AU2019100343A4 - A Low-Cost Method for the Safe Extraction, Storage, Audit and Transfer of Value of Precious Metal Deposits - Google Patents

Abstract

A system and method of securely extracting, auditing, and transferring the value of precious metals. Geophysical, geochemical, geological, drill core, location, and other data are extracted from a naturally occurring precious metal deposits. The amount of precious metal present in the precious metal deposit is determined using the data extracted from the deposit either directly of via the use of geological, geophysical, mathematical or other models. The amount of precious metal in the precious metal deposit is divided into units. The precious metal deposit is not mined nor is the precious metal extracted from the deposit via other physical means. Ideally the precious metal deposit is selected to preclude the possibility of future mining or physical extraction of precious metals by other means, by selecting a deposit that is unsuitable because of its location, and or the limitations of current or foreseeable mining or extraction technology, and or law. The data extracted from the precious metal deposit including the geophysical, geochemical, geological and drill core and location data, together with the determination of the volume of precious metal present, and any models or other data used to determine the amount of precious metal in the deposit, and the unit scheme description together with the number of units created, any rights or titles issued, are deposited into a secure ledger, such as a distributed ledger, that is made generally available for review and audit at any time. The precious deposit itself is also made generally available for review and audit at any time. Changes in the ownership of the units are recorded in the secure ledger.

Description

A Low-Cost Method for the Safe

Extraction, Storage, Audit and Transfer of Value of

Precious Metal Deposits

Priority [001] The present application claims priority from Australian Provisional Patent Application 2018901115 filed on 4 April 2018, A Low-Cost Method for the Safe Extraction, Storage and Transfer of Value of Precious Metal Deposits.

Technical Field [002] The present invention relates to the field of security methods and devices.

Background [003] Precious metals such as but not limited to gold, silver and platinum have been extracted from mineral deposits, henceforth precious metal deposits, throughout history in order to generate two very different forms of value:

1. to providing noble metals for the manufacture of jewellery and for use in industrial processes

2019100343 03 Apr 2019

2. to provide a store of value and a medium of exchange for individuals, the finance industry and governments [004] Despite the fact that each of the end uses noted above is completely different and despite the fact that each of the end uses noted above exploits a completely different aspect of the precious metal deposit, to date no effort has been made to differentiate between the methods of extracting value from the precious metal deposit for each of these end use application, nor has any effort been made to date to determine whether perhaps completely different methods of value extraction could and indeed should be used in order to optimise the value extraction method for each end use application.

[005] When a precious metal deposit is mined for precious metals, such as but not limited to gold for the manufacture of jewellery and or for use in industrry, the most important values being extracted from the precious metal deposit are the elemental, chemical, electrical, thermal, physical, and, aesthetic properties of the metal gold. The metallic gold is mined and smelted into gold bullion and then the gold metal is placed under heavy security whilst the gold metal makes its way through the distribution chain to its end use application.

[006] When a precious metal, such as but not limited to gold is mined to provide a store of value and a medium of exchange, that is when the precious metal deposit is mined to create a form of money, the key values being extracted from the precious metal deposit is scarcity.

2019100343 03 Apr 2019 [007] That is, the elemental metallic metals being extracted from a precious metal deposit for the purposes of creating jewellery and or for use in industrial processes, are completely different in nature to the scarcity value that is being extracted from the precious metal deposit in order to create a store of value and a medium of exchange.

[008] The fact that the method used to extract value from precious metal deposit does not discriminate at all between these two critically different types of end use applications:

1. gives rise to profoundly expensive inefficiencies in the value extraction process when the value being extracted is scarcity

2. profoundly degrades the security, and auditability, and thus the ultimate utility and value, of the scarcity that is being used as a store of value and medium of exchange [009] The capital cost of simply establishing a precious metal mine routinely exceeds a billion dollars and obtaining the various government approvals required to commence construction of the precious metal mine can a take decade or longer. Once the mine is commissioned decades of uninterrupted operation are then required in order for the mine to extract the precious metal reserve and recoup the initial capital investment. However, over such a prolonged period of time there are numerous risks that can and often render the mine a complete write-off, and or, even bankrupt the mine owners. For example:

• as precious metal commodity prices fluctuate the mine may become uneconomical and be forced to close for years or even decades on end • a major environmental mining incident, such as a toxic material dam failure, might:

o cause the deaths of hundreds of people in the surrounding area

2019100343 03 Apr 2019 o devastate the surrounding environment by poisoning a river or poisoning an aquifer o lead to billions of dollars of environmental fines and damages claims • social breakdown in the form of revolution or war makes the mine untenable • new mining and or processing technology renders the mine uncompetitive [010] In order to reduce costs and to economically extract low-grade deposits of precious metals most modern-day precious metal mining operations operate on a vast scale using opencut mining methods. Such enormous mines require the construction of towns, dams, roads, railroads, energy-grids and jetports, and the importation of hundreds of mine workers to run and operate the mine. The result of such large-scale mining operations is invariably the complete destruction of the natural landscape over tens of square kilometres, allied with the social disintegration of any nearby communities.

