Board Resolution No. 007/2014

RESOLUTION OF THE BOARD OF DIRECTORS NO. 007/2014

SUBJECT: MONETARY OPERATIONS MANAGEMENT — APPROVES CONCESSIONAL EXTRAORDINARY CREDIT TO THE BOLIVIAN MINING CORPORATION (COMIBOL) FOR AN AMOUNT OF Bs237,274,016.-

HAVING SEEN:

The Political Constitution of the State promulgated on February 7, 2009.

Law No. 1670 of the Central Bank of Bolivia (BCB) of October 31, 1995.

Law No. 396 modifying the General State Budget (PGE-2013) of August 26, 2013.

The Law of October 29, 1956.

Supreme Decree No. 03196 of October 2, 1952.

Ministerial Resolution No. 195 of April 9, 2013.

Board Resolution No. 023/11 of February 22, 2011, which approves the Regulations for the Granting of Credit to National Strategic Public Enterprises within the framework of the General State Budget — Management Years 2010 and 2011; modified through B.D. No. 026/11, No. 027/11, No. 030/11, No. 097/11, No. 039/12, No. 064/12 and No. 024/13, dated February 22, March 2, March 22 and August 9, 2011, March 23, May 29, 2012 and March 12, 2013.

Board Resolution No. 144/13 of October 15, 2013.

Notes from the Bolivian Mining Corporation (COMIBOL) REF: GERE: 1309/2013 and 1369/2013 of December 6 and 12, 2013 respectively.

General Board Resolution of COMIBOL No. 5642/2013 of November 8, 2013.

Ministerial Resolution of the Ministry of Mining and Metallurgy No. 224/2013 of November 22, 2013.

COMIBOL notes REF: GERE: 1366, 1367 and 1368/2013, of December 11, 2013.

The report from the Economic Policy Advisory REF: BCB-APEC-SSMF-INF-2013-44 of December 13, 2013.

The Report from the Monetary Operations Management REF: BCB-GOM-SOSP-DCE-INF-2013-20 of December 16, 2013.

The Report from the Legal Affairs Management REF: BCB-GAL-SANO-INF-2013-444 of December 16, 2013.

CONSIDERING:

That the Political Constitution of the State (CPE), approved by referendum on January 25, 2009 and promulgated on February 7, 2009, in item 6 of Article 9, establishes that it is the goal and function of the State to promote and guarantee the responsible and planned use of natural resources, and to boost their industrialization, through the development and strengthening of the productive base in its different dimensions and levels. Likewise, in item 10 of paragraph I of Article 158 and Article 322, it establishes that the Plurinational Legislative Assembly has the attribute to approve the contracting of public debt.

That Article 322 of the Political Constitution of the State provides that the Plurinational Legislative Assembly shall authorize the contracting of public debt when the capacity to generate income to cover the principal and interest is demonstrated, and the most advantageous conditions in rates, terms, amounts and other circumstances are technically justified. Public debt will not include obligations that have not been expressly authorized and guaranteed by the Plurinational Legislative Assembly.

That Law No. 396, in its Article 9, authorizes the BCB to grant an extraordinary credit of up to Bs5,332,050,000.- (Five Billion Three Hundred Thirty-Two Million Fifty Thousand 00/100 Bolivianos), in favor of COMIBOL, on concessional conditions, with the object that its National Manager of Evaporitic Resources invests in research, development and transfer of technologies in laboratories and research centers, pilot plants, production and industrialization of Lithium Carbonate, Potassium Chloride, derived and intermediate salts, and other products of the evaporitic chain, Lithium batteries and their components; whether as direct investment or capital contribution through associations with companies that contribute technology, for the manufacture of cathodic, anodic, electrolytic materials, Lithium batteries and their components; and others that are in accordance with the object of this credit. For this purpose, the Central Bank of Bolivia (BCB) is exempted from the application of Articles 22 and 23 of Law No. 1670 of October 31, 1995.

That within the framework of Paragraph I of the mentioned Article and according to what is established by Item 10, Paragraph I of Article 158 and Article 322 of the CPE, COMIBOL is authorized to contract the aforementioned credit with the BCB.

That according to item III, the Ministry of Mining and Metallurgy is responsible for the evaluation and monitoring of the execution of the resources of the credit to be granted by the BCB in favor of COMIBOL.

