Alan Muir Leaves Rand Refinery
Indian Opportunities
Krugerrand Gold Bullion Portfolio
Strengthening ties with key stakeholders
AuDITIONS update
Update! Comprehensive listing of value-added products manufactured at Rand Refinery
New horizons for Rand Refinery
Rand Refinery continues partnership with Minquiz
New plans for Krugerrand
Rand Refinery donates prize at World Money Show
Rand Refinery Publishes 2006 Annual Report
40th Anniversary Of Krugerrand
Rand Refinery at the annual Mining Indaba Conference

Alan Muir Leaves Rand Refinery

Alan Muir, RRL’s managing director for the past two and a half years, leaves RRL at the end of January to return to AngloGold Ashanti.
 “I’m sorry to be leaving RRL at this stage, but am confident we have made a good start,” says Alan. “The most important thing is that we have begun to take control of our own destiny. Having made a significant profit, up from the previous year, we are definitely no longer in pure survival mode. When the ship is floundering, you can’t start charting new courses: we’re now beyond that stage, and can focus on investing in our future. My very best wishes remain with everyone in the company and I look forward to watching its ongoing success, albeit from a distance.”

Indian Opportunities

The London Bullion Market Association (LBMA) conference –widely recognised as the premier event in the gold industry’s calendar – was held in Mumbai, India, from 18 to 20 November 2007. Head of global markets John, head of customer relations and products (global markets) Johan Botha, and head: evaluation and sampling Neil Harby represented RRL.

“Networking is always a major focus of the LBMA conference,” says John. “Industries represented included banking, security, mining and jewellery manufacture, as were other major refineries, with whom we had some useful discussions.”

Another objective of the Indian visit, for John and Johan specifically, was to meet with a number of the country’s major bankers, regarding opportunities for RRL to supply large orders of small branded coins.

“These are sought after both by investors and collectors,” says John. “In India, where people buy jewellery for investment as much as for ornament, the line between the different market sectors is often a fine one. A critical factor in the project is the ability to produce cost-effective, tamper proof packaging. Once this is in place, we can supply any order, with unlimited flexibility in terms of shape and design.

Krugerrand Gold Bullion Portfolio

On 3 October, four years of intensive planning came to fruition with the launch of the SA Bullion Fund, a partnership between RRL and Cape Town based Hilton Davies.
The route to the launch was not always straightforward. “Investing in gold in South Africa is subject to complex legal requirements,” says Hilton (pictured left).

“Gold falls within the area of foreign currency, so we had to win the approval of the SA Reserve Bank (SARB); working with the Bank’s exchange control department, the South African Mint and RRL, we achieved this earlier this year.”

Hilton has an established track record in the investment field, having served as a director of both the Allan Gray and Foord investment groups. SA Bullion Fund’s investment mandate makes use of the world’s most successful bullion coin – the Krugerrand. “This is where RRL comes in,” says Johan Botha of global marketing. “Through the Fund, investors can buy Krugerrands which are stored at RRL: the normal risks and costs – relating to security and storage – associated with investing in physical gold therefore fall away.”

RRL has been an integral part of the story of the Krugerrand since the coin’s launch 40 years ago. RRL produces the blank coins, and has been responsible for marketing and distribution since 1998. “With SA Bullion Fund’s investment mandate, investors get the best both worlds,” says Johan. “Hilton is firmly of the view that gold should be viewed as a monetary asset, and the Krugerrand, of course, is legal tender. The SARB stands as a guaranteed buyer, and transfer of ownership does not attract Value Added Tax, unlike other forms of gold.”

Recognition of the importance of stakeholder engagement is an important part of Rand Refinery’s philosophy. Stakeholders include clients, local communities, regulators and many others. A number of visits which have taken place in recent months serve as practical illustrations of this approach.

In August 2007, eight employees of Central African Gold (CAG) visited RRL to “understand the refining process and see where gold from our Ghana mine is refined”. CAG owns the Bibiani mine in Ghana, which was acquired late last year from AngloGold Ashanti. A ‘mid-tier’ African gold producer, CAG – listed on the London Stock Exchange’s Alternative Investment Market (AIM) – also has a variety of gold assets in Mali, Botswana and Zimbabwe.

