MINING IN BOLIVIA

1. Executive Summary

2. Brief History
a. Mining in Bolivia
b. The Elephant in The Room
c. The Pabon Family
d. Current Players

3. Why Bolivia
a. New Constitution
b. Un explored Territory
c. High Quality Reserves
d. Our Team

4. Our Team & Services

1. EXECUTIVE SUMMARY

There is a famous story from the industrial revolution that tells the experience of the
two best sales associates of a shoe factory in England that were sent to Africa to
prospect the market. The first one came back after a month and said, nobody wears
shoes, there are no business opportunities for us there. The second one came back a
month later and said, nobody wears shoes, the opportunities for us are incalculable as
we can supply all of the shoes.

Something similar is happening with Bolivian mining opportunities. Ever since the late
1800s Bolivia has been off the beaten path for foreign direct investment in mining and
very little is known about our country and specially our mineral reserves as we have
not been able to qualify and quantify them. Back in the late 19 th century the “Black
Legend” states that the British Empire cut ties with Bolivia because their ambassador
was run out of the capital city (La Paz) on an ass. If this is true or not is up in the air,
but what can be confirmed is that both countries cut ties and did not renew them until
after the turn of the century.

As the US Department of Trade states, “…. only 10% of Bolivias´mineral resources have
been extracted”. This is particularly telling as Bolivia has produced a great part of the
riches the Spanish empire produced in its colonies, and has produced the three “Tin
Barons”, has lived from its royalties for over three decades. Bolivia is once again
starting to pay attention to its mining potential.
Considering the recent changes, the world economy is facing which includes,
incentives for divesting in hydrocarbons in favor of green energy, G7 countries
migrating from off shoring to near shoring and/or onshoring, BREXIT, inflation caused
by fiat money printing which is overheating assets in the largest stock markets in the
world and favoring investment in “safe haven assets, and the lack of investment in
mining development in the past ten to twenty years, several minerals and
commodities are increasing in value and are foreseen to continue increasing in value in
the short to middle term which creates the perfect climate to invest in a rich mineral
territory that is ripe and eager to receive investment.

2. BRIEF HISTORY OF MINING IN BOLIVIA

During colonial times, Bolivia was a mining territory famously known for the silver
mine in the “Cerro Rico” in Potosí which is said to have produced so much silver that a
bridge could be built between Potosi and Madrid. To this day the phrase “Vale un
Potosí” is used in Spain to denote something of high worth.

After gaining its independence, Bolivia became a Republic, and all mining activities
were continued by wealthy families with ties to Europe and fortune seekers. This
continued until we reached the era of the “Tin Barons” which were Bolivia´s version of
the “Robber Barons”. Simón Patiño was the richest and most notable of all three and
amassed a fortune that made him one of the richest men of all times. Today, Albina du
Boisrouvray one of his great granddaughters, is second cousin to Prince Rainiero III of
Monaco and godmother to Carlota Casiraghi, daughter of Carolina de Monaco. The
rest of his descendants have also married into some of the wealthiest families and
royal houses of the world and continue to live off the fortune left behind by Patiño.

In 1952, the political party MNR (Movimiento Nacionalista Revolucionario) came into
power and nationalized the mines, because they paid little or no taxes and used slave
labour. During their first term in office, they also gave voting rights to women and
Indians, and pushed forward an agrarian reform that gave back the land to the
campesinos. This is when the Corporación Minera de Bolivia COMIBOL was created and
all big mining industry in Bolivia began to be administered and run by COMIBOL, the
newly created state-run company.

Three decades later, during the 1980´s big mining activities in Bolivia came to a halt
due to a sudden drop in the minerals markets which made all COMIBOLs operations
lose money. This also caused all of Bolivia’s rich mining families to either go broke,
change industries or leave the country. During those years, tin and lead where Bolivia’s
main exports. This, price drop, caused a macroeconomic imbalance that ended with
hyperinflation, and put thousands of miners out of work. Once again, during the
1980’s, it was the political party MNR that led the way and reversed what they had
started four decades before. They relocated thousands of miners and their families to
a semi tropical area of Bolivia known as El Chapare which would later become Bolivia’s
main coca leaf growing area and the political birthplace of former president Evo
Morales and is where his current constituent base is located.
With the end of big mining projects in Bolivia the few mining activities that were left
were run by the remnants of the labour unions and Cooperatives (Similar structure to
the German model of Cooperatives). This change meant that we went back to a very
artisanal and rudimentary way of mining which continues to this day, especially in the
gold sector. This lack of modern mining methods causes most of Bolivian miners to
have trouble in mining large quantities which is one of the reasons they cannot enter
international capital markets as their production quantities are too small.

