cash investing and financing activities

Common shares issued for interest in mining lease

Common shares issued for services

Compensation warrants issued for services

Net liabilities of BE Resources Inc. assumed in connection with the reverse merger transaction

Cumulative adjustment on stock option liability

Nature of Business, Basis of Presentation and Going Concern

BE Resources Inc. (the "Company”) was incorporated on August 8, 2007 under the laws of the State of Colorado, United States for the purpose of acquiring certain mineral interests and all operations from Great Western Exploration, LLC (“GWE”) and further exploring and if warranted, developing those interests.

The Company is engaged in the business of the acquisition and development of mineral properties believed to be prospective for minerals such as Beryllium and other elements in the State of New Mexico, United States. To date, the Company has not earned revenue and its operations have been limited to general administrative operations, obtaining initial capital, initial property staking and exploration, and is considered an Exploration Stage Company in accordance with Accounting Standard Codification ("ASC") 915.

The business of exploring for minerals involves a high degree of risk and there can be no assurance that current exploration programs will result in profitable mining operations. The Company’s continued existence is dependent upon the preservation of its interest in the underlying properties, the discovery of economically recoverable reserves, the achievement of profitable operations, or the ability of the Company to raise alternative financing, if necessary, or alternatively upon the Company’s ability to dispose of its interests on an advantageous basis. Although the Company has taken steps to verify title to the properties on which it is conducting exploration and in which it has an interest, in accordance with industry standards for the current stage of exploration of such properties, these procedures do not guarantee the Company’s title. Property title may be subject to unregistered prior agreements and non-compliance with regulatory requirements, increases in taxes and royalties, renegotiation of contracts and political uncertainty.

These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has an accumulated deficit of $13,549,279 as at March 31, 2011 and a net loss of $1,572,251 and negative net cash flows from operating activities of $1,629,404 for the three months ended March 31, 2011. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations and to determine the existence, discovery and successful exploitation of economically recoverable reserves in its resource properties, confirmation of the Company’s interests in the underlying properties, and the attainment of profitable operations. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.

Summary of Significant Accounting Policies

These unaudited interim financial statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and with the instructions for Securities and Exchange Commission (“SEC”) Form 10-Q. They do not include all of the information and footnotes required by GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended December 31, 2010, included in the Company’s Annual Report on Form 10-K filed on March 30, 2011 with the SEC. The balance sheet at December 31, 2010 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements.

Summary of Significant Accounting Policies (continued)

These financial statements are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the Company’s financial position as at March 31, 2011, and the results of its operations and its cash flows for the three month periods ended March 31, 2011 and 2010. The results of operations for the three months ended March 31, 2011 are not necessarily indicative of the results to be expected for future quarters or the full year. Except as disclosed herein, there have been no material changes to the information disclosed in the notes to the audited financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2010.

Accounting Principles Recently Adopted

In January 2010, the FASB issued ASU 2010-06, “Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements,” which adds new requirements for disclosures about transfers into and out of Levels 1 and 2 and separate disclosures about purchases, sales, issuances and settlements relating to Level 3 measurements. ASU 2010-06 is effective for the first reporting period (including interim periods) beginning after December 15, 2010. ASU 2010-06 did not have an impact on the Company's financial position, results of operations or cash flows.

In April 2010, the FASB issued ASU 2010-13, "Compensation-Stock Compensation (Topic 718) - Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades - a consensus of the FASB Emerging Issues Task Force". ASU 2010-13 provides amendments to Topic 718 to clarify that an employee share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity's equity securities trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, an entity would not classify such an award as a liability if it otherwise qualifies as equity. The amendments in this update do not expand the recurring disclosures required by Topic 718. Disclosures currently required under Topic 718 are applicable to a share-based payment award, including the nature and the term of share-based payment arrangements. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. In accordance with ASU 2010-13, the Company has recorded a cumulative adjustment of $846,300 to eliminate the stock option and warrant liability.

Cash and Cash Equivalents

The Company considers all short term investments with a maturity of three months or less at the date of purchase to be cash equivalents.

Fair Value of Financial Instruments

The Company's cash and cash equivalents, short term investments, accounts receivable, accounts payable and accrued liabilities are considered financial instruments whose carrying value approximates fair value based on their short term nature.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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 revenues and expenses during the reporting period. Actual results could differ from those estimates.

Earnings per Share

The basic earnings (loss) per share is calculated by dividing the Company's net income (loss) available to common shareholders by the weighted average number of common shares during the year. The diluted earnings (loss) per share is calculated by dividing the Company's net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted as of the first of the year for any potentially dilutive debt or equity.

Future Accounting Pronouncements

Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not, or are not believed by management to, have a material impact on the Company's present or future financial statements.

Reclamation Bonds

The Company made a deposit in the amount of $25,863 during the three months ended March 31, 2011, for the drilling permit for its Warm Springs Beryllium Property in New Mexico, U.S.A. As at March 31, 2011, the Company has four reclamation bonds totaling $117,913. These bonds are held with the United States Department of the Interior, Bureau of Land Management ("BLM"), the United States Department of Agriculture Forest Service ("USDA") and the New Mexico Energy, Minerals and Natural Resource Department, Mining and Minerals Division ("MMD") and are required before any surface disturbing activity can commence. The bonds will be released following satisfactory completion of reclamation of any disturbance resulting from operations at the site.

