Source: AMG, South African Mint ink landmark coin deal – DailyNews Live
BUSINESS WRITER 29 January 2019
HARARE – African Medallion Group (AMG) has signed a landmark cooperation
deal with a subsidiary of the South African Reserve Bank to resell and
redistribute its gold and related products such as medallions and
krugerrands
The multi-year deal with AMG, founded by trailblazing Zimbabwean
businessman Frank Buyanga and the South African mint company, will allow
the appointment of the SA coin dealer as an official reseller and
re-distributor of the fast expanding startup’s yellow metals.
AMG’s chief financial officer Constantine Itai Maunganidze and the SA mint
company’s general manager Christine Roux signed the core chapters of the
association agreement.
The deal is for one year, with subsequent annual renewal.
The South African Mint produces a range of coins, including the one-ounce
gold Krugerrand. It is a privately owned mint responsible for minting all
coins of the South African rand on behalf of the Reserve Bank. Located in
Centurion in Gauteng province near Pretoria, the mint manufacturers coins
and planchets for both domestic and international markets.
AMG hopes the tie up with SA Mint will help it make further inroads into
yellow metals sector.
This comes as deal-making has largely been dormant in South Africa’s gold
sector in recent years, as companies focused on cutting costs amid
investor criticism of inadequate management of capital. But the need to
bolster shrinking gold reserves to boost growth and take advantage of
rising gold prices are now providing the impetus for consolidation by
companies such as AMG.
Under the agreement, both companies will begin collaborating immediately.
“The appointment of the coin dealer as an official reseller and
re-distributor in terms of this agreement takes effect on the commencement
date and continues for the initial term, immediately after which the
agreement shall automatically continue for successive periods of 12 months
each,” reads part of the agreement.
This deal significantly strengthens AMG and should accelerate its growth
and benefit its customers across the sell-side, buy-side and trading
venues.
On the other hand, the SA Mint’s strong relationships in the gold sector –
it is the leading African mint with over 100 years’ experience in
supplying coins to Africa and the world – and long and successful history
of corporate partnerships, will help AMG navigate its ongoing industry
consolidation as well as boost earnings, confident of retaining its
leading position in the fast-growing market.
In April last year, AMG closed a Rand 100 million acquisition of Pagliari
Group (Pagliari), a former subsidiary of Rand Refinery (RF) and supplier
of high-quality gold products. With the Pagliari deal having been
concluded in April, the 62-year old jewellery maker’s acquisition also
comes as Buyanga has been stockpiling on the yellow metal from the
world-famous RF – one of Africa and the universe’s largest gold
refineries.
And the Cape Town-based minting firm also has major contracts with such
clients as global automaker Volkswagen, and others.
As part of the latest transaction, AMG will own costs to promote sales of
the products; provide and maintain adequate facilities and personnel for
warehousing, merchandising, marketing, reselling and redistributing the
products in the territory, among others, as part of the agreement.
The cooperation agreement has a clearly laid out dispute settlement
system.
“Should any dispute, disagreement or claim arise between the parties
concerning this agreement, the parties shall try to resolve the dispute by
negotiation. This entails that the one party invites the other in writing
to a meeting and to attempt to resolve the dispute within five days from
date of written invitation.
“If the dispute has not been resolved by such negotiation, the parties
shall submit the dispute to the Arbitration Foundation of Southern Africa
(AFSA) administered mediation, upon the terms set by the AFSA
Secretariat,” according to part of the agreement.
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