# Refinery Assay differs considerably !!!!



## bryantch (Sep 20, 2007)

This is my first post on this forum and I must say that I wished I had found it before my mother and I did our first gold buying event.

A little background...my mother is a GIA Certified Gemologist and has been in the jewelry business for quite a few years. I am a business man with little knowledge of the jewelry business other than what I gleamed from her over the years but have a few bucks to fund this venture. 

We purchased a fair amount of gold over the last month, all scrap karat gold. All jewelry was stripped of gems and very carefully weighed prior to shipment to Specialty Metals Smelters in Connecticut. All gold was clearly marked as 10kt, 14kt, 18kt or 24kt or it was not purchased. No Korean gold was purchased at all. We did not test each piece due to time constraints during the event.

We sent the following:
Troy Oz
24kt .39
18kt 3.95
14kt 21.60
10kt 10.10
Dental .50

Total 37.05

We just received their "invoice" which shows the following amounts:

Entire Lot 36.541
Net after melt 36.429

Gold quantity Net 17.779

Our calculations show a pure gold content of 20.197 Troy oz for the scrap we sent (no value was given for the dental gold in this calculation as my mother was not sure of the gold content of the dental gold and paid very little if anything for it). This works out to 54.4% gold by weight. The "refinery" says the scrap we sent only contained 48.7% gold! 

My question is this, is this type of discrepancy "normal"? We have extremely detailed records of the weight and stamped karat value of each piece we sent and have gone over the numbers way too many times. 

We got a similar discrepancy with the sterling silver we sent them. They are claiming that stamped sterling silver we sent is only 70.1% fine silver.

I expected a learning curve but I dont expect to be ripped off. Any tips, insight, etc. is welcome.

Thank you!
Ian


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## goldsilverpro (Sep 20, 2007)

Was the 17.779 oz the net to you or, was it the net before charges were applied?

I can see a possible .7 oz error in your calculations. Before about 1980, the jewelry industry was allowed a .5 karat leeway in 10K and 14K gold. Therefore, when buying, you have to assume that 10K is 9.5K and 14K is 13.5K. I didn't do the calculations but, I assume you didn't take this into consideration. I may be wrong but, I don't think this leeway applied to 18K.

If the 17.779 was the net to you and, if you take into consideration the .5K marking differential, your return would be about 91.1%. This is not a terrible return. Not good but not terrible. If the 17.779 oz was before charges, it would seem you really got ripped off. Specialty Metals's stated charges are a return of 98% less $200 in charges. Over the years, I seem to remember hearing a few horror stories about Specialty. 

Refiners rely on repeat business. Depending on how you prepared your lot, they know what your "gray area" is. They know what they can take and still, most likely, get you to send more material. They know that you can shear a sheep many times but, you can only skin him once.

If you got cheated, you have no recourse. The way you did things, you really didn't know what you had. It is possible that you overvalued the material. For example, I have seen 6K Mexican gold marked as 10K or 14K. Did you have any chains or pocket watches? They can lower the yields.

There are so many crooked refiners, you have to assume that any refiner is not honest and try and take precautions to prevent it. If it were me, before I shipped it, I would melt all of the gold into one bar, drill it, and send out the drillings for assay. This won't guarantee honesty but, they will know that you know. 

I hear more good things about Midwest Refining than any other refinery. They pay back a flat 94%. This is higher than what others quote but, this way, they don't (necessarily) have to steal.

A member here, Catfish, sells his karat gold in Dallas for a return of 98%. I would suggest you read all of his posts and PM him to get the refiner's name.


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## bryantch (Sep 20, 2007)

17.779 was before $200 charges...


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## aflacglobal (Sep 20, 2007)

> Refiners rely on repeat business. Depending on how you prepared your lot, they know what your "gray area" is. They know what they can take and still, most likely, get you to send more material. They know that you can shear a sheep many times but, you can only skin him once.


 :shock: 

Well said Chris. They do know their prey. 

I know a local jeweler/refiner here in town. The small amounts of gold i have sold him years ago were melted, then i took the bar to him. We would drill it in several locations. I think their is a pattern to the process ?
Anyway he would mark the bar wih a stamp, then i took the bar while he sent the sample off. When the sample came back i would bring the him the marked bar back and he would pay me on the spot for the results.


Chris, have you seen the 10 million dollar thread yet ? I tried to register my company last night but the dam site would not except it. It's a new site and has a glitch i guess. Then i tried to contact the company today and am still waiting for some pencil neck to call me back. Hey, 10 million and i don't have to spend anything. Shittttt count me in. Them folks said we will consider all and provide funding. :shock: Oh, i know they didn't say that 

I think i might have a good lead on this one. I actually found it by looking at silicon chips and their structure. I actually have 2 ways. One hardly cost anything and will actually bring the cost of recovery way down.
Remember the Iranian mining company with the sulfide ore ? That's actually what i was using the idea for but hey, If it works, it works.