[Oil] To create ingots of precious metals for use as a medium of exchange and or as a store of value, mineral deposit must be mined, processed and smelted. This requires:

• the expenditure of an exceedingly large amount of energy • the emission of large volumes of carbon • the use of large amounts of highly toxic chemicals, such as cyanide to process the ore • the provision of high security measures during all stages of processing and transport of the gold [012] Mining companies generally pay royalties to countries that host their value extraction operations. In many countries, such as but not limited to say Australia, the extraction of the

2019100343 03 Apr 2019 value of precious metal reserves is a major source of government revenue as well as being a significant source of foreign exchange for the country. Yet notwithstanding the extraordinary efficiency of modern-day open cut mining operations, some of which can economically extract gold at a concentration of a half a gram of gold per metric ton of host rock, there are hundreds of proven and exceedingly significant gold deposits in Australia at least, that cannot ever be economically mined by any foreseeable mining method, and that are therefore likely to remain unexploited forever, thereby depriving Australia and its people of a vast fortune in forgone royalties and foreign exchange.

[013] Mining companies collects revenue on the one-time sale of the extracted value of the precious metal reserve to the bullion banking system. The mining company however does not benefit in any way from downstream sales of the value of the precious metal reserve as the value of the precious metal reserve changes hands from owner to new owner over time. Similarly, the government of the country from where the value of the precious metal reserve originated does not receives any revenue as the value of the precious metal reserve changes hands from one owner to another in the aftermarket.

[014] To protect the value embodied in precious metal ingots, custom high-security vaults are created in order to house the ingots. These vaults typically consist of:

• an expensive high-security vault complex, often constructed underground • the provision of around the clock armed security

2019100343 03 Apr 2019 [015] Yet despite the use of high security vaults and other security measures, stores of precious metals have proven themselves to be exceedingly vulnerable to theft and counterfeiting. For example:

• during times of war or other types of civil unrest, vaults of precious metals looted within hours by invading armies or revolutionary forces arriving at the vault containing the precious metal. The former owners of these metals therefore suffer a total loss.

• during times of economic collapse or extreme economic stress, vaults of precious metals are taken over by sovereign governments that are desperate for hard currency.

The former owners of the metals therefore suffer a total loss.

• in 2017 it was found that stock of gold bullion stored by the Canadian Government in its vaults were in fake, that is to say • stocks of gold bullion are sold by bullion banks to people seeking to invest in precious metals as a store of value are subject to fractional reserve selling by the bullion banks. Fractional reserve selling is the process whereby the same unit of physical precious metal reserve, gold bullion in this instance, is deliberately and systemically oversold to say 20 different owners. That is in the major bullion bank centres of the world, such as London, the amount of physical precious metal reserve, gold bullion in this instance, which actually exists in the bullion bank vaults, is approximately 5% of the volume of gold that was actually sold to unsuspecting clients. Another way of putting this is that 95% of the precious metals sold by bullion banks, gold bullion in this instance, simply does not exist [016] It is apparent therefore that the traditional approaches to extracting value from precious metal deposits via mining and then reburying the precious metal in underground vaults, in order to create a store of value and a medium of exchange, is at once: slow, expensive, open to misuse

2019100343 03 Apr 2019 and corruption, environmentally destructive, commercially risky, dangerous to miners and surrounding peoples, and, highly insecure during times of war, revolution and economic crisis.

Summary of Invention

Technical Problem [017] There are a number of significant technical issues that need to be resolved in order to create a novel low-cost method for the safe extraction, storage, audit and transfer of value of precious metal deposits.

[018] In the first instance, large scale mining of precious metals, such as but not limited to gold, has been developed in countries such as Australia into a fine industrial art of extraordinary efficiency. The art of mining has reached such a peak of development that any improvements in the efficiency and performance of the mining process are now subject to ever diminishing returns on investment. Fundamentally the process of mining is defined by the fact that a great deal of energy is required to remove a great deal of rock from deep underground, and then a great deal of energy is required to subsequently fracture or even pulverize said rock prior to removing the gold or other precious metals from the rock material via a mechanical and or chemical means. Not only does this process require a spectacular amount of energy, but the capital machinery that is needed to contain and direct these massive amounts of material, energy and toxic chemicals, is extraordinarily costly to purchase and maintain and the actual

2019100343 03 Apr 2019 process of mining will invariably always contain a high degree of operational and commercial risk.

