Board Resolution No. 172/2014

BOARD RESOLUTION TV 172/2014
SUBJECT: MONETARY OPERATIONS MANAGEMENT — APPROVES MODIFICATIONS TO THE FINANCIAL CONDITIONS OF CONTRACT SANO No. 178/2011 "INTEGRAL DEVELOPMENT OF THE BRINE OF THE UYUNI SALAR — INDUSTRIAL PLANT PHASE II" OF THE BOLIVIAN MINING CORPORATION.

VIEWING:
The General State Budget Law 2010 — (GBE 2010).
Law No. 062 General State Budget — Management 2011 of November 28, 2010.
Ministerial Resolution of the Ministry of Economy and Public Finance (MEFP) No. 318 of August 26, 2009.
Ministerial Resolution of the MEFP No. 060 of February 28, 2011.
Ministerial Resolution of the Ministry of Mining and Metallurgy (MMM) No. 268/2014 of November 13, 2014.
Board Resolution of the Central Bank of Bolivia (BCB) No. 052/2011 of May 13, 2011.
Contract SANO No. 178/2011 of May 13, 2011 and its Addenda SANO No. 282/2011 of August 23, 2011 and No. 080/2013 of April 9, 2013.
General Board Resolution of the Bolivian Mining Corporation (COMIBOL) No. 5849/2014 of November 10, 2014.
Note from the Ministry of Mining and Metallurgy CITE: MMM/DS/1402-D.1-407/2014 received on October 16, 2014.
Notes from the Bolivian Mining Corporation (COMIBOL) CITE: GERE: 1066 and 1088/2014 of November 14 and 21, 2014, respectively.
Report from the Monetary Operations Management (GOM) CITE: BCB-GOM-SOSP-DCE-INF-2014-33 of November 21, 2014.
Report from the Legal Affairs Management (GAL) CITE: BCB-GAL-SANO-INF-2014-557 of November 24, 2014.
Act No. 057/2014 corresponding to the Ordinary Meeting of the BCB Board of November 25, 2014.
Note from COMIBOL CITE: GERE: 1107/2014 of November 26, 2014.

CONSIDERING:

That Law GBE 2010 in its Article 41 authorizes the BCB to grant an extraordinary credit up to the equivalent of $1,000,000,000.- (One Billion 00/100 United States Dollars) in favor of National Strategic Public Enterprises under concessional conditions, with the exclusive objective of financing productive investment projects within the framework of the country's food and energy security; for this effect, the BCB is exempted from the application of Articles 22 and 23 of Law 1670 of October 31, 1995.

That Article 13 of Law No. 062 of the GBE — 2011 modifies Article 8 of Law No. 050 of October 9, 2010, authorizing the BCB to grant an extraordinary credit to La Corporación Minera de Bolivia — COMIBOL of Bs 836,400,000.- (Eight Hundred Thirty-Six Million Four Hundred Thousand 00/100 Bolivianos), with the exclusive objective of investing in the production and industrialization of lithium; under concessional conditions; for which, the BCB is exempted from the application of Articles 22 and 23 of Law No. 1670 of October 31, 1995.

That Ministerial Resolution of the MEFP No. 318 in its Article 15 subsection b) establishes a Degree of Concessionality of 2.3%, and in its Article 17 determines the update of the Degrees of Concessionality (Internal Debt) and the period for updating them (subsections a. and c.).

That Ministerial Resolution of the MEFP No. 060 determines to maintain during the quarter March to May 2011, the degree of concessionality for internal credits at 2.3%.

That Ministerial Resolution No. 268/2014 of the MMM justifies to the BCB the following:

1. That the use and destination of the credit resources of the Project "Integral Development of the Brine of the Uyuni Salar — Industrial Plant Phase II" are of national priority based on the National Development Plan (PND), Medium and Long-Term Planning Guidelines towards the Patriotic Agenda 2025 and Law No. 535 of Mining and Metallurgy; therefore, it is indispensable, necessary, and pertinent to modify Contract SANO 178/2011, under the following terms: term, 20 years; Grace period, 7 years to capital, and interest; interest rate, 0.84% and payment method, semi-annual, from December 2018.
2. That the cash flows proposed in the Project "Integral Development of the Brine of the Uyuni Salar — Industrial Plant Phase II", will be used for the payment of the project.
3. Confirms based on the conclusions of Technical Report No. 1198-DDP 594/2014 of November 12, 2014, the technical feasibility of the Project.
4. Determines that the Financial Economic Evaluation of the Project, as established by Technical Report No. 1198-DDP 594/2014, justifies and guarantees the payment capacity under the established modification terms.
5. Instructs that the technical evaluation of compliance with the BCB Regulation, will be executed through the Vice Ministry of Mining and Metallurgical Productive Development and follow-up of the execution of credit resources, through the Vice Ministry of Mining Policy, Regulation and Supervision, Administrative Affairs Directorate and General Planning Directorate of the Ministry of Mining and Metallurgy within the framework of their competencies.

That the BCB Board through Board Resolution No. 052/2011 approved the granting of a concessional extraordinary credit to COMIBOL and authorized the Acting President of the BCB to sign Contract SANO No. 178/2011 for extraordinary credit under concessional conditions granted within the framework of the GBN — 2010 and Law No. 062, for the Project "Integral Development of the Brine of the Uyuni Salar — Phase II", with COMIBOL and the MMM.

That Contract SANO No. 178/2011 stipulates, among other aspects, the following:

• The object of the contract is the granting of an extraordinary credit under concessional conditions for an amount of Bs 801,050,000.- (fourth clause)
• COMIBOL will use and direct under its exclusive responsibility the resources coming from the credit for the financing of the Project "Integral Development of the Brine of the Uyuni Salar" Industrial Plant Phase II (Production), according to Ministerial Resolution No. 56, of March 14, 2011, of the Ministry (Fifth clause).
• The credit conditions established in the sixth clause are the following:
  o Credit Amount: 801,050,000.- o Disbursement Currency: Bolivianos. o Term: 20 years. o Grace Period: To capital for three (3) years. o Current Interest: 0.80% (zero point eighty percent). o Penalty Interest: Form and scale provided in Article 2 of D.S. No. 28166 and its modification effected through D.S. No. 530. o Disbursement Schedule: According to the disbursement schedule approved by the COMIBOL Board. o Deadline for Disbursements: December 30, 2012. o Guarantees: Bonds issued by the TGN for each disbursement.
• In case the Investment Plan or the Disbursement Schedule is subject to modification, COMIBOL must accredit the corresponding approval by its Board and the communication to the Ministries of Planning and the MMM.

That by Contract SANO No. 282/2011 an Addendum to Contract SANO No. 178/2011 was signed, by which the nature of the Contract is clarified, stating by agreement of the parties that it constitutes a draft with the value of a private document while it is notarized before the Notary of the Departmental Government of La Paz.

That by Contract SANO No. 080/2013 an Addendum to Contract SANO No. 178/2011 was signed, by which the deadline for disbursements provided in numeral 6.7 of the Sixth Clause of the Contract is extended until December 30, 2013.

That through General Board Resolution of COMIBOL, No. 5849/2014, Contract SANO No. 178/2011 is modified regarding the extension of the grace period to capital and interest of the Project "Industrial Development of the Brine of the Uyuni Salar — Industrial Plant" Phase II.

That the MMM through note CITE: MMM/DS/1402-DJ-407/2014 requests the BCB the extension of the inherent grace period of Contract SANO No. 178.

That COMIBOL through note CITE: GERE: 1066/2014 requests the BCB an Addendum to Contract SANO No. 178/2011, proposing new financial conditions and attaching the corresponding documentation.

That COMIBOL through note CITE: GERE: 1088/2014 complements note CITE: GERE: 1066/2014, clarifying that the requested addendum is for the extension of the grace period to capital and interest of Contract SANO No. 178/2011 and that the interest accrued from the second semester of management 2014, will be paid in the current maturity terms.