That according to item IV, COMIBOL is responsible for the use and destination of the resources to be disbursed by the BCB, within the framework of Paragraph I of the mentioned Article.

That according to item V, the Ministry of Economy and Public Finances (MEFP), through the General Treasury of the Nation (TGN), is authorized to issue and grant Non-Negotiable Treasury Bonds in favor of the BCB to guarantee the amount of the credit granted by said entity in favor of COMIBOL, upon written request of the Sector Head Ministry and jointly with the BCB.

That according to item VI, COMIBOL is exempted from the effects and scope of the application of Articles 33 and 35 of Law No. 2042 of December 21, 1999, on Budgetary Administration.

That in concordance with item VII, the Ministry of Mining and Metallurgy, through Ministerial Resolution, must justify before the BCB that the use and destination of the resources of the credit to be acquired by COMIBOL are of national priority within the framework of the National Development Plan and that future cash flows will be used for the payment of the credit indicated in the mentioned Article.

That through Supreme Decree No. 03196, COMIBOL is created as an autonomous entity with legal personality.

That the Law of 1956 elevates to the rank of Law the aforementioned Supreme Decree No. 03196.

That Ministerial Resolution No. 195 determines for the 2013 management, a value of at least 20%, as the degree of concessionality for Public Enterprises that access internal credits of the Central Bank of Bolivia in an extraordinary manner.

That the Regulations for the Granting of Credit to National Strategic Public Enterprises within the framework of the General State Budget Management Years 2010, 2011 and 2012, approved through BCB Board Resolution No. 023/11 and modified through Board Resolutions No. 026/11, No. 027/11, No. 030/11, No. 097/11, No. 039/12, No. 064/12 and No. 024/13, has the object of regulating the granting of credits by the BCB in favor of the NSPE.

That Board Resolution No. 144/13 approves modifications to the Regulations for the Granting of Credit to National Strategic Public Enterprises within the framework of the General State Budget — Management 2010, 2011, 2012 and 2013 and the Procedure to define the Discount Rate and the Degree of Concessionality in Credits to be granted to the NSPE.

That through COMIBOL note REF: GERE: 1309/2013 and within the framework of what is established in Article 9 of Law No. 396, it requests the BCB for the concession of a credit on concessional conditions for the execution of the project: "Implementation — Research, Development and Pilot Center CIDYP — La Palca, Potosi" for Bs237,274,016 (Two Hundred Thirty-Seven Million Two Hundred Seventy-Four Thousand Sixteen 00/100 Bolivianos) and proposes for the payment of the debt a term of 18 years, of which 5 years are for the grace period for principal and interest and presents the proposed Disbursement Schedule and Payment Plan. Likewise, it attaches the documentation established in the Regulations for the approval of credit to National Strategic Public Enterprises within the framework of the General State Budget — Management 2010, 2011, 2012 and 2013.

That through COMIBOL note REF: GERE: 1369/2013, it complements note REF: GERE: 1309/2013, making known that the proposed interest rate is 0.74% annually, that the guarantees offered are the non-negotiable bonds of the TGN. Likewise, it attaches the requested documentation.

That through General Board Resolution No. 5642/2013, the Board of Directors of COMIBOL approves the Identification Study "Implementation of the Research, Development and Pilot Center CIDYP in La Palca — Potosi, Industrialization of Lithium Carbonate for the obtaining of materials and Lithium batteries — Stage III — Phase III" Updated study of economic pre-feasibility for the project: "Derived salts of Lithium Carbonate with high added value and Lithium batteries" and the Investment Plan and Disbursement Schedule for the implementation of the CIDYP.

That Ministerial Resolution No. 224/2013, of the Ministry of Mining and Metallurgy justifies before the BCB the following: 1) That the resources of the credit requested from the BCB for an amount of Bs237,274,016 (Two Hundred Thirty-Seven Million Two Hundred Seventy-Four Thousand Sixteen 00/100 Bolivianos) to be executed in the years 2013 and 2014, are of national priority within the Framework of the National Development Plan. 2) That the proposed cash flows will be used for the payment of the credit. 3) Confirm the technical feasibility of the Identification Study "Implementation of the Research, Development and Pilot Center (CIDYP) — La Palca — Potosi". 4) Determines that the Financial Economic Evaluation of the Project justifies and guarantees the payment capacity of the resources of the requested credit. 5) Authorizes the disbursement request to be directed to the BCB and to carry out technical evaluation through the Vice Ministry of Mineral-Metallurgical Productive Development and monitoring of the execution of the credit resources, through the Vice Ministry of Mining Policy, Inspection and Regulation, General Directorate of Administrative Affairs and General Directorate of Planning of the Ministry of Mining and Metallurgy.

