SGDB No. 017/2012: Procedure for the Purchase of Gold from State Mining Enterprises for International Reserves

EXTERNAL CIRCULAR OF THE CENTRAL BANK OF BOLIVIA

La Paz, April 19, 2012
SGDB No. 017/2012

FROM: GENERAL MANAGEMENT
INTERNATIONAL OPERATIONS DEPARTMENT
TO: STATE MINING ENTERPRISES
SUBJECT: PURCHASE OF GOLD DESTINED FOR INTERNATIONAL RESERVES

Ladies and Gentlemen:

In accordance with the provisions of Supreme Decree No. 1167 of March 14, 2012, and the Regulation for the purchase of gold from State Mining Enterprises destined for International Reserves (REGULATION), approved by Board Resolution of the Central Bank of Bolivia (BCB) No. 046/2012 of April 17, 2012, the procedure for the gold purchases to be carried out by the BCB from State Mining Enterprises (EMIES) is detailed below:

1. The EMIES shall, through a written note, credential the officials responsible for coordinating with the BCB the sale of gold bars.
2. By 15:00 hours on Fridays of each week, the EMIES shall send a note to the International Operations Department of the BCB communicating its request for the sale of gold, specifying:
   a) Quantity of bars and unique consecutive numbering. b) Weight of each bar in grams with one decimal place. c) Name(s) and identity card number(s) of the EMIES official(s) who will deliver the gold to the BCB. d) License plate of the vehicle that will enter the BCB. e) Name and identity card number of the vehicle driver.
3. The BCB shall, through a note to the EMIES, confirm acceptance of the request and communicate the date for the receipt of the gold.
4. On the day of the operation, in a secure environment with permanent filming in the BCB building, with the presence of EMIES officials, the company contracted to perform the purity analysis, and BCB officials, the following shall proceed:

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Ayacucho y Mercado • Tel: (591-2) 2409090 • Casilla: 3118 bcb@bcb.gob.bo • La Paz - Bolivia 1

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a) The receipt of each gold bar. b) The review of the identification seals of each bar. c) The taking of samples by the company contracted for this purpose. d) The weighing of each gold bar. e) The signing of the Gold Delivery/Receipt Act.

5. Three samples shall be taken from each gold bar: one for delivery to the company that will perform the purity analysis, one for the EMIES, and one under the custody of the BCB for potential arbitration. Upon completion of this work, the Gold Bar Sample Taking Act shall be signed.

6. The weighing of the bars shall be carried out after the taking of 2 samples.

7. The gold bars shall remain in custody in the BCB vaults until their purchase in accordance with Article 7 of the REGULATION.

8. Upon receipt of the purity percentage analysis from the company contracted for this purpose, the EMIES and the BCB shall sign the Final Purchase-Sale Settlement Act for Gold Bars.

9. The BCB shall proceed to make the payment for the gold purchase as provided for in Articles 6 and 7 of the REGULATION.

10. The samples for arbitration shall be returned quarterly to the EMIES for gold bars that have been paid for and on which the EMIES has no observations.

11. In the event that the EMIES disagrees with the results of the gold purity analysis, it may perform a test with the sample in its possession at an internationally certified laboratory, the cost of which shall be borne by the EMIES.

12. If the results of the laboratory tests conducted by the company contracted by the BCB and by the EMIES differ by more than the error margin established in point 13 below, the sample under the custody of the BCB shall be subjected to a test with another internationally certified laboratory. The costs of the arbitral test shall be borne by the party whose laboratory result has the greater difference compared to the results of the arbitral test. For payment purposes, the results of the party with the lesser difference compared to the arbitral test shall be assumed.

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Ayacucho y Mercado • Tel: (591-2) 2409090 • Casilla: 3118 bcb@bcb.gob.bo • La Paz - Bolivia 2

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13. An acceptable error margin in the analysis of gold purity of up to 0.5% is established.

Sincerely,

RPR/JLB

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Ayacucho y Mercado • Tel: (591-2) 2409090 • Casilla: 3118 bcb@bcb.gob.bo • La Paz - Bolivia 3 ---