ARA wants you

[dick b]

I believe this may be the thread she was referring to. Any way there a few threads in the Selling your precious metals topic that specifically refer to ARA. What I found to be interesting was the testimonial by peaceful at the end of the topic!
dickb


http://www.goldrefiningforum.com/phpBB3/viewtopic.php?f=72&t=4189

 

[Palladium]

You can't please them all. As refiner's you know that you have the occasional crack pots who think they hit the mother lode.

 

[Irons]

You can't please them all. As refiner's you know that you have the occasional crack pots who think they hit the mother lode.

Making fun of me again. :lol:

 

[Palladium]

You can't please them all. As refiner's you know that you have the occasional crack pots who think they hit the mother lode.

Making fun of me again. :lol:

But it's so easy. :mrgreen:

 

[4metals]

Peaceful from ARA wrote;

we do melt and assay but do not refine to pure, it is bulked and eventually shipped to Johnson Matthey. We pay 80% with no additional charges of any kind. We provide this service purely as a convienence to our customers. JM refining fees are hefty and this allows us to make approx. 1 % for our trouble.

I have said in the past that I believe a refiner is entitled to make a fair profit for his or her efforts but having read this statement I have to balk. ARA pays 80% for platinum group metals, or put differently, they charge 20%. They pay on your metals by assay and accumulate what are generally referred to as 4 metal bars which are shipped to Johnson Matthey, as is stated above. What makes me choke is the claim that "JM refining fees are hefty allowing ARA to make approx 1% for their trouble."

I have attached some rates from JM from 2008, actual rates today are actually better. As you can see if a refiner manages their 4 metal lots well, their charges will never approach 20%.

I'm not saying ARA is wrong charging 20%, they take the risk and have to hold the metal. This is a big deal for lots containing small amounts of platinum group metals. High grade platinum and palladium are a different story. But there is no way they are working at a 1% margin.

 

[nickvc]

Peaceful from ARA wrote;

we do melt and assay but do not refine to pure, it is bulked and eventually shipped to Johnson Matthey. We pay 80% with no additional charges of any kind. We provide this service purely as a convienence to our customers. JM refining fees are hefty and this allows us to make approx. 1 % for our trouble.

I have said in the past that I believe a refiner is entitled to make a fair profit for his or her efforts but having read this statement I have to balk. ARA pays 80% for platinum group metals, or put differently, they charge 20%. They pay on your metals by assay and accumulate what are generally referred to as 4 metal bars which are shipped to Johnson Matthey, as is stated above. What makes me choke is the claim that "JM refining fees are hefty allowing ARA to make approx 1% for their trouble."

I have attached some rates from JM from 2008, actual rates today are actually better. As you can see if a refiner manages their 4 metal lots well, their charges will never approach 20%.

I'm not saying ARA is wrong charging 20%, they take the risk and have to hold the metal. This is a big deal for lots containing small amounts of platinum group metals. High grade platinum and palladium are a different story. But there is no way they are working at a 1% margin.

Im with you on that, im sure they get an advantageous rate from JM which most members wont get,not saying their wrong to make money but be transparent with the members of the forum..you dont fool to many of them for long

 

[Anonymous]

Guys,
If someone was grossing 20 percent as a charge for anything, they may in fact only have profit in the low single didgits.

They get 20 percent from your metals off the top from that they pay refiners fees, rent/mortage, employee hourly pay/benefits, taxes, utilities, etc.
Do I think they end up with 1 percent, well maybe after depreciation and other accounting cost.

Now, I am sure they have the bets covered long and short so they make the actual profit from the movement in prices, which is not a cost to you.

Jim

 

[4metals]

Overhead is usually calculated against your primary process, which in their case is gold. No doubt any business has expenses, but don't tell me you're doing my PGM's as a convenience and only taking a meager 1% for your trouble when the rates you are being charged are no where's near as high as implied.

 

[qst42know]

If I read the chart correctly JM charges $6 to process an ounce of Pt. ARA takes $312. That's far from the 1% claimed. Minimum lot sizes and such will cut into that as well as market fluctuations but.

I far prefer a straight story. If you want our business tell it straight. :evil:

 

[4metals]

JM also charges an assay fee per lot, the per ounce refining fee, a treatment charge, and a minimum charge. To sum it up JM doesn't want the small lots it wants refiners like ARA to collect the small lots and combine them into larger lots which is their bread and butter.

