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| There's gold in them thar hills …er Internet site |
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| BY PAUL VECCHIATTO, ITWEB CAPE TOWN CORRESPONDENT |
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| [Cape Town | ITWeb, 27 January 2004] -
Gold mine Durban Roodepoort Deep (DRD) has paid $200 000 (about R1.3 million) for a 1.4% stake in GoldMoney.com, a US Internet site dedicated to the marketing and sale of the precious metal.According to a DRD statement, the gold mining group has an option to expand its stake to 14.3%.While almost all of SA's established mining houses have had Internet home sites for some time, this could be the first known instance of a mining company buying into a business that actively markets and sells gold via the Internet.The timing of such a deal seems opportune as gold has risen by 19.6% over the past year to a current price of $406.25/oz. IT shares have done well as the technology-heavy US Nasdaq index is at a three-year high.DRD is listed on the Nasdaq as well as the Johannesburg and Australian stock exchanges.James Turk, an internationally respected authority on gold, founded GoldMoney in 2001.“GoldMoney is the easiest and most economical way to buy and sell gold on the Internet, but we see gold not only as a metal but also as a form of currency,” says Turk.He believes there is huge potential for gold to be used more for low-cost online payments worldwide, as people are now doing with GoldMoney. Using gold in this way will increase its demand to the benefit of the industry, he says.“We're well known for our belief in gold as money and for some time we've been considering ways of actively encouraging private ownership of gold,” says DRD CEO Ian Murray. “Gold money, to our mind, is one very direct way. It is particularly attractive for South Africans who, regrettably, cannot own gold in bullion form due to long-standing legal constraints.”Murray says gold and GoldMoney should gain greater prominence as the international financial markets look for an alternative to the ailing US dollar. He adds that DRD will make similar announcements in the future.In January 2003, DRD began an investigation into various gold beneficiation and marketing options. The company says it decided on an initial investment in GoldMoney, given its leadership position in the market and the secure, state-of-the-art technology it uses to effect transactions.GoldMoney has around 10 000 customers in more than 100 countries, while nearly 30 000 ounces of gold is held in allocated storage for the company's clients.The Web site works by using only units of accounts called “goldgrams”. The actual gold is stored in vaults and is insured by Lloyds of London.Just like a share of stock represents an investor's ownership of a fraction of a publicly traded company, a goldgram represents a buyer's ownership of a portion of the gold held for GoldMoney customers in a secure vault in London. GoldMoney's servers keep track of purchasers' ownership of goldgrams.South African IT group Dimension Data, which plays an ongoing role by managing the company's database, designed and constructed GoldMoney's system.
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