Lionsgold Ltd (LON:LION) Chief Executive Officer Cameron Parry caught up with DirectorsTalk for an exclusive interview to discuss the launch of their gold ownership platform, IndexGold
Q1: Now Cameron, today we saw the announcement that your gold ownership platform has gone live. Firstly, why the need to trade in gold and silver, we used to deal in cash then we moved to plastic, isn’t it a step backwards?
A1: When you say deal in cash and plastic, we do in modern society deal in digitised representations of our currency but as you may be aware, living in the current world and climate, there’s growing concern over the validity and I guess the financial wellbeing of the banks and governments that stand behind the currencies that we use. Since 1971, global currencies, fiat currencies have been debt-backed whereas prior to that they were gold-backed so they were tied to something tangible and real, something that was traditionally a store of value and a medium of exchange.
Now, whether or not you think there’s going to be a currency crisis in the coming years, like there was a credit crisis almost ten years ago now, or whether you just think it might be prudent to hold a tangible asset that’s very very liquid, gold being the third largest traded market in the world, behind US debt and Japanese debt, it really is something that if it’s convenient and you can have an online account and you can hold some of your family’s wealth against a tangible asset such as gold or silver, then it makes a lot of sense to do it.
We believe, as a Board at least, that there’s a growing appetite and a growing awareness for that need in the consumer market.
Q2: How are these exchange rates on the platform going to compare to, say, my local gold exchange store?
A2: We don’t have exchange rates on our platform as such, there is a difference between the spot price in GBP and the spot price in USD for example but if you put in USD and GBP you’ll go straight into gold on our platform. There is a spread that’s generally about 0.5% which includes exchange rates in that spot price and in the price that you’ll get through our platform, but we use the market rate.
Q3: It is a competitive marketplace out there, how are you going to market this?
A3: Well, I believe with Lionsgold, and at the end of the market we are in on the London Stock Exchange, on the AIM market here, that we’ve got a very receptive audience who’re making sure they’ve got some diversification in their assets, and holding some cash or cash-equivalent assets outside of any larger systems, like the banking system that can have a contagion effect if we get another situation like we had in 2007/2008.
So, marketing-wise, we’re looking at grassroots promotion, if you like, to our shareholder base and to the wider audience at this end of the market because at the speculative end, micro-cap sort of end of AIM, I believe there’s a lot of, not necessarily contrarians but there’s a lot of people who like to have diversification in their portfolio and hold things that are liquid, but give them exposure to different areas, and protect their wealth. So, it’s a grassroots sort of campaign, it’ll be direct promotional activities and it’ll be to the audience that are probably inclined to listen to this interview today.
Q4: So, what does the launch mean for investors?
A4: Basically, people are just buying and holding gold and that is an asset for them to directly own. IndexGold vaults that for them and stores it and manages it but we don’t manage their money, we just manage the logistics behind all of that and make it very convenient for them to do this with their online account.
As far as what the launch means for Lionsgold, it’s another key milestone in the development of what are three pillars that are in the company:
We’ve got India Gold where we’ve got our projects in India, our interest in India with the gold projects there in exploration tenements as well as the Jonnagiri mine that we’re completely a feasibility study on at the moment, or should I say our partners there are, Geomysore Services, which we own 20-odd percent of. That, if that’s a decision to mine, which we should be able to make over the course of next month, then that should see us being able to be a gold producing gold mine there by the end of next year, and that’ll be the first privately-held gold producing mine since India gained independence in ’47.
With our Finland Gold where we should be in production in the later part of this year, we’re doing ground prep work there.
And with this, the launch of IndexGold, that’s our fintech division, it starts becoming revenue-generative from now and we’re growing that to being a self-sustainable business model. Whilst the revenues remain in the company, which we own 38% of at present that is just another successful model that we’re looking to implement and bring to market. Of course, that has other potential, if you have a platform for the retail use of something, something you’re sourcing and producing in a primary industry, then that actually has the potential to create a vertically-integrated business model.
Q5: So, you’ve told us some things are due to come out so is there anything else, in terms of news flow, that investors should be looking out for?
A5: Yes, in regards to IndexGold, which for anybody listening I’d suggest they go to www.indexgold.com and buy some gold, we have related products that we’ll be looking to release over the coming months and there are a couple of other strategic things and directions we’re looking to do there. I suppose, not that it’s necessarily regulatory news, but various promotions and things we do, that we speak about IndexGold, that obviously should put Lionsgold front of mind for people as well. So, hopefully this sort of has a twofold effect there, where we’re able to promote now a retail product in IndexGold but also to help build and grow awareness of Lionsgold itself.