MASSIVE GOLD DEAL selling 500k/week to refinery NEED ADVICE

[Dan Dement]

Palladium,

I thank you for the kind words and i theory I agree with you. My personal experience is with the subject of solidification and the methodology of pin testing or samples for fire assaying. Whether it is Fire Assaying or XRF'ing, the results are only as good as the sample. From personal experience, I know that gold purity or fineness varies a great deal in gold bar made up of hundreds or thousands of pieces of jewelry. Perhaps this does not hold true in recycling in all business models but the majority of the gold being refined comes from thousands of pieces of jewelry. I know from personal experience that the method of obtaining Pin samples can esily be tilted to the refiner's favor. I claim no expertisein Gold Refinig but after 40 plus years in the Jewelry business, I understand a dollar fairly well. Many wise men have made a very nice profit in the assending market that the gold refining business has recently gone thru. The future may or may not be as bright but the true wise men will make a profit in a declining market also. When we see payouts being discussed in 99 plus area, I must say that my "business" alarms start going off! Excuse me for being a Pessimist but a Pessimist is an Optimist with experience!

I think our young friend< Lou gave some wise advice. I think my advise will keep the "500K a week"'s money safe.

Just my 2 cents. Might be right and I might be wrong! But I think my suggestion is a safe path.

Dan

 

[Westerngs]

Contracts are very common in the precious metals industry, even for small lots but especially for larger lots.

They are used to protect both the seller and the buyer, and to help settle disputes.

They state splitting limits for assay exchanges, as assays performed by each party will almost never agree exactly. If the exchanged assays fall outside the splitting limits, the contract will list umpire labs, whose assay will be used to settle the lot or some other similar arrangement.

They specify payment, shipping, and delivery terms. Many other things as well.

 

[nickvc]

I must admit the claimed payouts look extremey unlikely especially the other values at 99.75%. If you have any idea of how much more work and costs are involved in refining the PGMs compared to the gold I think you would agree so something doesn't add up. I know several people who move as much if not more than your friend and they sell assayed bars and don't get that sort of return, maybe the gold but certainly not the other values, many big refiners have accountability levels and anything under those isn't paid and most will also have a fixed cost per lot or ounce on top of the claimed payout that covers the costs as outlined by Lou, understand refineries aren't charities they make money and in most cases large amounts of it.

 

[Palladium]

I agree 100% if your talking about refining and then settlement on a lot. Lot of gray area there. Contract would protect both parties indeed. I made reference to selling out right to the refiner for karat content. If I'm selling outright to the refiner and i don't like what they have to say i will pick my material up and be gone with it. No contract to argue, nothing!

 

[NobleMetalWorks]

johndee23,

If I was a large refiner and giving you those kinds of numbers, I would make sure I hooked you for at least a year, otherwise I wouldn't be making enough to give you the time of day.

Also, I'm kind of curious. Are you being paid by your friend to help him/her? If so, all your friend has to do is cut out your fee, add that to the total profit and your margin just went up by a considerable amount. I am not trying to be a jerk, just making a point here.

From what I have read, 500k a week is not really a lot, matter of fact it's only 312.5 ounces, or if you prefer lbs, between 21-22 lbs or around there at current spot prices. Heck, it's not even enough gold to make a standard 400 oz bullion bar, which incidentally weighs about 26.4 lbs.

Watch the video I linked to below for Republic Metals. About 30 seconds in you will see someone unloading gold bars from an armored truck. Imagine each of those bars just weighing 100 ounces, of course they are much heavier, but to make my point if they were only 100 ounce bars, just what you see in that one delivery far exceeds what you are talking about.

[youtube]http://www.youtube.com/watch?v=hS5G7SxFZkk[/youtube]

I don't say these things to discourage you, on the contrary I would say to shop around and get the best price you can. But do so with the knowledge that the amount you are talking about will not impress any large refiner. So you are not going to get prices as if you are providing a quantity that is truly off the scale.

My other half works in a jewelry store. She has to deal with people all day who think because they have cash, that they can get a great deal. A fact that she complains about constantly. The reason being is that when someone buys something on credit, she makes more commission. So she doesn't care how much cash the person walking in has. She cannot give any special deals anyway because the company she works for already has their profit margin figured on each piece. Same thing goes for your refineries. They don't care how much you have, they care how much they will make on what you have. It's business. And although this amount seems like a lot to you, a refinery sees amounts far greater than this, on a regular daily bases. Can you imagine how jaded they would be?