To say JM charges $6 per ounce is an oversimplification. If you sent 1 ounce of fine platinum to JM, they would charge you $1500 (the minimum invoice fee). The settlement would be broken down as $4.50/14.583= $.308 treatment charge plus $6.00 refining charge, plus $1557*.005= $7.785 for accountability, and when the whole price doesn't equal the minimum lot charge they charge the minimum of $1500.

Most refiners collect their PGM's by cementation and melt it into a bar, adding any scraps of platinum they have recovered from refining lots as un-dissolved metal and come up with a bar which is sized to minimize the charges (like a bar size of 810 ounces to meet the treatment charge minimum) And if possible bring up the assay to get the best rates. In order to do this they have to hold on to the metal they have paid on for a while.

So it is obvious that refiners like ARA have to come up with a working number to settle the lots quickly, as customers don't want to wait for weeks or months for final payout on their PGM's. For this reason, refiners settle on a percentage to charge their customers. Waiting to accumulate a bar of 810 ounces will leave the refiner having paid on over a million dollars worth of platinum, (at 90% assay) depending on how long that takes to accumulate has associated costs as well. That's why most refiners choose to pay the minimum treatment charge of $250 and cash in bars as small as 100 ounces. (not a terrible price to pay to free up over 100K)

I guess what it boils down to is 20% is high.

 

[qst42know]

My apologies, an 810oz. bar at today's prices is 1-1/4 million hanging on the whims of the market, enough to have most anyone biting their nails. Perhaps they don't see enough platinum in a years time to pass it on fast.

I over reacted sorry.

A conspiracy minded pessimist I am.

 

[babytrilly]

Some of us have done business on the basis of recommendations the forum pros have made. It is hard to know who to trust and even who might be representing a company- under cover- as a forum member. We have done tens of thousands of $$$ in business based on some of these refinery recommendations. We always melt and assay well what is shipped, but somehow, hundreds of $$$ in Au seem to disappear mysteriously during refining. I wish there was a way to gain reliable information about the competency of an assayer/refiner and keep that updated. A company can start out being careful and honest and due to personnel changes, human error, spills, or any of the other factors, have their performance degrade. It is damaging to one's bottom line when picking a refinery based on old feedback and it is a heck of a lot easier to give positive feedback than to warn people.

The refiner has the last word. I've read a lot about being present with your gold ie. (not feasible if you are of state and ship under $20,000 at a time); doing your own fire assay and knowing what your ship (still does not prevent material from disappearing). I would suggest one thing that can prevent some potential disasters. When you ship scrap jewelry in ingot form and you know the amount of Au in it, have the refinery XRF your holes for a preliminary number, and then melt and give you a fire assay before anything else is done to the material. At least then if the discrepancy is large, you could possibly get your bar back. If you get talked into digesting it because "they can recover 100% of the gold and you will be totally happy with the result and we are totally honest and everyone loves us and we have grown from referrals, etc.", don't do it. You can deal with delightful and helpful salesmen but ultimately if anything happens they plead that they have checked everything and they don't even call you back as promised. More than half a Troy oz of Au disappearing is not even in the realm of normal incompetence, and when it happens a few times (not that much all at once you have to wonder what is going on). Obviously, regardless of the cause this is the cost of learning.

The lessons learned are those that the wise people in the forum have written about:
1. do fire assays
2. refine yourselves

We are evaluating 1 & 2 to prevent more problems. Although, we do very precise XRF analysis and use well calibrated standards, and for the life of me I can't see how a fire assay will make ANY difference when shipping bars of about 12-14k gold. What is key really is to find a truly honorable refinery that is totally committed to competence and is eager to make sure that OUR analysis (by whatever method) correlates to THEIR analysis (generally fire assay or ICP). Then if one can establish trust that our #s and their #s have a correlation with little variability, then one can have an honest and profitable relationship.

My advise, is find someone who is large enough and who WANTS your Au on a long term basis and is willing to build this correlation. One who will freely share their data and compare to your data and who WANTS to get to the point where they trust your data. Another thing we have done over the last few months is to keep retains of the drillings of all the bars shipped out. When we set up fire assay testing, I want to fire assay those retains and compare to fresh XRF measurements. One thing that happens out there is that buyers seem to set up their XRFs to measure low. We want ours to be right on and be able to prove to our customers that it is right on. Having fire assaying capabilities will at least allow us to establish that confidence retroactively. It will also allow us to go back and double check all the numbers that the refineries reported (and find out how much material we did not get paid for-almost always is in their favor, isn't it?).

