In the offshore commodity world—especially in physical gold transactions—deals succeed not because of endless documentation or drawn-out negotiations, but because of clear procedures, fast execution, and strong principal-to-principal relationships. The truth is, most deals fall apart because intermediaries delay introductions or overcomplicate what should be a straightforward process.
Here are the key steps to closing an offshore gold deal—and why remembering the Golden Rule (“the one with the gold makes the rules”) is critical.
1. Vet the Buyer’s Proof of Funds (POF)
Before anything else, make sure the buyer has the capacity to perform. Proof of Funds (POF) must be fresh, verifiable, and traceable. This could be a recent bank statement, a screen share with a recognized institution, or a readiness letter. If the money isn’t there, the deal isn’t real.
2. Assure the Source of the SKR
The next step is verifying the Safe Keeping Receipt (SKR), which proves the gold exists and is secured—often in a recognized vault such as Brinks, Loomis, or a bonded Free Trade Zone. A proper SKR includes serial numbers, assays, origin information, and photographic proof. Without this, there’s no legitimate product to trade.
3. Present Terms, Procedures, and Process
Lay out the Terms and Procedures (T&P) clearly. This includes the quantity, purity (typically 999.9), location, discount (often Spot -X%), logistics (F.O.B. or CIF), and payment mechanism. Use bullet points, keep it concise, and use WhatsApp or secure messaging to move fast. Don’t hide behind vague language—clarity builds trust.
4. Draft the SPA (Special Purchase Agreement)
Once both sides are aligned on terms, the first formal document is the Special Purchase Agreement (SPA). This outlines the transaction details, responsibilities, and deliverables. It’s the legal foundation for the trade. Don’t overcomplicate it. The goal is mutual understanding, not legal gymnastics.
5. Follow with the PSA (Profit Sharing Agreement)
In some structured deals—especially when intermediaries or private partners are involved—a Profit Sharing Agreement (PSA) follows the SPA. This agreement defines how profits will be distributed among stakeholders, including brokers and facilitators. This step ensures everyone’s role and compensation is transparent, reducing conflict later.
6. Introduce Buyer to Seller—Then Get Out of the Way
Here’s where many intermediaries ruin the deal: trying to control the conversation. Once everything’s aligned, introduce the buyer and seller directly and step back. You’ve done your job. Don’t hover, interfere, or delay. The principals need space to finalize and execute the deal. Secure your position with a fee agreement beforehand and trust the process.
7. Forget the NDNCA Overkill
NDNCA (Non-Disclosure, Non-Circumvention Agreements) are often unnecessary and overused. In reality, professional players don’t need NDNCAs to do good business. They rely on reputation, performance, and track record. If you bring real value to the table, you’ll get paid.
8. Speed Wins. Delay Kills.
The longer it takes to introduce the principals, the greater the chance the deal falls apart. Gold is a volatile commodity. Prices shift, buyers move on, and opportunities vanish. Time is your enemy—decisiveness is your edge.
And above all, remember the Golden Rule: the one with the gold makes the rules.
At Invest Offshore, we connect serious actors in the commodity and resource space, particularly across West Africa’s Copperbelt Region. If you’re ready to close—not just talk—get in touch.
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