How to Make Money From Gold Without Mining It

1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Great Eagle Gold Corp. 
2. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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The idea is not much different than gold-backed currency — but for the 21st century.

Gold has been a store of wealth for thousands of years, but the valuations of gold mining stocks have sunk 40% since 2009. Younger investors are shrinking from the industry's environmental footprints, where mining 1 kilogram uses 265,000 liters of water and mining enough for a gold ring can create 20 tons of toxic waste.

But what if that gold didn't have to be mined? Enter NatGold Digital Ltd. with its plans to transform underground gold resources into "tradable, compliant tokens — NatGold Tokens — regulatory compliant trading platforms. This innovative approach unlocks value without physical extraction, aligning seamless with ESG principles."

NatGold founder and Chief Executive Officer Anthony Wile said every token would be on the blockchain and "100% backed by certified in-ground gold resources; everything that we are doing is 100 percent transparent, auditable, and completely regulatory compliant."

"We are providing investors a pure way to invest in gold that doesn't cause you to have to sacrifice your values or your ethics or your morality," he told Streetwise Reports. "We're all looking to have a cleaner and healthier planet."

'Gold Will Always Have Value'

Often referred to as environmental, social, and governance (ESG) factors, a study by European ETF provider Tabula this year found that only one in four institutional and wealth managers believe gold miners are "very good" at adhering to ESG standards, with 24% of investors anticipating dramatic improvements in the situation over the next five years.

Jason Williams of Wealth Daily wrote on December 13 that the "convergence of environmental degradation, ethical challenges, regulatory pressure, and declining investment (has created) the perfect storm for disruption" of the gold mining industry.

"It's not just an opportunity; it's an imperative," he wrote. "The world is waking up to gold's tarnished legacy — and whoever solves these entrenched problems stands to lead a revolution in the industry. After all, gold will always have value, but the way we produce it needs to change. And that's where NatGold comes into the picture."

NatGold Digital entered into a strategic supply arrangement with Canadian gold miner Great Eagle Gold Corp. (GEGC: TSX.V; GEGCF: OTC; GI8: FRA). While NatGold Digital is the creator and operator of the digital mining ecosystem and also responsible for the demand-side market creation for the NatGold Token, Great Eagle represents the supply side of the NatGold ecosystem — the side that supplies the ecosystem with qualifying mining titles containing certified gold resources that are tokenized into NatGold Tokens.

The agreement offers multiple mutual benefits, but the most significant is its focus on developing a stable and friendly supply of NatGold Tokens to the marketplace, with the goal of ensuring market stability for the tokens. Great Eagle benefits by having the right to supply sufficient certified gold resources to generate the first supply of 2.5 million NatGold Tokens — a significant market leadership advantage before the NatGold digital mining ecosystem opens its doors for the rest of the global mining industry to participate. Even then, it's important to note that Great Eagle has the equivalent of a "Tokenization Fastpass" (think Disney) that ushers them to the front of the tokenization queue for a period of five years.

"The innovative NatGold model introduces a paradigm shift in how gold is valued and utilized," Great Eagle Chief Executive Officer Andrew Fletcher said. "Traditionally, mined gold derives its value from its physical presence above ground. … The NatGold digital mining ecosystem challenges this notion by unlocking value from certified in-ground gold resources through tokenization."

Using the Blockchain

But what is a blockchain, and how does this all work? According to Wealth Daily, a blockchain is "a distributed public ledger. Just picture it like a giant jumbled spiderweb — there's no start or center and no central controlling entity."

"In the world of digital currency, this is a huge benefit to many investors and users who don't like the idea of their money being tied to a central government or bank," the website noted.

Tokenization is simply "converting the rights of an asset to a token on a blockchain."

The world's largest asset manager, BlackRock, is aiming to tokenize US$10 trillion of its assets.

"We believe that next step going forward will be the tokenization of financial assets," Chief Executive Officer Larry Fink has said. "Every stock, every bond will have its own (number), it will be on one general ledger, (and) every investor, you and I, will have our own number."

In a fireside chat with Bretton Woods Committee, Securitize CEO and cofounder Carlos Domingo said that tokenizations is not that different than ownership of certain assets now, like deeds for homes and other real estate or securities recorded by an issuer.

"Tokenization is nothing else but a very efficient ledger that is that is public" but also digitally secure, he said.

Much of what asset managers do is to raise and invest money, he said. "But they also have to record the ownership of everything," he said. "They have to move it around, and that turns out to be a very complicated process with a lot of intermediaries involved, with a lot of reconciliation errors, manual processes, etc."

"Gold needs to keep up with the times. How?" asked entrepreneur, business author, and seasoned capital markets professional Alex Tapscott, who co-wrote the bestselling book Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business, and the World, and the more recent Wall Street Journal Bestseller Web3. "The answer lies in blockchain, the technology behind Bitcoin. Blockchains allow us to program a digital coin or 'token' to represent anything of value — stocks, bonds, art, gold — and make it accessible to anyone without the need for intermediaries."