Sometime in the next few months I would love to be able to report on this and see how close the precision of our XRF comes to the fire assay results. It should be fun to do but very time consuming. It will also help in getting better mixing. Although using an induction melter, we wonder if improvements can be had.

I hope this experience helps new people in their decisions about who to work with and what to look at.

 

[4metals]

If you are shipping gold in $20,000 or less valued lots and being shorted half an ounce, you are talking about being shorted 3.5%. That is a huge difference. Unfortunately in the size shipments you are talking you are not large enough for the bigger refineries and the refiners you deal with will most likely settle on an XRF result with the assumption that you will be happy because you are paying your customers between 50 and 70%. Since you are not making the typical buyer margins you are walking a fine line.

Refining it yourself, in the quantities listed, would require a modest setup at most but you will still be faced with selling your fine gold out-turn to keep the cash flow up to buy more material. Selling fine gold in the half kilo quantities you generate will still cost you at best 1%.

Shipping less than 100 ounces of fine gold a week it is tough to find a very low rate. It's almost as if you will be damned if you do and damned if you don't. You have to find a refiner who will give you a fair shake in turn for your loyalty and repeat business.

 

[golddie]

Hi Folks
This sounds like a thread I should read but for now I am short of time
I was talking to a jeweler and he said he sends his gold to the US and they charge 2%
The Canadian dollar is higher so I would have to charge him less than 2 %
I have not done much calculations but when I take a quick look its about $720 dollar on $40,000
Would it be worth my effort to take a job like this
If I get an order like this I would have to build an atomizer because otherwise I can loose money on this
I have not done a larger quantity but can anyone tell me if my calculations are right
Thanks

 

[4metals]

If the price of gold is quoted in US dollars, the 2% is in US dollars. If the price of gold is in Canadian dollars the 2% is in Canadian dollars.

For $40,000 worth of gold at todays prices you are talking about less than a kilo of fine gold and even if it is 10 karat scrap, around 70 ounces. You could process that easily in 4 equal sized lots in a 4 liter beaker. Why are you talking about an atomizer?

 

[golddie]

Hi 4metals
The reason I say atomizer is I think that way the process will be done faster.
I am thinking that there will be less acid used and everything will be quicker.

I should also say that on my blower for pulling the air outside
I don't have a filter because the filter makes the system work ineffectively and the smoke fills the room
So I will not be able to catch the values that go out the blower
Thanks for your help

 

[HAuCl4]

Some of us have done business on the basis of recommendations the forum pros have made. It is hard to know who to trust and even who might be representing a company- under cover- as a forum member. We have done tens of thousands of $$$ in business based on some of these refinery recommendations. We always melt and assay well what is shipped, but somehow, hundreds of $$$ in Au seem to disappear mysteriously during refining. I wish there was a way to gain reliable information about the competency of an assayer/refiner and keep that updated. A company can start out being careful and honest and due to personnel changes, human error, spills, or any of the other factors, have their performance degrade. It is damaging to one's bottom line when picking a refinery based on old feedback and it is a heck of a lot easier to give positive feedback than to warn people.

The refiner has the last word. I've read a lot about being present with your gold ie. (not feasible if you are of state and ship under $20,000 at a time); doing your own fire assay and knowing what your ship (still does not prevent material from disappearing). I would suggest one thing that can prevent some potential disasters. When you ship scrap jewelry in ingot form and you know the amount of Au in it, have the refinery XRF your holes for a preliminary number, and then melt and give you a fire assay before anything else is done to the material. At least then if the discrepancy is large, you could possibly get your bar back. If you get talked into digesting it because "they can recover 100% of the gold and you will be totally happy with the result and we are totally honest and everyone loves us and we have grown from referrals, etc.", don't do it. You can deal with delightful and helpful salesmen but ultimately if anything happens they plead that they have checked everything and they don't even call you back as promised. More than half a Troy oz of Au disappearing is not even in the realm of normal incompetence, and when it happens a few times (not that much all at once you have to wonder what is going on). Obviously, regardless of the cause this is the cost of learning.