That through notes REF: GERE: 1366, 1367 and 1368/2013, COMIBOL informs the Ministry of Mining and Metallurgy, the Ministry of Development Planning and the Ministry of Economy and Public Finances of General Board Resolution No. 5642/2013.

That the Monetary Operations Management indicates in its report REF: BCB-GOM-SOSP-DCE-INF-2013-20 of December 16, 2013 concludes that: Since COMIBOL presented its credit request note proposing financial conditions, the GOM simulated scenarios to be taken into account by the Board and recommends: 1) Consider the proposed interest rate scenarios for the approval of the financial conditions of the credit requested by COMIBOL and the proposed financial conditions. 2) In case the credit request is considered favorably, COMIBOL must open the corresponding disbursement and payment accounts at the BCB. 3) Ensure the recovery of the credit in the shortest possible time, seeking to safeguard the capital complying with the degree of concessionality provided for in the current regulations.

That the Legal Affairs Management in the report REF: BCB-GAL-SANO-INF-2013-444 of December 16, 2013 concludes that the request made by COMIBOL falls within what is provided for by the current regulations, Law No. 396 and to this effect it has complied with the presentation of the documents required in Article 2 of the Regulations for the Granting of Credit to National Strategic Public Enterprises Management Years 2010, 2011, 2012 and 2013, so it corresponds to the Board of Directors of the BCB, to consider the referred credit request, by two-thirds of the votes of the members present in the meeting.

That the report from the Economic Policy Advisory REF: BCB-APEC-SSMF-INF-2013-043 of December 13, 2013 indicates that the credit requested by COMIBOL is within the amount considered for the financing of the NSPE in the Fiscal Program sent by the MEFP.

That through note GERE: 002/2014 of January 9, 2014, COMIBOL requests to specify the disbursement deadline for projection and planning purposes.

That the Monetary Operations Management indicates in its complementary report BCB-GOM-SOSP-DCE-INF-2014-2 of January 10, 2014 concludes that it is pertinent to specify the disbursement deadline being until December 30, 2014.

That the Legal Affairs Management indicates in the report REF: BCB-GAL-SANO-INF-2014-7 of January 10, 2014, that the request made by COMIBOL does not violate the regulations supporting the approval of the credit, nor modifies the validity conditions of the request or the approval made, so there are no legal observations regarding this.

That Article 6 of the Regulations for the Granting of Credit to National Strategic Public Enterprises in the Framework of the GBE — Management 2010, 2011 and 2012 establishes that the Board of Directors of the BCB, considering the technical and legal reports, will consider the credit request and in its case approve it, through the favorable vote of two-thirds of its members present in the Board meeting, issuing the corresponding Resolution; and instruct the preparation and subsequent signing of the contract by the President of the BCB, prior to review and approval by the Board.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Approve within the framework of what is provided in Article 9 of Law No. 396 of August 28, 2013 on Modifications to the GBE — 2013 (Law No. 317), of the antecedents and provisions described above, the granting of a concessional extraordinary credit to COMIBOL under the following terms and conditions:

Currency: Bolivianos
Total Credit Amount: Bs237,274,016.- (Two Hundred Thirty-Seven Million Two Hundred Seventy-Four Thousand Sixteen 00/100 Bolivianos).
Term: 18 years
Grace Period: To principal and interest five (5) years with payment of accumulated interest from the 6th year.
Annual Interest Rate: 0.64% (zero point sixty-four percent) Disbursement Deadline: Until December 30, 2014 Payment Plan: Annual Guarantees: Non-Negotiable Treasury Bonds.

Article 2.- Authorize the President of the BCB to sign the contract with the Bolivian Mining Corporation (COMIBOL) under the terms of this Resolution.

Article 3.- The Presidency and General Management are in charge of the execution and compliance of this Resolution.

La Paz, January 14, 2014

Abraham Alandia
President

Rafael Boyano
Reynaldo Yujra Seg

Board Members