[019] In the second instance, storing previous metals such as but not limited to gold in ‘secure’ vaults, no matter how well protected and intimidating, simply provides no protection whatsoever to the gold inside the vault during times of war or revolution or when corrupt governments decide to seize the gold for their own political ends. As people typically seek to invest in precious metals, such as but not limited to gold, in order to preserve wealth during times of crisis and uncertainty, this inherent security failure in the state of the art constitutes a fundamental flaw that cannot be resolved by improving upon existing methods. Any amount of additional conventional security applied to a vaults system will not resolve this fundamental issue, as any vault can simply be blown apart by military munitions in a matter of seconds. Today even aerial bombs and missiles are readily able to penetrate reinforced concrete underground bunkers, and, to pass through a dozen or more stories of reinforced underground concrete floors within the bunker, prior to detonating at a programmed floor within the bunker. Further, during times or war or revolution, the keepers of the vault complex can be easily coerced on pain of death to open the vault complex, which saves the vault raiders the minor inconvenience of blowing apart the vault using military force. Further still, when corrupt governments decide to solve their economic mismanagement issues by stealing the gold belonging to their citizens and or foreigners stored in vaults in its jurisdiction, the gold vaults provide no security whatsoever against the actions of the corrupt governments. The vaults will be opened by the vault custodians as soon as the custodians receive official instructions from their governments, or as soon as the security forces bearing military weapons and plastic explosives arrive at the vault and threaten the vault custodians with execution or arrest. Again, as people typically invest in precious metals, such as but not

2019100343 03 Apr 2019 limited to gold, in order to preserve wealth during times of crisis and uncertainty, this inherent security failure constitutes a fundamental flaw in the current state of the art.

[020] In the third instance, precious metals such as but not limited to gold that are stored in a ‘secure’ vault are exceedingly difficult to audit as the process of auditing the contents of the vaults actually diminishes the security of the what is stored in the vault. This means that there is an upper limit to the degree of certainty that can be achieved regarding the contents of the vault. Using too few audits compromises the security of the vault and leaves it highly vulnerable to corruption and counterfeiting; using too many audits compromises the security of the vault and leaves the vault open to the possibility of theft or counterfeit. The issue of safely of auditing precious metal vaults in turn has enabled the flourishing of rampant fractional reserve selling schemes by bullion banks, especially in gold, whereby a single unit of gold is oversold to some twenty customers that each think that they have unique title to a unit of gold stored in the bullion bank vault. During times of invasion, revolution, or economic crisis, any gold in the vaults will be seized by military force within hours. Should the bullion bank fail during peace time, the client(s) will discover that only approximately five percent of the ‘gold’ sold to them by the bullion banks actually exists in the bullion bank vault. In either case, during times of crisis the ‘gold’ stored in the bullion bank vault fails completely to act as store of value and as a means of exchange for the investor.

[021] In the fourth instance, individuals sometimes take physical possession of their precious metals, such as but not limited to gold, and make their own provisions in respect to the security of their precious metal store. Typically, these security measures translate into:

storing the gold in a domestic safe, hiding the gold somewhere in the house, or, burying the

2019100343 03 Apr 2019 gold somewhere in the back yard. Whilst this type of security effectively bypasses some of the issues noted above with centralized vault storage, most of the key issues remain unchanged. Anyone suspected of owning gold can be easily coerced on pain of death to hand over their gold store instantly. The location of buried and hidden gold can be easily discovered within minutes using advanced but readily available handheld metal detectors, and domestic safes can be opened in seconds via the use of military explosives. Again, as people typically invest in precious metals, such as but not limited to gold, in order to preserve wealth during times of crisis and uncertainty, this inherent security failure constitutes a fundamental flaw in the current state of the art.

[022] As can be seen by the above, the current method of extracting, storing, auditing and transferring the value of precious metal deposits, such as but not limited to gold, via the use of mining and ‘secure’ vault storage or other means, is fundamentally flawed on a profoundly deep technical level. The existing method of precious metal value extraction, storage, audit and transfer using mining and ‘secure’ vault storage fails miserably during times of war, revolution or economic crisis and no amount of development, augmentation or finessing of the existing method will do anything to resolve these fundamental issues. Even during times of peace and order, the very process of auditing the precious metal vault introduces significant security risks to the metal stored in the vault, but the alternative approach, that is to not audit the precious metal vault also introduces significant security issues. Worse still, the difficulty of auditing the precious metal vault encourages the development and spread of runaway fractional reserve selling schemes, whereby each unit of gold is oversold by a factor of twenty to one, or more.

