Comparison - 2 different refiners

[Dawnsdad]

I often rely heavily on the experience of others to help me determine whether or not to buy a product or do business with a firm. When making such a decision, I usually search on Google for complaints about a firm or product. That was the case when I was looking for a precious metals refiner. I also read extensively on this forum as well. Over the last year I have dealt with three refiners. One of them, Garfield in Philadelphia, I have only used for lower grade materials and have been satisfied with their service although I have found that I must pay close attention or they "accidentally" forget what they have been charging me and try to bump it up a little. In their favor, I must say that they have always been quick to process my materials and get a check to me. As far as the other two go, I wish to give you a comparison of statistics I have compiled relative to their performances.

First, an explanation of my situation. I process industrial waste for firms that do a lot of soldering/brazing. When I get it, there is a lot of extraneous waste: everything from chemicals and flux to the dead bugs and lunch leftovers. By the time I get done sorting and cleaning, I have nothing but pieces of metal. The original solder is 50% silver and guaranteed lead and cadmium free. Everything is always treated the same and I deliver a very consistent product. Every two weeks I take 15 to 20 kg of metal to the refiner.

I first started taking my product to Hi--Tech in Dallas, mainly influenced by comments posted on this forum by Miguel. I got to meet Miguel not too long ago. He's a nice guy and I do not doubt his integrity. Not so sure I can say the same about his company. On my first visit, they were quite accommodating. "Just grab anything you want from the fridge", "Not quite up to our minimum in this or that category, no problem", "Sure you can watch us process your materials; we'll do it all while you wait and give you a check right away", "You want to trade for silver, no problem and by the way, no premium". Their charge for anything under 50% pure was 12%. It all seemed very reasonable. But then it seemed that each time I came in they were a little more difficult to deal with than the time before. I could understand that sometimes they were busy and it might take a little longer to process my material. No problem. But there seemed to be a fairly wide swing in the assays from one time to the next. Then they decided that they would not be able to process the same day even though I always got there early in the morning. The last time I took a significant amount to them, they claimed that my material was causing all kinds of problems. They showed me a picture taken on a cell phone that looked a little like one of those volcanoes from a child's science project; smoke and sparks everywhere. They brought out a giant cone that would have been about 30 pounds of my material and said things had been so bad that they couldn't even assay it. So they said we'll just call it 45% silver, take it or leave it. I showed them assay after assay of theirs where every one was 2 to 3% higher than that. "Take it or leave it" they said. I knew that I would probably get more loss than the difference if I took that giant cone somewhere else to be processed, so I had to take it knowing that they were cheating me out of 10 ounces or more. Needless to say, I was quite pissed off. By the way, I bought one of those 3Kilo electric furnaces on eBay and tried to duplicate the problems they claimed to have. After several attempts I have been unable to come close.

Maybe I should thank them because that led me to Millennium Precious Metals, also in Dallas. They too have been quite cordial. The big difference has been that it hasn't worn off. They have been very consistent, no change-ups. They let me know up front that they already have certain priorities and may not be able to give me same day service. But my experience has been that they almost always do. I told them upfront about the problems that Hi--Tech had claimed. Obviously, it is not in my best interest to screw up their facilities. They were a little bit cautious at first but have not had any problems like that either. The obvious conclusion is that the problem was with Hi--Tech. Millennium has now processed about as many batches of my material as Hi--Tech and the numbers speak for themselves:

Processing charge: Hi--Tech 12% Millennium 10% Millennium 2% better
Average melt loss: Hi--Tech 3.45% Millennium 2.36% Millennium 1.09% better
Average assay: Hi--Tech 47.8% Millennium 49.46% Millennium 1.66% better

Net difference: Millennium 4.75% better

These results are from the same number of batches at each firm, roughly the same weight. I did not include the cone incident at Hi--Tech nor any batches that I had processed beyond the raw metal stage. I am not affiliated with either firm except for having been a customer and I can't speak concerning any precious metals other than silver.I have tried to be fair in my description of my experience with both firms but, obviously, my experience with Hi--Tech started out positive but ended up not so much so. I am not accusing Hi--Tech of any dishonesty but a significant difference like this is difficult to explain. All I can say is thank you Hi--Tech for driving me to your competitor. I am very pleased with their service. It pays to shop around.