In September, a delegation of ten senior South African Police Services officers based at the Germiston branch of the SAPS, led by Director Shabangu, was invited to tour the refinery. Following the tour, the visitors had the opportunity to interact with a range of Rand Refinery employees on issues such as security and logistics.

AuDITIONS update

The AngloGold Ashanti AuDITIONS Global Gold Couture Collection took place during the Cape Town Fashion Week on Saturday, 11 August 2007. Following a catwalk parade featuring selected winning pieces from the international jewellery design competition, the finale of the show was a gold ball gown, worth over R2 million, weighing 7kg and made up of 4500 18 carat gold sequins. The masterpiece, which was modelled by Brazilian supermodel Isabella Fiorentino, was designed by Brazilian fashion designer Victor Dzenk and produced in partnership with the jewellery designer and retailer Manoel Bernardes.

AuDITIONS, originally launched as the annual Riches of Africa competition by AngloGold Ashanti (then still AngloGold) in 1999, has become a prestige international event in the gold jewellery design calendar. Competitions, for some of which Rand Refinery has supplied the gold, have been held in Brazil, India, and – most recently – China.

The Indian and Chinese markets in particular present Rand Refinery with a number of opportunities. In India, gold jewellery is extensively associated with gifts given at wedding and religious festivals, and is popular as an investment. In China, the rapid expansion of the economy in recent years has supported high levels of consumer spending in recent years, including an increased demand for jewellery.

• Small bars:
• Kilobars (99.50 and 99.99)
• 500 g bars (99.50 and 99.99)
• 100 g bars (99.90)
• Ten Tola bars (99.90)
• Comex bars (99.50)
  
  
• Jewellery semis:
• Au Alloy grain (range of alloy compositions from 9ct to 24ct, yellow and white gold)
• Ag Alloy grain (99.90 and sterling silver)
• Au Wire (range of 9ct to 24 ct alloys and thickness from 5mm to 0.10mm)
• Ag wire (99.90, thickness as for Au wire)
• Au plate (9ct to 24ct and thickness from 7 mm to 0.20mm)
• Ag plate (99.90 and thickness as for Au)
• Bangle washers (9ct to 18ct, varying diameters)
• Ring washers (9ct to 18ct, varying diameters)
• Finished Bangles (9ct to 18ct, varying thickness and diameters)
• Finished Rings (9ct to 18ct, varying thickness and diameters)
• Ferrules (9ct to 18ct, varying thickness and diameters)
• Tube (9ct to 18ct, varying diameters)
• Pins (9ct to 18ct)
• Butterflies (9ct to 18ct)
  
  
• Solder (9ct to 18ct):
• Plate (triangular, square)
• Wire (5g capsule)
• Paste (complete range of compositions in 30 g tubes depending on customer requirements)
  
  
• Dental alloys:
• Complete range of some 30 alloys depending on the application.
  
  
• Coin blanks:
• 1 oz KR, ½ KR, ¼ KR, 1/10 KR (22ct)
• 1 kg (99.99)
• The KR size range in any other alloy.
  
  
• Minted bars and medallions (in association with The Gold Reef City Mint):
  • Sizes range from 1kg to 5g in a range of alloys and product sizes.

For more details, contact jewellery@gold.co.za

“One of the most important developments for Rand Refinery in the last five years has been our response to South Africa’s declining gold production profile by sourcing material from other countries, principally in Africa,” says Johan Laas, Rand Refinery’s sourcing manager.

Current principal sources of gold in Africa are Tanzania, Ghana and Mali, which together supplied Rand Refinery with 141 tonnes of gold in 2006. Gold produced in West Africa is generally of a high level of purity (over 90% purity compared with under 85% for a typical bar of South African doré), so has the advantage of being quicker – and therefore more cost-effective – to refine.

