One of the things we are called upon is being able to monetize in-ground assets, such as gold mines, or any other asset that may be under the ground. The majority of owners with in-ground assets are "asset rich" and "cash poor". Since some of the assets can have substantial value to them, many brokers throughout the world believe you can take an in-ground asset, monetize it, or put an insurance wrap on the asset, then monetize it, and place the cash funds into a private banking program.
The truth of the matter and fact, is this proposed activity has never been done and the probability to get it done is nil. One the primary reasons why is to really know how much, in assets, is under the ground is hard to predict. The other aspect, is finding the appropriate insurance company to place an insurance wrap on the "predicted" assets which are under the ground. The other important part to realize is even if the asset owner was able to get an insurance wrap on the in-ground assets, it does not mean the wrap can be monetized. It would be a risky proposition for the owner for the reason an insurance wrap costs a substantial sum of money. To further clarify, the lender, or the one to monetize, the asset is taking a risk too.
As you can see, there are many facets involved, step by step, as to why this type of private banking transaction will not work. We will go through it step by step throughout our blog/article post.
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