Refining precious metals safely and accurately is not for the novice. Refining is a multi-step process that begins with the use of heat around 1,948 degrees Fahrenheit for gold and even higher for metals such as platinum. Safe, accurate and efficient processes require huge induction furnaces, skilled professionals and strict adherence to environmental safeguards.
During the 2010 precious metals boom, numerous new gold-related businesses popped up around the country; many were street-corner refiners. While some of these businesses were able to hold on and remain open today, many others closed their doors when the boom subsided and the markets dropped. No matter what the current environment, it is always important to verify the reputation and credibility of your refinery. It might surprise you that there are very real differences in the choices you have for refining your scrap lots.
So how do you decide which refinery to trust?
Here are the top ten questions you should ask in 2015. Even if you are already doing business with a refinery, you owe it to yourself to get the answers to the following questions:
- How long have you been in business? It’s safer to entrust your valuable inventory to an established company. It’s also important to find out what other people in the business think of them. You should even get the opinion of a competitor. Asking for customer references may not be helpful for two reasons:
• Satisfied customers may not want to identify a valued resource to their competition.
• Some large companies use 3 to 5 refiners simultaneously. You may have four refiners say they do refining for the same company, and they are all telling the truth.
Asking for a refinery’s credentials is also important. Are they an LBMA Associate or member of the Jewelers Board of Trade? Affiliations such as these can help assess the strength and reputation of a refinery.
- Do you honestly have the means to offer super low prices? Look at the fee terminology and the actual return. It should be simple and straightforward. You can be promised 99%, but it could easily work out to be much less if there are other fees or your assays are continually lower than expected.
- Do you perform ALL of the refining steps or do you supply another refiner?
For a variety of reasons including security and ROI, it’s better to work directly with a refinery that can handle all your needs and not simply ship your material to another plant.
- How diverse are you? Make sure they are capable of doing stone removal themselves, not operating as a middleman. Besides offering state of the art stone removal, Dillon Gage has a diamond division with onsite experts who can purchase your diamonds, making the turnaround from scrap to cash incredibly fast.
- Do you handle all types of precious metals and materials? Make sure they will process all of the precious metal you give them, not just the gold or platinum. You want a facility that is capable of handling all precious metals and has the professional staff necessary to process your materials accurately and efficiently. Ask them to describe the different protocols they use for the various metals. (For example, an XRF analysis is best when analyzing a platinum ingot that has trace silicon, phosphorus or silver contamination.)
- What are your turnaround times? Time is money! Many refiners can take up to two weeks to process low grade gold and silver. That’s 14 days your capital is tied up which may affect your business. Refineries with proper capacity should be able to refine high-grade gold scrap within 24-48 hours, which is standard processing time at Dillon Gage. Platinum group metals are processed in 3-5 days. Lower grade materials are processed in 10 days. These materials take longer because of the processes that must take place in order to properly sample the material.
- Are you in control of your pricing? Can they lock in if the market is really moving? This will help you ascertain if you are getting a fair spot price or one that is docked. Dillon Gage provides an online portal, Refinery Direct™ that allows customers to login, view assay results and lock in during market hours at a time that is convenient for them. There is full transparency regarding spot price and the settlement price.
- Do you offer a product made from precious metals that someone can take in at 99%? For example, at Dillon Gage, we pay 99% for gold scrap, but the pure gold we recover is traded with one of the world mints for bullion items that are sold by our bullion department above spot. If a company is buying gold at “99%” while selling it to another company for “99%” then how are they making money?
- Are you compliant with the EPA and all government rules and regulations? This is not just important from an environmental standpoint. Something as simple as owning lab ware or glassware is illegal unless properly permitted. If a refiner were to have a legal problem while your material was in their possession, you could lose your money at worst or have it tied up as evidence for an indefinite period.
- Can I get a sample? Checks and balances are always important. Consider asking your current refinery for a pin sample. You can then send it to an outside lab to check their accuracy and honesty. Just asking for it will keep them on their toes. You could also ask for older samples from settled lots to see how they react. At Dillon Gage, we keep samples 60 days and welcome witnessing, which most refineries do not allow.. We’d rather the customer be present to see the entire process, if at all possible. A few of our refining techniques are proprietary, but we are very educational, open and glad to show what happens on our side of the business. We have learned that an educated customer is a satisfied customer.
- Are you compliant with the US Patriot Act and anti-money laundering rules? As of Sept 11, 2001, the U.S. Congress enacted certain requirements intended to prevent the laundering of money that might be used to further terrorism. Some of the rules are that refineries are required to collect and maintain information on the companies with whom they deal. Who is subject to this act? The answer is any person or company who operates as a “dealer in precious metal, jewelry or stones.” It is important to identify that your refinery is compliant because non-compliance could result in fines and/or closure which could affect any of your assets they have in their possession.
In summary, now more than ever, time is money; particularly when it comes to precious metals. Do your homework and trust your instincts.
We look forward to helping you get the most out of your refining lots in 2015. Give us a call and see what specials we have for first-time customers. For information on our services, click here or give us a call at 1-888-436-3489.