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The BullionGold Facility  & Financial Advisor Support
Product Definition <ul><li>The BullionGold Facility creates an  enabling environment  for investors to  accumulate funds  ...
The Shortcomings of the Retail Market <ul><li>Only manufacturing jewellers or numismatic dealers  may acquire gold bullion...
Product Rationale <ul><li>The  objective  of the product is to  provide the market  with  a feasible investment propositio...
The BullionGold  Facility  and Financial Advisor  Support
<ul><li>Title owned call accounts  held on behalf of each client to manage funds </li></ul><ul><li>  </li></ul><ul><li>Pre...
<ul><li>Deposits receipted by 1pm  eligible for  gold purchase the following day </li></ul><ul><li>Clients may request SA ...
<ul><li>SA Bullion  operates  a bullion desk  which processes  all gold transactions </li></ul><ul><li>Gold bullion  purch...
<ul><li>Bullion acquired from RRL at the previous days  LBMA PM Gold Price Fix ($)  ( www.lbma.org.uk ) </li></ul><ul><li>...
<ul><li>The bullion is stored  at RRL in Germiston  in an allocated vault  on behalf of clients </li></ul><ul><li>The bull...
<ul><li>Cash Redemptions </li></ul><ul><li>Perfectly liquidity  for redemptions into Rands (underwritten by SARB) </li></u...
<ul><li>Physical Bullion Redemptions </li></ul><ul><li>Physical  gold  redemptions  are  subject to a 3 year holding perio...
Fee Structure : Upfront Fees <ul><li>Levied on initial investment amounts </li></ul><ul><li>Fixed 1.5% Platform Charge </l...
Fee Structure : Ongoing Fees <ul><li>Levied on Gold Bullion holdings </li></ul><ul><li>Fixed 2% Platform Charge </li></ul>...
Fee Structure : Redemption Fees Cash Redemptions Perfect Liquidity - No fee applies No time restiction applies Physical Re...
Large Transactions  <ul><li>Phase In Option </li></ul><ul><li>Minimum initial investment R100 000 </li></ul><ul><li>Phase ...
Reporting <ul><li>Client </li></ul><ul><li>Activity notifications - remitted with each investment or withdrawal from the c...
The Investment Proposition <ul><li>The BullionGold Facility has enabled the following proposition: </li></ul><ul><li>Signi...
The Investment Proposition <ul><li>The BullionGold Facility has enabled the following proposition: </li></ul><ul><li>Ensur...
Def  n :   the process of adding value to a metal, mineral or commodity. Gold  Beneficiation   Chain :   Role Gold Mining ...
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The BullionGold Facility

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Transcript of "The BullionGold Facility"

  1. 1. The BullionGold Facility & Financial Advisor Support
  2. 2. Product Definition <ul><li>The BullionGold Facility creates an enabling environment for investors to accumulate funds in order to acquire physical gold bullion . The platform provides investors with the lowest acquisition costs for bullion , while providing a complete solution to the traditional concerns related to the vaulting, insurance and liquidity of physical gold bullion </li></ul>The BullionGold Facility and Financial Advisor Support
  3. 3. The Shortcomings of the Retail Market <ul><li>Only manufacturing jewellers or numismatic dealers may acquire gold bullion from Rand Refinery Limited </li></ul><ul><li>  </li></ul><ul><li>The retail market for Gold Bullion relies solely on the imposition of upfront and redemption margins on gold. </li></ul><ul><li>  </li></ul><ul><li>As such retail margins for Krugerrands are typically 10% above the wholesale supply price at acquisition and varies between 10%-15% on redemption. </li></ul><ul><li>  </li></ul><ul><li>Therefore, typical friction charges amount to some 20%-30% through traditional channels for gold bullion Krugerrands </li></ul><ul><li>  </li></ul><ul><li>This is clearly an unfeasible investment proposition. </li></ul>The BullionGold Facility and Financial Advisor Support
  4. 4. Product Rationale <ul><li>The objective of the product is to provide the market with a feasible investment proposition surrounding physical gold bullion. </li></ul><ul><li>  </li></ul><ul><li>This has been achieved through the disintermediation of the retail supply chain </li></ul><ul><li>  </li></ul><ul><li>And has lead to the creation of a gold supply for investment demand and a gold bullion management chain </li></ul><ul><li>  </li></ul>The BullionGold Facility and Financial Advisor Support
