Board Resolution No. 173/2014

BOARD RESOLUTION NO. 173/2014

SUBJECT: MONETARY OPERATIONS MANAGEMENT — APPROVES MODIFICATIONS TO THE FINANCIAL CONDITIONS OF CONTRACT SANO NO. 179/2011 "IMPLEMENTATION OF LITHIUM BATTERY PILOT PLANT IN BOLIVIA PHASE III (INDUSTRIALIZATION)" OF THE BOLIVIAN MINING CORPORATION.

HAVING SEEN:

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. 269/2014 of November 13, 2014.

Board Resolution of the Central Bank of Bolivia (BCB) No. 053/2011 of May 13, 2011.

Contract SANO No. 179/2011 of May 13, 2011 and its Addendum SANO No. 283/2011 of August 23, 2011.

General Board Resolution of the Bolivian Mining Corporation (COMIBOL) No. 5850/2014 of November 10, 2014.

Note from the Ministry of Mining and Metallurgy REF: MMM/DS/1402-111-407/2014 received on October 16, 2014.

Notes from the Bolivian Mining Corporation (COMIBOL) REF: GERE: 1068 and 1090/2014 of November 14 and 21, 2014, respectively.

Report from the Monetary Operations Management (GOM) REF: BCB-GOM-SOSP-DCE-INF-2014-34 of November 21, 2014.

Report from the Legal Affairs Management (GAL) REF: BCB-GAL-SANO-INF-2014-558 of November 24, 2014.

Act No. 057/2014 corresponding to the Ordinary Meeting of the BCB Board of November 25, 2014.

Note from COMIBOL REF: GERE: 1109/2014 of November 26, 2014.

CONSIDERING:

That Law of the 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 application of Articles 22 and 23 of Law No. 1670 of October 31, 1995 is exempted from the BCB.

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 the Bolivian Mining Corporation — 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 the same (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. 269/2014 of the MMM justifies to the BCB the following:

1. That the use and destination of the credit resources of the Project "Implementation of Lithium Battery Pilot Plant in Bolivia Phase III" are of national priority based on the National Development Plan (PND), Guidelines for Medium and Long-Term Planning towards the Patriotic Agenda 2025 and Law No. 535 of Mining and Metallurgy; therefore, it is indispensable, necessary, and pertinent the modification of Contract SANO 179/2011, in the following terms: term, 20 years; Grace, 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 "Implementation of Lithium Battery Pilot Plant in Bolivia Phase III", will be used for the payment of the project. 3) Confirms based on the conclusions of Technical Report No. 1199-DDP 595/2014 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. 1199-DDP 595/2014, justifies and guarantees the payment capacity under the modification terms established. 5) Instructs that the technical evaluation in accordance with the BCB Regulation, will be executed through the Vice Ministry of Mining Metallurgical Productive Development and monitoring of the execution of credit resources, through the Vice Ministry of Mining Policy, Oversight and Regulation, Direction of Administrative Affairs and General Direction of Planning of the Ministry of Mining and Metallurgy within the framework of their competencies.

That the BCB Board through Board Resolution No. 053/2011 approved the granting of a concessional extraordinary credit to COMIBOL and authorized the Acting President of the BCB to sign Contract SANO No. 179/2011 of Extraordinary Credit under concessional conditions granted within the framework of the GBN — 2010 and Law No. 062, for the Project "Implementation of Lithium Battery Pilot Plant in Bolivia Phase III", with COMIBOL and the MMM.

That Contract SANO No. 179/2011 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 35,350,000.- (clause fourth)
• COMIBOL will use and allocate under its exclusive responsibility the resources coming from the credit for the financing of the Project "Implementation of Lithium Battery Pilot Plant in Bolivia Phase III", according to Ministerial Resolution No. 55, of March 14, 2011, of the Ministry (Clause fifth).
• The credit conditions established in clause sixth are the following:
  o Credit Amount: 35,350,000.- 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 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 that 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 to the MMM.

That by Contract SANO No. 283/2011 an Addendum to Contract SANO No. 179/2011 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 Government of the Department of La Paz.

That through General Board Resolution of COMIBOL No. 5850/2014 the contract SANO No. 179/2011 is modified regarding the extension of the grace period to capital and interest of the Project "Implementation of Lithium Battery Pilot Plant in Bolivia Phase III".

That the MMM through note REF: MMM/DS/1402-DJ-407/2014 requests the BCB the extension of the inherent grace period of Contract SANO No. 179.

That COMIBOL through note REF: GERE: 1068/2014 requests the BCB an Addendum to Contract SANO No. 179/2011, proposing new financial conditions and attaching the corresponding documentation.

That COMIBOL through note REF: GERE: 1090/2014 complements note REF: GERE: 1068/2014, clarifying that the addendum requested is for the extension of the grace period to capital and interest of Contract SANO No. 179/2011 and that the interest accrued for the second semester of management 2014, will be paid in the current maturity deadlines.

That the GOM through report REF: BCB-GOM-SOSP-DCE-INF-2014-34 presents for consideration of the BCB Board the following: I. Consider the interest rate scenarios proposed for the approval of the Addendum to Contract SANO No. 179/2011 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 credit interest rate 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 interest 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. 179/2011, the BCB must return to the MEFP the treasury bonds of the disbursements made that serve as guarantee of the credit, with the object that that portfolio of state makes the corresponding replacement with the new amortization tables.

That the GAL through report REF: BCB-GAL-SANO-INF-2014-558 concludes that the modification of the financial conditions of Contract SANO No. 179/2011, as requested by COMIBOL implies the modification of numerals 6.3. and 6.4. of clause sixth of Contract SANO No. 179/2011, 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, the President of the BCB is authorized to sign the corresponding addendum.

That according to Point 10 of Act No. 057/2014 the BCB Board took note of Ministerial Resolution No. 269/2014 of November 13, 2014 by which the MMM determines that it is indispensable, necessary and pertinent the modification of Contract SANO No. 179/2011, and determines to accept the request of COMIBOL to modify numerals 6.3 and 6.4 of Contract SANO No. 179/2011 regarding the interest rate and the extension of the grace period to capital and interest.

That COMIBOL through note REF: GERE: 1109/2014 expresses conformity with the financial conditions approved by the BCB Board for the Addendum to Contract SANO No. 179/2011 and commits to make the payment of the corresponding accrued interest for the second semester of 2014.

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 strategies, administrative, operational and financial. To this effect, it is empowered to adopt general decisions that were necessary for the BCB to comply with its functions, competencies and faculties recognized by legal mandate, as well as assume the attributions that are necessary for the fulfillment of its functions (Art. 54 subsections a. and q.)

That as established by the referred Law, the President is the first executive authority of the Institution (Art. 57) and has as an 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. 179/2011 of Extraordinary Credit in Concessional Conditions granted within the framework of the GBN — 2010 and Law No. 062 in the following manner:
Total Amount of the Credit: Bs 35,350,000 (Thirty-Five Million Three Hundred 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 from 10/12/18.
Interest Payment: The interest that accrues for the 3 years and 6 months, from 11/12/14, will be paid on 10/12/18 in a single payment, subsequently payments will be semi-annual.
Deadline for disbursements: December 30, 2012.
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 credit contract, according to the approved conditions and terms.

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

La Paz, December 01, 2014

Brakatii Perez Alandia
Reynaldo Yujra Segales
Ronald Polo Rivero
Velarde Vera