sa bullion ifa introduction presentation

IFA INTRODUCTION PRESENTATION

WHO WE ARE:

• FSB LICENSED INVESMENT MANAGER

• INVEST EXCLUSIVELY IN PRIMARY MARKET FOR

KRUGERRANDS

• MANDATED BY SPECIAL DISPENSATION OF SA RESERVE BANK

• OPERATE WITH RAND REFINERY

• DISTRIBUTE VIA IFAs

THE CASE FOR GOLD: THE ECONOMIC OUTLOOK• GENERATIONAL ECONOMIC PROBLEMS

– Deleveraging– Weak economies– Low interest rates– High public debt-raising– Persistent easy money

 • ECONOMIES HAVE TO REFLATE

• DEBTS HAVE TO BE INFLATED AWAY

• CURRENCIES HAVE TO TAKE THE PAIN • THE SOUTH AFRICAN RAND HAS ITS CHALLENGES AS A COMMODITY

CURRENCY • GOLD IS BENEFITING AND WILL CONTINUE TO BENEFIT AS THE

CURRENCY FOR BAD TIMES…

HOW HAS THE GOLD PRICE REACTED?

GOLD PERFORMANCE TABLE

Date US$ Gold Price US$ Gold Price Performance ZAR Gold Price ZAR Gold Price

Performance

31-Dec-04 $436   R 2 454  31-Dec-05 $513 18% R 3 254 33%31-Dec-06 $632 23% R 4 456 37%31-Dec-07 $834 32% R 5 698 28%31-Dec-08 $870 4% R 8 041 41%31-Dec-09 $1 088 25% R 8 308 3%31-Dec-10 $1 406 29% R 9 282 12%31-Dec-11 $1 531 9% R 13 062 41%31-Dec-12 $1 658 8% R 14 044 8%31-Dec-13 $1 205 -27% R 12 386 -12%31-Dec-14 $1 206 0% R 13 680 10%

US$ ZAR10 Year Annualized Performance:

12% 20%

WHY OWN PHYSICAL GOLD?

GOLD AS THE CURRENCY OF THE BAD TIMES

In the good times gold is a commodity. In the bad times gold is a currency.

COMPETITOR TO CASH

We do not see gold as an alternative to shares, bonds or property but as an

alternative to holding cash in the bank

SOLVENCY

Physical gold is a safe haven as it has no counterparty or credit risk ie. It

cannot go broke

PORTFOLIO DIVERSIFIER

In the ‘bad times’ gold should be a component of investment portfolios so as

to reduce risk and to benefit from its outperformance of cash

WHY THE KRUGERRAND IS THE IDEAL INSTRUMENT

LEGAL TENDER STATUS– Underwritten by SARB

NO VAT PAYABLE– All other forms of Gold Subject to 14% VAT

PERFECT LIQUIDITY– SA Bullion has guaranteed buyback arrangement with SARB

MOST WIDELY RECOGNIZED GOLD COIN WORLDWIDE

RAND HEDGE

SHORTCOMINGS OF THE RETAIL CHANNEL FOR KRUGERRANDS

SUPPLY

FRICTION CHARGES

LOGISTICS

HAZARD

THE SA BULLION VALUE PROPOSITION

• Proprietary supply of Krugerrands per SARB dispensation

• Wholesale pricing arrangement with Rand Refinery Limited

• Vaulting agreement with Rand Refinery Limited

• Insurance arranged with Lloyds of London

• Buy-back agreement with SA Reserve Bank

“UNBROKEN CHAIN OF INTEGRITY”

PRODUCT:THE BULLIONGOLD FACILITY

• Seamless transition Cash->Gold->Cash• Lump sum or recurring debit order contributions• Forms and processes similar to standard unit trust practice• Monthly statements and reports• Wholesale pricing guarantees lowest acquistion costs• Upfront and ongoing fees• Online view of funds and fund flows• Physical delivery option

ASSET ALLOCATION

• Interest Rates are repressed and will

remain so

• Cash will remain a poor investment

• Gold presents a safer alternative to cash in

the bank

• Investment returns on Gold will likely

continue to outperform cash

• We advocate a position of 50% of the cash

component of a portfolio to be held in

physical gold – typically 5%

FINANCIAL ADVISOR

Role – Advisory / Distribution / Intermediation Remuneration (a ‘first’ on physical gold) Weekly Commission runs Statements and reports Online viewing of funds and fund flows Marketing materials and supporting presentations Forms Website Ease of administration Established via FSP Contract

FEES

SA BULLION IFA PLATFORM

THE BULLIONGOLD FACILITY SA BULLION IFA

INITIAL FEES 1% 0% - 3.5%

ONGOING FEES (p.a.) 1.5% 0.5%

EXIT FEES 0.0% 0.0%

Gold Mining Companies

Rand Refinery Limited& SA Mint

SA Bullion SA Bullion Financial Advisor

Extraction Manufacturing Wholesale/Retail Distribution & Sales

Department of Minerals & Energy

South African Reserve Bank Financial Services Board South Africa

The SA Bullion Gold Beneficiation Chain

www.sabullion.co.za