Option A- unless her lies are going to have an adverse impact on someone else, or has implications of some kind on you or your mutual acquaintances. I think keeping well out of it is the better option. It is less likely to come back and bite you. Obviously, if what she is lying about is serious, or could lead to serious consequences for herself or others, then I think you should speak up.
If her lies are trivial, whilst it is very annoying to have to listen to, I would leave well alone and just avoid as much as possible. I guess you could approach her, but I doubt she'd suddenly turn over a new leaf just because you said so. She could even twist things to make you look bad, if she is a skilled liar.
At the end of the day, if it makes you feel better/gives you satisfaction to expose her lies because they annoy you then you could tell your friends. Just be clear in what you are trying to achieve and why- is it to get her to stop the trivial lies because they are annoying or something more profound- such as removing her from the friendship group?
I have a friend of a friend/acquaintence who tells lies about trivial things, most of her friends and acquaintances know she does this. It is annoying and usually it's that she has to top whatever story/event is being discussed. Whilst I wouldn't trust her with secrets/important information, as her lies are not malicious or about anything important/likely to have a negative outcome for others, I generally ignore it and simply make no effort to be her friend (am polite when we meet though). I know she has been a good friend to out mutual friend in other ways, so she is not all bad.
I think she does it due to chronic lack of self-esteem and it's a bit of a compulsion now. I feel a bit sorry for her, and so don't really think I'd get any satisfaction out of publicly humiliating her in front of mutual friends (who mostly have worked things out for themselves anyway) and would feel pretty silly telling my friends that she has lied about something as most would have worked it out already/it's about something pretty trivial and they wouldn't really care. I'd just look a bit foolish and vindictive, TBH, and wouldn't reflect well on me. Obviously not the case with everyone who is like this, though, which is why I'd say you need to be clear about why you are getting involved and what you hope to achieve by telling others.
Caveat to that would be if her lie was about something important/someone else/negative impact on others, in which case I would feel that I should say something to her, or the person on whom the lie would impact negatively upon.