For Mining Companies

GFC finances the mine. GFC does not operate the mine.

GFC may provide qualifying capital in exchange for a contractually defined participation in qualifying future precious-metal production. The miner remains responsible for the mine.

Why enter earlier?

A conventional gold-backed currency generally acquires finished bullion after it has been mined, processed and refined.

GFC is designed to enter earlier.

Through qualifying mining-finance transactions, GFC seeks to acquire a protected participation in future qualifying physical gold production while the gold remains underground but has already been independently identified and verified.

Because development, extraction, processing and time still remain, that participation may potentially be acquired at a substantial discount to equivalent finished-bullion value.

Acquire earlier.
Before the vault captures the full finished-bullion economics.

Why a miner may choose GFC capital

Mining projects frequently require substantial capital long before commercial production begins. Traditional sources of finance can be expensive, dilutive, restrictive or difficult to obtain, particularly where a project is technically attractive but still moving through development.

GFC seeks to provide an alternative source of long-term capital by purchasing a contractually defined participation in future qualifying physical production. The mining company retains responsibility for developing and operating the mine. GFC does not seek to become the mine operator.

The mining company benefits from access to development capital and retains the majority of future production. GFC benefits if the mine is successfully developed, produces gold and extends its economic life.

The intended sequence

Qualifying capital
Protected participation
Development
Physical gold

A related financing principle to precious-metal streaming, used for a different purpose: to build the monetary foundation of a circulating digital currency.

Life-of-mine participation

Where commercially and legally appropriate, GFC may seek participation in an agreed percentage of qualifying precious-metal production over the economic life of a mine rather than limiting its interest to an arbitrary fixed number of ounces.

The applicable percentage is transaction-specific. A 10% participation is an illustration only. It is not a universal GFC requirement.

If the qualifying gold base later increases, the existing participation may relate to a larger quantity of future production. No additional GFC is created merely because the mine grows.

Protected contractual rights

GFC's position is deliberately broader than that of a purchaser simply waiting for future delivery. It should receive both the precious-metal participation for which it has financed the mine and the institutional protections reasonably appropriate to a sophisticated financing provider.

Depending on the transaction and jurisdiction, those protections may include contractual and beneficial economic rights, security, information and monitoring rights, use-of-proceeds and drawdown controls, covenants, and appropriate default, cure and enforcement rights.

Independently verified gold + contractual gold interest + enforceable protection

Independent verification and economic assessment

A mining company's need for capital does not itself justify GFC financing or GFC issuance. The relevant precious-metal participation should be independently verified and independently economically assessed before a transaction becomes eligible to support GFC issuance.

Geological quantity, economic value, acquisition price, financing requirement and GFC issuance are separate concepts. They must not be treated as interchangeable.

Progressive deployment where appropriate

The financing allocated to the mine should be made available progressively in accordance with budgets and funding requirements prepared by the mining company within the agreed development programme.

The financing is secured at closing. Capital is deployed progressively. Progressive deployment controls the use of capital. It does not make the underlying financing commitment optional.

Delivery mechanics

GFC's economic return is intended principally to be received in gold, not in cash. The commencement of that gold stream should be linked to an objectively defined sustainable operating cash-flow threshold established in the applicable transaction documents.

Cash flow is the delivery threshold. Gold is the intended return. Cash is not the intended end product. Physical gold is.

Underperformance, cure and enforcement

A delay, technical difficulty or operational problem should not automatically result in enforcement. A delay is not automatically a default, and a default is not automatically an enforcement event.

Where a problem is capable of remedy and the mine remains fundamentally viable, GFC should ordinarily seek to understand the problem and, where appropriate, permit cure, corrective action or an agreed restructuring before enforcement.

No automatic dilution merely because the mine grows

Subsequent financing, corporate restructuring or changes in mine ownership should not improperly dilute GFC's agreed precious-metal participation. Existing participation is preserved.

If GFC later provides genuinely new qualifying capital, any additional gold participation should be independently assessed at the mine's then-current stage, risk and value.

White Paper 2.0 — 06 · How GFC Acquires Gold

ALPINE Independent Verification How GFC Works White Paper 2.0