June 17, 2024


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Non-extractive mining: Startup proposes using blockchain technology to leave gold in the cave

3 min read

Hector Casas, CTO of the Roela project, recounts that their initiative emerged as a result of various circumstances, as is often the case with innovative ideas. “One of our collaborators was a helicopter rescue pilot for miners, and from there came the idea to examine the gold market and its operation,” he narrates. He adds, “We understood that much of the gold extracted today is used as a reserve worldwide. Basically, the obtained metal is melted, transported by trucks and ships to reach a bank vault.” This entire process, he notes, seemed illogical to them as a “store of value.” The driving force behind the project created by Aurum41 in 2022, which is close to obtaining regulation to operate globally, explains it this way: “If you’re a bank customer in Australia and your gold is stored under a vault in Switzerland, you’ll never see it. Even though an entity assures its presence through its balance, you’re blindly trusting the bank.”

Therefore, he continues, they asked themselves, “Does it make sense to extract and go through all that process for gold to be used as a store of value?” Instead, they decided to “consult a geologist first,” who labeled them as “crazy.” However, he considered the idea excellent and decided to collaborate. “Even the miners themselves began to understand that it could be beneficial for them too, as gold is the metal we focus on. When a mining company extracts other metals, they use them in the industry, but this is not the case with gold,” says Casas.


‘Tokenizing’ gold

It is a unique way to tokenize unextracted gold, backing the security token with this valuable resource still in the earth. Casas adds that they faced two challenges or “needs.”
The first was to “certify that the gold is there.” This, he says, “can be easily achieved” thanks to the Canadian certification NI43-101, “a national instrument for disclosure standards for mining projects in Canada.”
Then, he adds, they had to “seek strong regulation.” And they found it in Gibraltar, which “is considered a global leader in digital assets to provide credibility in both aspects.”
Both certification and regulation are crucial to “support” their business model, Casas explains. “One certifies that the gold is where it should be; the other creates a financial argument or security token, controlled and regulated.” In other words, the mine’s content would not be vulnerable to hacks, duplications, or inventions.
Moreover, its ownership would be shared: once the company starts operating, web3 would allow access to a new technological layer of truth and digital ownership of gold. Currently, Casas continues, “we are in the process of obtaining that regulation, which will happen before the end of the year. We have five deposits at the moment, two in Argentina, one in Chile, and two in Mexico, and we are exploring other locations.”


Strategic partners

Furthermore, they aim to be considered strategic partners of large companies, rather than competitors. “Our hope is that this process can be replicated by large mining companies for undeveloped or economically unprofitable deposits. What we guarantee is that in our projects, that land will not be exploited.” In fact, they have added a social component to the non-extractive initiative, allocating a percentage of the sales of these properties to nearby communities to offset the lack of employment. For the founders of this innovative project, and for other entrepreneurs, a radically new moment has arrived: it is now technologically possible to tokenize polluting or costly activities that do not add value in the subsequent stages of the chain.

Published by Iraic.Info, news and information agency.

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