Gold Loan10 Apr 2024 13:24
If you care to have a proper look at the pretty piccies on Twitter/X, you will see that the illegal miners have busy little bees and that they have mined a substantial amount of material and some of it is at the pond. That being the case, we can make a fair estimation of the confirmed mined gold at surface.
"Long-term gold loans
This is a special type of loan that applies exclusively to the gold mining industry.
Long-term gold loans are used to finance projects for gold mines and ore processing plants producing this precious metal.
The peculiarity of these loans is that the borrowed funds are issued to a mining company and subsequently returned to creditors in gold. This entails certain advantages for both lenders and the gold mining company.
For banks that hold a portion of their financial reserves in gold, these loans provide a temporary mobilization of these reserves in order to make a profit. At the same time, banks have complete confidence in the return of gold due to the development of the mine.
The gold mining company benefits from the return of the loan funds in precious metal (the company's product) at the exchange rate on the day the loan was issued.
This guarantees the stability of prices for a certain part of the product, regardless of speculative fluctuations.
Companies often financed successful gold mines on preferential terms (annual interest rate of about 0.5%). This opens up new horizons for mining projects, especially considering the possibility of flexible adjustment of the terms of the gold loan in accordance with the real needs of a developing enterprise.
Typical maturities for gold loans are around 5 years.
However, despite the attractiveness of this type of financing, banks require confirmation of the company's ability to ensure the planned extraction of the precious metal.
This requires in-depth expert analysis and presentation of the results of the study of gold deposits to potential lenders.
The financial literature describes cases where banks have required reliable collateral to lend to a new mining project, covering up to 125 percent of the current value of the gold provided."
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