Update soon. 8)


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## Harold_V (Sep 21, 2007)

goldsilverpro said:


> I may be wrong but, I don't think this leeway applied to 18K.



The law concerning gold content was not restricted to 10K and 14K objects, it was across the board on anything fabricated of karat gold. 

While I don't recall the precise date, marking laws were changed, and about the time you suggested. The new law mandated that gold be held to the marking------in other words, 14K must be 58.3%

That did not prevent dishonest manufacturing. One of my customers proudly told me that he routinely under-karated. :roll: 

There was a half karat tolerance for alloy error, and a half karat tolerance for soldered objects, so it's not uncommon for something like a class ring, which is marked 10K, to border on 9K. I ran them by the pound and found it to be the case. While the tolerance was there for the sake of error, it was most likely done intentionally. When the tolerance is used to advantage, gold which is far heavier than base metals and silver, is replaced by each of them. The net result was to stretch their gold by almost 10% due to the variance in specific gravity as it relates to volume. 

Regards the level of honesty of the refiner------it is my opinion the OP got ripped off. They are notoriously dishonest, which is the reason my venture into refining gold, which was never intended to become a business, did so. I found that by treating my customers fairly and honestly, they had no problem trusting me, and what I did for them. Without going in to details, I charged 10% to refine karat gold waste materials, and they found it to be a far better bargain than using the services of others that touted a 5% fee. As the saying goes, " do the math". 

Harold


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## catfish (Sep 26, 2007)

Hi Bryantch:

I would like to comment on your post about the actual gold content in your gold that you sold.

First of all, I buy and sell karat gold and silver too. I read your post on the quanities and karat rating of the gold you sent to the recycler. I have a couple of concerns. One is the 24 karat gold you mentioned. I have never seen any pure 24 karat gold. Most gold rated 24 karat is .99 or could be much less. Also about the dental gold. Most gold teeth are 16 karat gold, but beware some bridges and etc can have some strange alloys mixed. That can go either way. I have bought teeth that were solid gold and tested 16 karat. Also watch Chinese gold coins rated at .999, they often assay much less than that. I have had some of them come to 94% pure.

With all that said, it sounds like you may have been shorted on your gold content.

The gold standards for decorative gold or jewelry are regulated by the Federal Trade Commission. The rules were changed in 1984 to eliminate the + or - .5 karat tolerance in manufacturing karat gold. Most gold to day is just what it sez. If it is 14 karat, it should be .583 pure.

Now for the mystery of loss. I just looked at three different batches I have recently sold and they consistently ranged about 1% to 2% loss on refining from karat gold to pure gold.

By the way the pre 1984 standards were as follows:

Actual content Theatrical content these numbers are rounded off.
10k gold .38 .42
14K gold	.55 .58
18K gold	.72 .75
Dental (16	.63 .66

.925 silver	.92 .925
Silver coin	.89 .90

This is what we refer to as old gold. Most gold today is just what it sez.

I test all my gold with a good tester, and the acid test for gold content. No exceptions.

I also, like you did, I always figure my theoretical gold content before I ship to recycler and then check it a gain on return. I have never been off more than 2% and most of the time it will be about 1% less. There are inherent losses in refining. Not much but some.


After discounting the concern about the 24 K and the gold teeth, you still was short about 2.3 ounces. My calculations were 20.487 troy ounces of pure gold if the teeth were 16K and the 24K was 100% pure. Take the worst case scenario of 2% refining loss, (.4097 oz) you still was shorted about (20.0772 -17.7790) = 2.2982 troy ounces. That is about 1682 dollars short. That is totally unacceptable.

All these numbers take into consideration that all the gold was actually the karat rating they were identified.

I have been doing this for a few years and sell quite a bit of karat gold and sterling silver and have never experienced any thing like this. I sell all my gold to a recycler in Dallas Texas and would be happy to give you his name and telephone number if you want it. You may want to give them a call and discuss it with them. They are very honest and trustworthy. 

If you are interested, drop me a PM and I will share this information with you and the names of the owners of the company.

Lots of luck

Catfish

PS I sell all my gold at 98% market spot and can book it any time I want. I also have no other fees such as refining costs or assaying or handling charges. I sent some to him a couple of weeks ago and just booked it for last Friday at $732.00 per troy ounce.


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