 

[4metals]

Thanks for posting this, I ran the numbers and they break down like this;


Hi Tech Hi Tech Millenium Millenium
kg 15 20 15 20
assay 0.478 0.478 0.4946 0.4946
loss 3.48% 3.48% 2.36% 2.36%
rate 12% 12% 10% 10%

AMW 465.47 620.62 470.87 627.83
Ag content 222.49 296.66 232.89 310.52
charged oz 26.70 35.60 23.29 31.05
Ag fix $33.38 $33.38 $33.38 $33.38
cost $ $891.22 $1,188.29 $777.39 $1,036.52
payout $6,535.61 $8,714.15 $6,996.53 $9,328.71

cost as a % 13.64% 13.64% 11.11% 11.11%


In reality you cannot add up the varying percentages as you did and come up with a total as you are not comparing apples to apples so to speak. In the end Millenium was 2.53% cheaper in real dollars.

Posts like this are helpful to our members, again thank you.

edit, I tried to post a spreadsheet but the fields get scrunched I hope you can follow my numbers
is there a way to post a spreadsheet without this happening?

 

[Dawnsdad]

Thanks for posting this, I ran the numbers and they break down like this;


Hi Tech Hi Tech Millenium Millenium
kg 15 20 15 20
assay 0.478 0.478 0.4946 0.4946
loss 3.48% 3.48% 2.36% 2.36%
rate 12% 12% 10% 10%

AMW 465.47 620.62 470.87 627.83
Ag content 222.49 296.66 232.89 310.52
charged oz 26.70 35.60 23.29 31.05
Ag fix $33.38 $33.38 $33.38 $33.38
cost $ $891.22 $1,188.29 $777.39 $1,036.52
payout $6,535.61 $8,714.15 $6,996.53 $9,328.71

cost as a % 13.64% 13.64% 11.11% 11.11%


In reality you cannot add up the varying percentages as you did and come up with a total as you are not comparing apples to apples so to speak. In the end Millenium was 2.53% cheaper in real dollars.

Posts like this are helpful to our members, again thank you.

edit, I tried to post a spreadsheet but the fields get scrunched I hope you can follow my numbers
is there a way to post a spreadsheet without this happening?

4metals,

Thanks for your reply. I hope you won't take this the wrong way but I just don't see how you came up with your results. Having successfully managed money customer funds for many years in the financial markets using mathematical trading models that I developed, I am well aware of the limitations of statistical analysis. It is especially difficult with so few data points. I would prefer to have hundreds or even thousands of data samples to draw my conclusions from. Alas, I only have my limited number of batches to analyze. Obviously, there are many variables that may influence the outcome and this was not intended to be too precise. None-the-less, I don't get your figures. You don't even need to factor price in. Assuming that the averages hold (and correcting for your slight mistake in the melt loss figure), start with the same apples, 100 oz. If you subtract the melt loss. That leaves 96.55 oz. for HT and 97.64 oz. for Mil. Multiplying by the assay percentages, leaves 46.15 and 48.29 oz., respectively. Deducting processing costs leaves 40.61oz. at HT and 43.463oz. at Millennium. 40.61 is 6.56% less than 43.463 and 43.463 is 7.025% more than 40.61. So, if I left 100oz. of raw material at both places, regardless of price, I figure that I would be at least 6.5% better off at Millennium. So I think I was a bit generous to HT above. Also, please keep in mind that if I am wrong, it won't be the first time. Thanks again.

 

[4metals]

All I did was take a 15 kilo lot and a 20 kilo lot and run the numbers. Multiplying the incoming weight by the reciprocal of the melt loss gives the AMW (after melt weight)
AMW times the assay tells you fine ounces of silver
Fine ounces of silver times the price of silver (today when I posted)
The charge as a percentage is the amount you were charged divided by what you received.

I was not trying to compare the rates in terms of who gave you a better deal but to see how the different percentage losses stated specifically related to your payout. Obviously the 2% difference in rates was a big contributor but the differences in melt loss and assay made of more than half of the $347.09 price difference between each refiner for the same lot.

The question remains what is the normal variation in this scrap material? Obviously you are referring to different lots in the examples you cited. It is entirely possible (and I am trying to be impartial here and not trying to defend or criticize either refiner) that the individual lots did vary slightly in assay and composition making the melt loss differ. That still does not address the 2% rate difference or the big issue which is inconsistency from the refiner. When a refiner gives you reason to doubt them it is tough for the refiner to recover his reputation.