The sustained buoyant gold price has made a number of exploration projects look increasingly viable, and these also hold the promise of potential new business for Rand Refinery. For example, the Tabokoto gold mine in the western part of Mali opened in May 2006. The project is owned by Canadian-based Nevsun, a gold mining and exploration company that also owns a very large – potentially 1 million ounce – project in Eritrea. In Ghana, Newmont is targeting 2 million ounces from its African operations, such as the Ahafo project in north-west Ghana and the Akyem project east of the Ashanti gold belt. Projects are also coming on stream in such countries as Burkina Faso, Ivory Coast and Guinea.

Alluvial gold – mined by informal gold miners – is becoming a significant factor, with more than 5 tonnes of gold produced from this source in East and West Africa in 2006. While this type of mining poses obvious safety, health and environmental challenges, which will need to be addressed, it nevertheless represents another untapped market for Rand Refinery.

“The challenge of sourcing gold from Africa, of course,” says Johan “comes with managing the security and logistics associated with transporting precious metals over long distances.” This comment is borne out by Rand Refinery’s vault manager, Dalene Hind, who visited Mali in March. Rand Refinery’s import- and export-related logistics are managed through the vault, which also provides a service to third parties involved in the international transport of precious metals, diamonds, jewellery and other valuable cargo. “Procedures in Africa are more complex and thorough than those we are used to here,” says Dalene “with all parties – government departments, police and customs – involved every step of the way.”

Sourcing new markets is as important for the smelter as for the refinery. RRL is the only single-site refinery and smelter complex in the world. Sources for precious metal-bearing by-products treated at RRL include other refineries, the mining process and scrap material from such industries as electronics and computers. Treatment of different products in the smelter is driven by their chemical composition, so it is important to have sufficient critical mass to make the process cost-effective. In 2006, Rand Refinery’s smelter treated material from South Africa, Australia, the Far East, North America and Europe.

On 18 May, Rand Refinery lent its support for the seventh consecutive year to the Minquiz competition organized annually by Mintek for Grade 12 students. This science, engineering, technology and mathematics contest which was originally introduced in 1988 is now a national event. It is recognized by the Department of Minerals and Energy as one of the key vehicles for promoting awareness and interest of the importance of minerals to South Africa among learners.

On behalf of Rand Refinery, Rosaline Nutsugah of Strategic Marketing department donated Krugerrands to the winning team who came from schools in the Free State. In a departure from previous years, Rosaline was accompanied at the finals of the competition by Matebogo Kgomo, process engineer: Refinery. Matebogo took the opportunity of sharing some of the practical aspects of her working experience at Rand Refinery with the learners.

Launched in 1967, with sales to date totalling some 46 million ounces of fine gold, the Krugerrand has outperformed all other bullion gold coins worldwide. Rand Refinery is the only refinery authorised by the Reserve Bank of South Africa to manufacture gold coin blanks for Krugerrands: these are then minted by the South African Mint Company and returned to Rand Refinery for final quality control. Since 1998, Rand Refinery has also assumed responsibility for the marketing and distribution of Krugerrands, both in South Africa and internationally.

A number of new interventions are under way to enhance demand for the coins from both the investor and collector markets.

Prospective investors in physical gold are faced with difficulties of security and storage. Recently developed investment products such as Exchange Traded Funds (ETFs) allowed investment in gold without these issues, giving these products a strategic advantage compared with bullion coins.

The creation of a new entity – SA Bullion Fund Management – is poised to resolve this difficulty. Founded by Cape Town-based Hilton Davies and scheduled for launching once final Financial Services Board (FSB) approval is granted, the firm will act as a specialist investment manager in physical gold: investors who purchase Krugerrands will have direct ownership of their bullion coins, but will enjoy the benefit of absolute security, as Rand Refinery will be responsible for storing the coins.

Ms Beverly Bennett pictured with Mr Mudunwazi Baloyi, Minister (Economic) at the South African Embassy in Washington

Rand Refinery donates prize at World Money Show

A Krugerrand, donated by Rand Refinery Limited was, for the second year running, the coveted prize for a lucky raffle participant in a workshop held as part of the recent World Money Show, held in Orlando, Florida (USA) between 7 and 10 February.

