The curious case of digital gold, free shares and a cheap bed; Country Road dumps Feagins

Record gold prices have led to some bizarre attempts to cash in on the surging price. Picture: AFP

Digital gold, debit cards, free shares in an unnamed company and a cheap deal on beds – what could possibly go wrong? Ask the good folks at Malaysian mining hopeful Besra Gold.

Margin Call has seen a few attempts to cash in on a surging gold price over the years, but the offer by Malaysian gold trader Dato Lim Khong Soon’s Quantum Metals group is pretty special.

For $US1688 ($2606) you get a USB stick with “digital gold” software, allegedly backed by 18 grams of physical gold (just under two-thirds of an ounce), somewhere in the world.

You get a debit card which allows you to spend that gold as cash at the supermarket. You get 1000 shares in an unnamed ASX-listed gold company. And you get a partnership with Malaysian bedmaker Goodnite, which will allow you to buy a bed on a cheap instalment plan – underneath which, we’re guessing, you’d then stash all of your digital loot.

Sounds bizarre? Yet that is exactly the offer being made to Malaysian investment clubs by Lim’s Quantum Metal Bullion Pty Ltd, an Australian-registered company.

There are a few problems here, obviously.

Starting with the fact that Quantum Metal Bullion was sent into liquidation earlier this month, according to ASIC filings.

Don’t be fooled by its size, apparently the offer is a golden opportunity, even if all your money buys is a USB stick.

But even leaving that minor hurdle aside, there’s plenty to unpack.

The online presentation made to potential “investors” by Lim’s company, seen by Margin Call, makes it clear the gold will come from a mine run by ASX-listed Besra which owns a deposit containing more than 264 million ounces of gold, and is the 13th biggest gold mine in Asia.

About $US300m worth of that gold is due to head in Quantum’s direction, according to the presentation, which is why the company can now offer digital gold in a USB to investors at a discount.

Except that almost none of that is correct.

Besra does own some gold deposits in Malaysia. But it currently hosts a resource of about 2.6 million ounces – a hundredth of the amount claimed by Quantum’s representative on the presentation.

More importantly, Besra isn’t mining anything yet. In fact, the company is still negotiating over the extension of its mining leases in the country.

Lim’s company is supposed to receive around 250,000 ounces of gold if mining ever begins at Besra’s Bau deposit – but that is years away, and even that is a matter of minor dispute.

The gold supply agreement stems from a funding deal between Besra and Lim – the company’s biggest shareholder – to provide about $US35m to help develop the deposit. But Lim’s company is still to deliver the final $US9m instalment on the deal, Besra says, and legal action may ensue.

The legality of offering shares in an unnamed ASX-listed company as part of the deal is probably best left to regulators. Worth noting, however, that is that the Malaysian Securities Commission has already put Lim’s Quantum Metal Exchange on a warning list for unlawfully offering to issue shares in the company without the regulator’s approval.

So then, pity newly installed Besra chairman David Potter, who will preside over a meeting to discuss all of this on June 25, when Lim – Besra’s former executive chairman – will try to spill the board. It, in turn, is trying to oust him as a director.

The result is anything but certain. Lim claims to control 30 per cent of Besra shares. The company says he’s recently offloaded a third of that number, possibly as the result of a margin lending call, but hasn’t disclosed the change to the ASX.

It’s not entirely clear how many people have taken up Quantum’s digital gold offer either. Besra, meanwhile, still has $20m of cash in the bank and is valued at about $17m by the market.

And, for readers who are still curious about how the deal on cheap beds fits into all of this? Sadly, Margin Call has no idea. NE

Country Road ditches Feagins

Country Road has become the latest corporate brand to drop its affiliation with Melbourne blogger and entrepreneur Lucy Feagins – founder of The Design Files and a vocal, hostile critic of Israel – whose sentiments have already cost her lucrative partnerships with Mercedes-Benz and Dulux over the past fortnight.

Feagins is more than just a critic of the war. When two Israeli embassy staff members were murdered in Washington last month she posted a “propaganda alert” to her followers, urging them to “stay focused” on the “14k babies!” in Gaza. “Don’t let them change the narrative,” it said in finer print.

Lucy Feagins is losing contracts left, right and centre.

Last year, Feagins “liked” an image of shoeless Palestinian Islamic Jihad terrorists on the day they massacred 47 people in the southern Israeli village of Nir Oz. The image, posted by activist Laura Allam, encouraged people who were feeling “sad” that day to cheer up at the sight of “barefooted men” who were fighting “on behalf of all of humanity”.

Mercedes-Benz wasn’t overly impressed with these morally repugnant posts and cut all dealings with Feagins last month, not long after they were brought to its attention. “At Mercedes-Benz, there is no room for extremism, racism and especially anti-Semitism,” the company said in an internal note.

Dulux followed suit this week, revealing that it was ending its affiliation with Feagins by “withdrawing its advertising from The Design Files” for practically the same reasons.

Which left us wondering what Country Road might do about its very special relationship that it holds with Feagins and The Design Files. Their partnership has spanned several years. A recent collaboration, in April featured Feagins on the brand’s Instagram account, at a Country Road store, for the launch of a magazine.

Well, we asked Country Road, and at first it tried to tell us that there was no “formal relationship” with Feagins or The Design Files – a claim that jarred with ample evidence available to the contrary, including sponsored Country Road advertorials on Feagins’ website and, of course, those smiley pictures uploaded to the gram.

By Friday, however, Country Road walked back its statement and signalled that whatever partnership they had between them, well, it was over.

A spokeswoman said: “Our Country Road brand has in the past engaged with The Design Files as a media publication within the design space.

“We can confirm that Country Road Group currently has no relationship with Lucy Feagins or The Design Files, and has no intention of engaging either in the future.” YB