Commitments and Contingencies

Environmental Considerations

The exploration for and development of resource properties involves the extraction, production and transportation of materials, which under certain conditions, can be hazardous or cause environmental pollution problems. The Company is continually taking action it believes appropriate to satisfy applicable federal, state and local environmental regulations and does not currently anticipate that compliance with federal, state and local environmental regulations will have a material adverse effect upon capital expenditures, results of operations, financial condition or the competitive position of the Company in the mineral resource industry. However, due to the significant public and governmental interest in environmental matters related to those activities, the Company cannot predict the effects of possible future legislation, rule changes, or governmental or private claims.

Employment Agreement

Pursuant to an amended employment agreement dated January 1, 2011, in the event of certain circumstances, the Company would be obligated to pay the employee an amount equal to twelve times the employee’s current monthly base salary of $3,000 (note 6(a)).

Property Maintenance Costs

The Company is required to incur property maintenance costs for its mineral rights. These costs are currently estimated at $171,000 for each year and include the following items:

Annual fees of $140 per claim per year to maintain federal mining claims; and

Annual lease payments for state leases and the minimum annual royalty of $12,000 for the lease regarding the Sullivan property.

Capital Stock

Stock options

Capital Stock - continued

Stock options - continued

During the three months ended March 31, 2011, the Company granted 40,000 options, valued at $36,997, to a consultant at an exercise price of $0.40 that expire on January 17, 2013. The options vested immediately. The weighted average grant date fair value of these options was $0.275 per share. The assumptions used to estimate the fair value are as follows: expected dividend yield of 0%; expected volatility of 162.31%; risk free interest rate of 1.79%; and expected term of 2 years.

In accordance with ASU 2010-13, the Company has recorded a cumulative adjustment of $846,300 to eliminate the stock option and warrant liability.

On September 27, 2010 and October 4, 2010, the Company entered into two Consulting Agreements which required the Company to grant a total of 200,000 stock options, valued at $163,000, for services to be performed over a six month period. During the quarter ended March 31, 2011, the Company expensed the remaining prepaid balance of $81,583 as stock based compensation.

Warrants

A summary of changes in warrant and compensation warrants during the three months ended March 31, 2011 is as follows:

440,499

Related Party Transactions

Pursuant to an amended employment agreement dated January 1, 2011, the Company paid an officer who is also a director of the Company, a salary of $9,000 (three months ended March 31, 2010 - $9,000) and an expense allowance of $45,000 (three months ended March 31, 2010 - $6,000) for the three months ended March 31, 2011, these amounts are included in management and consulting fees in the statement of operations.

During the three months ended March 31, 2011, the Company incurred fees for accounting services rendered of $8,806 (three months ended March 31, 2010 - $8,092) charged by a corporation controlled by an officer of the Company and consulting fees of $6,000 (three months ended March 31, 2010 - $6,000) charged by this officer. These amounts are included in professional fees in the statement of operations. In addition, during the three months ended March 31, 2011, the Company incurred fees for corporate secretarial services rendered of $3,872 (three months ended March 31, 2010 - $1,636) charged by a corporation of which an officer of the Company is also an officer. Included in accounts payable as at March 31, 2011 is $17,120 (December 31, 2010 - $12,295) owing to this corporation, $1,463 (December 31, 2010 - $1,455) owing to the corporation of which this officer is also an officer. These amounts are unsecured, non-interest bearing with no fixed terms of repayment.

The above transactions were in the normal course of operations and were measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

Financial Instruments

Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits. Cash deposits with a major Canadian chartered bank are insured by the Canadian Deposit Insurance Corporation up to Cdn$100,000. Cash deposits with a major U.S. bank are insured by the Federal Deposit Insurance Corporation up to $250,000. As at March 31, 2011, the Company held Cdn$1,146,976 (December 31, 2010 - Cdn$2,854,705) with the major Canadian chartered bank and $85,024 (December 31, 2010 - $27,297) with the major U.S. bank.

Foreign Exchange Risk

Certain of the Company's expenses were incurred in Canadian currency and are therefore subject to gains or losses due to fluctuations in this currency. As at March 31, 2011, the Company held cash of $1,035,742 (US$1,068,265) denominated in Canadian dollars (December 31, 2010 - Cdn$2,821,419 (US$2,836,655)) had accounts payable and accrued liabilities of $74,024 (US$76,348) denominated in Canadian dollars (December 31, 2010 - Cdn$153,876 (US$154,707)).

Commodity Price Risk

The ability of the Company to develop its properties and the future profitability of the Company is directly related to the market price of certain minerals. The Company’s risk management objectives are to ensure that business and financial exposures to risk that have been identified and measured are minimized using the most effective and efficient methods to reduce, transfer and, when possible, eliminate such exposures. Operating decisions contemplate associated risks and management strives to structure proposed transactions to avoid or reduce risk whenever possible.

We maintain a system of controls and procedures designed to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported, within time periods specified in the SEC’s rules and forms and to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of March 31, 2011, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective.

Changes in Internal Controls. There were no changes in our internal control over financial reporting during the quarter ended March 31, 2011 that materially affected or are reasonably likely to materially affect, our internal controls over financial reporting.

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for David Q. Tognoni.

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Carmelo Marrelli

Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for David Q. Tognoni and Carmelo Marrelli