How a Mineral Purchase Works: Assay, KYC, Origin Documents and Responsible Sourcing
A broker’s view of a compliant mineral purchase, from specification to payment.
This article is for general information only. It is not an offer, financial or legal advice, and no outcome or return is guaranteed.
1. Start with a clear specification
A serious enquiry names the product and its form (for example, gold or silver ore or concentrate), the grade or purity, the quantity, the Incoterm and the delivery point. Without these, no seller can make a meaningful offer.
2. Know your counterparty (KYC/AML)
Both sides identify themselves before any introduction: company documents, beneficial ownership, authorised signatories and, where relevant, the source of funds. A counterparty that refuses KYC is not a counterparty.
3. Origin and chain-of-custody documents
The seller shows that the material was extracted and sold lawfully.
- Mining concession or title and operating permits
- Export permits and certificates of origin
- Transport and warehouse records (chain of custody)
4. Independent assay and inspection
An independent laboratory or inspection company samples and analyses the material. Buyer and seller agree on the laboratory, the sampling method and, if results differ, an umpire (arbitration) assay.
5. Responsible sourcing
Responsible sourcing follows the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. For refined precious metals, refiners also apply the LBMA Responsible Gold and Responsible Silver Guidance.
6. Sanctions screening
All parties, vessels where relevant, and the origin of the material are screened against sanctions lists such as those of OFAC, the UN, the EU and the UK.
7. Red flags
- Gold or silver offered “without papers”
- Prices far below the market
- Requests for payment in advance without a contract
- “Mandates” or intermediaries that cannot be verified
8. Contract, delivery and payment
Buyer and seller sign the sale and purchase contract directly. Delivery follows the agreed Incoterm and payment is made through the bank instruments agreed in the contract. The broker is paid a commission under a signed agreement and never asks for upfront fees.