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Unlocking the value of Reserves has its greatest direct benefit for Producers in the “cash upfront” characteristic of the PurePlay® Instrument, coupled with recognition of the interest saved as a result of accessing this new source of funds.

It is claimed that Einstein said that the most powerful force on earth is compound interest (no proof exists that he did in fact make the comment) and anybody who has ever worked with compound interest knows the incredible power of the compound interest exponential growth curve. To work effectively compound interest needs a fair passage of time.

We design PurePlay® Issuance programs generally with an emphasis on maximising the funding benefits while minimising the price risk effects.  A further objective of the funding design is to avoid having to “time” the market for the placement of PurePlay® Instruments. These two objectives are achieved through implementing a ramp up issuance program whereby PurePlay® Instruments are placed in the market in fixed quantities for fixed storage intervals. An example would be to place PurePlay® Gold Instruments for 1,000 ounces per month with storage durations of 10 years. The monthly placements would continue for 10 years and beyond.

The funding is ramped up during the first ten years. Each placement during this period ramps up the issuance level by 1,000 ounces as no storage arrangements expire during the first ten years. The Producer Issuer can then continue with the program to extend the compounding period beyond ten years on the full ramped up value achieved for as long as the Producer has sufficient Reserves to meet future deliveries. The issuance volume would however remain constant after 10 years as each new issue would ounce for ounce be matched by a delivery for an expired storage arrangement under prior PurePlay® Gold instruments issued.

The Producer Issuer will not try to time the market and instead will achieve price averaging over the period, similar to the normal practice of selling production without trying to time the market. The advantage of averaging is that it is in harmony with the objective of maximising funding benefits and compound interest savings while mitigating price risks with averaging over time. The staggered nature of the maturity profile of PurePlay® Instruments in issue will ensure that the Producer is not exposed to concentrations of delivery risk.

Here is a reminder of the power of compound interest. The Producer Issuer wants this curve working in its favour.

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
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