Corporate advisory firm PCF Capital has launched a new cryptocurrency that could shake up traditional funding mechanisms and change the way junior gold miners raise capital.
PCF Capital unveiled its FutureGold cryptocurrency today, along with its plans for a security token in Q1 2019 to raise up to US$250 million via the issue of up to 5 million security tokens.
Proceeds from the FutureGold offering will be used to invest in eligible mining projects, based on strict lending criteria that leverages PCF Capital’s market experience, backed by 150 mining asset transactions worldwide worth an aggregate US$2.5 billion.
Similar to the way a stablecoin can be pegged to the Australian or US dollar, FutureGold will be backed cash and asset security.
FutureGold will operate via a registered managed investment scheme powered by blockchain technology and tick off all compliancies in relation to cryptocurrency best practice and applicable securities law.
PCF Capital founder and executive chairman of FutureGold Liam Twigger said the crypto initiative would provide much needed capital support to a sector increasingly ignored by traditional funding sources.“The ASX and the TSX are full of shells and zombie-like companies that have mining and exploration projects but no hope of getting them funded, particularly in these times when risk-averse investors are dominant,” Twigger said.Click To Tweet
“There are more than 300 junior resource companies listed on the ASX, TSX and AIM markets with gold projects containing over 300 million ounces – and all are looking for funding.
“The companies’ plight is exasperated by the fact that in North America investors have switched out of the junior mining sector in favour of bitcoin and medicinal cannabis stocks.”
Twigger said this had created the perfect storm for junior miners and that FutureGold could be their light at the end of the tunnel.
FutureGold, he said, could match investor interest in regulated and transparent cryptocurrencies with junior miners’ needs for innovative funding solutions.
“So far in 2018, US$20 billion has been raised in crypto offerings, up from US$6 billion in 2017,” Twigger said.
“The time is right for a legitimate mining industry cryptocurrency to enter the fray.”
The FutureGold security token offering will be made pursuant to a product disclosure statement and will require FutureGold to obtain an Australian financial services licence (AFSL) from the Australian Securities and Investments Commission.
FutureGold said it was currently in the process of applying for an AFSL and will be assisted in this process by PCF Capital, which has held an AFSL for more than 10 years.
The security tokens will be Know Your Client (KYC) and Anti Money Laundering (AML) compliant.
FutureGold said that it anticipated the tokens will be tradable on a recognised Global Digital Asset Exchange to provide investors with liquidity, confidence and security.“The ASX and the TSX are full of shells and zombie-like companies that have mining and exploration projects but no hope of getting them funded, particularly in these times when risk-averse investors are dominant,” Twigger said.Click To Tweet
“This innovative new investment product will be compliant to enable both institutional and retail investors to participate.”
An example of the type of transactions FutureGold could facilitate includes offering an emerging mining company a cash pre-payment in return for a loyalty or share of production over the company’s initial production.
Subject to the performance of the gold royalties and streams acquired by FutureGold, security token holders may also receive future dividends and upside from potential security token buy backs.