About 3 000 t of gold are mined each year, of which 50% goes directly into bank vaults. Environmental, social and governance finance company Nature's Vault aims to keep gold in the ground, thereby avoiding the carbon emissions and environmental impact of mining, while providing investors with stable, tradeable tokens representing what they dubbed “nature's gold” or environment-friendly gold.
"In many jurisdictions, investors and investment companies must declare the carbon associated with the gold investments they own, and this is leading to gold becoming a negative on their balance sheets in terms of greenhouse-gas and carbon emissions," says Nature's Vault CEO Phil Rickard.
"We have tokenised some of our gold mine assets and have started with private sales of the tokens. We found that what resonates most with investors is the ability to buy an environment-friendly gold-linked product," he notes.
Nature's Vault acquires mining assets and then verifiably commits not to exploit them. The tokens are created based on the quantified reserves within a mine, based on international mining and geological standards, and the company guarantees investors that they will retain their assets in perpetuity, based on the ownership of mining rights for the deposit.
"The quantity of gold subject to tokenisation is based on internationally recognised geological standards, such as the Joint Ore Reserves Committee, or Jorc, code and the National Instrument 43-101, verified by approved third-parties," Rickard explains.
"Anywhere in the world that has a pristine environment with gold beneath, we feel it is better to leave the gold in the ground. Our first mine in Canada is in a beautiful lakeside area, and there are similarly beautiful and pristine places with gold underneath in North America and South-East Asia, as examples."
What Nature's Vault requires is stable and predictable rule of law to ensure consistency in mining regulations and rights.
"Since we do not intend to mine the deposit, we must ensure mining rights and licensing remain consistent, as we guarantee this to our token holders," he says.
One of the reasons the company started with its first mine in Canada is because it could hold a patented claim to the mining rights, which makes it easier to guarantee rights for token holders and to guarantee that the company is able to keep the gold in the ground, Rickard explains.
Countries and jurisdictions with advanced and stable mining regulations and laws present the most potential for Nature's Vault. Within these parameters, Nature's Vault is open to discussions with mines anywhere in the world and is being approached regularly, he adds.
"We provide a service to maintain a quantifiable amount of gold in the ground, and we envision that the tokens will trade based on a relationship to the price of gold that will be set by the markets. We are also developing an avoided mining protocol that may enable us to offer carbon credits back to token holders to provide a further upside benefit."
As an environmental, social and governance finance platform, Nature's Vault will use proceeds from token sales to buy more mines, and will also establish projects that remove carbon or avoid carbon to provide carbon credits for investors' portfolios.
For example, Nature's Vault has established the Sawa Project, which aims to tackle the problem of the burning of agricultural waste across Asia. About 50-million tonnes a year of agricultural waste is burned across Asia and the project is working with farmers to process their waste into usable products.
"This then generates valuable carbon removal credits, with the revenue shared with the farmers, who make a bit more money for the same work," Rickard says.
Further, Nature's Vault is also exploring potential projects in the blue economy.
"As a group of seasoned business leaders, our aim is to provide business solutions to some of the most pressing environmental issues the planet faces," he says.
“We are bringing our approach to tokenising environmental, social and governance projects and natural capital assets to help mitigate climate change in a transparent manner through distributed ledger technology and a platform that can be replicated and scaled up for future growth.”
Nature’s Vault is creating a platform built on the blockchain to tokenise projects focused on preserving natural capital, namely the planet’s natural resources, Rickard says.
"Our initial project avoids the environmental impact and carbon emissions related to gold mining by using tokenisation to monetise the value of in-ground gold deposits by preserving quantified gold reserves.
"It is time that certain minerals and metals stay in Nature's Vault," he says.
Edited by: Chanel de Bruyn
Creamer Media Senior Deputy Editor Online
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