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This blog discusses The Perth Mint's bullion coins and bars, providing information about our latest designs, mintages, sales volumes and sell outs. On a broader front, we share relevant research and opinions for anyone interested in gold and silver bullion investing.

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Perth Mint Gold: Monthly Holdings Report – January 2020

Topics [ Perth Mint Gold ]

Perth Mint Gold (ASX: PMGOLD) holdings hit a new all-time high of 137,730.86 ounces (4.28 tonnes) in January 2020, with inflows beyond 3,500 ounces for the month.

Monthly flows into PMGOLD are displayed in the chart below.

Source: The Perth Mint, ASX, Reuters

Inflows in January continue a strong record for PMGOLD that dates back to September 2018, with total fund holdings rising by more than 60% during this time period.

The value of PMGOLD holdings also topped AUD 300 million for the first time ever in January, driven by the 10% rise in the Australian dollar gold price during the month. To learn more about how to access returns on gold using PMGOLD, simply download our PMGOLD Factsheet



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Perth Mint leads the way in ethical gold

Topics [ ethical ]

MEDIA RELEASE

Global leader in precious metals The Perth Mint has joined with leading-edge technology specialists Security Matters Ltd to develop the world’s first mine to market ethical gold supply chain assurance solution.

Titled trueGold, the initiative will lead the commercialisation of a worldwide integrity application for gold mining companies, refiners, vault operators, depositories, mints, wholesalers and retailers.

The high-tech Australian innovation will provide everyone involved in or with the gold industry the surety that the metal they purchase has been ethically sourced and reliably tracked throughout its journey from the mine site to the marketplace.

trueGold is a particularly significant development given the increasing focus on Environmental, Social and Governance (ESG) practices across the world pertaining to the gold supply chain,” Perth Mint Chief Executive Officer Richard Hayes said.

“This game changing technology will report on the origin of the gold and how the metal moves through the entire production and distribution process. This complete transparency will instil even greater trust in a commodity which already provides the ultimate refuge during times of economic and geopolitical turmoil.”

As the world’s largest refiner of newly mined gold and a fully integrated precious metals enterprise, The Perth Mint has long been at the forefront of setting the highest possible ethical standards across all its operations.

“This agreement extends our proactive efforts to maintain integrity throughout the gold value chain and strengthen the precious metals industry’s commitment to sound ethical and governance practices to provide peace of mind to investors and consumers worldwide,” Mr Hayes continued.

ASX-listed Security Matters Ltd specialises in state-of-the-art and reliable operational solutions that can irrevocably mark a range of fungible products and substances. With several supply chain integrity applications already live in other industries, Security Matters Chief Executive Officer Haggai Alon said he is honoured to now work with a leading name in the gold industry.

“We work tirelessly to create an authentic and transparent marketplace for all commercial and consumer goods, so by collaborating with The Perth Mint we can demonstrate how our technology can be used to validate the legitimacy of gold and other premium ores,” Mr Alon said.

“Significant changes can easily be made to supply chain processes when adopted by leading organisations and technology can drive that change.

“By differentiating between and employing a different technique to each of the three major life cycles within the gold supply chain - raw material to production, production to commercial, commercial to recycle - we can create an entire technology driven ecosystem that promotes integrity, corporate transparency and accountability, anti-counterfeiting and sustainability.”

At present, investors and consumers have few assurances and little understanding of the origins of gold, and in line with modern practices, are increasingly looking for surety that the gold they are buying is mined and processed through socially responsible and acceptable sources.

“The metal obtained from war-torn areas, where child labour and other abhorrent practices are widespread, is indistinguishable to the end user from gold that has been ethically sourced from mines in Australia and the United States, for example,” Mr Hayes said.

London is and will remain the pivotal point of the gold industry. The World Gold Council (WGC) has recently issued a set of responsible gold mining principles and the London Bullion Market Association (LBMA) has issued a statement of principles of responsible gold guidance for Good Delivery Refiners. This initiative is being developed against the backdrop of both industry guidance statements.

“Currently there are no overarching standards for the gold industry but instead a mix of legislation (Dodd-Frank in the United States and Conflict Free Minerals in the European Union) and voluntary codes of conduct issued by the WGC and LBMA, which result in potentially opaque gold supply chains.”

