After a challenging start and a change of ownership and company name, Grand Cayman’s only private vaulting facility, coupled with a precious metals brokerage and smelting services, is up and running full steam.
Although Byzantium International Ltd. SEZC has its vault and precious metals processing center in separate buildings in George Town, Byzantium is one of the companies registered in Cayman Enterprise City in the commodities and derivatives sector.
It started out known as Argentum Worldwide Ltd. SEZC in 2012, but was sold in January 2014, when it changed its name to Byzantium. Its Cayman Enterprise City office is in the Flagship Building in central George Town.
The new majority shareholder is David R. Barker, an America author and former economist with the Federal Reserve Bank of New York. He was also an adjunct professor of economics at the Graduate School of Business at the University of Chicago. John Buck, who serves as the company’s managing director, is also the minority shareholder.
Byzantium has a sister company in the Cayman Islands known as Au Ltd., which is a local company able to transact business with residents.
The two-company group has six employees in Cayman, with two working with Au Ltd. and the other four with Byzantium, which provides a variety of services to overseas clients.
Byzantium offers several services to clients, starting with private vaulting. Its facility houses a modern Class 3 vault that is available for storage to individuals, something that is rare in the region, said Kody Zander, the company’s vice president of sales.
“It’s one of the only vaults outside of the U.S. on this side of the world that individuals have access to,” he said. “People are very happy when they learn we have one here. They know the Cayman Islands is safe and is a British territory, plus it has the banking infrastructure.”
Although customers like the fact that Cayman has a good banking infrastructure, people who own precious metals like even more the fact that Byzantium offers secure storage away from the regulatory regimes of banks, Zander said.
“People who like the physical side [of precious metals ownership] want it outside of the banking system,” he said.
Unlike many precious metals commodity merchants, Byzantium deals only with physical gold, not futures.
“People buy it to sit on multiple years; it’s a long-term investment,” Zander said, noting that that’s the reason they need a secure long-term storage solution.
Byzantium’s current clients come from around the Caribbean region, as well as from the U.S. and Europe, Zander said.
The main storage vault houses 465 small, medium, large and extra-large safe deposit boxes, which combined could store more than 2.5 million Troy ounces of gold. Byzantium also offers smaller vaults for customers who want one to which only they have access.
The 150,000-pound main vault would take professionals several days working around the clock to break into, but the smaller vaults are very secure as well. The renter of one of the vaults at Byzantium’s facility forget his lock combination and the door had to be drilled.
“It took four days, eight hours per day to get into it,” Zander said.
Sales and processing
In addition to storage, Byzantium sells gold and silver ranging from 1-ounce bars and coins to 1-kilogram bars, all at very competitive prices, Zander said.
“Our prices for gold and silver are equivalent or cheaper than in the U.S.”
It also has smelting facilities capable of melting gold or other precious metals to molten form in a matter of minutes. Once liquefied, Byzantium has laboratory equipment capable of sampling and assaying the purity of metal to the precision level of parts per billion.
Once the purity is confirmed, Byzantium can offer valuation services.
Zander, who worked off and on for a different precious metals company in the Cayman Islands starting in 1998 and started with Byzantium last December, said that since the financial crisis, the demand for owning gold and silver has increased significantly. Byzantium has benefited from that increased demand.
“The company is growing a lot faster than expected,” he said. “The growth year on year is quite substantial, and even month on month we’re growing substantially.”
One of the things that makes Byzantium attractive is that it falls outside of U.S. regulatory agencies, and outside of the reporting requirements of FATCA, meaning that people don’t have to divulge what they have stored in the vaults.
“But we still have to do KYC and anti-money laundering, and purchases can’t be made in cash,” he said.
He said that word about Byzantium’s services has spread quickly among those who deal with precious metals, mostly from off-island.
“It doesn’t take long [for word to get out] in this industry,” he said.