Phillip Brodie-Hall, President and CEO of South American Silver said, "It is regrettable that we are forced to resort to international arbitration to resolve this matter. Bolivia chose to expropriate our mining concessions; it must now meet its legal obligations and compensate us for this significant loss. International arbitration gives us the means to pursue our case and we are very confident that it will deliver fair value compensation. We have a first-class team working on the case and, while we are open to dialogue with the Government, we are prepared to go the full distance in arbitration if that's what it will take to get fair value compensation. Our loyal shareholders deserve nothing less."
Now that the arbitration has been commenced, the Bolivian Government has thirty days to respond and an arbitration tribunal will be empanelled in the coming months. Thereafter, the tribunal will set a provisional timetable for the arbitration itself including a schedule for submission of a Statement of Claim, Statement of Defense and oral hearings. Unless there is a negotiated settlement of the dispute, it is expected that the arbitration could take up to 2-3 years from commencement of proceedings until rendering of a final award.
Bolivia has been involved in over fifteen "nationalizations", the majority of which have taken place after President Morales came to office. A number of the cases have reached negotiated settlements and at least five others are pending. Bolivia's reserves of cash and gold were estimated at $13.62 billion as of December 31, 2012, up from US$3 billion when Morales came to office in 2006. Bolivia's credit rating was upgraded by all three major rating agencies in 2012, the most recent being Fitch Ratings upgrade from B+ to BB- in October 2012. Bolivia has demonstrated that it has ready access to international funding, having had a $500 million 10-year bond offering significantly oversubscribed in August 2012 at an interest rate of only 4.875%. The IMF recently forecast that Bolivia will be one of the fastest growing economies in South America with an expected GDP growth rate in 2013 of 4.8%.
Mr. Brodie-Hall went on to say, "It is not a question of whether Bolivia is capable of meeting its obligation to compensate the company for the expropriation; it clearly has the financial capacity."
About South American Silver Corp.
South American Silver Corp. (the "Company") is a growth focused mineral exploration company creating value through the exploration and development of the large scale Escalones copper-gold project in Chile, the realization of value from the Malku Khota project in Bolivia and the pursuit of new opportunities. South American Silver Limited is a company incorporated in the Bermuda Islands, an overseas territory of the United Kingdom, which through its wholly owned Bahaman subsidiaries: Malku Khota Ltd, G.M. Campana Ltd. and Productora Limited., owns one hundred per cent of the outstanding shares of Compania Minera Malku Khota S.A., a Bolivian company, holder of the Malku-Khota mining concessions until their nationalization by the Bolivian Government. The Company's approach to business combines the team's track record of discovery and advancement of large projects, key operational and process expertise, and a focus on community relations and sustainable development. Management has extensive experience in the global exploration and mining industry. The Company's shares are listed on the Toronto Stock Exchange under the symbol "SAC" and on the OTCQX as "SOHAF". Information related to South American Silver Corp. is available at www.soamsilver.com and on SEDAR at www.sedar.com.
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