Verified gold suppliers in Africa: how to confirm a seller before you buy

What “verified” should mean

Many gold offers arrive with the word “verified” attached: a verified seller, verified documents, a verified assay. The word is only as good as the check behind it. A useful test is simple — who did the checking, and against what? A certificate the seller sends you has been checked by no one but the seller. A registry record you or your agent looked up yourselves has been checked against the source.

Our verification standard covers the counterparty, the material and the paperwork, and every engagement closes with a written recommendation.

Where to check a gold supplier, country by country

Company and licence records are kept by public bodies. The names differ by country; the principle does not.

Each country page goes into more detail: Tanzania, DR Congo, Kenya, Uganda, Zambia and West Africa.

Documents to ask a gold supplier for

Ask for these at the start. A supplier who can provide them quickly is organised; one who cannot is telling you something useful before you have spent anything.

• Certificate of incorporation and a current company extract from the registry
• Mining licence, or dealer’s or trading licence, covering gold and export
• Identity documents of the directors and the signatory, and proof the signatory may bind the company
• Where the seller is not the miner: the mandate from the owner of the gold, or the purchase records
• A recent assay certificate for the lot, with the laboratory’s name and report number
• Export permit or a description of how export will be arranged
• Bank details of the account that will receive payment, in the company’s own name

Having the documents is not the same as their being genuine. How to verify gold deal documents explains how each one is confirmed with its issuer.

Checking the licence: the defect we find most often

The most common problem with a gold supplier is not that the company does not exist. It is that the licence does not fit the deal: it has expired, it belongs to another company, it covers mining but not export, or it is a local-trading permit being used for an international sale. Each of these can be found in a day by checking the licence with the authority that issued it.

Confirm four things: the holder (is it the company you are dealing with?), the type (does it allow what is being offered?), the mineral (gold, specifically), and the dates (current today, and still current on the planned export date). See how to verify a mining licence.

Authority to sell: when the seller is not the owner

Much African gold is offered through intermediaries — brokers, agents, “mandates” and trading companies. That is normal. What matters is that each intermediary can show a written authority from the next person up the chain, back to the licensed holder of the gold, and that the holder confirms it directly.

A long chain is not a problem in itself, but every link adds a person who must be identified and screened. If the chain cannot be traced to a licensed holder, the lot cannot be verified.

Seeing and testing the gold

Photographs and videos sent by a seller show what the seller chose to show. Physical existence is confirmed when your own tester, or an independent one you appoint, sees the lot, counts and weighs it, tests it and seals it.

Testing combines several methods because each reads something different. XRF reads the surface; density measures the whole piece; fire assay at an accredited laboratory gives the reference figure for gold content. Doré and cast bars should be drilled or melted so the sample comes from inside. The detail is in gold testing methods compared.

Responsible sourcing: OECD and LBMA expectations

If the gold will be sold to a refinery or into the international market, the buyer will be asked about its origin. The OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas sets a five-step framework that most refiners and many banks follow, and the LBMA Responsible Gold Guidance applies it to refiners selling into London.

1. Establish strong company management systems for supply-chain due diligence.
2. Identify and assess risk in the supply chain.
3. Design and implement a strategy to respond to identified risks.
4. Carry out an independent third-party audit of due diligence, where required.
5. Report annually on supply-chain due diligence.

For a buyer, step 2 is where supplier verification sits: knowing where the gold was mined, who handled it and that the chain is documented. Our reports are written so they can be filed as part of that record.

Paying a gold supplier safely

Verification is most useful when the payment terms are built around it. The principles are the same whatever the instrument:

• Pay against confirmed results — the independent assay and the sealed weight — not against promises or the seller’s own papers.
• Pay into an account in the selling company’s own name, confirmed with the bank where possible.
• Avoid up-front fees for “registration”, “documentation” or “release” before the gold has been tested.
• Use an escrow, a letter of credit or a documentary collection where the size of the deal warrants it.
• Have your lawyer review the contract before signing, against the findings of supplier due diligence.

Having a gold supplier verified

We do not sell gold. We verify the supplier you are considering, on the ground, and report to you directly. Our field teams are based in Tanzania, Kenya, Uganda, Zambia, the DR Congo, Ghana and Sierra Leone and deploy anywhere in Africa, and every engagement is assessed against the Nairank Global Standard.

Send us the supplier’s name, what they are offering and any documents they have sent. We reply within 24 hours with a scope and a quotation; scoping is free. Start at supplier due diligence.