July 2013 Silver Bullion Newsletter - Discounted Coin Specials and DUX Test Cases

Posted by Admin on 19 Jul 2013


Silver Bullion Pte Ltd

Dear Subscriber

We launched our bullion testing program, called DUX, last November 2012. About 600 DUX inspections have been conducted so far and no suspicious samples have been found. However we had three interesting cases, involving issues related to bar porosity, metal grains and scope limitations of X-ray Spectrometry which we would like to share with you. As DUX capabilities increase and we are eager for greater testing challenges. if you have a suspicious bullion item bring it to our store / depository in Certis Cisco , as only through testing more types of bullion products that you, our esteemed clients, bring, can we further improve DUX.

On the supply side of bullion, gold is still fairly easy to obtain while procuring silver is a mixed bag as a number of popular silver coins are still supply constrained. Furthermore, the Johnson Matthey foundry is now about to commence its annual maintenance shutdown. We do, however, have an allocation of about 1.2 tons of maples leaf coins (~37,000 troy ounces) incoming these days and have considerably discounted (the Maples are now on offer for as low as 2.95 USD premium over spot for Tier 5 customers) these along with the Australian Koala 2013 silver coins. This promotion will last until August 9, Singapore’s National Day.

Please also take note that, based on customer feedback, we have extended our opening / collection hours on Wednesdays to 7:00 pm to allow for easier after work pickup. We will close slightly earlier on Saturdays at 1:00 pm.


DUX Inspections, Interesting Cases in H1 2013

Through our Transfer-in program we have expanded the quantity and range of bullion types we get to inspect. We have not yet come across any suspicious bars but we learned much from a few interesting cases as listed below:

#1 - High Porosity Gold Kilobar

Fire Assay
Cross-section of the dissected bar exposes the porosity inside that caused signals to be scattered
 

We had a case whereby nine serial numbered gold kilobars arrived directly from the mint. Eight of these tested fine, but one bar returned only noise when we ran the ultrasound probe across the length of it. Ultrasound is the most important of DUX tests as it will detect inserts, hollow areas or impurities inside the tested object. As per our company policy, we did not qualify the bar for storage without DUX providing us a satisfactory result.

After trying out different ultrasound detectors and using probes of varying sizes there was still no meaningful signal. Eventually, with permission from the customer / owner of the bar (he shipped his bullion to us through our transfer in program), we sent the bar back to the mint after they agreed to conduct further analysis. The mint eventually reported that - although the bar's surface, purity and mass were as specified - tiny air bubbles/ pores had formed during the manufacturing process. These pores caused ultrasound waves to be scattered and prevented receipt of ultrasound back echoes resulting in the signal noise and thereby masking the bar’s content.

It is important to note that these internal pores did not reduce the bar's mass or purity but rather caused the bar's volume to be slightly larger than usual so the bar was still within specifications. The mint agreed to substitute the bar nonetheless free of charge and sent back a replacement bar for the customer which ‘DUXed’ fine.


#2 - ~1,000 oz Good Delivery Silver Bars, Rough to the Core

Good Delivery Bar
Close-up picture of 1000 oz bars show their porous surface. The suspected large grain further attenuate signals
 

Good Delivery Silver Bars are produced as cheaply as possible, resulting in large mass variations (see June Newsletter), porous surfaces and large metal grain structures.

When we received our first batch of 22 bars (cast by a major LBMA member) from a transfer-in customer, the tests resulted in unreadable ultrasound returns, making DUX verification impossible. It was only through the dedication of our materials engineer, who physically carried sample bars, to a number of testing labs and ultrasound equipment manufacturers that eventually allowed us to solve the problem.

The primary challenge is that these bars tend to have large grain structures which are likely caused by the slow cooling process during manufacturing. These grain structures make traditional frequency ultrasound probes impractical to use as the soundwaves are greatly attenuated by the large grain. This results in extremely weak back-echoes. A second challenge is the porous surface which requires a different testing setup to ensure all pores are filled with a coupling agent before meaningful ultrasound readings can be done.

Ultimately we had to order an entire new set of dedicated ultrasound detectors, probes and couplants to overcome this grain size problem. Thus, Good Delivery Bars might be the cheapest silver around... but when it comes to authenticating them their roughness (in weight and grainy structures) can be quite costly to compensate for, compared to the more standardized and better finished 100 oz bars.


#3 - Gold Coins and X-Ray Spectrometry, 99.99% vs. 99.87%

One of the DUX tests consists of a surface sample analysis using an X-Ray Spectrometer. These machines give the user a detailed surface composition of the first 20 microns (1/50th of a millimeter) of the metal.

Fire Assay
Invasive fire assay on gold coin
 
So what is the implication if a coin surface, rated at 99.99% gold is measured to be 99.87% (taking into account margin of errors) by the spectrometer? Does this imply that the coin is not 99.99% pure or is there another explanation?

We first eliminated the possibility of measurement errors by ensuring the coin is clear of fingerprints or chemicals and repeated the reading with another spectrometer to make sure that a faulty measurement device was not the issue. We then tried a much more expensive spectrometer from the same manufacturer and finally tried a spectrometer from another manufacturer altogether. The results were still around 99.87% (even when allowing for the estimated margin of error) while density and ultrasound readings were fine.

Unwilling to keep the stone unturned, we sent the coin (our own) to undergo destructive fire assay at a local assay laboratory. The laboratory drilled on five spots into the coin, taking five samples of a few grams each and all samples were certified to be 99.99% genuine gold. The coin was thus ruined as a sellable item but we had verified that the coin was indeed 99.99% pure as per specifications regardless of the 99.87% spectrometer surface reading.

