AMG, South African Mint ink landmark coin deal

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.

Comments (2)

Absolute rubbish written by an illiterate person

ace mukadota - 31 January 2019

The administration's communism true face.

One man a notch up..the rest ? - 4 February 2019

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