 

[Dawnsdad]

All I did was take a 15 kilo lot and a 20 kilo lot and run the numbers. Multiplying the incoming weight by the reciprocal of the melt loss gives the AMW (after melt weight)
AMW times the assay tells you fine ounces of silver
Fine ounces of silver times the price of silver (today when I posted)
The charge as a percentage is the amount you were charged divided by what you received.

I was not trying to compare the rates in terms of who gave you a better deal but to see how the different percentage losses stated specifically related to your payout. Obviously the 2% difference in rates was a big contributor but the differences in melt loss and assay made of more than half of the $347.09 price difference between each refiner for the same lot.

The question remains what is the normal variation in this scrap material? Obviously you are referring to different lots in the examples you cited. It is entirely possible (and I am trying to be impartial here and not trying to defend or criticize either refiner) that the individual lots did vary slightly in assay and composition making the melt loss differ. That still does not address the 2% rate difference or the big issue which is inconsistency from the refiner. When a refiner gives you reason to doubt them it is tough for the refiner to recover his reputation.

This feels a little like an argument although I don't think you are arguing and I know that I am not arguing. I get the feeling that you are taking something that is actually quite simple and making it complicated. Forget about the price. Obviously, I want the highest price that I can get. But that is under control of neither myself nor the refiner. Ultimately it doesn't matter in this case. When I go in to Millennium's office next Monday morning, I will already know how many ounces I need to sell in order to pay my customers. They get a set percentage of the gross yield. That is the yield in terms of ounces, not dollars. They can take silver if they want but these are large companies and they prefer cash. My concern, simply stated, is this: What portion of what I put in do I get back? It is of little concern to me whether the part that I didn't get back went to melt loss or reduced assay or refining fees. All I care about is the bottom line. If one company is less competent than the other, that's their problem not mine. I just want to know if I take 10 kg of raw material to two different companies, will one consistently produce better results than the other. In this case, I am convinced that the answer is yes.

Normal variation in the quality of the scrap could possibly explain some variation in results. That is why it is important to have as many data points (batches) as possible. In this case, all of the batches were from the same customer, similar in size, from the exact same source material and all prepared exactly the same way. Batches that were prepared differently or that were significantly of different weight were excluded in order to not skew the results. I don't know how I could have been more fair in comparing the results from these two refiners. I accept the notion of some normal variation. But that cannot account for the fact that 84% of the time Hi Tech's melt loss was higher than Millennium's worst single melt loss. At the same time, 84% of the time their assay was lower than Millennium's lowest assay. Put a different way, only 16% of the time was Hi Tech's best better than Millennium's worst.

As to your assertion that Millennium was only 2.53% cheaper, who cares? Look at your 15 Kg example. The Hi Tech payout is $6,535.61 and the Millennium payout is $6,996.53 or a difference of $460.92. That means that the Millennium payout is 7% higher.

When you are done with that one, figure this one: three men are traveling together and stop overnight at a hotel. The desk clerk charges them $10 each. After they have gone to their room the clerk realizes that he should have given them a group rate of $25 for the three. He gives the Bellhop five dollars to take to the three men. The bellhop figures it will be hard to split the $5 three ways so he pockets two dollars and gives each man a dollar. So now each man has paid only nine dollars for a total of $27. But they originally paid $30. The bellhop has two dollars which, added to the $27, makes a total of $29. Where is the other dollar?

 

[Oz]

This feels a little like an argument although I don't think you are arguing and I know that I am not arguing.

I can assure you that 4metals is trying to help you, not argue.

Figure this one: three men are traveling together and stop overnight at a hotel. The desk clerk charges them $10 each. After they have gone to their room the clerk realizes that he should have given them a group rate of $25 for the three. He gives the Bellhop five dollars to take to the three men. The bellhop figures it will be hard to split the $5 three ways so he pockets two dollars and gives each man a dollar. So now each man has paid only nine dollars for a total of $27. But they originally paid $30. The bellhop has two dollars which, added to the $27, makes a total of $29. Where is the other dollar?

You’re kidding right?
If the three men were actually only charged $25.00 for the room
Were refunded $3.00 by the bellhop
And the bellhop pocketed $2.00
Is that not equal to the $30.00 they originally paid?

 

[Palladium]

That will probably be the last you hear from 4metals. I think you said it best when you said bottom line is all you care about. I think you missed the whole point. Just me!