2019100343 03 Apr 2019 [023] What is required therefore is a novel technical approach to the problem of the extracting, storing, auditing and transferring the value of precious metal deposits for the purpose of creating a scarcity-based store of value and a medium of exchange, that completely bypasses the numerous fundamental limitations of the current state of the art.

Solution to the Problem [024] The present invention teaches a novel low-cost method for the safe extraction, storage, audit and transfer of value of precious metal deposits for the purposes of creating a scarcitybased store of value and a medium of exchange. The present invention achieves this result by teaching against essentially all of the key aspects of the prior art, and by essentially turning the current set of fundamental issues associated with the prior art, on their head.

[025] The present invention creates value for the ultimate end-user of the precious metal store of value and medium of exchange, by teaching a novel method that actually exploits the fundamental issues associated with the precious metal mining prior art, and, the vault storage prior art.

[026] More specifically, for the purposes of creating a vastly more secure and generally superior store of value and medium of exchange using precious metal deposits, the present invention teaches away from the use of the prior art of mining value extraction, and, the present invention also teaches away from the prior art of using vaults to store precious metals. The present invention instead teaches a method whereby the fundamental issues that beset the prior

2019100343 03 Apr 2019 art of precious metal value extraction by mining, such as but not limited to capital costs, operating costs, energy requirement, mine risk, time to extract value etc., are now exploited and nullified, by in effect being deployed to solve the fundamental issues that beset the prior art of using vaults to store precious metals.

[027] A precious metal deposit is identified. The deposit many be a naturally occurring deposit. The deposit may also be an artificial deposit such as but not limited to a mine tailings heap.

The deposit may be a discrete deposit. The deposit may also be a deposit that is contiguous with or connected in space or geologically or by other means to a currently mined or previously mined metal deposit. The precious metal deposit may contain one or a number of precious metals. The precious metal deposit may also contain a precious metal or precious metals together with non-precious metals or minerals.

[028] This method of precious metal deposit identification may include be but is not limited to the use of data collection methods such as: reference to history, geographical survey, geophysics, geochemistry, geology, drilling, remote sensing, surface prospecting, etc. The data used can be pre-existing data, or, data specifically commissioned for the project, or, a combination of both.

[029] The precious metal deposit is optionally investigated. The investigation method can include but is not limited to the use of geographical survey, geophysics, geochemistry, geology, drilling, remote sensing, surface prospecting, mining data etc. The data used can be pre-existing data, or, data specifically commissioned for the project, or, a combination of both.

2019100343 03 Apr 2019 [030] The quantity of precious metal in the deposit is estimated or determined. The method of estimating or determining the amount of precious metal in the deposit may include but is not limited to the creation of a model of the precious metal deposit. Ideally but not necessarily the model will be created in reference to the collected data that can include but is not limited to geographic survey, geophysics, geochemistry, geology, drilling, remote sensing, surface prospecting, mining data etc. Ideally but not necessarily the model will describe the precious metal deposit in three-dimensional space. More ideally but not necessarily the model will also include the density distribution of the precious metal in three-dimensional space. Even more ideally but not necessarily the model will further include the geological structure of the deposit. Most ideally but not necessarily the model will yet further include the geographical and geological structure of the deposit.

[031] Optionally, the economic feasibility of extracting the value of the precious metal deposit is estimated or determined. The method taught by the present invention is applicable to all precious metal deposits whether or not they can be economically mined. The present invention however teaches that elaborations of the present invention that exploit precious metal deposits that cannot be economically mined, provide the present invention with a number of significant benefits, namely:

• precious metal deposits that cannot be mined economically and would thus be ignored or abandoned without the present invention, can now be exploited by the method taught by the present invention • precious metal deposits that cannot be mined economically are effectively immune from theft even if attacked by state actors and military force. This is because:

2019100343 03 Apr 2019 o anyone seeking to steal the precious metals contained within the deposit would lose money by undertaking the mining processes necessary to remove the precious metals, which renders the theft of the precious metals counterproductive.

o any mining activity on the site could take decades to complete and would also be exceedingly vulnerable to disruption and or complete destruction during times of war and or civil disturbance [032] Ideally but not necessarily a precious metal deposit that cannot be economically mined as determined in the steps above is preferentially selected.

[033] Ideally but not necessarily the precious metal deposit is formally set aside or preserved or excluded from future mining activity, so that no mining of the precious deposit will take place in the future. More ideally, the special preserved status of the deposit will be formally recognised by the jurisdiction where the precious metal deposit is located.