Current Conditions
Today COMIBOL has inherited many reserves and is legally capable of signing joint-
venture contracts with foreign investors. Aside from a handful of private projects,
mentioned below, they have some of the largest projects in the country. Cooperatives
are the biggest group of miners in the country and function with the labour, money
and equipment provided by their partners. Their mining practices are extremely
predatory and destructive for the environment which is why the government is facing
outside pressure to reign them in. Lastly, you have small privately owned mining
companies that are always looking for strategic partners, and a few big international
operations like San Cristobal which is owned by Sumitomo from Japan.

Except for the big international operations, all the above share the following.
1. Lack of Investment
2. Lack of Know How
3. Lack of Technology - Use of outdated practices and technology
4. Limited access to international markets

a) MINING IN BOLIVIA

Bolivia has always been a miner’s promised land and has never been fully developed.
The best proof of this is the first paragraph of the US Department of trade website
regarding mining in bolivia which literally states “Mining remains one of Bolivia´s most
important economic activities. Despite more than 500 years of continuous mining in
Bolivia, estimates suggest that only 10 percent of Bolivia´s mineral resources have
been extracted. Principal metals and industrial minerals include zinc, Lead, tin, gold,
silver, copper, tungsten, potassium. Borax, and semi-precious stones. Mining
accounted for approximately 22 percent of Bolivia´s exports or $1.5 billion in 2020.”
https://www.trade.gov/country-commercial-guides/bolivia-mining-sector

b) THE ELEPHANT IN THE ROOM

Nationalization is always the “Elephant in the Room” when looking at mining prospects
in third world countries. In this case the risks of nationalization are slim because Bolivia
has already gone through the social or left-wing reforms that are starting to take place
in Chile, Perú, and Colombia. Our “Asamblea Constituyente” started in 2006 and our
new Constitution came into effect in 2009. This means that the door for
nationalizations and other big reforms that is being opened in our neighboring
countries has already been closed in Bolivia.
In the specific case of San Dimas, it has already complied with everything the new
constitution states and new mining laws state.

Another reason why the risk of nationalization is low is because the government needs
to attract Foreign Direct Investment in order so stay in power. The reason behind this
is because Bolivia’s main export was natural gas to Argentina and Brazil. The export
contract with Brazil ended and was not renewed and the depletion of current wells
caused Bolivia to default on the quantity of gas it exports to Argentina so now the
government must pivot in order to foment other activities such as mining in order to
offset this. According to the World Bank “Bolivia is trying to cushion the effects
generated by the COVID-19 pandemic and the fall in oil price. The recovery will require
actions to secure stability promote the private sector and protect the most
vulnerable.” https://www.worldbank.org/en/country/bolivia/overview#1

Lastly, the industries that Evo Morales nationalized when in government where
industries that had previously been owned by the state and had been privatized under
a shady privatization scheme in the 1990´s called “Capitalizacion”. The best example of
this is LAB, our national airline, which had over $80 million in assets that were sold
immediately after privatization and the money went straight into the balance sheet of
VASP(the Brazilian airline that privatized LAB) and not LAB. VASP also bought cheap
aircraft and leased it at over the market prices to LAB and hence never paid taxes in
Bolivia because the airline always lot money because VASP set it up to do so.

