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The PurePlay® Product directly unlocks the mineral value of Reserves and creates a value chain from mineral Reserves at the spot cash value of Reserves right into the bank account of the commodity Producer.

This desirable effect is achieved through the unique design of the PurePlay® Instrument :

  • a tradable Bill of Sale of a specified quantity of gold (or any other fungible mineral) in the Proven and Probable Reserves of the Producer. It is a sale at spot, payable upfront and the price risk passes upon sale to the Investor.  No interest is payable on the proceeds of the PurePlay® Instrument, as it is a sale of the commodity in Reserves.  The Producer must of course calculate the saved interest at its cost of funds in order to measure the benefit of receiving significant payments years in advance of spending the costs of extracting and refining. Investors in commodities give up interest in exchange for the price movements in the commodity with the aim of making “capital” profits (an Investor in a gold coin does not expect to receive interest); 
  • an obligation on the Producer to store that gold free of charge (usually in unmined form) for the Investor for a period of (say) 10 years from subscription. This is where the Investor achieves an unmatched cost efficiency relative to existing commodity exchange traded funds where the mineral is stored in a costly vaulting system while the Producer can provide this service free of charge without any effect on its cost structure;
  • an obligation on the Producer to extract and refine the gold (or any other fungible mineral) on or before the delivery date (ie mining will probably take place just before redemption). The Investor must be satisfied that the Producer will honour this obligation and this risk will be judged by reference to the ability and track record of the miner to produce the mineral. Most of the envisaged issuers have excellent production track records stretching back over many decades. The Producer would have borne this cost in any case which again translates into no additional cost for the Producer but the Producer now acquires the opportunity to monetise a portion of the Reserves while delaying incurring associated costs until shortly before the storage term expires;
  • an obligation on the Producer to deliver the gold on the delivery date to the then holder of the Bill of Sale. The Investor must be satisfied that the Producer will honour this obligation. Producers deliver their product continuously and this will just be an extension of normal deliveries, again having no additional cost implication for the Producer.

The Producer receives the spot value of the commodity in cash on the date at which it sells the PurePlay® Instrument but as a result of the storage arrangement can delay the extraction and delivery costs for most of the storage period. It effectively means that the Producer has the use of the cash free of interest for this period and that is a material value gain for the Producer, which can be quantified by setting up a notional sinking fund reflecting the receipt and compound interest at the Producer’s cost of funds.

PurePlay® Instruments unlock a whole new source of funds for Producers and can be used very effectively to displace existing interest bearing debt in exchange for funding which carries no interest obligations. The unique design of the PurePlay® Instrument also allows the Producer to receive the spot value of the commodity while only having to account for a liability equal to the value of the extraction, refinement and delivery costs. In accounting terms this is an accrual of the Cost of Sales at the cash cost of production. The liability for the cash cost of production will have to be marked to the annual cash cost of production. This liability would immediately be less than the previous debt liability as it would be restricted to the “Cost of Sales” while the Producer had in fact received cash for the full spot price as the “Sales” receipt. The gross profit amount would normally be transferred to a “Deferred income reserve” as part of the capital of the Producer. (see also accounting for PurePlay® Instruments).

The issuance designs for PurePlay® Instruments take full cognisance of the implications of the value of compound interest savings and viability is tested against potential risks of cost increases or price fluctuations in the spot price of the commodity. The huge value unlocked via compound interest savings generally delivers unsurpassed and exceptional net value when historical and scenario viability test studies are undertaken, provided that compound interest savings are allowed to effectively deploy compounding over sufficient time periods.

Patents and Trade Marks

The Intellectual Property of PurePlay Holdings (Pty) Ltd is protected by world-wide pending Patents.

Trademarks awaiting registration are PurePlay™, Nature’s Vault™, As Good as Gold™ and Sp☼t True Value™.

Contact Details

5 Jan Smuts Avenue,Winston Park
Durban, 3610,South Africa

Tel: +27 31 7670156
Cell: +27 82 4515864
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.