The integrity solution to be delivered by The Perth Mint and Security Matters Ltd is based on scientifically proven molecular markers which will enable gold to be traced and tracked. Its patented code identification reader will simply and immediately indicate any integrity anomalies in the supply chain and thereby make it much more difficult for dealers in conflict or ‘dirty’ gold to release it into legitimate supply chains.

The Perth Mint and SMX will be seeking the involvement of other gold industry supply chain participants through expressions of interest as part of the commercialisation.



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Monthly Sales – January 2020

Topics [ Monthly sales figures ]

Total ounces of gold and silver sold by The Perth Mint in January 2020 as coins and minted bars:

  - Gold (Au): 48,299 oz

  - Silver (Ag): 1,450,317 oz

NB This chart shows total monthly ounces of gold and silver shipped as minted products by The Perth Mint to wholesale and retail customers worldwide. It excludes sales of cast bars and other Group activities including sales of allocated/unallocated precious metal for storage by the Depository.



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What is 'conflict-free' gold?

Topics [ responsible gold gold refining gold refinery gold trading gold ]

Since 2006 when Leonardo Di Caprio’s hit feature film Blood Diamond exposed the dark side of mining in east African countries rich in natural resources, the trade of precious stones, minerals and other commodities has come under increasing public scrutiny.  

Best evidenced by the growing number of ‘fair trade’ products worldwide, this global concern with ethical sourcing is steadily on the rise as consumers and organisations become increasingly focused on corporate transparency, responsible supply chain management and sourcing. 

While huge leaps have been made in recent years in the prevention of conflict mining, it remains a global issue – particularly for gold. In response, leading industry players including The Perth Mint have implemented strict supply chain policies as part of their commitment to responsible metals. 

Conflict minerals

Investigations into revenue obtained from the trade in natural resources including gold, tin, tantalum and tungsten in the Democratic Republic of Congo (DRC) and neighbouring countries identified links to organised crime and the finance of corrupt officials and organisations.

In fact, of these ‘conflict minerals’, gold is considered the least controlled due to its high worth and the ease at which it can be moved across borders. The DRC government estimates that while more than 20 tonnes of gold are extracted by artisanal miners each year only about 10,000 ounces are officially exported. Meanwhile, it is estimated that more than half of Congo’s artisanal miners are exploited by local armed groups and non-state security forces present at gold pits around the country. (IPIS Research, 2015.)

In 2010 US Congress passed the ‘conflict minerals’ law which legally requires publicly-listed companies to check their supply chains and take steps to address any risks associated with procurement of these materials. Part of a wider move towards responsible sourcing, this was key in the development of an internationally recognised due diligence framework by the Organisation for Economic Cooperation and Development (OECD) which aligns with guiding principles outlined by the United Nations.

In 2012 the London Bullion Market Association (LBMA), one of the world’s largest distributors of precious metals to global markets, set up a Responsible Gold Guidance based on the OECD framework.

Dore bars


To be accredited as a LBMA ‘good delivery’ refiner and issued a LBMA Responsible Gold or Silver Certificate, refiners must undergo comprehensive yearly audits to ensure compliance with high standards of anti-money laundering and combating terrorist financing practices.

These include the establishment of systems and processes covering:

• Company management systems

• Identification and assessment of risks within the supply chain

• Management strategy to respond to identified risks

• Independent third-party audit of supply chain due diligence

• Supply chain due diligence reporting

As the fight against conflict gold and its global impact continues, the processes in place at The Perth Mint Refinery, as Australia’s only accredited LBMA refiner for both gold and silver, remain as relevant as ever for producer and investor clients around the world.       

Committed to responsible metals

The Perth Mint Refinery takes the risk and impact of handling precious metals mined within conflict affected areas extremely seriously.

“As the largest gold refiner in the southern hemisphere, we have a responsibility to do everything within our power to reduce the global impact of conflict metals,” Refining Operations Manager Nathan Edwards said. 

“We are aware that gold or silver mined in high risk countries has the potential to make its way to our refining operations in Western Australia. That’s why we’ve aligned our practices with the LBMA and OECD, to ensure we uphold and exceed global standards in due diligence and responsible sourcing.”

