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ARGENTINA

LAND OF MININGOPPORTUNITIES

TThe boom the mining industry is expe-riencing in the last decade is due tothe sharp rise in prices of minerals

and metals: emerging economies have joi-ned traditional countries; they are changingcourse, and therefore the economic and po-litical arena globally.

This strong demand for minerals and metalshas caused many companies to exceed theboundaries of traditional countries, to be in-serted in places that were not known, orwas on a limited basis.

A test case of the mentioned is Argentina,with a very short mining history, mainly sum-marized to mineral industries and applica-tion rocks, and only one metalliferousproducer El Aguilar.

The enactment of a friendly framework was

the momentum for a significant number ofmining companies to take the decision tocome to Argentina.

The geological potential was very superfi-cially known through historical work of statebodies with the aid -in some cases- of ins-titutions such as the United Nations. Tech-nological change was one of the tools forthe geological potential to give birth.

Thus, the combination of several factors hastransformed Argentina as a Mining Destiny,in almost two decades.

Mining: A new Industry

There are some topics that make the argen-tine Mining industry as an ideal destiny forMining investments:

Veladero MineSan Juan Province

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• A broad geological potential (less than20% of the Mining regions with mining po-tential have been explored);• An investor-friendly legal system;• Argentina ranks among the Top 15 miningexploration destinies;• The so called “Great Metalliferous Mining”has gained momentum in less than two de-cades;• Application of the most advanced techno-logies;• High skilled human resources: universities–Geology and Mining Engineering specially-have a worldwide status, and high skilledprofessionals hold degrees from those uni-versities;• The good and services suppliers haveknown how to fit themselves to the opportu-nities Mining brings, allowing a revenue di-versification in consolidated companies,also as the beginning of new ventures

Geologic potential for over4,000 km

Throughout the Andes there is geologic po-tential as any in the world; in the very mo-ment that Argentina has become adestination for exploration, that event wasrated as "The opening of the latest miningfrontier in the world.”

Virtually all types of minerals can be found inArgentina: precious metals, nonferrous me-tals, ferrous, lithium and potassium. Themost important Mining centers are:

• Bajo la Alumbrera;• Veladero;• Cerro Vanguardia;• El Aguilar;• Gualcamayo;• Manantial Espejo;• San José;• Pirquitas;• Salar del Hombre Muerto;• Casposo;• Sierra Grande;• Río Turbio;• Martha• Salar del Rincón;• Tincalayu;• Farallón Negro

There are also two mega projects in cons-truction, with billions of dollars invested ineach case: Pascua-Lama and Potasio RioColorado.

Other projects in different advanced stages

(Feasibility; Prefeasibility; advanced explo-ration) are:

• Cerro Negro;• Agua Rica;• El Quevar; • Salar de Olaroz;• Don Nicolás;• Lomada de Leiva;• Navidad;• El Pachón;• Cerro Moro;• Lindero;• Los Azules;• San Jorge;• Caucharí-Olaroz;• El Altar

Friendly legal framework forinvestors

Because the mining industry is a risky busi-ness where large sums are invested whichcan result in failures, it was imperative theneed to have an attractive legal framework.Some advantages are

• Fiscal, customs and exchange rates stabi-lity for 30 years;• Determination of a maximum to the miningroyalties that may be collected by the pro-vinces, not exceeding 3% of the value of theextracted mineral “at pit head”;• Fast amortization;• Double tax deduction of exploration ex-penses;• Refund of VAT paid, or financing schemefor such tax;• Capitalization of mining reserves

Mining integration with Chile

Argentina and Chile are the only two coun-tries to have a Binational Treaty to developmining projects lying on both sides of theborders in an efficient and profitable man-ner.

This tool enables mining companies to workin hard areas where –without the Treaty- itcould not be possible to do that: Border fa-cilitations (Free Access and transit of peo-ple), Tax and Customs (Free access andtransit of machinery and goods and servi-ces), Promotion Schemes, Social Security,Labor, Investments and Consequential Ex-penses, Environment, Human Health, Sha-red Water Resources, Preservation ofBorder Demarcations, Mining Business Endand Suspension.

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According to the last survey (2009-2010)and 2010 Mid-Year update, performed bythe Fraser Institute of Canada –a non-pro-fit organization dedicated to social andeconomic research- based on the res-ponse of 670 mining companies with anexploration budget for 2009 of US$2.9 bi-llion and of US$3.6 billion in 2008 (or 38%

of total global nonferrous exploration ofUS$7.7 billion in 2009), and an estimatedUS$13,2 billion in 2008 (i.e., 13% up fromthe previous year).

Argentina’s prospects as a mining countryare very favorable. The following numberswere published in the survey:

World´s view of Argentina

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Argentine Mining Projects Map