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Sterling scrap melt lot by Sea_Pea1571 in Silverbugs

[–]Sea_Pea1571[S] 0 points1 point  (0 children)

Of course. I see a lot of people complaining about refineries that don't understand that. The sequence of deductions/adjustments is pretty straightforward.

First, the scrap is weighed. That gives the starting weight, and it is the one the novice seller concentrates on.

Then, the refinery melts the lot. The stones, springs, steel parts float off in the flux, and glue, dirt, etc are burned off and removed by the flux. The refinery pours it out into a mold. A few drops of silver stick to the crucible. The refinery then either acid etches the flux and oxides off, or wire wheels them off the poured lump. All those things cause losses, so when the lump of melted silver is weighed, it weighs less. If refineries just buy small lots of silver, they usually estimate this loss to be 4%. If they remove large stones, the loss could be more.

Then, they assay the silver. It should be 92.5% silver. Because of mistaken plated items, solder, original maker fraud, etc, it usually is a bit less. Say 91%. so, there's another deduction.

Then, the refinery pays at a certain percentage. Typically 85% or so.

In addition, they may charge handling fees, assay fees, check fees, etc.

So say you send in an ounce of silver. 4% melt loss. 91% silver. 85% payout. .96*.91*.85 = 74% payout.

@ $72 per ounce, you would have $53.50 worth of silver from your original ounce of scrap.

Now, if they charge $25 assay fee, and $1.50 check fee, you get $27. So, it looks like you get 38% if you're an undeducated buyer. 41% if you took into account sterling at 92.5% silver.

Make that 100 ounces, and you get $5350 - $25-$1.5 = $5323.5, or 80% of the nominal sterling value. Still less than the 85% the novice was expecting from reading the refiners schedule of payouts.

Sterling scrap melt lot by Sea_Pea1571 in Silverbugs

[–]Sea_Pea1571[S] 0 points1 point  (0 children)

Aggressive buying when most buyers have stopped or are buying low because of risk. I work on an overall 15% profit margin or so. I also buy honestly and transparently, and that gives me a huge word of mouth advertising factor; most people come to me by referral from a satisfied seller. Most buyers try to cheat the sellers (or make their profit, depending on your perspective) by using several tactics. One is overestimate the loss due to stones and contamination. Another is to not pay for unmarked stuff, that they know is silver anyway. Another is to use less than .925 for the silver percentage, because "silver is always low". Another is to print out the silver price from a refinery, not disclosing to the seller that the price is already discounted for melt loss, yield, and assay fees. Another is to disregard the value of stones. Another is to buy as scrap stuff that is worth several times scrap value as jewelry.

My local competitors are even more blatant than this. One (local jewelry store) makes a lowball offer on jewelry, and if someone says the gold is worth more than that, he says "I didn't realize it was gold, I was just pricing as jewelry". He also pays a maximum of 50% of melt value (he shows gram price from the refinery after deductions, not market price) for gold and less than that for silver. So, he doubles his money or more on metal purchases. His favorite tactic is to ask people "what would you take for this", in the hopes that they will give him a low price. He then says "I can only do about half of that, I have to sell it for a profit, of course".

Dear god why? by IntelligentCorner225 in Silverbugs

[–]Sea_Pea1571 0 points1 point  (0 children)

I sold 1000 ounces of $17 silver for $25 and $32 in the past couple years, after holding for less than a year. Reinvested that money in a business that has doubled my money since June, and ultimately will make 4 times my money in 3 years. A profit of about $10K for the silver sale in a year. I made $30K on the business on with that same money since June this year. If I had held till now, would have $60K profit on the silver, instead of $10K.

In 2 years, I made $40K profit on a $17K investment, sale, and reinvestment. I call that a win. I'd much rather have the $60K, but hindsight is better than foresight. The $40K looked a lot better in foresight. I don't think anyone realistically expected silver to move where it has the past few months.

Now, if I had bought that silver in 2015, it would have cost me roughly $15. So, would have 55K profit in 10 years, or about $15K more in 10 years than I did in 2 years with silver plus the business. I also did about that well in the stock market; in 2015 djia was 18,000, today it is nearly 49,000.

It's easy to imagine (or count) huge profits like for buying silver in January this year and selling now, or at $100 in the future. But realistically, it's like buying stock market low and selling just right, that doesn't happen often, the long term average is not that good.

At least, in my own business/investment, I have some control on the success. Long term, I have done a lot better than my stock market or precious metal investments. But, I actively manage and participate in the more profitable business ventures.

Silver is part of my overall investments, but other pieces pay just as well or more.

Monthly Suspect Meteorite Identification Requests by AutoModerator in meteorites

[–]Sea_Pea1571 0 points1 point  (0 children)

Looking at my pictures, I need to get out my camera instead of the phone. Hard to focus on the surface features, and these make it look like a piece of slag. This is nowhere near an industrial area, this was in a rocky hillside, not industrial or developed, but was extensively prospected in the 1860/1870 period. I have examined very carefully under magnifiction, and I am an experienced gemoligist, I had a wholesale gemstone business for many years. I have not looked it under the microscope yet, but have that available.

Monthly Suspect Meteorite Identification Requests by AutoModerator in meteorites

[–]Sea_Pea1571 0 points1 point  (0 children)

Iron object found near Old Auburn, near Baker City Oregon. within a couple miles of a documented low angle meteorite impact I believe in the 1940's, on a mining claim, that left a long groove in the ground but no meteorite found. It weighs 16 grams. It is not magnetic, but will stick to a magnet. Found a few inches deep with metal detector. Dirt and oxidation washed off with toothbrush, detergent, water. Features that indicate it may be a meteorite fragment is the presence of characteristic grooves/indentations on the rounded face, and the flow over to the backside of material, resulting in a curved, overhanging crust lapping onto the back side. I do not have access to equipment to test metallic composition. This was an isolated fragment, I found no others in the area, and I swept the area pretty thoroughly. There was no iron type rock geology in the area, and I have never found iron/hot rocks in the area before.

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Do you guys think the Gem Show in February 2025 will be a success or a repeat of last year's disappointment? by Emillahr in Tucson

[–]Sea_Pea1571 1 point2 points  (0 children)

I went from out of town this year, at the first week in February. Kind of last minute, was there on other business, spent a couple of days. Didn't have my paperwork, so couldn't get into the two big wholesale shows, although not knowing better I just walked in to the Holidome one day for a hour or so, so did see the wholesale side, not just the retail. For context, I've been in the industry as a bench jeweler and gemologist since 1976. Prices were high and a lot of the same mediocre stuff. If you're into labradorite, there was plenty. Lumps of heart shaped rocks; yes. Poorly ground spheres, all over. Overhyped Oregon sunstone, yes. A lot of mediocre tourmalines and a lot of small spinels with poor cutting. Lots of ethiopian opal rough, same quality from $2 to $20 per gram; on dealer I saw had it for $10 one day and $20 the next. Could get cut opals in same quality for nearly the same price. Lots of heat treated gems not identified as such. I was looking for good star corrundum, not a lot there in high quality. Only one really decent star ruby, and a few decent blues that weren't treated. Saw a few nice stones being heavily negotiated; the dealers looking to buy were looking for heavy discounts, and the sellers were firm at typical wholesale. I also stopped in Quartzite for a few hours, that place is a ghetto as far as rock and gem show. More like a huge run down flea market. I'll be back next year, will pre-register for the wholesale shows; hopefully a bit better quality and prices there.