Sunday, February 19, 2012

Are Perth Mint damaging their reputation?

Those of you who follow my posts on bullion forums that I frequent might have picked up that I'm not a huge fan of purchasing bullion Chinese Panda coins. This has nothing to do with their designs. Having seen several in the flesh I would agree with many of the enthusiasts that they are a stunning coin. 

The main reasons I avoid Pandas are:

- They have a reputation of many fake coins circulating and I think this will make them difficult to resell.

- The mintage has been announced and then increased part way through their production year (they did this in 2010 and 2011).

- Slight variations in many of the designs due to being minted across multiple locations each with their own set of dies (although to be fair this has actually increased the value of some anomalies).

- There are lower mintage coins available (such as those from Perth Mint).

So two of the key things I am looking for when choosing bullion Silver coins to buy is a consistent product and a mintage number that can be trusted.

Are Perth Mint keeping to their previously high standard in these areas or are they releasing opportunistic products which harm existing collectors and investors who hold their products?

The Russian Red Back Spider

Most collectors who are familiar with high value modern numismatic coins would know of the Perth Mint Red Back Spider from the Deadly & Dangerous coin series. It was a 1oz Proof coin released as the first in the series. The price soared with some paying in excess of $1500 for the coin and prices now are still well elevated at around $1000 for a coin which contains $31 worth of Silver. The coin was released in 2006 with a 5000 coin mintage:

Original Red Back Spider Coin, 1oz Silver Proof, 5000 Coin Mintage

What you may not be aware of is that the Perth Mint produced a "copy" coin especially for the Russian market 5 years later in 2011 (2000 coin mintage):

Russian Red Back Spider Coin, 1oz Silver Proof, 2000 Coin Mintage

So they've slapped an extra ring around the existing design, imprinted some Russian text and then they are flogging this off as a new coin? In my opinion this sort of activity reeks of a Mint who do not have respect for their collector coin customer base.

But are such tactics only a problem for their numismatic coin releases?

The Privy Mark Dragon

The Perth Mint has had strict mintage limits on their bullion coins over both 1st and 2nd Lunar Series coins. The limits having been set at 30,000 coins for 1oz Gold and 300,000 coin for 1oz Silver. These (previously strict) limits have made them a popular choice for both collectors and investors given that most other bullion series coins have much higher limits (which in most cases range from 1 million to tens of millions).

A couple of weeks ago I wrote about the forthcoming Privy Dragon design (on SilverLunar.com), little did I know at the time that this was to be a bullion release rather than a low mintage premium coin. As pointed out by a user on Silver Stackers and later blogged on at Silver Lunar this coin is being produced with a 200,000 mintage limit and is being sold for bullion prices. Assuming that these coins sell out (or have already been minted in full), it will result in a 1oz Silver bullion coin mintage of 500,000 rather than the 300,000 of previous years, with only a small lion privy separating the two.

Spot the difference: 2012 Perth Mint Bullion Silver Lunar Dragon vs Privy Mark Lunar Dragon

In March 2011 Stephen Ward of the Perth Mint blog had this to say in relation to the 1oz bullion coins:
"For investors, we offer bullion quality versions in capsules. These coins are made in much larger quantities, enabling us to keep the sales premium to a minimum. Even though Lunar bullion coins are made for investors, we do acknowledge that they attract significant collector interest in many quarters.

1oz Lunar silver bullion coins have a maximum mintage of 300,000 each." Perth Mint Blog
This statement is now void as there will be 500,000 Silver bullion coins.

Then in September last year Ron Currie said this:
"Throughout the course of the first 12-year Australian Lunar bullion coin series and also during the second 12-year series, 1oz releases have been limited by mintage: 30,000 gold and 300,000 silver. As well as investors, these mintage quotas have also attracted collectors to the series.

To increase mintages of 1oz coins during a particularly popular year could be interpreted as opportunistic and possibly damage our credibility as a Mint." Perth Mint Blog
While the bullion Privy Dragon is technically a different design to the standard bullion coin, it is obvious to investors and collectors that the Perth Mint has used a backdoor technicality to workaround their own mintage limits and this is (as Ron Currie hints above) an opportunistic action which has the potential to damage the Mint's credibility.

As I pointed out in a recent blog post on Silver Lunar it appears that this Privy Mark coin will continue in the Year of the Snake (2013), so assuming the sale of these coins goes well we can expect the mintage of bullion 1oz coins to be permanently increased for the rest of the second series (and maybe the Perth Mint will even work on getting the previous Series 2 releases, Mouse, Ox, Tiger and Rabbit also minted with the Privy)...

There are other examples of opportunistic behavior from the Perth Mint, but to list/describe them all now would take more time than I have available to write this post.

It seems to me that of late the Perth Mint strategy is to squeeze every dollar they can out of their customer base, releasing as many designs as the market will soak up with little regard for those who have already purchased based on expectations previously set by the Perth Mint and it's representatives. 

