# Armena Refinery - too good to be true?



## fourninesAU (Mar 30, 2012)

Hello,

I recently spoke to a rep at Armena Refinery in New York. I called them, it was not an incoming telephone solicitation (I'm a scrap buyer so I get a ton of those).

Anyway, they are claiming to pay 99.25% contained on silver lots of just 200ozt or more, with the only fee being a 35 cents per gross ozt to cover 2nd day insured shipping. And he told me that fire assay turn around time from receipt to payment is only 4 working days.

To me, this seems a little too good to be true. I'm currently getting 95% contained from RMC in Miami, after a typical 3-4 week wait. But, from what I can tell, Armena is a respectable refinery. 

Does anyone have any thoughts on this? I thought for them to pay 99.25%, their minimum would have to be a lot higher than 200ozt...


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## Palladium (Mar 30, 2012)

http://goldrefiningforum.com/phpBB3/viewtopic.php?f=72&t=13651&p=137186&hilit=hi+tech#p137186


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## Lou (Mar 30, 2012)

Yeah, those terms are almost certainly too good to be true at that amount of ounces. 

So let me see, he's going to make 200*.0075%= 1.5 gross ounces + $70 = $118 and still do a "fire assay" (not good due to volatility losses of silver). 
That's $0.59 an ounce GROSS. Sure there's money to make, but you better be doing 100K oz/week, selling it over spot, buying hedge contracts or having their buyer do it or else leasing from Scotia Mocatta, and turning it quick. Maybe net after processing costs (not including personnel and waste) $0.50/oz. $50K/ week, 2.5 M / year. Maybe. Probably just shipping to Metalor because it's close. I think they're at $1.50 or so per ounce to process gold in great bulk (like 1000s of ounces).

Likely, you'll have a 2-3% melt loss, an average that's around 89-90% instead of 918 or 920 on old sterling, and no credit on the gold contained. Happens at other refiners on small lots like that ALL OF THE TIME.

Silver refining capacity in the US is about 3200 tons per year and that's ~103,000,000 oz. Half of that comes from secondary sources, the rest is mines.


The big electrolytic silver refiners in the USA:


Academy (now owned by Materion/Brush) ? M ounces
Metalor (after they bought the now defunct Handy and Harmon for a song) probably 15+ M ounces
Heraeus ? M ounces (don't really count as it's not done here in the US I suspect)
Johnson Matthey ? M ounces
Ohio Precious Metals--probably the largest refiner of jewelery and second use scrap, they do nothing from mines so far as I know. Probably 15-25 M ounces.
Rochester Silver works (they were once of Kodak, but they are the preeminent film processors in the world and the largest silver nitrate producer) (10+ M ounces)

BASF and Pyromet are two that are more smelters rather than anything else. Their silver probably flows to the above parties.
Throw in a few operations in TN and TX for silver film reclamation and maybe a few others with silver refining capacity on the small scale (30-100K oz per week, my company is one such) and you're accounting for what gets done. 

Then there's the small refiners that get the crumbs from the big boys and actually do or have capacity to do electrolytic silver refining in bulk (I consider anything over 15000 oz a week bulk but less than 100,000 oz/week), there's probably 4 or 5 of us stateside. Call that another 5 million oz annually.


4metals would be even better to comment on the state of silver refining in the US (as well as world).


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## fourninesAU (Mar 30, 2012)

Thanks for the informative post. I should've done the math. And the $70 you are adding to his 1.5ozt actually goes toward recovering the cost of me shipping and insuring heavy packages 2nd day air to them on their account. I would love to be able to discuss this with the rep in person, as he told me he is going to be at a JIS show in Miami in a couple days. Unfortunately I can't get in as I'm not a jeweler.

So the question is, is there actually anyone who WILL give me that kind of pricing? Say, for lots of 500ozt gross weight+? I want to position myself to buy from dealers in my area, especially coin silver, and need an ultra-competitive return to be able to do it. 

I was thinking of sending them a test lot of about 300ozt mixed coin silver, sterling jewelry, and flatware. I have the weights broken down separately and can get an average fineness so I can evaluate the melt loss.


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## Lou (Mar 30, 2012)

I can do something close. PM sent.