[034] Optionally the precious metal deposit may be put into a pool of a number of precious metal deposits. The pool of precious metal deposits may consist of by way of non-limiting example, a number of precious metal deposits that are each located on a different continent. The pool of precious metal deposits may also by way of non-limiting example consist of a heterogenous mix of different types of precious metal deposits, such as but not limited to naturally occurring precious metal deposits and artificial precious metal deposits. Henceforth the term precious metal deposit will be used to indicate either a single precious metal deposit or a pool of precious metal deposits.

2019100343 03 Apr 2019 [035] The precious metal deposit is divided into shares or units. The number of shares could be equal to just one share and or a number of shares. A number of elaborations are taught by the present invention in this respect, these elaborations include:

• dividing the precious metal deposit as a whole, whereby each share of the deposit represents a portion or percentage of the entire precious metal deposit • dividing the precious metal deposit into specific locations in space whereby each share represents a one or a set of specific three-dimensional locations within the deposit • ideally but not necessarily each set of location in three-dimensional space will represent an approximately equal portion of the total amount of precious metal present in the deposit, by way of non-limiting examples, one ounce of gold or one kilogram of gold.

• where the precious metal deposit is owned by an entity such as but not limited to a corporation, the entity can be divided into shares • combinations of the above points [036] Information describing the precious metal deposit and the amount of precious metal or metals that it contains is then uploaded into a secure ledger, ideally this information is kept unencrypted. Information describing the share issue is then uploaded into a secure ledger, ideally this identification is kept unencrypted. Having these two types of data stored in an unencrypted form enables transparent reconciliation by the public of the number of shares issued, against the amount of precious metal held in the precious metal deposit. More ideally

2019100343 03 Apr 2019 the name of the owner of each share will be kept encrypted, so that the name of the owner of each share can remain completely anonymous.

[037] Optionally the secure ledger can be a proprietary secure ledger. Optionally the secure ledger can be a block-chain based secure ledger or other form of secure distributed ledger. Ideally, where secure distributed ledgers are employed, each node of the ledger will contain a full copy of all of the information noted above, this type of distributed ledger node is often referred to as a super node. Where a distributed ledger is used, ideally each node of the distributed ledger would be owned by a different person or entity, for example, each node of the distributed ledger could be owned by a different mining company. Ideally, nodes of the distributed ledger would be located in a number of different countries. Ideally, the entire distributed ledger would be owned by a foundation or similar, where each node owner would have a share in the control of the distributed ledger. Most ideally the nodes would be owned by a plethora of different entities, say a plethora of mining companies, and, some of the nodes would be located in a number of different countries, and, the entire distributed ledger would be owned in common by a foundation or similar comprised of the node owners.

[038] Ideally the information describing the precious metal deposit should include: statutory titles or licenses or to exploit the precious metal deposit, the number and type of shares issues for the deposit, an encrypted list of share owners, the location of the precious metal deposit, and, the amount of precious metal or precious metals estimated or determined to be contained within the precious metal deposit. More ideally any information that was used to estimate or determine the amount of precious metal or metals in the precious metal deposit should also be

2019100343 03 Apr 2019 uploaded into the secure ledger. Most ideally all the pertinent information collected in relation to the precious metal deposit should be uploaded into the secure ledger, for example:

• license agreements to allow exploitation of the precious metal deposit • data collected in relation to the precious metal deposit (map, coordinate data, prospecting information, geophysical information, geological information, geochemical information, remote sensing information, drilling, mining data etc.) • any model or models related to the precious metal deposit • any environmental impact assessments relating to the precious metal deposit • any economic assessments relating to the viability of mining the precious metal deposit • description of the shares structure relating to the precious metal deposit including:

o the nature of the of shares o the number of shares relating to the deposit o a list of initial share owners [039] As the shares in the precious metal deposit are sold, or otherwise change hands, changes to the ownership of shares are uploaded to the secure ledger.

[040] As the precious metal deposit location is effectively immune to theft even if attacked by state actors and military forces, it is now possible to enable third parties seeking to audit the precious metal deposit essentially unrestricted access to the precious metal deposit without any threat to the security of the precious metal deposit.

2019100343 03 Apr 2019 [041] Optionally the precious metal deposit can be audited. Ideally but not necessarily the audit will be conducted by third parties. More ideally but not necessarily, any data created by an audit of the precious metal deposit, and or, by an audit of the secure ledger, will be added to the secure ledger.

