Bolivia's Door Creaks Open to Foreign Mining Investment

2/14/2019 Bolivia’s door creaks open to foreign mining investment – The Northern Miner

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Bolivia’s door creaks open to foreign mining investment

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https://www.northernminer.com/news/bolivias-door-creaks-open-to-foreign-mining-investment/1003804067/ 1/8 2/14/2019 Bolivia’s door creaks open to foreign mining investment – The Northern Miner Philip Harwood, A view of New Pacic Metals' Silver Sand silver deposit in Bolivia. Vice-President Credit: New Pacic Metals. Marketing BY: TOM AZZOPARDI, SPECIAL TO THE NORTHERN MINER FEBRUARY 14, BFL CANADA 2019 View all

Submit a notice SANTIAGO, CHILE — A rst-of-its kind deal between Bolivia’s state mining company Comibol and Vancouver- based explorer New Pacic Metals (TSXV: NUAG; US- OTC: NUPMF) promises to usher in a new period of foreign investment into Bolivia’s mining industry.

Under the deal signed in January, New Pacic Metals will have a 45-year contract at its Silver Sands silver project to explore and produce minerals over a 57 sq. km area in Bolivia’s mineral-rich Potosi department. In exchange, the company has committed to spend at least US$6 million on exploration during the rst ve years and pay a 4% royalty on all minerals produced in the area.

The deal is the rst to be signed between Comibol and a RECENT POSTS private company under Bolivia’s new mining legislation.

“It is a benchmark achievement that shows that Bolivia is Bolivia’s open to foreign investment,” said New Pacic’s president door creaks Gordon Neal when the deal was announced. open to foreign mining The rst signs from Silver Sands are promising, with 94 investment out of 98 holes in a recent drilling campaign intercepting near-surface silver mineralization, including 77 metres grading 383 grams silver per tonne. United States The hope now is that similar deals will follow, says Pablo Snapshot: Ordoñez of law rm Ferrere who helped New Pacic in its Ten negotiations with Comibol. Since the deal was companies with announced, interest among international mining projects on companies in Bolivia has picked up, he said. the go in the USA The deal is evidence of a policy shift in the Bolivian government which until was recently better known for nationalizing natural resources than courting foreign Ascendant Resources updates investors. resource for Lagoa Salgada in Portugal https://www.northernminer.com/news/bolivias-door-creaks-open-to-foreign-mining-investment/1003804067/ 2/8 2/14/2019 Bolivia’s door creaks open to foreign mining investment – The Northern Miner First elected in 2005, Bolivian President Evo Morales is often lumped together Facts ‘n’ with other 21st gures: century leftist Central banks leaders in the buoyed gold region, such as demand in Argentina’s 2018 Cristina Fernandez, Brazil’s Lula da Silvercrest Silva and nds Venezuela’s another vein at Las Hugo Chavez. Chispas But while those Bolivian President Evo Morales in 2012. regimes ended in Commentar huge corruption cases, nancial chaos and economic y: Mining in disaster, Morales has presided over a decade of the digital unprecedented political stability and growth thanks to age canny management of the economy and booming gas exports to neighbouring Argentina and Brazil. BMO: After nationalizing the oil and gas industry in 2006, Silvercrest Metals an Morales’ left-wing administration funneled the foreign attractive revenues to infrastructure projects and welfare spending, takeover which has driven growth ever since. This year the candidate economy is expected to grow 4.5% making it one of the strongest in the region.

Continental However, Morales’ sweet patch may be running out. The Gold decline in oil prices since 2011 and the rise in domestic expands resource at gas production in Argentina and Brazil threaten to choke Buritica off his key source of funding. The value of Bolivia’s gas exports fell from US$5.5 billion in 2014 to US$2.6 billion in 2017, hammering government nances. First Cobalt extends Faced with that economic reality, the government is keen mineralizati to nd alternative sources of funding with mining seen as on at Iron the best bet.

https://www.northernminer.com/news/bolivias-door-creaks-open-to-foreign-mining-investment/1003804067/ 3/8 2/14/2019 Bolivia’s door creaks open to foreign mining investment – The Northern Miner Creek in The country’s geological potential is huge, with deposits Idaho of gold, silver, iron ore, zinc, tin, lead and lithium. It was silver from the mines of Potosi, still a byword in Spanish for incalculable wealth, which supercharged Europe’s Editorial: economy in the early modern era. Cerro Rico, which Iron ore prices surge towers over the city, is still being mined today using higher on almost medieval techniques. Vale disaster “The potential is amongst the best in the region. Everything you could imagine and more,” says Andres Moreno, a mining lawyer in La Paz. Even the tailings left Roxgold by centuries of mining are richer than most deposits in acquires neighbouring Chile, Peru and Argentina. Newcrest’s Seguila But decades of political instability mean that little of the project in Cote country has been subject to modern mineral exploration. d’Ivoire The country’s only large-scale mine is the San Cristobal mine, the world’s fourth largest producer of zinc, operated by Japan’s Sumitomo. Kerr Mines targets Leading the search for foreign investors is Mines and 2020 Metallurgy Minister Cesar Navarro, in the post since production 2014, during which time he has attended the last three at Copperston annual conventions of the Prospectors and Developers e Association of Canada in Toronto.