c) THE PABON FAMILY GROUP

The Pabon Family is one of the oldest mining families in Bolivia. Today, Daniel Pabon
Lopez Videla is the fourth-generation descendant of Mr. Carlos Balanza who started
mining activities in the early 1900´s when he worked in several mining operations in
the Milluni and Chacaltaya mountains, on the western side of the Cordillera Real of
Bolivia located in La Paz. Mr. Balanza was seconded by his son, Daniels great
grandfather, who discovered the San José de Ayata tin mine and who was also
followed by his son, Arturo Pabon Balanza, Daniels’s father, who modernized the
mining works in San José de Ayata and in the late 1960´s and was able to produce
44,000 fine pounds of tin per month, employed around 500 employees and constituted
the core developer of the region. Mr. Arturo Pabon also founded other prominent
projects and mining corporations. Empresa Minera Pabon acquired the San Dimas
property in 1963 and now, decades later it is the flagship project of the Pabon Family
Group. Because of the long history between the Pabon family and the local indigenous
people they have a good longstanding relationship.

d) CURRENT PLAYERS

Project in Owner Ticker Country Location Status

Bolivia of
Origin
San Sumitom Japan Potosi
 Cristobal o
Silver New (TSX:NUAG; OTCQX: Canada Potosi
Sand Pacific NUPMF)
Project Metals www.newpacificmetals.com
Carangas New (TSX:NUAG; OTCQX: Canada Oruro Waiting
Pacific NUPMF) approval to
Metals start a drilling
programme
San Pablo Andean Canada Potosi Phase I –
TSX. VAPM
Gold Precious Diamond Drill
Metals Programme of
www.andeanpm.com
Corp 10,000m in
2021
Rio Blanco Andean Canada Potosi Phase I –
TSX. VAPM
Precious Surface
Metals Mapping,
Corp Deep IP and
Geophysics in
Q2 2021
San Andean Canada Potosi
TSX. VAPM
Bartolome Precious
Metals
Corp
Iska Iska Eloro TSX-V: ELO; Frankfurt: P2Q Canada Potosi Commissioned
Resources (WKN A1JKAT); OTCQX: ELRRF and NI43-101
www.elororecources.com to Micon
International
Limited.
Already filed
under SEDAR.
Don Orvana (TSX: ORV; US-OTC: Canada Santa Successfully
Mario Minerals ORVMF) Cruz depleted
www.orvana.com

TRADERS
1. Trafigura
2. Blue Quest
3. Glencore
4. Several small others
Should we decide to start mining operations we can export directly, through one of our
companies or reach an agreement with any of the above.

3. WHY INVEST IN BOLIVIA

Bolivia has been one of the highest growing countries in the region for the past 10
years and its growth forecast continues to be favourable. There are several reasons as
to why investing in Bolivia is a profitable and secure option and can be summarized by
the following.

a. New Constitution
 b. Un explored Territory
c. High Quality Reserves
d. Our Team

a) NEW CONSTITUTION.- As mentioned before, Bolivia approved a new

constitution that guarantees private property and has also enacted a new
mining code that follows the spirit of the constitution.
b) UN EXPLORED TERRITORY.- As stated by the US Trade Department Bolivia is
rich in mineral reserves and 90% of those reserves are left untapped. The
quality of our reserves is usually outstanding. For example, we export a lot of
silver to Mexico, the world’s largest silver producer, because our concentration
of silver is much higher than the one found in Mexican mines.
c) HIGH QUALITY RESERVES.- Bolivia is known for its high quality reserves in silver
and other precious metals and minerals.
d) BUSINESS ACUMEN AND LOCAL TEAM.- Experience and knowledge of the
Bolivian political, financial, and business landscape. Our family group has been
doing business in Bolivia for over a century and we have a relationship with the
Bolivian state independently of who’s in power. We have good relationships
with both government officials and opposition leaders. We have successfully
worked in the automotive, aeronautic, software, telecommunications,
communications, and security sectors.
which allowed us to have a national and international network that enables us
to move between and translate Bolivian business practices and ways of doing
things to international best in class practices to reach our common goals.
e) OUR TEAM & SERVICES.- Team and Services. Given our experience and
knowledge of the Bolivian business landscape we have ongoing agreements
with former ministers and vice ministers of mines, former vice minister of
foreign investment, very good relationship with the lawyers that redacted the
new mining code, high level authorities and professionals in different fields and
can therefore take care of all and any paperwork or job that needs to be done.