The Problem

Gold One treasury became dissatisfied with the spreadsheet and manual support systems in use by their treasury service provider: it was taking hours to complete transactions, and this was found to be quite unacceptable in the volatile conditions of the FX and commodities markets.  All the system’s reports had to be interpreted and processed before they were usable, so the Gold One treasury did not have a dependable and up-to-date record of their risk exposures and hedging operations.  In addition, the platform was quite unsuitable to support Gold One’s plans to develop the scope and sophistication of their treasury operations.  The levels of operational and market risk exposures were unacceptable. In addition, the platform was quite unsuitable to support Gold One’s plans to develop the scope and sophistication of their treasury operations.

The Solution

Accordingly, Gold One initiated a project to select a partner to provide treasury services, to complement their in-house team’s skills, and to provide additional expert resources and effective systems support.

TreasuryONE’s service offering integrates a powerful treasury management system, IT2, with the provision of a full range of front, middle and back-office treasury services delivered by their professional team.  This scalable, full-service provision has enabled a solution to be implemented in which Gold One and TreasuryONE operate seamlessly as a team to fulfil Gold One’s best practice operating objectives for their treasury, with TreasuryONE providing the set of services which Gold One needs to fulfil its treasury mandate, in a very timely and cost-effective manner.

Gold One performs debt and capital management operations in house, sets risk policy, and maintains a real-time view of positions, exposures and risks through IT2’s web-based facilities.

TreasuryONE is responsible for cash management operations, and for Gold and FX dealing.  Dealing operations and payments processing are performed in strict compliance with Gold One’s treasury policy, including the real-time management of counterparty limits and exposures.  Together, Gold One and TreasuryONE work to plan and execute hedges and mobilise cash to protect the earnings and profits generated by Gold One’s commercial operations.

The TreasuryONE team takes care of back-office administration, including confirmation management, settlements execution, reconciliation and treasury accounting.  The IT2 TMS provides full support, including real-time database updates, the generation of fully automated on-demand operational and management reporting, and transparent and automated process management, all performed to best practice treasury process audit standards.

The state-of-the-art technology platform enables dealers and treasurers to concentrate on their professional duties.  They are liberated from struggling with spreadsheets and worrying about data processing and control.  IT2’s transparent and user-friendly workflow management facilities have facilitated a new treasury processing environment, which has readily enabled Gold One to establish efficient automated treasury operations and to focus on achieving more strategic, value-adding goals.  This scope and quality of this result are simply not possible under more traditional models of vendor-client outsourcing relationships – which lack the underpinning of contemporary finance technology and the broad base of treasury management skills needed for success.

Operational Benefits

Among the benefits that Gold One treasury is now enjoying, effective reporting represents a major step forward.  The new ability to create bespoke reporting, slicing and dicing a complex set of data as required, permits the team to research new ideas and to respond to ad hoc enquiries quickly and easily, in this transparent, flexible and well-controlled environment.

Gold One has developed new levels of insight into its derivative positions, enabling the team to make better-informed decisions, in demanding market conditions.  The benefits feed the bottom line directly.

Today, Gold One enjoys the visibility of an accurate daily cash position over all its bank accounts.  This advance alone provides substantial decision support value, helping to assure that cash can be accurately mobilised to where it is needed, optimising financing and investment operations and interest income/expense management.

Furthermore, IT2’s web-based facilities provide a straightforward method for Gold One’s operating divisions to submit and update cash forecasts: treasury now has a sound basis for planning future cash management operations with precision, based on real insight into the evolving cash situation.  The system automatically maintains and reports treasury KPIs (Key Performance Indicators) so that the management team has an objective and accurate view of forecast quality, and of the actual operating performance against budget targets.

Gold One’s treasury KPIs enable processes to be evaluated and hence improved where necessary – as the quality of the base information and subsequent analysis is now very good.  This enhanced environment has enabled Gold One to elevate the importance of cash flow forecasting across the organisation, so that executives are now in part evaluated on the accuracy of their team’s cash forecast performance, to the tangible benefit of the company’s cash management results.  Relatively few companies globally have been able to achieve such results.

Strategic Benefits

Gold One’s partnership with TreasuryONE has yielded so much more than the initial value of outsourcing some key treasury activities to a strong professional partner.

The Gold One and TreasuryONE teams have integrated to form a true operational partnership, in which TreasuryONE’s professional service provision is now embedded into Gold One’s finance operation.  On a daily basis, TreasuryONE’s market skills and experience, treasury management expertise and operational capabilities add value to Gold One’s financial performance, supporting the treasury team’s activities in several complementary ways.

Working with TreasuryONE’s market specialists, Gold One’s dealing volume has become much more efficient and cost-effective, achieving savings of around 90% compared with the previous cost level.  The TreasuryONE dealing desk has initiated new execution approaches to Gold One’s hedging mechanism which have contributed to this powerful cost reduction result, whilst fulfilling the risk management objectives of Gold One’s treasury policy.

Gold One enjoys the benefits of world-class treasury operations in a most cost-effective way, through participating in an efficient and professional treasury service, which is underpinned by a superb technology platform, IT2.  The IT2 TMS provides Gold One treasury with a world-class management system that controls, secures and documents all operations.  The Gold One treasury team enjoys 24/7 access to a real-time system that supplies and controls the information, policy and regulatory compliance processes and risk analysis needed for superior treasury performance in today’s turbulent and competitive market environment.

Gold One has achieved a significant upgrade to the quality and performance of its treasury operations, through establishing integrated value-adding operations with a trusted professional treasury services partner – TreasuryONE.

About Gold One: Gold One Group Limited is a mining group that is focused on developing and mining low technical risk, high margin precious metal resources in diversified jurisdictions. The company’s flagship Modder East gold mine, commissioned in 2009, distinguishes itself from most other gold mines in South Africa owing to its shallow nature (300 to 500 metres below the surface) and continues to ramp up production. The company’s flagship Modder East gold mine was advanced from a greenfield exploration project through to production and is the only new mine to be built in South Africa’s historically rich East Rand Goldfield in over 30 years.