Once you have firmly placed your feet back on the ground, and humble yourself understanding that the quantity you are talking about is not really a big deal, then you might be able to effectively negotiate a good price. But if you attempt to negotiate from the standpoint that the quantity your friend is selling every week, is something special, you are going to be sorely disappointed in the lack of special treatment you will receive.

I hope you take what I am saying as just friendly advice. I have seen many international brokers become blackballed because they operated under the assumption that whatever it was they were attempting to sell, put them into a class that made them deserving of special treatment. Without even understanding their blunder, they end up not ever being able to do business with anyone, ever again, just simply because they had no understanding of how they should conduct themselves.

Scott

 

[jimdoc]

I think the answer is easy. If you think those numbers you are being paid aren't enough learn how to process it yourself and make all the money. It is as easy as that, then you will see what the real deal is.
And you will have all the fun, and all the money.

Jim

 

[MiguelRosas]

I have heard of refiners making clients sign delivery contracts.... One of my clients was in a contract where he "Had to" deliver 10 kilos per week of fine gold... If he missed his goal, then the remaining balance was rolled over to the following week's amount, and he was not given the High payout.

Complete BS in my opinion.

I don't think any client should ever have to sign any contract with a refinery. It's sounds unfair to the customer, and something I would have him look into.

Also, I think having your own "Smelting" ability (melting into non-pure bars) is a great piece of advice. You'll reduce or basically eliminate any weight loss, and you're able to have a detailed understanding of what results to expect.

 

[Ocean]

Excellent info here, great post by Lou!


I second the opinion that Miguel Rosas and his company are fabulous to work with.

Overnight the package, receive a call to verify they received it, melt and assay done, and a wire sent the same day.

High percentage payout, and extremely professional and easy to work with.

You won't go wrong with Miguel!

 

[4metals]

Nobody in the current gold buying industry would ever consider getting into the market if their margins were as small as the refiners they ship to. Lets be clear here, the people really profiting from the gold boom are the gold buyers.

That said, there are major refiners out there offering that rate .997 so taking advantage of a good rate is smart, the real question here is peace of mind. You want to know what the content of your material is before you ship it and you never want to ship anything you cannot quantify.

That means you need a melting furnace. Not an old gas fired beast but an induction furnace where you can get a good roll and a representative sample. Proper melting fluxing and sampling is important for good results. By melting at proper temperatures in an induction furnace, you will minimize your melt losses when your refiner remelts and samples. You will experience the greatest melt loss under your control in house as the dirt and low value stones burn off or remain in the flux but the bar you ship will be clean and any additional melts will have much less weight loss.

Next you will need the ability to fire assay your bars, the refiners you ship to do it and if you want to be sure, you should as well. A very modest assay lab can be set up to handle a few samples a week.

The real value in melting and assaying is in controlling your own business. I doubt you are buying $500,000 to $1,000,000 a week in one store. But by shipping out one large load of unmelted goods, you have no way to evaluate the individual performance of each of your buy locations. With in house melt and assay capabilities you can melt each stores daily or weekly accumulation of scrap and assay the bar. You now know exactly how much metal is in each bar and you know what you paid for it, store by store. It is a powerful management tool you gain to help you know when your stores are having issues with buying right vs overpaying. When all of the scrap is lumped together and melted at your refiner, you lose this valuable management tool.

Finally, since you have a small lab, you can build your hood a little larger and do stone removal in lots up to 15 ounces per lot in beakers. There is a trade off, you cannot do assaying and refining at the same time because of the HCl in the Aqua Regia fume so you have to clean up the hood after refining. Most gold buying stores do not collect over 15 ounces of stone removal goods on any given day so the 15 ounce limit of 4 liter beakers is not necessarily limiting most needs of gold buyers.

So now you can do your own stone removal from each store iindividually as well as melt and assay each stores karat scrap, and when you are ready to ship to your refiner you can melt allof the fine from the stone removal process as well as the individual stores karat bars into one bar to ship for refining. (after assay of course) And most important, you are in control of the situation. Knowledge is power!

 

[johndee23]

I'm not making a dime directly, I found this forum out of mere interest in helping someone who has referred me business and been very generous with me in the cultivation of my sales office. I wanted to figure out a way to repay the favors, maybe itll come back to benefit me indirectly- we will see. but that wasn't the initial goal to be compensated financially.

