Ley 25.429

This law, passed during 1993, gives two extremely important elements tomining projects, specially those that as a result of their importance, needsubstantial development, since they fix parameters that otherwise could not bepredicted, reducing thus the risk in mining business projections.An element, is to ensure the undertakings comprised in the law regime, taxstability for the term of thirty (30) years; another element is to limit the amount ofroyalties that the provinces may provide for mining.Next we will point out the benefits of this law regime.a) Tax benefit (Section 12 of the Law and Regulatory Decree)In the balance sheet for tax purposes, the company may obtain a benefit of100% on the amounts invested in all the pre-investment expenses userd todetermine the technical-economic feasibility of projects, whether they are newor enlargements thereof.Notwithstanding the treatment corresponding to it pursuant to the income taxlaw, as amortizable expense or investment.Thus, this benefit implies a double deduction of these costs, in the balancesheet for income tax purposes.b) Accelerated Amortization (Section 13 of the Law and Regulatory Decree)It comprises capital investments made for the performance of new projects andfor the enlargement of the production capacity of the existing operations, aswell as those required during its operation.Capital investments will be performed in the following manner and with thescope detailed next.1. Investments in equipment, civil works and constructions to provide thenecessary infrastructure for the operations.1.1. 60% during the fiscal year when the authorization is given.1.2. 40% in equal parts, during the two following fiscal years.2. Investments in equipments, machinery, vehicles and facilities, not comprisedin the foregoing item.2.1. One third of same are amortized per year, as from their start-up.c) Capitalization of Mineral Reserves (Section 15 and Regulatory Decree)The valuation of the mineral reserves that are economically exploitable, can becapitalized up to 50% and the non-capitalized balance shall constitute avaluation reserve.The method to calculate said reserves considers the expected future income,net of costs and expenses, discounted at a present value, after absorbing theinvestment required for the enjoyment of said reserves.d) Imports (Section 21 of the law and Regulatory Decree)Those registered with the regime are exempted from the payment of importduties and from any other duty, special tax, correlative tax or statistics rate,excluding the other services charges and V.A.T.This benefit reaches capital goods, special equipments, spare parts and partsor elements composing such goods and, the supplies determined by the36