Madison Metals, a mining and exploration firm operating uranium mines in Namibia, has signed an agreement with the Lux Network blockchain for up to 20 million pounds of uranium to be tokenized in the next 5 years.
In what is a forward sales agreement, Madison will deliver 20 million pounds of uranium from its operations in Namibia to the Lux Network over the next 5 years, starting as soon as commercial production, the firm has said.
Madison Metals is an upstream mining and exploration company focused on sustainable uranium production in Namibia🇳🇦
The company has signed a uranium forward sales agreement to create the first uranium-backed NFT with the Lux Network pic.twitter.com/FYT6ymDGAb
— BitKE (@BitcoinKE) October 6, 2022
However, as soon as October 15, 2022, interested individuals can go to the Lux Market to mint the uranium NFTs. Mining is exclusive on Lux Network but the NFTs will be made available on every major blockchain, thanks to the Lux Standard for asset-backed NFTs.
By selling direct to retail, Lux is able to offer buyers the lowest possible price, disintermediating opaque and inefficient financing with transparent and clear pricing, the statement reads. According to Madison CEO and Executive Chairman, Duane Parnham, the partnership brings several benefits to the company as well:
We believe there are many benefits to forward selling a portion of our assets in this way. We expect it to provide non-dilutive capital to explore, develop and mine our properties while also generating additional revenue through token trading fees.
Lux will initially tokenize 7.65 million pounds of the uranium contributed to the partnership. The sales of tokens are intended to generate cash which will be returned to Madison, plus royalties from trading fees, the statement indicated.
Lux Uranium #NFTs are 1:1 backed by certified Namibian🇳🇦 uranium deposits that will be mined over an estimated 5 year period, enabling the lowest possible prices directly from mine to chain. $LUX pic.twitter.com/W5ubL45H6b
— BitKE (@BitcoinKE) October 6, 2022
Users will also be able to stake the assets, going by a statement from Zach Kelling, CEO of Lux Partners:
Through staking, users are exposed to the upside of the uranium market while also earning additional fees from lending and liquidity. By digitizing assets, Lux expects to unlock greater price discovery, asset value, and liquidity throughout the entire mineral extraction lifecycle.
It is estimated that the unmined uranium could end up earning MadisoN US$700 million should all NFTs generated in the scheme be sold at their original prices.
Currently, Namibia produces 8% of the world’s uranium.
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