While pumping out these releases might improve their bottom line in the short term, it's more than likely going to make buyers a lot more wary about purchasing their releases in the future and in my opinion has the potential to devastate a well established reputation which the Perth Mint has spent a long time building. Here's hoping they can get things back on track.

BB.

 Buy bullion online - quickly, safely and at low prices

33 comments:

  1. The time and trouble you have taken to draft this article is appreciated but I don't think they care BB, and I am no longer interested in anything series II onwards.

    Should have listened to what someone had told me 7 years ago, avoid the rubbish and stick to the classics and pre-decimals.

    They can do whatever they want in a legal and technical fashion, and so can we - we choose what we buy more wisely next time.

    I have 2 rolls of 2012 1oz silver dragons, where can I dump them and not loose one cent?

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  2. Likewise anon I think I will concentrate on Series 1 for most of my future numismatic/premium purchases.

    As for sale of the 2012 Dragons, going rate on Silver Stackers is around $55 per coin, around $60-70 on eBay (- their fees), so I guess it depends on what you paid for them.

    At the height of the mania there were people paying in excess of $150 per coin with the expectation that there would be no more than 300,000 1oz bullion coins minted...

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  3. Is 1.5 hour's time off to and fro work to join the silly queue at 9AM, parking and fuel inclusive? I think it does therefore unless silver 2x I won't breakeven.

    When 200,000 of these Lion privy dragons are sold out, what's next, 200,000 dragons with Hippo privy?

    All series II in my portfolio WILL be going hereon. They (PM and their series II products) cannot be taken seriously anymore.

    I'm so so fed up.

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  4. I had intended on flying over to Perth to check out the Mint and to be there for the launch of the 2013 Lunar Snake, but seriously questioning that move now. I don't think I'll bother.

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  5. great articel man its like u write it
    let the people know whats going on
    this perth scam whats next restamp all serie 1 lunar to 300.000 also because off overwhelming demand jezus
    great articel again keep it up

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  6. Thanks LAB. Perth Mint have explicitly stated that no further Series 1 Lunar coins will be minted, but who knows what they could do... e.g. maybe they reproduce a set of coins using the Series 1 design but the current year.

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  7. Or Series 2 coins with privy of Series 1.

    This is gold: Series 2 dragon with privy of dragon to target the Chinese markets.

    How about gilded privy?

    It's a joke but I'm not laughing.

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  8. I wrote a litlle piece on kitco forum about the perth scam and was attacked by there forum master for being a bad investor.. and that the new privy coin was not a problem the problem was with me
    i couldnt believe that respose.. so i put on u artikel with u name offcourse and was abbandoned 2 hours later for violating copyrights (there site is full off pics and links from all kinds of sites) IAM SHURE THEY HAVE A PERTH LINK CAUSE ALL CRITICS ARE KILLED on a forum sharing info about coins can u believe it so far for my posts iam heading into the real world again saluti and be happy

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  9. Great response on PM's blog BB - I didn't quite get BBS' response though. Sucking up to Don Curry, will he be getting some limited edition dragon or discounts as such? The response made no sense to me at all. The facts of the matter remain that the limitation of the mintage have been circumvented.

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  10. Thanks Anon.

    Agreed, I don't get the response from BBS either. Sounded like he was sucking up.

    I try and tell it how it is. I've written plenty of positive articles about Perth Mint products, but this Privy Dragon was a poor decision and customers need to speak up if they are unhappy or the Perth Mint will stomp all over them...

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  11. I am pissed off big time, i had a feeling i would get burned with these dragons because everyone was going for them. I bought 4 fkin rolls, i thought at least there is only 300000 in the world. I too have completely lost faith in PM. Thanks very much for the info BB. Shit off big time and burning a hole in my pocket. Ainslie still have some in stock and want $70 each

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  12. @ AnonymousFeb 20, 2012 09:04 PM

    Tell you what, I'm waiting for PM's buy back price to let me breakeven and I'll flog my dragons off to them, ALL of them. I have lots of them and I am extremely furious.

    They cannot claim the lunars are different from eagles and maples and be doing this. Harp huff and puff about the 300,000 pieces limit and now we already have 500,000. I don't care about the privy, it's just a lazy replacement of the fireball that's all. Sheeesh !

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  13. Easy for BBS to say. He probably bought 1oz silver dragon, at best 2x 1oz, for keepsake.

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  14. I'm sitting on a pretty large stack of them (purchased at $44, $48 and $59), waiting on a response as to whether the previous 4 coins in Series 2 could have Privy versions minted, if not I will be considering a swap from Dragons to the first 4 coins.

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  15. the only thing the australian dealers are worried about is they cant make profits from the new privy release fast enough
    on the forums all critics are being killed i cant believe it ..nothing about the promised 300.000 mintage no words like ....i can understand the minth is selling overseas
    but now i cannot make profits
    incredibile makes me doubt all silver invest from now on the rules are so easy bend in a another direction baron again keep it up saluti

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  16. Yes, that is so true LAB, as you have put it, "all critics are being killed."