Advantageous Effects of Invention [042] The present invention teaches a novel method of extracting, storing, auditing, and transferring the value of precious metal deposits to create a store of value and a medium of exchange, that is at once:

• vastly more secure for ultimate end users of the store of value and medium of exchange • orders of magnitude less capital intensive to set up • orders of magnitude less costly with respect to operating costs • orders of magnitude faster to set up • vastly less risky for investors • risk free with respect to miner safety • effectively zero impact on the environment • vastly more profitable to the mining industry and also the nation state that hosts the precious metal deposit

2019100343 03 Apr 2019 [043] The present invention also teaches a method that renders the store of precious metals and the ownership of the value of the precious metals effectively immune from theft and or counterfeiting, even if:

• the precious metal reserves should be attacked by forces such as but not limited to invading armies, revolutionary forces or corrupt government. This is because in the preferred elaboration of the present invention, precious metal deposits are selected preferentially so that the deposit cannot be mined at a profit. To steal the precious metals within the precious metal deposit is not practically possible, because it would cost more to mine the precious metal than the precious metal is worth. Further, to mine the precious metal would could take a billion dollars or more of capital investment, and, require several decades of uninterrupted mining operation, whilst loosing money on every unit of precious metal extracted from the precious metal deposit • the state or nation where the store of precious metals is located should fail or cease to exist. Even if the state or nation where the precious metal reserve is located should fail or cease to exist, the precious metal deposit is for the reasons described above immune to theft. Further, where the preferred elaboration of a secure distributed ledger is used to house the precious metal deposit information and the share information, entire copies of the information will be securely preserved in distributed ledger nodes located in other countries. In short then, it would be ‘business as usual’ for the novel store of value and medium of exchange as taught by the present invention.

• the company or companies that originally traded the precious metal shares should fail cease to exist, the precious metal deposit is for the reasons described above immune to theft. Further, where the preferred elaboration of a secure distributed ledger is used to house the precious metal deposit information and the share information, entire copies of the information will be securely preserved in distributed ledger nodes located in other

2019100343 03 Apr 2019 countries and operated by other companies. In short then, it would be ‘business as usual’ for the novel store of value and medium of exchange as taught by the present invention.

[044] The present invention teaches a method that allows effectively unrestricted access by third parties to the precious metal reserve in order to enable independent auditors to validate the quantity and integrity of the precious metal reserve. This type of access is made possible by the fact that the physical precious metal reserve is effectively immune from theft (see above). A preferred elaboration of the present invention teaches that ownership of the precious metal deposit should ideally held within a blockchain or other distributed ledger technology, where the public may have free access to the ledger to audit the total number of claims of ownership of the precious metal reserve at any time. In this elaboration of the invention the identification of each share in the precious metal reserve can be kept unencrypted to enable transparent reconciliation by the public of the number of shares issued against the amount of precious metal held in the precious metal deposit. A further preferred elaboration teaches that the name of the owner of each share can be kept encrypted, so that the name of the owner of each share can remain completely anonymous.

[045] A preferred elaboration of the present invention also teaches that every audit of the precious metal reserve should ideally be made public and more ideally that the audit information should be incorporated into a ledger where the audit information is freely available to the public to examine. In this manner the present invention teaches a means of maintaining and even increasing the confidence of the public in the security and integrity of the precious metal reserve over time, which ensures the future value and liquidity of the store of value and medium of exchange taught by the present invention.

2019100343 03 Apr 2019 [046] The present invention teaches a method that effectively eliminates the possibility of undisclosed fractional reserve selling of precious metal reserves by teaching a means of enabling the safe and secure audit of precious metal stocks and shares at effectively any time, by effectively anyone, without any impact on the security of the precious metal reserves whatsoever. Bullion banks in major Western financial centres operate fractional reserve systems whereby the same unit of physical precious metal reserve is over-sold, typically 20 times, to different unsuspecting clients. As all 20 clients leave ‘their’ precious metal reserve in the bullion bank vault for ‘safekeeping’, each of the 20 bullion bank clients remain unaware that ‘their’ unit of precious metal reserve has been sold 20 times over, and hence that ‘their’ unit of precious metal reserve is in fact subject to 20 separate claims of ownership. The bullion bank relies on the fact that in times of major crises, say an invasion, that the ‘owners’ of the precious metals will be unable to recover ‘their precious metal’, and or, that the bullion bank itself would be raided by the invading forces and all reserves of precious metals would be stolen by the invaders in short order thereby absolving the bullion bank of all liability. The upshot of the current situation that the bullion bank model of holding precious metal deposits as a store of value and as a means of exchange in order to weather times of major crisis, simply does not and cannot work.

[047] The present invention teaches a method that entirely removes the need to for expensive high security vaults for the storage of precious metal deposits used as a store of value and as a medium of exchange. Yet despite this, the present invention manages to create a store of value and or a medium of exchange that is effectively immune to theft, even if the precious metal deposit is attacked by military force.

2019100343 03 Apr 2019 [048] The present invention teaches a method that entirely removes the need to provide expensive monitoring and (armed) security for deposits of precious metals that are used as a store of value and as a medium of exchange. Yet despite this, the present invention manages to create a store of value and or a medium of exchange that is effectively immune to theft, even if the precious metal deposit is attacked by military force.