The World Money Show is an annual event aimed at gold investors worldwide, and this year once again attracted more than 10,000 delegates from four continents.

Entitled ‘Find good value and high growth in this big emerging market’, the workshop, held on 8 February, was hosted by Mudunwazi Baloyi, Minister (Economic) heading the Trade and Investment Division of the South African Embassy in Washington DC. The objective of the workshop was to promote awareness of South African gold-related investment products in general, and to promote investment in South African gold bullion coins in particular.

The Krugerrand was won by Ms Beverly Bennett of Virginia, USA.

Rand Refinery Media Alert
Rand Refinery Publishes 2006 Annual Report
Thursday 22 February 2007

Rand Refinery today publishes its Annual Report for 2006.

In addition to the usual contents of an Annual Report such as a message from the Chairman, Thero Setiloane, and an interview with the Managing Director, Alan Muir, the report contains articles from several outside commentators so that the business of Rand Refinery is reviewed within a global context.

The contributions are as follows:

• a detailed discussion on the outlook for the gold price in 2007 by GFMS;
  
  
• a piece on the growth of Exchange Traded Funds (ETFs) by the Chairman of DRDGOLD SA, Mark Wellesley-Wood;
  
  
• a thorough look at the evolving industrial uses of gold by Dr Richard Holliday, Industrial Applications Manager of the World Gold Council (WGC); and
  
  
• an article on industrial uses of gold with the emphasis on environmental issues by Dr Christopher Corti of COReGOLD Technology Consultancy in London.

To view and/or download the Rand Refinery 2006 Annual Report, please click here

For a hard copy of the document please contact:

Rosaline Nutsugah
Strategic Marketing and Planning department
Tel (011) 418 9011
Mobile 082 334 6309
E-mail: rosalinen@gold.co.za

40th Anniversary Of Krugerrand
The most widely-sold gold bullion coin ever produced celebrates its 40th anniversary in July 2007. The Krugerrand was first minted in July 1967, although the bullion coin was only launched in 1970. Between 1967 and 1970, proof sets were produced for the collectors’ market only.

Krugerrands, which are legal tender in South Africa, were initially only minted in one size – one troy ounce, or 31.1034768 grams – but smaller coins, of ½, ¼ and 1/10oz, were introduced in 1980. The value of the bullion Krugerrand is directly linked to the gold price, with a fixed markup which varies from 3% to 9% according to coin weight.

Initially the responsibility of the International Gold Corporation, marketing and distributing of Krugerrands was taken over by RRL in 1998. Rand Refinery produces the blank coins, which are minted by the SA Mint and returned to the Refinery for final quality control and distribution.

Statistics are impressive. The Krugerrand is, without a doubt, the most successful bullion coin ever minted. More Krugerrands have been sold than all other coins combined: total sales amount to over 54 million coins, representing more than 46 million ounces of 22 carat gold. Annual sales peaked in the early 1980s at 200 tonnes per annum but have currently stabilised at around 80 000oz per annum.

Managing director Alan Muir welcomes guests to the cocktail party hosted by RRL at the historic Gold of Africa Museum

Rand Refinery at the annual Mining Indaba Conference

This year Mining Indaba conference was held in Cape Town from 6 to 8 February. Repeating last year’s successful event, Rand Refinry hosted an eve-of-conference cocktail part at the Gold Africa museum. Guests included existing customers and a cross-section of conference delegates.

At the conference, Rand Refinery was represented by Alan Muir – Managing Director, Steve Flatman - Operations Manager, John Reid – Head of Global Markets, Tania Pelser – Head of Metals Management in Global Markets, Johan Laas – Sourcing Manager and Dave Norval, Rand Refinery’s west and east African representative.

As always, the conference offered the ideal opportunity to get an up-to-date picture of the state of play of the gold markets and the status of the gold mining industry generally. Both the conference and the cocktail party presented an ideal opportunity for networking with a wide range of existing and potential customers of Rand Refinery from Africa and beyond.

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