How accurate is a pin sample ? misc questions

[irv]

You are correct, sorry, just wanted my thanks for everyones help to be very visible.

 

[nickvc]

Irv having read your post I think you find it hard to believe that your refiner is only making 1% off the deal you do with them but as you stated they are a large company and your deal is probably one of many per day so I calculated their take....$6500 for one deal plus their melt and assay charge.
Now in the total value your talking it seems tiny but it's not too bad...they process big volumes and once the break even point is reached so long as they have the capability to refine more, which all have, it's all profit. The fact they pay you for the silver and PGMs points to the fact your a valued customer and the ability to watch and check your melt and assay is another good indicator that they want your business. Not all the deals will as good as yours and just in the sheer volume of purchases the profit soon rolls up to a sizeable amount per day.

 

[HAuCl4]

...any thoughts as to what I should do to run my business better?

1-You could learn to refine to 999+ yourself with ease and sell at or above 99.25% with ease. Very little room to get screwed if you ship fine.

2-Alternatively you could also learn to fire assay yourself.

 

[irv]

curious, what would the capital investment be to reine to .999 fine gold?

how long would it take for a novice to learn to do a fire assay and what equipment is needed?

 

[4metals]

Refining with hoods scrubber and reactors around 50K

Assaying with all new equipment, balance, furnace, rolling mill, and parting hood around 25K

Methods already spelled out on the forum for free............priceless!

 

[niteliteone]

curious, what would the capital investment be to reine to .999 fine gold?

I have gone kind of crazy buying needed equipment (glassware mainly) $500. Built a small fume hood in my shed $500. Melting dishes, moulds and oxy/act torch setup $400. And a dozen 5 gallon buckets for large batches $50.
Would have no problem doing several 100 oz batches at the same time.

Hope this helps
Tom C.

 

[HAuCl4]

Refining with hoods scrubber and reactors around 50K

Assaying with all new equipment, balance, furnace, rolling mill, and parting hood around 25K

Methods already spelled out on the forum for free............priceless!

I'm certain that you 4metals, can come up with a setup for a lot less. He's doing 400 Oz a month total (150-200 Oz fine), not per day. And only needs a dozen assays per month, even if he refines once a week. Buckets are cheaper than reactors, and with a wet-dry vaccuum cleaner ($70), and 2 buckets, you can scrub any fumes. If really pressed, one could set this up for $1,000 or less imho using torch assays for fine. Only expensive item is the 0.0001g or better analytical balance which is not included in the $1,000. A used one in good condition would do.

Your budget is for a much larger volume and professional operation. Maybe justified for 1,000 Oz fine per day refinery with dozens of assays per day. Or Maybe I have become too much ElCheapo. :lol:

$1,000 goes a long way buying old used cast iron pans and/or plastic buckets. 8)

The assay lab is the most expensive part to setup properly, balance, furnace, rolls, etc. but $25k is a bit high, I think. I think GSP was selling a complete one, not long ago, for some $5k, but I can't remember for sure.

For the OP: If someone competent teaches you to assay (there must be courses at universities or by private companies/instructors), you can learn 95% of what's needed in 1 or 2 weeks of hands-on experience and reading, the other 5% will take reading many, many books, hundreds of assays and probably a lifetime to learn to the mastery level!. Your material is very easy to fire-assay accurately. I think someone in the forum posted about a fire-assay school course in Colorado or California, but perhaps I read it somewhere else.

I was self-taught by reading books and took me about 2 weeks to get repeatable and accurate results, after a few failed experiments, but later encountered dozens of "special situations".

 

[4metals]

You are correct, buckets and plywood and a blower you replace often is much cheaper. The question was not asked for a specific quantity of gold processed. Personally I will not build a half assed refinery, I see refining as a growth industry and people getting into it and setting up properly will be rewarded by growth. If you've been around this business for a while I'm sure you've been in some pretty ratty looking refineries, they leave an impression, rarely a good one.

 

[HAuCl4]

You are correct, buckets and plywood and a blower you replace often is much cheaper. The question was not asked for a specific quantity of gold processed. Personally I will not build a half assed refinery, I see refining as a growth industry and people getting into it and setting up properly will be rewarded by growth. If you've been around this business for a while I'm sure you've been in some pretty ratty looking refineries, they leave an impression, rarely a good one.

Well, he posted he was doing $3M a year in scrap...

I have grown the other way in philosophy, away from "growth industry" and towards a "One off"" jobs, where I never/rarely see the same guy/miner/client ever again.

I wish i could establish a stable permanent source of material to establish a "semi-permanent" operation. It won't happen unless I find a mine, imho.

I understand where you are coming from though, and thanks for your views.

 

[4metals]

I wish i could establish a stable permanent source of material to establish a "semi-permanent"

Well my philosophy to repeat business is to build it right and you will get repeat customers because they realize you are serious about what you are doing. The same basic chemical handling equipment has many uses in refining, so starting your core operation right is my idea of the way to begin a business that will be blessed with repeat customers.