 

[johndee23]

yes, and thanks for all the advice everyone. Free knowledge is great, all I am is someone who knows a gold buyer. two days ago I was probably more clueless than the general public about precious metals

 

[Palladium]

My name is Aflac and i approve this message. It still amazes me today how this forum has come from such humble beginings to be the informative source it is today. I want to thank each and ever person here on this forum for your contributions. You guys amaze this Alabama boy!

 

[johndee23]

If this was the credit card processing industry forum the responses I would have gotten are "this has been asked before" "your friend is no body"

 

[Palladium]

Your in good hands and amongst friends here John. These men bring with them well over a 100 years combined experience and this is one of the most informative and truthful website you will find for refining information.

 

[Dan Dement]

Johndee,

Lots of great guys ont the GRF and I have made several very good friends here. I will offer you an invite to grab your gold and come down to my store and I am happy to let you play with my toys. WE buy all day long and cash out every other day usually within $20 on $10,000 of what we test it. Newest XRF #4 with full alloy package to be delivered in about two weeks Two induction melters and we remove stones all day long. It's all free and hope you will learn enough to take 4metals & Lou's advice. I have an extremely high tech manufacturing Jewelry store that makes bling Platinum & Palladium Jewelry and gold buying is just a small sideline that has proven to be very profitable.

No strings, no fees, just a short hands on education that I am sure you can improve upon. Take what I show you and set up the house system you truely need to analyze the success of your business. Make the melee go away. I know far more about the diamonds than anything else! PM me your direct email and I will send you a little XRF study I did that might help you understand what you are up against. Just an invitation with no strings attached. Truth is: I think you really need the help.

Dan

 

[msharma]

Very informative thread guys, thanks.

 

[GotTheBug]

Once again the knowledge, experience, helpfulness, and friendliness of this board has blown me away.

I just love you guys, in a non-brokeback mountain sorta way.

Paul.

 

[gold_rush]

At $500k a week, I feel like this friend of yours should have the proper connections by now if he is that established in this industry. Where is he acquiring that much gold from on a per/week basis?

 

[nickvc]

Dan you have to allow for legal under assay material in the USA, I gather it can be around 1/2 karat below plum. Have you tried melting your own bars and then doing xrf scans and then comparing the results. Personally I wouldn't allow anyone else to melt my scrap because I'd never know the exact loses, some of which can be recoverable through the fluxes and old pots, I also always have fire assays done but I have access to cheap and quick assays.

 

[Dan Dement]

Hi Nick,

I guess us old Jewelry Dogs are still alive and kicking. I talked to JohnDee several times and what he actually is a friend of "PawnShop" gold buyer who is buying a big amount from many different PawnShops. I offered for them to come down and let me show how I do it as I have a good track record of getting what I feel is accurate payouts. I have had a couple of the Guru's check my payout and I am certainly very close if there really every "right on the Money" payout. Now, I believe in quick payouts and I don't like holding more than $15-$20,000 as I feel we have a bigger downward risk than an upward risk. Between my 4th XRF, two Induction melters, and 2 SG scales, I really don't have anything else to buy unless I really jump off the cliff and buy a $100,000 PP XRF which I don't see the return on the investment unless my volume takes a big jump. Being in Texas, we really don't have a fire assay source that you Brit's have. Being very close to Mexico, I see lots of under karat goods and you got to be aware of things are not always as marked.

I think the most alarming issue in the whole thread is the attitude that you can actually get 99.7% payout on metals. I am certainly no genius when it comes to refining but I do know what it costs to do business and that a business has to make a profit. I happily accept the honest 98.5% several times a week that my refiner pays me. This based on my numbers and not what someone calls it. With hundreds of payouts, I feel very comfortable that it is a fair exchange for both parties. Everyone wants the confidence without spending the money on the equipment. When you can accurately test larger 600 gram plus bars, you realize how big a part stratification and solidification plays in trying to put numbers into gold. When I torch melt a bar, I can have 20% difference in a bar and when I Induction Melt it falls to 2-3% difference. The methodology of the whole gold purity issue is one that everyone has to find there own method. I am happy to share mine but without the equipment, it's just all talk. all I can say is that on 7 figures, I am within $1,000 window which I am happy with..

Let me know how you come out on selling all your old breakout color stones. I have tons also.

Dan