2013-12-05 BULLIONROCK 2
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2013-12-05 BULLIONROCK 2

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How Do You Hold Yours? ...

How Do You Hold Yours?
Slides from the BULLIONROCK breakfast seminar held on 5 December.
Steve Burling, MD of Metalor Technologie UK

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  • 1. METALOR TECHNOLOGIES GOLD IS “HOT STUFF”
  • 2. PRECIOUS METALS Definition of “PRECIOUS “ Dictionary Definition … … … OF GREAT VALUE OR WORTH
  • 3. THE PRECIOUS METALS Gold Silver Platinum Palladium Rhodium Ruthenium Iridium Osmium Rhenium
  • 4. GOLD – THE ORES! Gold Ores come from. Panning Dredging Sluicing Hard Rock Mining By Product Mining Time taken to obtain the significant quantities can vary from days to weeks to months. Hazardous & Costly.
  • 5. WHERE DOES THE GOLD COME FROM? 1) 75% of the gold annual output comes from the top twenty gold producing countries. 2) South Africa, Australia, Canada, South American countries. 3) At 14% though China is now the world’s largest producer as well as the world’s largest consumer. 4) But if China supplies 371 tonnes (14% only) of the output from mines then this total world output is adequate for the JE market only. 5) So where does the rest come from? 6) SEE LATER … … … … … … … …
  • 6. Dore bars are semi-finished / semi-pure ingots of gold and silver usually created at the site of the mine. These are then supplied to a refiner such as Metalor for purification. The proportions of gold & silver can vary widely. Bars can weigh up to 25kg
  • 7. Marin (CH) REFINERY Employees: 151 Products: bars, investment bars, bullion, crystal, powders
  • 8. PRECIOUS METALS The semi-pure bars are treated with Borax or Soda ash to remove the less precious and non-precious metals. They can then be cast into the “good” delivery bars.
  • 9. LMBA – GOOD DELIVERY BAR STATUS 1) To get LBMA status. Must be established for three years. 2) To get LBMA status. Be able to refine a minimum of 10 tonnes gold and 50 tonnes of silver per annum. 3) There are stringent criteria of assaying standards. 4) Assaying abilities and standards are checked constantly/periodically by the LBMA. 5) A GDB (good delivery bar for gold will be a minimum 995 and weigh 11-13kg normally. 6) Therefore a GDB is a refined dore bar that would be further refined to 999. 9999 (four nines – fine gold) will be a HIGHLY refined bar.
  • 10. CAST SIZE OPTIONS: 1kg to 100g Different options can be offered regarding 999.9 (“four nines”) otherwise know as fine gold and, in jewellery terms, 24 carat gold. Bigger is cheaper… … … … … … … scale!
  • 11. WAFERS AND STAMPED INGOTS The initial stage is rolling an ingot into a form that can be stamped.
  • 12. INTERESTING FACTS ABOUT GOLD 1) Chemical symbol Au from the Latin Aurum meaning “shining dawn”. 2) Density 19.3g/cc. Most malleable metal. I gram can be beaten into a sheet 1 sq metre. 3) Gold leaf can be so thin to be transparent. 4) Dissolves into mercury at room temperature to produce amalgam. 5) Good conductor of heat and electricity. Reflects infrared radiation. 6) Unaffected by air, moisture and most corrosive reagent. 7) For these reasons above gold has many applications in such markets as Jewellery, Industrial, Chemical & Electronics. 8) As do others Precious Metals such as Silver, Platinum & Palladium. 9) ALL can also be “Investment Materials/Products.
  • 13. CONSUMPTION The consumption of gold produced in the world is approximately 50% in jewellery, 40% in investments, and 10% in industry. India is the world's largest single consumer of gold, as Indians buy about 25% of the world's gold, purchasing approximately 800 tonnes of gold every year, mostly for jewellery. India is also the largest importer of gold. Jewellery India China USA Turkey Saudi Arabia Russia UAE Egypt Indonesia UK Other Gulf Countries Japan South Korea Vietnam Thailand Total Others World Total 2009 442.37 376.96 150.28 75.16 77.75 60.12 67.6 56.68 41 31.75 24.1 21.85 18.83 15.08 7.33 1508.7 251.6 1760.3 2010 2011 745.7 986.3 428 921.5 128.61 199.5 74.07 143 72.95 69.1 67.5 76.7 63.37 60.9 53.43 36 32.75 55 27.35 22.6 21.97 22 18.5 −30.1 15.87 15.5 14.36 100.8 6.28 107.4 1805.6 3097.1 254 390.4 2059.6 3487.5 2012 864 817.5 161 118 58.5 81.9 58.1 47.8 52.3 21.1 19.9 7.6 12.1 77 80.9 2770.1 393.5 3163.6
  • 14. GOLD PRICING Of all the precious metals, gold is the most popular as an investment. Investors generally buy gold as a hedge or harbour against economic, political, or social fiat currency crises (including investment market declines, burgeoning national debt, currency failure, inflation, war and social unrest). The gold market is subject to speculation as are other markets, especially through the use of future contracts futures and derivatives. Gold price has shown a long term correlation with the price of crude oil. This suggests a reason why gold is sold off during economic weakness.
  • 15. GOLD ACCOUNTS Many types of gold "accounts" are available. Different accounts impose varying types of intermediation between the client and their gold. One of the most important differences between accounts is whether the gold is held on an allocated (fully reserved) or unallocated (pooled) basis. Unallocated gold accounts are a form of fractional reserve banking and do not guarantee an equal exchange for metal in the event of a run on the issuer's gold on deposit. Another major difference is the strength of the account holder's claim on the gold, in the event that the account administrator faces gold-denominated liabilities such as bankruptcy.
  • 16. COMPLIANCE RJC - Responsible Jewellery Council WGC - World Gold Council EICC - Electronic Industry Citizenship Coalition The Responsible Jewellery Council, the World Gold Council, and the Electronics Industry Citizenship Coalition are developing "known origin" compliance systems which take account of the specific complexities of the gold supply chain. Metalor, as a leading gold refiner, is actively participating in these initiatives and is fully commixed to support its customers, suppliers and agents in being "Dodd-Frank DRC Count􀀀Conflict-Free" compliant by implementing appropriate "known origin" systems.
  • 17. CONTACT: STEVEN BURLING, FIMF steven.burling@metalor.com