That the GOM through report CITE: BCB-GOM-SOSP-DCE-INF-2014-33 presents for consideration of the BCB Board the following: 1. Consider the interest rate scenarios proposed for the approval of the Addendum to Contract SANO No. 178/2011 requested by COMIBOL and the new financial conditions described. 2. If the request for Addendum to capital of 7 years and interest of 3.5 years is approved, it implies an increase in the interest rate of the credit by 4bp above the initial (from 0.80% to 0.84%) because there is a direct relationship between grace period and interest rate. 3. COMIBOL must make the payment of accrued interests until the next maturity of December 10, 2014 in this context, the extension of the grace period to interest will be 3.5 years. 4. The next payment after December 10, 2014 would be December 10, 2018, once the additional grace period of 4 years to capital and 3.5 years to interest is concluded. 5. Before the signing of the Addendum to Contract SANO No. 178/2011, the BCB must return to the MEFP the treasury bonds of the disbursed amounts that serve as guarantee for the credit, with the objective that this state portfolio carries out the corresponding replacement with the new amortization tables.

That the GAL through report CITE: BCB-GAL-SANO-INF-2014-557 concludes that the modification of the financial conditions of Contract SANO No. 178/2011, as requested by COMIBOL, implies the modification of numerals 6.3. and 6.4. of the sixth clause of Contract SANO No. 178/2011, corresponding that they be approved by the Board, by two-thirds of the votes of its members present at the respective meeting, likewise by virtue of what is provided by article 57 and subsection e) of Law No. 1670, authorize the President of the BCB, the signing of the corresponding addendum.

That according to Point 9 of Act No. 057/2014 the BCB Board took note of Ministerial Resolution No. 268/2014 of November 13, 2014 by which the MMM determines that it is indispensable, necessary and pertinent to modify Contract SANO No. 178/2011, and determines to accept the request of COMIBOL to modify numerals 6.3 and 6.4 of Contract SANO No. 178/2011 regarding the interest rate and the extension of the grace period to capital and interest.

That COMIBOL through note CITE: GERE: 1107/2014 expresses conformity with the financial conditions approved by the BCB Board for the Addendum to Contract SANO No. 178/2011 and commits to making the payment of the accrued interests corresponding to the second semester of 2014. In the aforementioned note, a typographical error is evident when mentioning the total amount of the contract as Bs 801,500,000.- when the correct amount is Bs 801,050,000.- which does not affect the substance and, under the principle of informality, is not observed.

That by virtue of what is provided in article 44 of Law No. 1670, of October 31, 1995, the highest authority of the BCB is its Board, responsible for defining its policies and specialized regulations of general application and internal norms, as well as establishing administrative, operational and financial strategies. To this effect, it is empowered to adopt general decisions that may be necessary for the BCB to fulfill its functions, competencies and faculties recognized by legal mandate, as well as to assume the attributions that are necessary for the fulfillment of its functions (Art. 54 subsections a. and q.)

That as established by the aforementioned Law, the President is the first executive authority of the Institution (Art. 57) and has the attribution to exercise the legal representation of the BCB (Art. 59 Subsection e.)

THEREFORE,
THE BOARD OF THE CENTRAL BANK OF BOLIVIA
RESOLVES:

Article 1.- Approve the modification of the financial conditions of Contract SANO No. 178/2011 for Extraordinary Credit in Concessional Conditions granted within the framework of the GBN — 2010 and Law No. 062 as follows:
Total Credit Amount: Bs 801,050,000.00 (Eight Hundred One Million Fifty Thousand 00/100 Bolivianos).
Currency: Bolivianos.
Term: 20 years.
Grace Period to capital: 7 years from the first disbursement (10/06/11).
Grace Period to Interest: 3 years and 6 months from (11/12/14).
Interest Rate: 0.80% from 10/06/11 to 10/12/14.
0.84% from 11/12/14 to 10/06/31.
Principal Payment: Fixed semi-annual installments starting from 10/12/18.
Interest Payment: The interests that accrue for the 3 years and 6 months, starting from 11/12/14, will be paid on 10/12/18 in a single payment, subsequently the payments will be semi-annual.
Deadline for Disbursements: December 30, 2013.
Guarantees:
Non-negotiable Treasury Bonds.

Article 2.- The interest accrued in the second semester of 2014 will be paid by COMIBOL on December 10, 2014.

Article 3.- Authorize the President of the BCB to sign the respective contract, according to the approved conditions and terms.

Article 4.- The Presidency and General Management are in charge of the execution and compliance of this Resolution.

La Paz, December 01, 2014
Abraham Pérez Alandia
Reynaldo Yujra Segales
Juan Carlos Polo Rivero - Sergio Velarde Vera