Henry McPhie is the CEO and Co-Founder of Streamex, leading the mission to bring commodities on-chain through tokenization. He is a mining engineer and serial entrepreneur with multiple blockchain ventures built and scaled.

Mining built civilizations. The first industrial mines appeared 5,000 years ago in Mesopotamia and Egypt, yet the business model the underpins the way we extract value from the earth hasn’t changed. We pull metal from the ground, sell it, and start again.

Tokenization offers a way out of this cycle, to transform how mined resources generate and sustain value for the mining companies producing them.

Let’s take gold. Every bar of gold sold today becomes someone else’s enduring store of wealth — a central bank asset, an ETF holding, a private vault insurance policy. The miner gets one transaction. The buyer receives a lifetime of compounding value. It is a fundamentally broken value chain.

For miners, single-use value extraction is the reason the sector remains capital-hungry, chronically undervalued, and trapped in a cycle where long-term value accrues to everyone except the miner. (machinery, and operational efficiency have improved with innovation the fundamental financial model of mining projects has not changed)

This has led to an industry constantly reliant on new capital to continue operations with junior developers in a constant struggle with valuations significantly below NAV (Net-Asset-Value) and majors beholden to constantly increasing reserves and selling assets as quickly as they can mine them. 

With the emergence of tokenization and integration of real world assets on blockchain, the mining industry can benefit exponentially both from new sources of capital from the creation of liquid assets representative of different aspects of the value chain and also the creation of assets that increase and continue value generation beyond the final sale. 

Tokenization is the process of creating a digital representation of a real asset, these digital representations or “tokens” act as a receipt of ownership that allows the holder of that token to own the underlying asset itself. This digital representation allows for a range of benefits over traditional funding and financial mechanisms. 24/7 worldwide trading and transfer, greater liquidity, instant settlements, capital efficiency and instant securitization creates a unique avenue for mining and commodity assets to reach a much wider audience and provide a lifetime value beyond final sale. 

By creating digital representations of real metals — backed by vaulted supply — mining companies can convert a finite resource into a recurring financial asset. 

Imagine you are the CEO of a gold mining company, your mandate is to mine gold out of the ground and then sell that gold onto the market. Now, imagine, if instead of selling that gold at or just below spot and realizing a one-time gain you had the ability to hold that asset and instead create a digital representation that can be sold and continuously add additional revenue. So, for example, the physical gold is still refined, held, and sold — but, instead of disappearing into the market forever, it is reborn as a tradeable, revenue-producing instrument that continues to work for the company long after the rock leaves the mill.

This shift is already underway. A new initiative by Streamex, in partnership with Monetary Metals, creates a yield bearing instrument trough active gold leasing that provides yearly distributions in additional gold. This digital representation can earn lifetime income from fees and integrations within defi (decentralized finance).

Now, instead of only realizing the gain on initial sale, you have created a mechanism that allows for you to hold the gold you mine, still realize value from its sale, and also earn additional revenue from both fees and yield revenue. 

This process can be simple. To continue with the gold example: gold is mined from a producing gold mine, this gold is refined and instead of sold is held by the producer, the gold is then allocated to a secure vault and allocated for tokenization, a compliant tokenization provider can then create a digital representation of the gold, this digital representation can then be sold into the market either as a spot asset or through Streamex’s yield asset create a yield generating instrument from the gold. The mining company still realizes the gain from the sale of the gold but now instead of never seeing the asset again they have created an asset that can continuously provide additional revenue beyond sale. All the while increasing reserves by simply increasing tokens outstanding every time they have more gold to sell. 

This notion of holding gold on balance sheet instead of selling to the market has been a talked about topic for years for gold mining companies and given a historic run in gold price recently many would have probably outperformed if they had a reserve of gold. However, historically due to IFRS accounting measures, gold, instead of being valued as a monetary asset is treated as inventory and investors traditionally expect the company to sell the asset in return for cash. Given these expectations mining companies are primarily in the business of selling produced assets rather than holding them. 

But the regulatory environment is catching up to innovation. Recent U.S. legislation — including the emerging frameworks in the Genius Act and Clarity Act — along with supportive signals from the SEC and CFTC, are clearing the way for real-world assets on-chain at institutional scale. The biggest banks, sovereign funds, and asset managers are already positioning to move trillions in tokenized capital.

It is only now that through tokenization, assets produced can be securitized and mining companies can have an alternative ability to hold produced assets such as gold on balance sheet as monetary instruments and still realize gain from its sale.

Boards should now be asking a simple question: why are we still giving away lifetime value for a one-time check?

Tokenization offers mining companies to transform finite outputs into perpetual assets giving the ability for mining companies to participate not only in the act of production and sale but also in the lifetime value of what they produce. Now is the time for the mining industry to start expanding beyond its dated and historic practices and use tokenization as a launchpad into the new generation of finance. Pilot projects should be put in place by large mining companies to prove out models of additional revenues through tokenization of produced assets, and education about what tokenization is should be mandatory for all high-level executives to ensure they are ready for the inevitable questions they will get from investors. 

The mine that never stops producing is now possible. The only question is who in the industry will be bold enough to build it first.