The Perth Mint was one of the first three gold refiners in the world to be certified under the internationally recognised Conflict-Free Smelter Program, now the Responsible Minerals Assurance Process (RMAP), which provides credible third-party valuation of a smelter's procurement activities.  

Our Responsible Metals and Supply Chain Policy is committed to ensuring all gold handled at The Perth Mint Refinery is obtained from conflict-free sources – from the moment it enters our high-security facility in Perth to when it leaves as 99.99% pure gold bars. 

Immediately after delivery, the origin of each batch is checked for compliance with our responsible metals policy before being weighed and entered into our barcoded metal deposit system. This facilitates tracking throughout the entire refining process.

For further information and to view our audit history, please visit our website.

Resources

https://ipisresearch.be/publication/analysis-interactive-map-artisanal-mining-areas-eastern-dr-congo-2/
https://www.globalwitness.org/en/campaigns/conflict-minerals/dodd-frank-act-section-1502/
https://www.pri.org/stories/2017-06-23/tracing-conflict-gold-democratic-republic-congo



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Demand for Kangaroo bullion coins surge as new decade dawns

Topics [ Australian Kangaroo silver bullion coins gold market gold bullion coins ]

The Perth Mint experienced an increase in demand for its signature gold bullion coin, the 1oz Australian Kangaroo, in the latter half of 2019 as investors turned to precious metals in the face of an uncertain 2020. 

Sales of the 1oz gold Kangaroo coin in Australia more than doubled in the six months ending December 2019, rising 63% against the same period in 2018. 

Silver purchases also spiked with more than four million 1oz Australian Kangaroo silver bullion coins sold to investors in Australia, Europe and Asia resulting in a 36% increase in overall sales year-on-year. 

Group Manager, Minted Products Neil Vance said political unease and a struggling retail sector reflected in record low interest rates around the world helped the case for precious metals as investors sought to preserve wealth. 

“Precious metal markets were certainly in the spotlight in 2019 with the price of gold reaching record highs in Australian dollar terms in the latter half of the year as investors sought to hedge against falling markets,” Mr Vance said.

“Our bullion coins have been a popular choice for decades and the rise in demand for both our 1oz silver and gold Kangaroo bullion coins prove that these signature offerings continue to provide investors with trusted quality and value as a leading global investment choice.”

The notable rise in gold purchase has been seen across The Perth Mint’s range of investment options, from physical bullion coins and bars to digital gold via exchange-listed gold products and an innovative digital app. 

With uncertainty about the future of the world economy and escalating tension between the US and Iran, it seems the case for gold remains strong at the dawn of 2020.



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Gold leaps on world tensions

Topics [ gold investing gold bull market gold analysis gold prices ]

Gold prices have begun 2020 on a very strong footing, with the yellow metal rallying beyond USD 1,600 and AUD 2,300 per troy ounce.

The proximate cause of the latest rally is the sharp escalation in tensions between the United States and Iran, with the drone strike that killed Iranian military general Qassem Soleimaini sparking a wave of safe haven buying.

The rally in precious metals is a continuation of a strong upside move which can be dated back to Q4 2018 when a sharp decline in equity markets reignited demand for gold and other safe haven assets.

Since then, gold has rallied by more than 30% in Australian dollar terms, topping AUD 2,000 per troy ounce for the first time ever last year as interest rate cuts and a decline in global bond yields helped fuel investor demand for the precious metal.

This demand has come from a multiple sources including central banks, which bought record amounts of gold in 2019, and gold ETF buyers who increased their holdings to all-time highs last year.

The Perth Mint has seen the growth in investor appetite for precious metals firsthand, with the number of clients opening direct depository accounts more than doubling in 2019. Meanwhile holdings in our ASX-listed product, ticker code PMGOLD, rose by 45% last year.

In troy ounce terms, December 2019 demand for our Australian gold bullion coins and minted bars neared 79,000 ounces – up 45% on the previous month. Driven by strong sales of Kangaroo and Lunar coins, particularly in Germany, the number of ounces sold in December 2019 increased 170% compared to same period in 2018.

The case for gold remains as strong as ever. The likelihood of elevated geopolitical tensions in the Middle East, equity market volatility and the prospect of even lower interest rates in Australia in 2020 are some of the many factors encouraging investors to allocate a portion of their portfolio to the precious metal.



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