Although it is always good to have some metal in hand for an emergency, (i recommend it highly, actually) a gold-backed crypto where the metal mined immediately goes straight to tokenization AND is able to be bought at spot price (I wouldn't mind if AABB even added at small percentage premium on top) is, in my mind, revolutionary... This is an operation and concept that has never existed, however is very attainable. The middle man is completely cut out of the Miner to End-Consumer process. The customer, without the hassle of paying high physical premiums and storing their own physical gold, can access real physical gold through a secure crypto token.
The company has the pieces in play:
1. the actual ERC-20 token on Ethereum.
2. Existing access through relationships in Asia (Asia big, bro — China, India — that’s like over 2B people).
3. Cash on hand.
4. Stake in existing mine(s) and access to real gold production.
The company just recently put out the AABBG website.. I'm waiting to hear from them directly how this is all going to work. If they've been in the business so actually as to have sold a gold mine, I'm not too worried how the gold that will back up the token will be sourced. Ideally, it would already be in their possession. If they're basing it off of current bullion holdings as well as gold they have in the ground, I'm good with that. If they have substantial drill reports on the land they own and have under control... great.
The value, to me at least, is twofold.
1. Increase in the price per AABB share.
2. Increase in the paper spot market price of gold.
Having paid attention to precious metals for the past 10+ years (long enough to have a grip on the industry), the past 6 - 12 months has gradually seen a decoupling of the paper Comex/ LBMA spot price versus the price of physical gold in hand (local coin dealer/ online bullion shop)…
… If the majority of the gold tied to the AABBG token is still in the ground, then they are not paying the roughly $1,900 per oz to mine it. Mining costs average in Mexico (I did the homework) average between $325/ oz to $700/ oz.. Let’s use the average, round number of these two and just say $500/ oz mining cost.. At a $1,900/ oz paper spot price, you would subtract the $500/ mining cost which would give the gold miner a $1,400/ oz profit on each ounce of gold they would mine. Gold is measured by troy ounces, which is about 31 grams per troy ounce..
"With a wonderful business, you can figure out what will happen: you can't figure out when it will happen. You don't want to focus on when, you want to focus on what. If you're right about what, you don't have to worry about when" ~~~ Warren Buffet