The lessons learned are those that the wise people in the forum have written about:
1. do fire assays
2. refine yourselves

We are evaluating 1 & 2 to prevent more problems. Although, we do very precise XRF analysis and use well calibrated standards, and for the life of me I can't see how a fire assay will make ANY difference when shipping bars of about 12-14k gold. What is key really is to find a truly honorable refinery that is totally committed to competence and is eager to make sure that OUR analysis (by whatever method) correlates to THEIR analysis (generally fire assay or ICP). Then if one can establish trust that our #s and their #s have a correlation with little variability, then one can have an honest and profitable relationship.

My advise, is find someone who is large enough and who WANTS your Au on a long term basis and is willing to build this correlation. One who will freely share their data and compare to your data and who WANTS to get to the point where they trust your data. Another thing we have done over the last few months is to keep retains of the drillings of all the bars shipped out. When we set up fire assay testing, I want to fire assay those retains and compare to fresh XRF measurements. One thing that happens out there is that buyers seem to set up their XRFs to measure low. We want ours to be right on and be able to prove to our customers that it is right on. Having fire assaying capabilities will at least allow us to establish that confidence retroactively. It will also allow us to go back and double check all the numbers that the refineries reported (and find out how much material we did not get paid for-almost always is in their favor, isn't it?).

Sometime in the next few months I would love to be able to report on this and see how close the precision of our XRF comes to the fire assay results. It should be fun to do but very time consuming. It will also help in getting better mixing. Although using an induction melter, we wonder if improvements can be had.

I hope this experience helps new people in their decisions about who to work with and what to look at.

If you have the cash, you are probably better off hedging your purchases against price fluctuation and accumulating till you can make a larger shipment to a trusty refiner. Use the lag time inbetween to refine at least to 996-999 (using simple inquartation+fluxing) or better to 9999+ using methods described in this forum. Plenty of time. The main advantage of shipping a refined product is that your counterparty will have less room to screw you and you get to keep all the other silver, PGMs, etc that may be present.

 

[babytrilly]

Thanks 4metals and HAuCl4 for your good comments. We are in that very thin margin area where we are a bit reluctant to go for the large vol costumer who is asking for 96%+ but with the uncertainty of the final outcome at the refinery is a large risk. The next few weeks will help us decide. We are getting the stuff together to do fire assay and will be dabbling in some refining in the next couple of months. Right now turning the money over is key. We now have a new refinery and they are working with us so that we can get the volume up. If this works for Au then we will be able to pay top $ and get new business and be "safe". Refining still requires an investment in facilities, equipment and time. If we can do 99% with no other fees (once we develop the credibility of our assays), and get 24-36 hr turn around, then we should make some progress. That is the current goal, we'll see how that works out. I still hold out the hope that there are large guys out there who really want the gold and want to do business with someone they can count on and in exchange they treat us right.

 

[4metals]

What kind of weekly volume are you talking about? Are you also buying silver?

 

[TrinityPM]

Hello,

I am a "local" competitor of ARA's. I have known Nicki for nearly 15 years. I am not saying that you couldn't "beat the bushes" to find someone unhappy with ARA's services, but I personally have NEVER heard abyone bad-mouth her or her company. I will say that I know for a fact that she refines all of her gold, just as she stated. They pay a fair price and turn the metal as fast as they can for the customer's sake as well as for profit's sake. The platinum pricing is fair, because it's not their forte'...she offers it as a service shoudl someone prefer to keep all of their business under one roof. When you take in pgm's and deal with JM, who is the main refiner of pgm's in the continental US, you have to be prepared to absorb their fees as well as ride out the 6 to 8 weeks they take to refine and pay us. Market fluctuations can be handled with hedging, but it doesn't replace the amount of dollars tied up that could have been spent on gold purchases. When working with paper-thin margins, the only way to be profitable is to turn your money many times per week. When the smoke clears, ARA isn't getting rich buying pgm's at 20% back, but probably breaking even, because you have to figure that $100K worth would be tied up for 8 weeks while you are still accumulating and right before they pay you, you are now sitting on nearly $200K. There's much more to this refining business than most people realize...lot's of moving parts! I'm definitely not here to promote her business, but I felt compelled to elaborate on her behalf.

PS...The size of the company doesn't determine whether or not they really refine or to what purity they attain in their process.

Brian