  5. 5. The BullionGold Facility and Financial Advisor Support
  6. 6. <ul><li>Title owned call accounts held on behalf of each client to manage funds </li></ul><ul><li>  </li></ul><ul><li>Preferential wholesale interest rates payable from 1 st Rand held on call </li></ul><ul><li>  </li></ul><ul><li>Client receives monthly statements , annual IT3 certificate and log-in access to account </li></ul><ul><li>  </li></ul><ul><li>Advisors receive single point of access to view/monitor all clients call accounts </li></ul><ul><li>  </li></ul><ul><li>Contributions via recurring debit order or ad-hoc lump sums </li></ul><ul><li>  </li></ul><ul><li>Gold Price queried daily against call balance for possible purchases </li></ul>The BullionGold Facility and Financial Advisor Support
  7. 7. <ul><li>Deposits receipted by 1pm eligible for gold purchase the following day </li></ul><ul><li>Clients may request SA Bullion to purchase on instruction only </li></ul><ul><li>  </li></ul><ul><li>Call Balances may be withdrawn at any time </li></ul><ul><li>  </li></ul><ul><li>All transfers to client nominated bank accounts effected by real time transfer </li></ul><ul><li>   </li></ul><ul><li>First R7.50 of interest earned payable as a bank charge – no capital diminishment </li></ul><ul><li>Perfectly transparent record of all cash movements in the facility – investments, gold purchases, fees and gold redemptions </li></ul>The BullionGold Facility and Financial Advisor Support
  8. 8. <ul><li>SA Bullion operates a bullion desk which processes all gold transactions </li></ul><ul><li>Gold bullion purchases and redemptions are processed daily from the Bullion Desk on behalf of clients </li></ul><ul><li>Transaction advices in respect of gold purchases and redemptions are remitted to the client and advisor following each transaction </li></ul>The BullionGold Facility and Financial Advisor Support
  9. 9. <ul><li>Bullion acquired from RRL at the previous days LBMA PM Gold Price Fix ($) ( www.lbma.org.uk ) </li></ul><ul><li>SARB releases applicable exchange rate to Rand Refinery Limited at first light daily </li></ul><ul><li>  </li></ul><ul><li>Resultant price is Rand Gold Price for Bullion ( www.randrefinery.co.za ) </li></ul><ul><li>  </li></ul><ul><li>The Wholesale rate for refining and minting obtained by SA Bullion is currently 4% . This is at a discounted rate than is available to the retail market. SA Bullion passes on this rate to the client. </li></ul><ul><li>Retail Minting Premium Comparison: </li></ul><ul><li>1-49 Krugerrands 6.5% ( 38% discount to small quantities of retail supply ) </li></ul><ul><li>50+ Krugerrands 4.5% (11% discount to large quantities of retail supply) </li></ul>The BullionGold Facility and Financial Advisor Support
  10. 10. <ul><li>The bullion is stored at RRL in Germiston in an allocated vault on behalf of clients </li></ul><ul><li>The bullion is held in the clients title </li></ul><ul><li>The bullion is insured through Lloyds of London while vaulted </li></ul><ul><li>  </li></ul><ul><li>Reconciliation of bullion holdings occur between SA Bullion and RRL </li></ul><ul><li>  </li></ul><ul><li>RRL auditors – Deloitte confirm reconciliation by physical stock count </li></ul><ul><li>  </li></ul><ul><li>Costs related to Vaulting and Insurance are included in ongoing platform fee </li></ul>The BullionGold Facility and Financial Advisor Support
  11. 11. <ul><li>Cash Redemptions </li></ul><ul><li>Perfectly liquidity for redemptions into Rands (underwritten by SARB) </li></ul><ul><li>  </li></ul><ul><li>Rand Redemption instructions received by 1pm are eligible for redemption the following day </li></ul><ul><li>  </li></ul><ul><li>The price received on redemptions is the previous days LBMA PM Gold Price Fix ($) expressed in Rand </li></ul><ul><li>  </li></ul><ul><li>Settlement is receipted in clients call account within two working days and paid into the clients nominated bank account </li></ul>The BullionGold Facility and Financial Advisor Support
