The finance and accounting challenges posed by businesses in the precious metals field are particularly complex, for example:

  • High inherent operating risks due to the nature and value of the product, with both physical (theft, loss) and compliance risks (anti money laundering, tax and duty evasion)
  • Co-mingled fungible tradable metals, comprising a mixture of own metal and third parties’ metal on account in various physical forms through the process
  • Necessity to maintain in addition to financial ledgers per metal asset and liability ledgers, which no existing ERP can handle “out of the box”
  • Numerous processing points (assay, smelting, processing) where real or book losses and gains may arise
  • Complex and protracted inventory preparation, counting and reconciliation processes particularly in the refining process
  • Currency and price exposures that must be meticulously hedged, and daily treasury liquidity flows which may equal or exceed annual operating profits
  • Unique funding of working capital through “metal leases” provided by a limited number of banks and brokers and with complex title and VAT  issues depending on the physical and paper flows
  • Rapidly evolving compliance and corporate and social responsibility landscape with initiatives such as the Dodd Frank Act conflict minerals provisions

I have gained industry leading experience in this area, including the negotiation and execution of  mergers and acquisitions projects where the value of metals being transferred may equal or exceed the enterprise value of the business itself, necessitating a particular approach to contract, exchange, completion and post transaction true up mechanisms.  I have served on the London Bullion Market Association regulatory affairs committee and have a deep understanding of the various corporate and social responsibility initiatives of the London Bullion Market Association, Responsible Jewellery Council, and EICC-GeSi in respect of conflict and known origin gold.

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