Mass Capital Holdings

Terms and risks

A summary of the key terms. The master partnership terms and each partner's partnership supplement prevail.

Structure

Vehicle
A separate, numbered Mass Gold Partnership En Commandite for each partner, on common master terms
General partner
Mass Capital Holdings (Pty) Ltd
Operators
Licensed gold refineries, each under its own refinery agreement
Trading desks
South Africa, Zambia or both. If both, no more than 50% of deployed capital is on the Zambia desk.
Partner's liability
Limited to their contribution, provided they do not take part in managing the partnership or hold themselves out to anyone as a partner who manages it
How partners join
Personal invitation from Mass Capital only

Contribution and fees

Contribution
R2 200 000 minimum, R20 000 000 maximum per partner, deployed as it clears
Establishment fee
2% + VAT to Mass Capital, once-off
Operator fee
2% + VAT where the refinery is VAT registered, to the refinery used, once-off
Refinery share
Set per refinery in its refinery agreement. It comes off before the partner's profit.
Management fees and profit split
Negotiated per partner and set in each partnership supplement. Trading losses are carried forward and recovered from later profit first.

Distributions and exit

Distributions
Paid monthly from realised trading profit, after any carried-forward losses, with a monthly statement. A month's distribution can be nil.
Lock-in
12 months per contribution, then withdrawal on 90 days' written notice
Insurance
Partnership gold must be insured for full replacement value, in the vault and in transit, subject to policy terms. No gold is bought until cover is in place.

Principal risks

Trading

  • Results are not guaranteed. Partnership gold must be insured for its full value, but trading results, and so distributions and the value of a partner's capital account, are not.
  • Distributions vary. They come only from realised trading profit.
  • Volume and margin. Supply, assay results and buyer pricing can reduce margins.
  • Gold price. A fall while stock is held can cause losses.

Counterparties and access

  • Operators. Partners depend on the refineries' performance, licences and solvency. A refinery's default is not insured.
  • Custody. Stock is held in the refineries' vaults and must be insured for full value. Claims are subject to policy terms.
  • Liquidity. Capital is locked in for 12 months, then needs 90 days' notice. Large withdrawals may be paid in stages, and a partner receives their adjusted capital account, not necessarily their original contribution.
  • Changes in law. New laws may affect the partnerships.

Next: Joining