The lesson reinforced the understanding that spectrometers measure only a tiny surface cross-section (1/160th of the coin height) and give no indication of what is inside a coin. A tiny scratch on the metal or fingerprint can cause measurements to be off and even if the coin is pristine or in ‘mint’ condition, the manufacturing process involved (i.e. stamping) can embed tiny extraneous substances onto the coin’s surface. Such minuscule impurities can cause a surface reading to register at less than 99.99% even though the coin itself is indeed 99.99% or more in purity.

On a related note, should you ever notice a few tiny red spots on a gold coin these are most likely caused by tiny amounts of silver on the coin's surface that reacted with sulfur in the air, so there is nothing to worry.


Miscellaneous
Minor Change in Operating Hours:
Operating hours on Wednesdays was extended to 7:00 pm from 6:00 pm to facilitate local pickups and we are now open on Saturdays until 1:00 pm instead of 2:00 pm. The revised collection / operating hours are therefore:

Monday/Tuesday/Thursday/Friday 10:00 AM to 6:00 PM
Wednesday 10:00 AM to 7:00 PM
Saturday 10:00 AM to 1:00 PM


Minor changes to the Schedule for Transfer-In Addendum as follows:
  • 3.4 Precising definition that Silver Bullion's liability will begin upon receipt of the transfer-in shipment
  • 3.5 Amendment to charges that, in case of payment delay by customer, Transfer-in bullion held for customer awaiting processing will incur prorated storage charges
  • 3.6 Precising definition that for transfer-in bullion pickups by the customer, before parcelization and testing, will be subject to the usual withdrawal charges
  • 25.3 "Passport" was extended to "passport or permanent resident card on record"
New Storage Inspectorate Report for download:
Silver storage was audited by the Inspectorate. Download the full report upon logging in and clicking on STORAGE.


July Special & Featured Bullion
 

Libertad 2013 Coins  - 1 oz

Reduced pricing on Silver Coin Maple Leaf 2013 - 1 oz
Canadian Maple leafs are among the world’s most recognized coins.
Until August 9th we have significantly reduced the premium on these coins as we have about 1.2 tons of these coins incoming. Once sold it will take about a month for the next bulk shipment as the mint is on allocation. Tier 5 customers will enjoy a 2.95 USD premium over spot on these coins.

Silver Coin Koala 2013 - 1 oz

Reduced pricing on Silver Coin Koala 2013 - 1oz
Like the Maple Leaf the coin premium was reduced significantly until August 9th. About 3,000 are in-stock for local pickup.

Platinum Platybus Coin 2012 - 1 oz

New Storage Options for Perth Mint Platypus Coins - 1oz
Platinum Platypus (Perth Mint) Coins and Maple leafs are now available for Storage.



Bullion Availability Update
In this section we summarize our inventory status and current bullion availabilities as reported by our suppliers and industry sources:
Local & S.T.A.R.+ Storage Availability
  • supply Silver Maple Leafs - Maple Leafs are still on allocation by the mint making global supply tighter than usual but better than it was a few months ago. We are receiving an allocation of over 37,000 coins that we ordered about a month ago giving us good local availability.
     
  • supply Silver American Eagles - American Silver Eagle coin availability remains very tight and premiums are still high. We recommend opting for Maples or Libertad coins until supply improves.
     
  • supply Johnson Matthey 100 oz Poured Silver Bars - The Foundry is about to close for maintenance so new orders will be delayed. However last month we have received a large allocation of 55,000 oz bars so we still have availability.
     
  • supply .9999 Royal Canadian Mint 100 oz Silver Bars - New RCM bar supply is getting a bit better and we have incoming shipments of these bars.
     
  • supply Libertad Coins - The majority of our last shipment sold out but a few thousand coins are still available.
     
  • supply Gold - Gold Maple Leaf and gold bar supply is quite good and pre-orders can be obtained reliably within normal delivery timelines.
  • supply Perth Mint Silver Coins and Bars - 10 oz Koala coins are available again as are 1 KG silver bars. A new shipment is due for arrival by late July.
     
  • supply Perth Mint Gold Coins and Bars - Gold Kangaroo coins and 100 gram bars are still available
     
  • supplyPlatinum - Perth Mint Platypus Platinum coins and Platinum Maple Leafs are now available for Storage as well as local pickup.
     

If you plan to import bullion into Singapore make sure you understand what type of bullion is classified as Singapore IPM Tax Free and what type is not, so that you are not burdened with unnecessary import taxes. See IPM Criteria & Tax Free Bullion for details.


See more products and prices at www.silverbullion.com.sg.

Best Regards

The Silver Bullion Team
Silver Bullion Pte Ltd
Registration Nr: 200907537M
Floor #03-02A Certis CISCO Center II
20 Jalan Afifi, Singapore 409179
Singapore

Phone: (65) 6100-3040
Fax: (65) 6826-4022
Email: [email protected]

 

Information provided here should not be considered as advice or as an offer or enticement to buy, sell or trade. The contents of this publication, including any opinions and analysis, are strictly intended for educational use. Opinions expressed in bylined articles are those of the individual author and do not necessarily reflect the views of Silver Bullion Pte Ltd.

Silver Bullion Pte Ltd. makes no warranties, whether expressed or implied, as to the accuracy of the information provided or for eventual results obtained by using the information. In no case shall Silver Bullion Pte Ltd. be liable for direct, indirect, or incidental damages resulting from the use of the information.

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