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## element47 (Mar 30, 2012)

My very simplistic advice is to NEVER EVER mix "types" of silver submitted to a refiner. NEVER mix coin with sterling. I don't care how well you label and separately package the two lots. I've had "pot losses" go from 1% to 4% doing this. Yes, it may very well speak to the integrity of the refiner and the specific one I'm thinking of who HOSED me on this doesn't have the best reputation around these parts. But in the end, you just have a settlement check and not much else to squawk about. I'll never mix types again. It cost me big time.


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## Westerngs (Mar 30, 2012)

If anyone is sending silver to a refiner doing fire assays - make sure you ask for proof corrected fire assay. If not, the silver losses in the assay process can range from 0.5 to 2%. That drops your payout by quite a bit.

Lou,

Are you forgetting Asarco (Grupo Mexico) in Amarillo, TX? I think their capacity may be greater than some of the big boys you listed. The majority of their silver comes from the copper refining operations.

Nice list by the way, pretty comprehensive. I don't remember if Ames Goldsmith refines their own silver or buys it for their silver nitrate production. If they refine it themselves, that would make them a pretty large refiner as well.


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## Lou (Mar 31, 2012)

I thought they (ASARCO) sent to Penoles.

That's why I put "fire assay" a such--it's going to be comparative and a proof must be run. But then again, everyone knowing their business runs proofs.


EDIT:

ASARCO moved from Amarillo. They keep an office there but I think they're out of Tuscon now? Last I heard is that their old place is a Superfund.


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## Westerngs (Mar 31, 2012)

One would think that everyone that knew their business would run proofs, but I recently ran across someone considered pretty big that did not. I have no idea how they have gotten away with it for so long.

As to Asarco, could be I am mistaken, but their website still lists their Amarillo operations as ongoing and they are currently hiring for some positions. Also, Once in a while I still come across their 1,000 t.o. silver bars, maybe they are old bars.


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## babytrilly (May 5, 2012)

> I recently spoke to a rep at Armena Refinery in New York. I called them, it was not an incoming telephone solicitation (I'm a scrap buyer so I get a ton of those).
> 
> Anyway, they are claiming to pay 99.25% contained on silver lots of just 200ozt or more,



I read this with interest. Maybe a year ago one of my customers got a solicitation from Armena. They were offering 99% on silver in quantities of >1000 Toz. I in turn called a rep in NY to find out but this guy told me it would take >2000 Toz to get those terms, but he was more interested in my gold. I did not enjoy the conversation, there was something akin to buying a used car from some slippery dude.


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## fourninesAU (Jul 9, 2012)

This has been my experience with them over 3 lots now - melt loss is minimal, comparable to what I was getting at RMC in Miami (which seems to be well respected on this forum). 

However, I got a call from them stating that they could no longer give me the 99.25% rate unless I could send at least 1000ozt per month, and that the material I was about to send in and any further material would be at 97% unless my volume went up.

I have no problem with a company having minimums, I DO have a problem with them clearly advertising 99.25% and 100ozt minimums, then switching things up once you've sent them a few lots.


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## Lou (Jul 9, 2012)

Making money on the gold in the silver. Good for them!!


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## The_EE (Dec 27, 2014)

element47 said:


> My very simplistic advice is to NEVER EVER mix "types" of silver submitted to a refiner. NEVER mix coin with sterling. I don't care how well you label and separately package the two lots. I've had "pot losses" go from 1% to 4% doing this. Yes, it may very well speak to the integrity of the refiner and the specific one I'm thinking of who HOSED me on this doesn't have the best reputation around these parts. But in the end, you just have a settlement check and not much else to squawk about. I'll never mix types again. It cost me big time.



My local refiner, NTR in KCMO wont allow the separation of karat lots anymore as of the 1st of the year. They say it creates too much waste and work. I have had issues with mixed karat lots coming out a bit lower than I had anticipated. Not sure if they are skimming off the top by adding GF in equal weight or what. I think I have been taken a couple times but I cant exactly prove it. I dont plan on using them anymore unless I absolutely need to, I plan on keeping all I buy from this point forward unless I come into an emergency situation.


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