However, convincing mining companies to return to JV Article: Bolivia will be difcult, given the administration’s past AspenTech record. Soon after taking ofce, Morales sent troops to Reduces seize the Vinto tin smelter, then owned by Glencore Downtime (LON: GLEN), and in 2012, nationalized the Colquiri tin for Mining mine. Equipment

TSX rises, Feb 4-8: RNC, Wallbridge and First Quantum

US markets post slight https://www.northernminer.com/news/bolivias-door-creaks-open-to-foreign-mining-investment/1003804067/ 4/8 2/14/2019 Bolivia’s door creaks open to foreign mining investment – The Northern Miner gains: Vale, Cleveland Clis, Buenaventu ra, Franco- Nevada, Peabody Energy

TSX Venture dips, Feb 4- 8: Max Resources, Bonterra From 2012: A protester opposed to South American Silver’s Malku Khota silver project stands in front of a barrier blocking access to the Resources, Bolivian presidential palace in the capital La Paz. Photo by Alexis Redzone Aubin. [email protected]. alexisaubin.blog.com Resources He has also rebuffed offers from multinationals to develop the Salar de Uyuni´s huge lithium potential, McEwen Mining on instead developing a state company YLB to head the task. verge of production The new mining law, approved in 2014, replaced existing at Gold Bar mineral claims with production contracts, reducing legal certainty.

American In addition, the sector has a long history of violent Lithium protests and strikes, often led by the powerful mining drilling cooperatives, key allies of the Morales regime. In 2016, Nevada claystones cooperative miners, protesting over legal changes, kidnapped, tortured and murdered the country’s Deputy Interior Minister Rodolfo Illanes. Trilogy Metals is Little wonder that in the Fraser Institute’s latest survey of cashed up mining executives, Bolivia was ranked 102nd out of 112 and ready jurisdictions, just behind Venezuela. to go in Alaska “The problem is that the mining industry is taking time getting over the stories of the past and the president’s rhetoric,” says Juan Gavidia, CEO of Toronto-based SEMAFO tables Orvana Minerals (TSX: ORV; US-OTC: ORVMF) which maiden operates the small Don Mario gold mine in eastern resource of Bolivia. https://www.northernminer.com/news/bolivias-door-creaks-open-to-foreign-mining-investment/1003804067/ 5/8 2/14/2019 Bolivia’s door creaks open to foreign mining investment – The Northern Miner Bantou gold Ordonez agrees, noting that Morales has only zone nationalized assets that were previously state-owned ones. But the image persists.

Adding to the uncertainty is next October’s general elections, in which the president is expected to seek a

PMF 2018 INNOVATION fourth term — despite a 2016 referendum in favour PRESENTATIONS presidential term limits.

The country’s nancial difculties and the general Video: public’s weariness with his regime mean that this likely to Peytech be the hardest electoral challenge yet faced by the former president coca farmer. Some recent polls give former president and CEO Peyman Carlos Meza a clear lead over the incumbent. Moeini – Innovation So far none of the candidates has clearly set out their Presentatio policy for the mining sector but given the country’s n economic challenges, the trend towards greater foreign investment is likely to continue, says Moreno.

Video: But uncertainty surrounding the result makes it likely Hydrostor that most investors will hold back from signing new deals president this year. and CEO Jon Norman – Innovation A likely beneciary of this delay could be China. The Presentatio Chinese government has become a key supporter of the n Morales government, becoming a major lender and investor in the country’s infrastructure push.

Video: Solar In the last ve years, Chinese companies have picked up Ship CEO road-building contracts worth a total of US$2.7 billion. Jay Godsall – This alliance is now expanding into the natural resources Innovation Presentatio sector. n While China National Petroleum Corporation and Sinopec are among the companies exploring for natural gas in Bolivia’s lowlands, Sinosteel last year began work More PMF 2018 Innovation on a steel mill that will process iron ore from the 40- Presentations billion-tonne El Mutun deposit near the border with Brazil.

https://www.northernminer.com/news/bolivias-door-creaks-open-to-foreign-mining-investment/1003804067/ 6/8 2/14/2019 Bolivia’s door creaks open to foreign mining investment – The Northern Miner In January state lithium company YLB signed a preliminary agreement with a Chinese consortium to form a joint venture that will invest around US$2.3 billion to extract and process lithium and other minerals from the Coipasa and Pastos Grandes salares

China also has an indirect connection to the new Silver Sands deal: Vancouver-based Silvercorp Metals, (TSX: SVM; NYSE-AM: SVM) the largest primary silver producer in China, is the largest shareholder in New Pacic Metals with 28% of the stock, compared to 16.4% held by Ross Beaty’s Pan American Silver (TSX: PAAS; NASDAQ: PAAS). Silvercorp chairman and CEO Rui Feng is also CEO and a director of New Pacic Metals.

— Based in Santiago, Chile, Tom Azzopardi is freelance journalist specializing in the resource industries.

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COMMODITY: Gold Industrial/Specialty Minerals Silver REGION: South America COMPANY: New Pacic Metals Corp Orvana Minerals Corp

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