Operative Control for Purchasing of Gold by the Mining Bank

Non Refined Alluvial Gold: To establish the purchasing price, the following parameters were used:

Base Rates: Average of the Final London Gold Exchange from Monday to Friday.

Type of Change: American dollar by supply and demand.

Price Validity: From Monday to Sunday of the following week to the one that corresponds the average rate.

Award: This was established by the BCR and was at five percent above the value of the liquidation. Purchasing of non refined alluvial gold, was generally done over the base of the pre established laws for the different qualities of gold known in each zone. In the actual buy a final liquidation is emitted for one hundred percent of the value of the liquidation.

By the salesperson's request or criteria of the bank and only in the main office can alluvial gold be bought by means of provisional liquidations taking into account the law or content that was pre established by the Mining Bank. In this case, up to eighty percent of the value of such provisional liquidity that is calculated by using the valid price at the moment of the delivery of the alluvial gold. The final liquidation is carried out right after the certification of the law.

The mining bank used to deduct the producers in each liquidation, the costs of refining, assays, cargo, and insurance and financial expenses.

Refined Gold: This gold must satisfy the requirement of the law or minimum content of 995/1000. In order to fix the price of its purchase, the following parameters were used:

Base Rates: Average was seven working days before the date of delivery of the material of Final London Gold Exchange of gold.

Type of Change: American dollar of supply and demand, published by the Superintendencia of Banca and Seguros on the liquidation date. if such publication was not available on the liquidation date, the last type of change rate that was published was considered.

Gold Award: This was established by the BCR and was a five percent above the liquidation amount.

In all the cases the reception of refined gold were sustained on certificates of analysis done by the National House of Currency that normally gave them 24 to 28 hours of the reception and sampling of the auriferous material.

The reception of the refined gold, for its later sale to the BCR is done through the Mining Bank or via the National House of Currency. In both cases, right after the certification is known of, from the law the final liquidation is emitted and at the same time the physical gold is turned into the BCR.

In some cases and by request of the client provisional liquidations could be done over the base of a referential law conservatively established by the Mining Bank. The bank turned in up to 80 percent of the value of such provisional liquidation. When the final liquidation was carried out, the import in dollars was discounted from provisional liquidation and what was left to pay was paid at the exchange rate of the day it is paid for.

Bullion: In order to carry out the buying of this type of gold the same parameters and procedures were used as in the case of refined gold. In this case, provisional liquidation is not emitted though. The final liquidation is done with the certification of the fine gold content. The bank included the discounts for reductions considered in the process of refining gold bullion and the costs of refining and assays.