Real-World Assets

According to a new book called The Dawn of NatGold by Wealth Daily's Williams and Brian Hicks, the security of the blockchain and ESG benefits are attracting younger investors, making gold a perfect candidate for the "revolution."

"With the global gold market estimated to exceed US$12 trillion in value, this transformation represents an unprecedented opportunity for those who act decisively to create generational wealth," the authors wrote.

Investing in NatGold offers these young investors improvements over cryptocurrency investment, giving them "real-world assets" that are "backed by tangible assets."

"This distinction is crucial. Tokenized real-world assets bridge the gap between traditional finance and the digital economy, providing a clear pathway for mainstream adoption," they wrote. "Blockchain technology ensures transparency and security, while regulatory frameworks safeguard investor confidence. For investors, this means they can access the benefits of digital innovation without sacrificing the stability and oversight of conventional systems."

Even financial powerhouse Goldman Sachs is in the process of offering tokenization of assets to customers, such as money market funds or real estate holdings, the company's global head for digital assets, Matthew McDermott, told Fortune in July.

The company planned at least three tokenization projects with major clients, including one in the U.S., he said.

McDermott said the key to success will be creating products that investors want. "There's no point doing it just for the sake of it," he told Fortune . "The definite feedback is, this is something that actually will change the nature of how they can invest."

Tapscott said that there are still some questions to be answered about the process, for instance, "you can't forge a wedding band" from a token. However, the process intuitively makes sense, he said. 

"The gold industry spends billions pulling gold out of the ground, only to bury it again in vaults and banks," Tapscott told Streetwise Reports. "Why not disintermediate the digging?"

Partner Great Eagle Creating Database of Targets

As mentioned above, Great Eagle's exclusivity agreement has firmly positioned the company as the sole supplier of the first 2.5 million NatGold Tokens minted. Their approach is a low-cost acquisition model, securing options on certified gold deposits within the existing production-or-bust gold mining framework. The costs incurred are a fraction of the anticipated market value that these gold resources will command once transformed into tokenized digital assets.

"The estimated US$45 cost per NatGold Token equivalent reflects the acquisition cost of certified gold resources based on tokenization ratios and industry averages," Great Eagle's Fletcher said. "By multiplying this US$45 cost against the 2.5 million NatGold Tokens they will supply, Great Eagle Gold effectively controls approximately US$112.5 million worth of certified gold resources."

To meet NatGold's stringent requirements for tokenization and trustworthiness, Great Eagle is focusing exclusively on acquiring NI 43-101 certified gold resources — the only type of deposits that qualify for tokenization within the NatGold digital mining ecosystem. This standard is globally recognized as the "gold standard" of independently audited gold certification reports.

Fletcher stated that the company has developed a proprietary acquisition strategy. "Over the past year, Great Eagle's in-house team of data analysts has compiled a comprehensive database of acquisition targets. This 'universe of targets' represents projects that meet specific criteria essential for NatGold Digital's tokenization process."

Based on a proprietary scoring system to evaluate targets, Great Eagle has analyzed and qualified more than 300 certified gold deposits mostly in North America.

According to Williams of Wealth Daily in his December piece, the companies are "setting the standard for responsible market development." Mining companies retain 85% of tokens minted from their gold deposits and NatGold and Great Eagle will collaborate to "ensure token liquidity is introduced carefully, fostering trust and investor confidence."

NatGold's Wile said there is a "collaborative relationship" between the companies' boards and management teams, but NatGold "has been built for the entire gold mining industry. It just happens that Great Eagle Gold is a company that recognized early that this is an opportunity they want to be a part of. They want to lead, and they want to make their name in the space."

Wile said upcoming catalysts for NatGold include launching the NatGold ecosystem, the first tokenization event, pursuing a public listing for the company.

Safe-Haven Demand to Remain High in New Year

Gold itself is enjoying a bull market, according to experts, although prices "dipped in thin trade on Monday as traders awaited fresh catalysts, including next week's U.S. economic data, which could influence the Federal Reserve's interest rate outlook for 2025, as well as policies from incoming President Donald Trump," Reuters reported on December 30, 2024.

Spot gold fell 0.6% to US$2,604.49 per ounce and U.S. gold futures settled 0.5% lower at US$2,618.10.

Ongoing safe-haven demand for gold is expected to remain high into 2025, the wire service reported, as central banks continue to buy it, and the U.S. debt continues to increase.

"Gold has surged nearly 27% this year, reaching a record high of US$2,790.15 on October 31, as investors sought the yellow metal amid geopolitical uncertainty and U.S. rate cuts," Reuters reported.

According to Fortune Business Insights, the global tokenization market — which also includes other assets like real estate and art — was valued at $US2.81 billion in 2023 and is projected to grow from $US3.32 billion in 2024 to $US13.2 billion by 2032, exhibiting a CAGR of 18.8% during the forecast period.

After the pandemic, businesses started "digitizing their processes to ensure that disruptions did not lead to further delays or stagnation processes" under future closures.