 

[HAuCl4]

I wish i could establish a stable permanent source of material to establish a "semi-permanent"

Well my philosophy to repeat business is to build it right and you will get repeat customers because they realize you are serious about what you are doing. The same basic chemical handling equipment has many uses in refining, so starting your core operation right is my idea of the way to begin a business that will be blessed with repeat customers.

I defer to your more successful experience, but we'll have to agree to disagree. Never, ever again I will be more than a 1 man operation running a disposable shop. My reasons are plenty but will not convince you.

 

[Harold_V]

I wish i could establish a stable permanent source of material to establish a "semi-permanent"

Well my philosophy to repeat business is to build it right and you will get repeat customers because they realize you are serious about what you are doing. The same basic chemical handling equipment has many uses in refining, so starting your core operation right is my idea of the way to begin a business that will be blessed with repeat customers.

That worked for me. Treat them fairly (honestly) and be prompt with your service. Most importantly, turn out a good product---one that is at least the equal of industry.

Harold

 

[HAuCl4]

You said you worked with 10% margins.
Good luck getting a quarter of the volume you enjoyed yesteryear even with 2% margins today.
The big guys are fighting even tighter. Sometimes 0.25% margins. Some even run losing deals to get volume.
There's very little room for "newcomers" unless they can source their own material at big enough margin and volume.
This is fine for a profitable hobby or a very small source of income. Only my opinion.

 

[irv]

This is my exact point and why I posted the original question, with margins being so small and more competition from other sources available to my customers, I want to make sure I am doing everything possible to maximize my gold return so I can can pay my customers more and stay competitive with the market place. A lot of jewelers and other sources prefer not to sell or ship to a refiner if they can find a local buyer who is honest and fair, this is the role I play and the reason I have a steady stream of product coming in, so if I do my due diligence and get maximum return it helps me to be competitive.

If I am not geeting the most I can for my scrap than I lose my edge.

Another question- would I get more if I was able to establish an account for refining with J&M, I think my smelter-refiner sells his gold bars to them?

Thank again for everyones help.

 

[nickvc]

Irv you could try but in honesty I don't think your volume will be large enough to attract a higher return than your getting, the big boys work on tight margins with large smelters / refiners as it keeps the materials flowing through the refinery 24/7, your current refiner is probably working on very tight margins with you to achieve the volumes JM require from them to keep the % return high.
To get a good deal with the big refiners is going to take a lot more material to tempt them, you need more material so you have to offer better terms to your customers, or get more customers, so your margins suffer until you can reach the amounts you need to be able to negotiate a better deal with the big refiners. Im not been rude but one company I know that does what your refiner does moves as much,if not more, in a day than you do in 2 months, it's a big step up.

 

[irv]

how much is J&m's minimum requirement?

would 1milion$ a month qualify?

 

[Harold_V]

You said you worked with 10% margins.
Good luck getting a quarter of the volume you enjoyed yesteryear even with 2% margins today.
The big guys are fighting even tighter. Sometimes 0.25% margins. Some even run losing deals to get volume.
There's very little room for "newcomers" unless they can source their own material at big enough margin and volume.
This is fine for a profitable hobby or a very small source of income. Only my opinion.

The thing you're overlooking is not all material is handled for a half percent. Submit polishing wastes or bench filings and then determine how much you're being dinged--not only by fees, but by theft. The 10% margin I spoke of would be a damned good figure, even today, if you consider how hidden fees change their advertised fee. Customers are charged for every operation, then they pay a premium to get gold in return. I did none of that.

I was up front with my customers. I told them what they'd pay, and I told them when they could expect their metal returned. I don't recall ever losing a customer because my fee was unreasonable, and if they suggested that it could be processed for a lower fee, it didn't take long to have them understand that a guy that works free is making money somewhere---it's up to the individual in question to determine where. Generally, it was by theft. Remember GSP saying the refiner was the last liar? Any of my customers that had submitted their waste for processing with a major refiner knew damned well my deal was better. And, they could buy pure gold for spot. Try that with a major refiner.

You simply have to have a different model by which you operate. I did, and it was grandly successful for years. I had more business than I could handle when I sold the operation.

Harold

 

[HAuCl4]

That's all fine and dandy Harold. But specifically to the OP of this thread, who manages to buy $3 M a year in scrap, your services at 10% would make him unprofitable. He hasn't mentioned his average margin, but I'm guessing he's buying at 3-5% discount maximum. Maybe only at 2% discount.

That's why I suggested him to learn to refine and find a buyer that pays at least 99.25% for fine. If he can find a way to make 400 OZ bars, he could possibly sell them even higher at 99.75% or more of spot. He would keep the silver and other metals for himself as well, and that would more than offset the costs of refining in-house.

 

[irv]

You are correct, I am working on a 2-3% margin and I buy at gross weight, not at the after processing weight. I do pick up a little extra by getting paid for silver and platinum (when detectable) but I pay a refining charge. My average sale is 400K

 

[4metals]

Harold got out of the refining business long before the price of gold rose to what it is today. A refining fee of 2% today will yield a dollar margin in the same range as 10% in the time frame when Harold refined.

It is unfair to judge percentage rates without figuring the base price of the metal involved.