  12. 12. <ul><li>Physical Bullion Redemptions </li></ul><ul><li>Physical gold redemptions are subject to a 3 year holding period </li></ul><ul><li>SA Bullion is authorized by SARB to create an investment not retail proposition </li></ul><ul><li>SA Bullion dispensation from SARB provides guaranteed supply and below retail acquisition costs for bullion – this would be subject to exploitation in retail markets </li></ul><ul><li>Clients may request earlier redemption, however an exit fee may be imposed (this charge will never exceed the equivalent of 3 years fees) </li></ul><ul><li>Gold deliveries are via RAM couriers Valuable Cargo Delivery option at preferential rates negotiated between SA Bullion and RAM Couriers </li></ul><ul><li>  </li></ul><ul><li>Courier costs are for the clients account and is quoted upfront on physical redemption request </li></ul>The BullionGold Facility and Financial Advisor Support
  13. 13. Fee Structure : Upfront Fees <ul><li>Levied on initial investment amounts </li></ul><ul><li>Fixed 1.5% Platform Charge </li></ul><ul><li>Advisor Fee 0% - 3.5% </li></ul><ul><li>Fees excl. VAT </li></ul>The BullionGold Facility and Financial Advisor Support
  14. 14. Fee Structure : Ongoing Fees <ul><li>Levied on Gold Bullion holdings </li></ul><ul><li>Fixed 2% Platform Charge </li></ul><ul><li>Rebate 0.5% </li></ul><ul><li>Calculated daily on market value of Gold Bullion holdings </li></ul><ul><li>Levied monthly in arrears and payable by debit order </li></ul>The BullionGold Facility and Financial Advisor Support
  15. 15. Fee Structure : Redemption Fees Cash Redemptions Perfect Liquidity - No fee applies No time restiction applies Physical Redemptions Perfect Liquidity – No fee applies in respect of redemptions after 3 years Redemptions within 3 years from date of acquisition subject to an early redemption fee (max 6% excl. VAT) The BullionGold Facility and Financial Advisor Support
  16. 16. Large Transactions <ul><li>Phase In Option </li></ul><ul><li>Minimum initial investment R100 000 </li></ul><ul><li>Phase in over 3/6 months </li></ul><ul><li>Redemption of Gold to offset fees </li></ul><ul><li>Subject to minimum gold holdings of R350 000 </li></ul>The BullionGold Facility and Financial Advisor Support
  17. 17. Reporting <ul><li>Client </li></ul><ul><li>Activity notifications - remitted with each investment or withdrawal from the call account </li></ul><ul><li>Transaction Advices - remitted following each gold transaction </li></ul><ul><li>Quarterly Statements - reflect both market value of Gold and Call Balances </li></ul><ul><li>Quarterly SA Bullion Gold Report – publication </li></ul><ul><li>Online access to view call account </li></ul><ul><li>Financial Advisor </li></ul><ul><li>Single point of access to view all client call accounts </li></ul><ul><li>Weekly commission runs and statements </li></ul>The BullionGold Facility and Financial Advisor Support
  18. 18. The Investment Proposition <ul><li>The BullionGold Facility has enabled the following proposition: </li></ul><ul><li>Significantly reduced the friction charges associated with trade in physical gold bullion </li></ul><ul><li>  </li></ul><ul><li>Imposed a maximum upfront charge allowable of 5% </li></ul><ul><li>  </li></ul><ul><li>Integrated all the cumbersome aspects relating to title ownership of bullion into a seamless facility wherein insurance, vaulting, redemption and liquidity are all addressed. </li></ul><ul><li>  </li></ul><ul><li>The platform charge is fixed at 2% pa on the value of gold bullion held in the fully integrated facility </li></ul>www.sabullion.co.za The BullionGold Facility and Financial Advisor Support
  19. 19. The Investment Proposition <ul><li>The BullionGold Facility has enabled the following proposition: </li></ul><ul><li>Ensures that there is no cost leakage on sale of bullion since the platform provides perfect liquidity for gold under management </li></ul><ul><li>Provides perfect transparency of all cash movements </li></ul><ul><li>  </li></ul><ul><li>Ensures title ownership of all assets contained in the product </li></ul><ul><li>  </li></ul><ul><li>Creates an enabling environment for the accumulation of Rands in order to acquire gold bullion </li></ul>The BullionGold Facility and Financial Advisor Support
  20. 20. Def n : the process of adding value to a metal, mineral or commodity. Gold Beneficiation Chain : Role Gold Mining Companies Rand Refinery Limited & SA Mint SA Bullion SA Bullion Financial Advisor Extraction Manufacturing Wholesale/Retail Distribution & Sales Regulated By: The SA Bullion Gold Beneficiation Chain The BullionGold Facility and Financial Advisor Support Department of Minerals & Energy South African Reserve Bank Financial Services Board South Africa

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