Is the Prepaid Gold Forward Sales Contract an expensive way of financing mining production?

Is the Prepaid Gold Forward Sales Contract an expensive way of financing the gold mining production?

This short article is answering the question if the Prepaid Gold Forward Sales Contract is an expensive way to finance gold mining production. It brings more insight into what our company is doing and how we are gaining control over the mining sites and how such gold delivery takes place.

Difference between our offer and classical future gold forward sales

In the large scale mining, such gold forward contracts are not used with discounts, rather with the premium future gold price.

Our Prepaid Gold Forward Sales Contract offers to the gold buyer the fixed gold price with discount of 20% for 1 kilogram of gold or 30% for 2 kilograms of gold. We are getting the gold prepaid and we develop the mining sites. We increase our equipment’s capacity in accordance with the EQV Formula for gold mining production.

In the normal course of mining business, forward sales contracts are used for hedging and ensuring, for the gold mining company, to sell the gold in future for certain price. And for the buyer or investor, future gold sales contracts ensure that gold will be bought for not higher gold price then the fixed one.

And such gold price is fixed to the predicted and estimated future gold price, which is never than the current gold price as of the date of the contract.

In our contract, the fixed gold price is less than the current gold price. We offer the direct benefit to our clients and much clearer future expectations of the profits.

Profits are obtained upon the sales of gold. For citizens of European Union, such gold sales become tax free.

And the contract becomes a simple buy and sell transaction with future delivery.

What we are doing in background?

In background, we are to enlarge or purchase new capacity of machinery and mining equipment.

Such assets remain ours. The mining equipment remains with us. Machinery remains with us.

It then becomes clear that our company is also gaining, if not immediately in profits, we gain in assets in terms of mining equipment.

And the mining equipment in our hands, is producing more gold than the client has obtained. In that sense we are to gain more than the client who is simply buying the gold.

The client who is based in Europe or US, may gain 30% profit, which may happen already after 6 months, event he contract duration is one year.

Such gain of 30% profit is already much in comparison to traditional or classic investments.

How is our business diversified?

We have diversified business strategy, which evolved very naturally.

Multiple mining sites available

We are doing this business since 2012. Since then, until today, we have got availability of total of 352 mining sites.

Availability means that we have pre-negotiated the mining sites, so that we may enter the joint venture or partnership contract with the license holders.

And we are in constant process to sign or obtain new favorable mining site under our control.

Into many of those locations we have put our money, efforts, to bring them forward one step.

For example, we have invested our funds to complete the Preliminary Site Assessment and Inspection or Matrix Gold Prospecting to make sure that ore is in sight or that ore is blocked.

We know the mining sites we are developing.

If ore is not in sight, it means, we do not know where it is, the land requires prospecting and exploration.

Such prospecting and exploration is conducted only once funds for such specific operation are available, usually by one of our foreign clients.

Otherwise, for gold deliveries we are choosing only ready and productive mining sites.

Multiple mining sites under control

We have several mining sites under the contract for exploitation of mineral rights, which means we have several mining locations where we can excavated the gold bearing ores, where we may process such ores and produce gold.

We do not lack gold bearings ores. Yet in case of lack of ores, we may quickly change from one mining site to the ther mining site.

When we are to deliver gold, we will use the most productive mining site, where even 200 grams may be excavated daily.

We have control over such mining site.

Our income in such profit sharing may be 100% or down to 60% and 50%.

Mining equipment is mobile

We are in small scale mining and our mining equipment is in smaller parts and it is mobile, it may take 2-3 days to transport mining equipment from one mining site to the other. Thus we are not dependent that much of the single location.

We have gold bearing ores in abundance

For the terms of small scale mining and deliveries of 20 kilograms of gold, we do have gold bearing ores in abundance.

We lack the machinery, and mining equipment to process such ores.

For this reason we are offering the Prepaid Gold Forward Sales Contract to investors and worldwide clients.

Why not work with the bank loans?

We never worked with loans in past, and I am sure we will never work in the future. We have enough businesses that create income, and by using that income, we are investing into new mining equipment and machinery. One of those services is the program Start Your Own Gold Mine.

Is the Prepaid Gold Forward Sales Contract an expensive way of financing the gold mining production?

This is the question of logics.

To have true and complete logics, one needs full data and information.

When data and information is missing, the situation becomes not logical.

So here is the logical information:

  1. We have invested much in research, we have got certain control of mining sites, and we do have recovery equipment. We need equipment for better digging, crushing and milling, it is all small scale, which means, I can build business to make kilograms per month, but not one tonne per month. That may come in future.

  2. We have good estimates, and estimates are being adjusted each time with new information. Our estimates relate to the capacity of gold bearings ores to be excavated, to the gold grade, to the actual gold recovery rates and any other activity that may be measured. We measure simply everything.

  3. Once any client pays for gold in Prepaid Gold Forward Sales Contract, for 2 kilograms or 1 kilogram, what we are gaining then?

    We are using this money to purchase equipment, mining equipment, crushers, compressors and similar.

    This equipment goes into separate sub-licensed, or sub-location on the present, well productive, locally managed, usually badly managed mining site. We change the management and put things in order and under our control.

  4. The management is changing on such site, and all is to be done according to our contract for mineral rights on such site. Often without equipment, we are not to change it. With the equipment, we are changing the organization and management, fully and completely, so that ore processing takes place under our control.

  5. Such mining equipment need often at least one month to be manufactured, and 2 months to be transported, so that within the fourth month, it may be engaged in the gold mining production. During the time of manufacturing and transport, ores may be excavated and prepared.

  6. Upon the arrival of greater better mining equipment, we are using its capacity to recover the gold from ores. Gold is then sold locally, as exporting is simply not worth. Exporting would require us to pay 4% royalties and insurances. We pay that locally anyway, and do not want repeated charges. We get local gold price of 99% of the world gold price.

  7. Now, is it expensive for us? It is not expensive at all. What do we gain?

    We gain equipment, so we have all the future production ANYWAY, and that is yet more than the buyer has gained. Buyer gaines 30% of the profit and did not work anything, we have put the work and effort and we are gaining more, as with the machinery and mining equipment, all the future gold production is ours.

Benefits for buyers of Goldivanti® Investment Gold

Those people who engage in purchase of gold by contracts will also get benefits in future and will be able to repeat such purchases and gain all over again. With the <% (princ (cl-user::plugin-count-miningsites)) %> mining sites available for our mining development, we may need in future always new sales of gold through the Prepaid Gold Forward Contract.

Example estimate of a sub-licensed sub-location’s production

This example calculation is the estimate of the sub-licensed, sub-location’s production on one of the mining sites we have under our control. It should be clear to the observer, that with the capacity of 5 tonnes per hour, which is considered very small, one is able to produce 2 kilograms of gold within shorter time.

Thursday 2017-04-27 (GMT+3) 11:45:00 - Gold Price: US $1263.65
SYOGM: SYOGM - EQV Formula - Estimate
(E) - Equipment capacity: 5.00 tonnes per hour
(Q) - Quality of gold and ores: 6.00 grams per tonne, of 95% pure gold
(V) - Volume of ores to process: 50 tonnes per day in 10 working hours
EQV = Gold Production (idealistic estimate):
Daily estimate: 285.00 grams per day or US $11,578, EUR 10,631, TZS 25,278,542
Monthly estimate: 8,549 grams per month, or US $329,995, EUR 318,945, TZS 758,356,276
Yearly estimate: 102,599 grams per year, or US $4,168,360, EUR 3,827,343, TZS 9,100,275,315

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