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The versatility of the PurePlay® Instrument is demonstrated when the design objectives change to incorporate a shift from maximising compound interest receipts to hedging commodity price risks while still achieving most of the compound interest benefits. The needs and management techniques of Producers differ across Producers, across minerals and across by-products. Some Producers will follow a no hedging or very reserved hedging strategy while other will hedge not only production but also the major input cost components.

It is often seen that a Producer says it has a no hedging policy but would happily hedge out most of its by-product production.

Hedging with PurePlay® Instruments is extremely cost efficient and hedging will always be protected or enhanced by the interest savings component.  It is achieved by concentrating the price and delivery risks.

We have explained that the design approach towards funding is to follow a staggered issuance program. The design approach towards hedging is to issue in large concentrations when the Producer Issuer wishes to hedge price risk. Producers are natural sellers of the mineral and hedging would involve selling a large volume of PurePlay® Instruments and setting the storage period (or periods) to match the view of the Producer. An example would be that if a Producer expects the price of its commodity to fall over the next 3 years and then stabilise at a lower level, it would then issue PurePlay® Instruments for say 50% of the next 3 years’ production to mature in 12 trances monthly from 3 years onwards per month. The great advantage is that the Producer would have the hedge and the interest free liquidity. The interest savings would mitigate the effects of rising prices while it would add to the value of the hedge if prices do in fact fall.

The versatility of the hedging designs is unlimited and could even include making use of the ETF arbitrage where available to greatly increase the value of the hedge. Please contact us should you wish to discuss hedging designs and hedging strategies or the use of the ETF arbitrage in hedging strategies.

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.