Madison Metals Announces New Decentralized Uranium Backed NFT
Madison Metals’ Executive Chairman and CEO, Duane Parnham, has always been known as an innovator in mining. His latest gambit linking pounds-in-the-ground with non-fungible tokens (NFTs) is his latest idea to attract attention in the generally stodgy world of uranium mining.
On September 30, Mattison Metals announced the signing of a first-of-its-kind uranium forward sales agreement with Lux Partners Ltd. Lux Partners operates Lux networkthe first decentralized blockchain integrated with and powered by a network of regulated banking and remittance partners.
The five-year exclusive supply agreement provides for the supply of up to 20 million pounds of U 3 O 8 from Madison’s uranium projects in Namibia after the start of commercial production. The fulfillment of U 3 O 8 delivery would return the first ever uranium-backed non-fungible tokens. Lux will initially tokenize £7.65 million U 3 O 8 that Madison has contributed to the Lux partnership, followed by a further £12.35m to be minted as conditions warrant.
The tokenization of pounds in the ground has a myriad of benefits for Madison Metals and unitholders, such as:
• Exposing the unit owners to upside in the uranium market while earning additional fees from lending and liquidity
• Provide non-dilutive capital to the Company to explore, develop and mine its properties
• To potentially expand Madison’s investor base through exposure to investors in the crypto market
Currently, sales and deliveries of uranium are usually fulfilled via forward contracts. A futures contract is a customized contract between two parties to buy or sell an asset at a specified price at a future date. They can be used for hedging or speculation, although its non-standard nature makes it particularly suitable for hedging.
Similar to a futures contract, uranium contracts are also traded as futures market contracts on exchanges such as COMEX. Futures contracts consist of one delivery on a future defined date and typically priced at or near the published spot market price at the time of purchase. A futures contract involves both a buyer and a seller – similar to an options contract. However, unlike options that may become worthless at expiration, a buyer is obligated to purchase and receive the underlying asset and the seller of the futures contract is obligated to deliver and deliver the underlying asset when the contract expires.
Now, through the tokenization of their developing uranium deposit in Namibia, Madison Metals is bringing contracts to the blockchain. However, just like a traditional miner, its main obligation remains to deliver the futures contract obligations it has committed to through NFT issuance facilitated by Lux.
Click the embedded link to see more of our introductory interview with Madison Metals Executive Chairman and CEO, Duane Parnham, in his own words.