[049] The present invention teaches a method that reduces the need for capital investment to extract the value of a precious metal deposit use as a store of value and as a medium of exchange by at least one and more likely three or more orders of magnitude when compared to the current art.

[050] The present invention teaches a method that effectively eliminates all environmental damage associated with mining, the current method of precious value extraction of precious metal deposits that are used as a store of value and medium of exchange.

[051] The present invention teaches a method whereby a mining company or a consortium of mining companies that currently invest billions of dollars into extracting the value of precious metal deposits for the purposes of creating a store of value and a medium of exchange, are now able to extract the value of their precious metal deposits quickly and with no environmental impact, by using only 1/1,000 or less of the capital the previously required. The mining company or consortium is then able to:

2019100343 03 Apr 2019 • sell the extracted value of their precious metal deposit at a vast profit, by avoiding essentially all of the the costs and risks and risks associated with mining • monetise the extracted value of their precious metal deposit over the course of hours, days, or months, rather than the decades it would take using mining methods • sell the extracted value of their precious metal direct to the (say gold) market and thereby reap for the mining company the fees and premiums normally charged by bullion banks and others in the precious metal value distribution chain • charge ongoing fees in perpetuity on the resale of the extracted value of the precious metal reserve, thereby creating an ongoing revenue stream for the mining companies that has not hitherto existed [052] The present invention teaches a method that enables mining or other companies that hold precious metal deposits to benefit from the sale of the value of the precious metal as they do currently. The present invention further teaches a method whereby mining or other companies that hold precious metal deposits - that own all or part own the register where the value of the precious metal deposit is recorded and traded, can now also charge ongoing fees in perpetuity on the resale of the extracted value of the precious metal reserve. Thereby creating a new perpetual revenue stream for the company or companies that has not hitherto existed.

[053] The present invention teaches a method that enables countries that host precious metal deposits to benefit by charging royalties and or taxes on the sale of the extracted value of the precious metal deposit, as per the current art. The present invention further teaches a method whereby a country that hold precious metal deposit can now also charge ongoing royalties or

2019100343 03 Apr 2019 taxes or fees in perpetuity on the resale of the extracted value of the precious metal reserve, thereby creating a new perpetual revenue stream for country that has not hitherto existed.

Description of Embodiments [054] A list of the previously described alternate components of the present invention includes the use of:

• precious metal deposits that cannot be economically mined • precious metal deposits that can be economically mined • precious metal deposits that are discrete in space • precious metal deposits that are contiguous with another precious metal deposit that can also be a mined deposit • precious metal deposits that are naturally occurring • precious metal deposits that are artificial, for example tailings dams • the use of pooled deposits • the use of a proprietary secure ledger • the use of a secure distributed ledger • the use of a secure distributed ledger that is owned by a consortium of companies.

[055] It is apparent to those skilled in the art that to attempt to describe every possible elaboration of the present invention would be unwieldy. So only a limited number of examples will be presented herewith.

2019100343 03 Apr 2019 [056] Example 1

a) A person becomes aware of a potential deposit of gold in central Australia

b) Legal rights to exploit the area are obtained from the local authorities

c) The nature, scale and extent of the deposit is examined using data sourced from geology, geophysics, geochemistry, remote sensing, drilling etc.

d) A model of the deposit is created using the data that includes the density distribution of the precious metal in three-dimensional space.

e) The cost of mining, processing, smelting, transporting and securing the gold in the deposit is determined

f) It is determined that the gold deposit cannot be mined economically

g) The authorities formally agree to set aside the despite to preserve the deposit from mining in perpetuity

h) The model of the gold deposit is then subdivided into a number of equal shares, whereupon each share represented one kilogram of gold.

i) All of the data in the steps (a - h) above is then entered into a secure block chain register

j) Sale and transfer of ownership of the shares is recorded in the secure blockchain register

k) If required the deposit can be audited at any time via a combination of geology, geophysics, geochemistry, remote sensing, drilling etc.

l) All audit data is then added to the secure register

2019100343 03 Apr 2019 [057] Example 2

a) A person becomes aware of a potential deposit of platinum on an asteroid

b) Legal rights to exploit the asteroid are obtained from the authorities

c) The orbit of the asteroid and the nature, scale, and extent of the platinum deposit is examined using data sourced from astrophysics, geology, geophysics, geochemistry, remote sensing, drilling etc.