    Someone quoted and properly referenced BB, on another forum and mate was he smashed and then banned.

    In a way PM has been gracious for posting all comments re the privy dragon, majority weren't that good. It's the PM die hard fans that I find .

    Hats off to you BB for speaking the truth.

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  17. Billy Black Smith on the Perth Mint blog has to be an employee. Check out the comment BBS gives to the blog post about how the PM works out its prices over spot. It's like a sales pitch!

    Will PM now do a privy gold dragon?!

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  18. @ Dave

    That's one way of telling.

    Another is how polished his praises are... almost proof finish.

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  19. u seem to irritate some people Baron incredibile what a strange people
    the truth is a killer obviously
    the perth cartel is blocking u for a privy dragon comment
    seems to me more is heading our way with the privy nonsens
    also the perth blog is canceled ????

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  20. had a error its back lets follow the mint blog

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  21. Briliant how he crawles in to his hole Billy BS
    good job baron and the others on the perth forum
    all u arguments where to strong hope the kitco forum members read it holdfast get lost
    loved it really thx

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  22. I just hope Perth Mint takes the feedback on board and reconsiders releasing such a ridiculous amount of Privy coins next year.

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  23. What the **. BB, myself and others asked some solid questions and PM's representative aka Billy BS (nice one LAB) couldn't help himself.

    He answered 99% of the questions. I was hoping for official answers from PM.

    PM just sat back and watch, Don Curry and mates' lives as employees were made heaps easier.

    From a 2 way communication point of view i.e. blog host's response(s) to comments brought forward by customers, epic fail.

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  24. Not being funny, I think each time whenever Perth Mint announces something major in the pipeline, and we perceive potentials, one of us must ask them if there will be any follow up privy versions or soft variations to it, just to be safe. Hey, it's our hard earned money.

    Now, this 2oz dragon Perth ANDA show specials, is that 1,000 ever or 1,000 for each of the ANDA shows?

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  25. The problem with asking whether there will be any privy issues is that we will get the brush off like I did "there are no plans for any at this stage", which basically means we reserve the right to if our plans change.

    The previous Lunar releases have only been 1,000 released for Perth (not for every city).

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  26. Can't afford to have them stuff around our investments like that can we?

    US coins for you BB?

    The market is huge, longer history plus I can imagine the outcry, collectors and their Congressmen alike, if their Mint was to pull similar stunt.

    I don't recall if the US Mint ever dared to pull such tricks. As for PM, with reference to your in depth research, they sure have that habit.

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  27. Not buying the privy dragon, not even one.

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  28. Neither am I. Have bought some 1/2, 2 and 5oz bullion coins but will be giving the privy a wide berth, not only out of principal but I think the final mintage on the 1/2, 2 and 5 ounce coins will be MUCH lower than 200,000.

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  29. Bullion Baron, what is your view on the 'dragon privy mark' on the kookaburra coin (newsletter from Perth Mint went out today)?

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    1. While the mintage is lower (80,000 vs 500,000 for the standard Kook) I think over the long term collectors and investors will favour the vanilla/standard coin over any of these privy releases, so the standard coins will achieve higher premiums. IMO there are better coins to be buying. e.g. Bullion Money has standard 1996 Kooks available to order, I'd take those over the 2012 Privy Kook:

      http://bullionmoney.com.au/products/1oz-1996-Kookaburra-Silver-Coin.html

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  30. They destroy collector confidence when a Mint coins too many. I agree with your article and also have stopped buying the recent silver pandas that number in the millions...not worth the price. Some of this has happened to the gold Buffalo coin in the USA. People stopped buying them since each year is exactly the same so even the previously sought after proofs are plunging in price.

    Simply too many of them.

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  31. Worth mentioning here that Perth Mint have just announced a new policy they were drafting, as response to various feedback (i.e. they are listening carefully to the investment community, and are welcoming feedback). This does not affect my area of investing, but felt it was a relevant update (November 2012).

    http://www.perthmintbullion.com/au/Our-Bullion-Products/Mintage-Policy.aspx

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    Replies
    1. They have definitely taken some feedback on board for the mintage policy which is a positive step and nice to have it clarified that numismatic coins prior to 2002 won't be struck up to their mintages, however recent additions to the Lunar Series 2 coins such as the twelve coin collection which doubles the number of 2oz proof lunars available, as well as privy coins, reminting 20 year old kooks, it has now put off many buyers. Perth Mint (retail) appears to be gunning for short term profits without much thought to long term implications of putting collectors offside.

      I rarely buy any numismatic coins, but understand the frustrations and after paying $59 for some of my 1oz Lunar Dragons it was disappointing to have Perth Mint whack a privy on the design and mint another 66% more...

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