PROCEDURES IN PURCHASING COMMODITIES
1. For us the fundamental approach in trying to assist the prospective buyers
is that we work with two important documents, viz the Letter Of Intent
(LOI) and a Bank?s Comfort Letter (BCL).
2. There are various reasons why the Mandate Holder and we chose
this Approach, the main being that we can quickly establish the financial
capacity of the buyer to transact, and as such the deal can be concluded
quickly without waste of time and resources.
3. Perhaps as an alternative to the above, where prospective buyers feel
uneasy about their information being given to Third Parties etc. is to submit
the LOI to us and the BCL to the buyer?s Attorney/s who can then
communicate with us in writing to the effect that he / she is holding such a
BCL in order to purchase a specific mine / commodity and that the BCL
shows sufficient funds to cover the transaction. Note that there is cost to
be borne by the buyer in this context.
4. This protocol to be followed is the simplest and most effective for us and
many others who follow it.