d) A model of the platinum deposit is created using the data and includes the density distribution of the platinum deposit in three-dimensional space

e) The cost of mining, processing, smelting, transporting and securing the platinum back to earth is determined

f) It is determined that the platinum deposit cannot be mined economically

g) The authorities agree to preserve the asteroid in perpetuity to prevent mining of the asteroid

h) The model of the platinum deposit on the asteroid is then subdivided into a number of equal shares, whereupon each share represents a mass of one kilogram of platinum

i) All of the data in the steps (a - h) above is then entered into a secure block chain register

j) Sale and transfer of ownership of the shares is recorded in the secure blockchain register

k) If required the deposit can be audited at any time via a combination of geology, geophysics, geochemistry, astrophysics, remote sensing, drilling etc.

l) All audit data is then added to the secure blockchain register τι

2019100343 03 Apr 2019 [058] Example 3

a) A person becomes aware of a potential mineral deposit of gold in a country in Africa

b) Legal rights to exploit the area are obtained from the local authorities and the authorities agree to preserve the area free from mining in perpetuity

c) The location of the deposit and the nature, scale and extent of the deposit is examined using data sourced from geology, geophysics, geochemistry, remote sensing, drilling etc.

d) A model of the gold deposit is created using the data. The model will include the density distribution of the gold in three-dimensional space and the geological structure of the gold deposit.

e) The cost of mining, processing, smelting, transporting and securing the gold is determined

f) It is determined that the gold deposit cannot be mined economically

g) The model of the gold deposit is then subdivided into a number of equal shares, whereupon each share represented one kilogram of gold

h) All of the data in the steps (a - g) above is then entered into a secure block chain register

i) Sale and transfer of ownership of the shares is recorded in the secure blockchain register

j) The country in Africa undergoes a revolution

k) The revolutionaries raid bank vaults, stealing all stocks of gold

l) The local and international owners of the gold stored in vaults in the African country suffer a total loss

2019100343 03 Apr 2019

m) The revolutionaries attempt to mine the gold deposit in order steal the gold to gain hard currency

n) Extraction of the gold from the deposit however would cost more than value of the gold extracted, so the revolutionaries abandon the project

o) The owners of the deposit shares suffer no loss whatsoever

p) Exchange of the deposit shares on the blockchain register continues without interruption

q) Even though the gold deposit is not in any danger, the owners of the deposit shares keep watch on the deposit via the use of satellite imaging

r) After the revolutionaries are ousted, the gold deposit is physically audited by third parties via a combination of geology, geophysics, geochemistry, remote sensing, drilling etc.

s) All audit data is then added to the secure register, which ideally is a blockchain register

END

Claims (9)

1. Claims

   1 A method of creating a store of value and medium of exchange via the use of precious metal deposits wherein the precious metal deposit consists of naturally occurring deposit of at least precious metal or metals, and, where the precious metal deposit (or a specific portion of the precious metal deposit) is specifically left in situ, that is when the precious metal deposit (or the specific portion of the precious metal deposit) is not mined and or where the precious metal or metals are not otherwise extracted from the precious metal deposit
2. 2 A method according to claim 1 wherein the precious metal deposit, or a specific portion of a precious metal deposit, is selected in order to preclude its future mining or the future extraction of the precious metals by other means, for example by selecting a deposit that is inaccessible, and or by selecting a deposit that is incompatible with current or foreseeable mining or other precious metal extraction technology, and or where the precious metal deposit cannot be mined by law.
3. 3 A method according to claim 1 wherein the information relating to and or describing the deposit portion and or the precious metals it holds, including but not limited to location data, titles, licences, geophysical data, geological data, drilling data, historical data, historical mining data, geological models, etc. is uploaded to a secure register or secure leger or distributed ledger
4. 4 A method according to claim 1 where the deposit or its precious metals are divided into shares or units of ownership
5. 5 A method according to claim 4 where the number and type of shares and other information describing the shares, such as not by limited to ownership of the shares, is uploaded to a secure register or secure ledger or distributed ledger

   2019100343 03 Apr 2019
6. 6 A method of creating a store of value and medium of exchange via the use of precious metal deposits wherein the precious metal deposit consists of at least an artificial deposit of precious metal or metals, such as but not limited to mining waste material, for example as a tailings heap, and, where the deposit is left in situ, that is where the deposit of precious metals is not subsequently mined and or where the precious metals are not otherwise extracted from the artificial deposit
7. 7 A method according to claim 6 wherein the information relating to the artificial deposit and or the precious metals it holds, including but not limited to location, titles, licences, geophysical data, geological data, drilling data, historical data, historical mining data etc. is uploaded to a secure register or secure ledger or distributed ledger
8. 8 A method according to claim 6 where the deposit is divided into shares or units of ownership
9. 9 A method according to claim 8 where the number and type of shares and other information describing the shares, including ownership, is uploaded to a secure register