Perth Mint Certificates – Too Good to Be True… Yet True

By Rich Checkan

If you are considering buying gold, silver or platinum right now, you must read this article!

Perth Mint Certificates – Too Good to Be True… Yet True – I mentioned in this month’s Information Line (available to members here) we were beating the drum about Perth Mint Certificates. When you compare current premiums for physical precious metals, you’ll understand why…

Unallocated Gold – 2.25% over spot… zero storage charges as long as you hold it.

Unallocated Platinum – 2.25% over spot… zero storage charges as long as you hold it.

Pooled Allocated Silver – 2.25% over spot plus a 10 cent per ounce fabrication cost (at current market levels, less than 3% to own silver)… and 0.95% storage fee per annum.

perth-mint-certificatesWith each purchase of any metal, there is as well a $50 Certificate Fee and $10 to ship all certificates on an order together in one package to the client.

When I spoke with clients one-on-one over the past six weeks, they all agreed this was fantastic pricing. But, immediately, they thought to themselves, “This is too good to be true.”

Those of you who shared your thoughts out loud with me, heard the following background on the product we helped develop for the Perth Mint over 19 years ago.

Those of you who kept your thoughts to yourself are missing out on what I believe to be the best kept secret in the precious metals industry.

Consider Perth Mint Certificate pricing for silver as stated above. Compare it to the pricing a client at the Stansberry Conference was recently quoted for a Mint Box of 500 one-ounce Silver Eagles at 25% over Spot Silver.

Given Perth Mint Certificate pricing, the client who was quoted 25% for Silver Eagles could buy the same amount of silver at Perth, and, if the spot silver price remains the same, it would take over 22 years of storage before he paid the same fees he is paying right now for Silver Eagles. This is an absolute no-brainer, and the story for gold and platinum is even better… especially since all forms of precious metals purchased on Perth Mint Certificates are…

  • 100% backed by physical metal, held at Perth Mint and unique to the client
  • Never used as backing for derivatives
  • Never leased to third parties
  • Always 100% insured at full market value at all times at Perth Mint’s expense

Well, there is a story worth telling here about how we became involved with the Perth Mint on this project 19 years ago. And, in this story, all these questions… never asked by clients… are answered.

The Perth Mint Certificate Story…

Perth Mint approached us 19 years ago asking for help to solve two problems they had…

They wanted to compete against the Eagle in America, but head-to-head, they would lose because:

  1. Americans buy American products.
  2. They were looking for a way to eliminate excessively high commercial leasing costs for inventory.

Problem #1…

This was easy.

We suggested they develop a unique product – the world’s only government guaranteed precious metals storage program, guaranteed by the highly-rated and profitable state government of Western Australia and stored at the world’s oldest continuously operating mint… the Perth Mint. And, if people buy into this concept, only allow Australian product in the program.

This was simply an end-around on the U.S. Eagle.

Problem #2…

We could not eliminate the leasing costs, but we were able to significantly reduce them. To understand how, you need to know how a mint operates.

Consider what happens when a source distributor wishes to buy 10,000 Gold Kangaroos from the Perth Mint. They agree to a price. The distributor sends money to Perth Mint. Then, they want their coins sent out immediately so they can sell them to dealers. But, to send them out immediately, Perth Mint would need to have 10,000 Gold Kangaroos already minted and waiting for someone to want to buy them. They don’t want to start making 10,000 coins once they receive the order and funds.

So, to get this metal, the Perth Mint (and any mint for that matter) leases (or borrows or rents) gold from the bullion banks. It is not their gold. They must eventually give it back. While they hold it, they pay a rental fee – high commercial leasing rates.

Now, when the source distributor comes calling, they have the coins already made. They fix a price. They immediately buy 10,000 more ounces of gold off market at current prices. They ship the 10,000 Gold Kangaroos to the source distributor, and they immediately start making 10,000 more.

To decrease this cost to the mint’s previous model of doing business, we suggested offering free storage on unallocated (basically unfabricated) gold, silver and platinum. The Perth Mint basically gives up the industry standard one-half percent storage fee which would typically cover their hard costs of storage and insurance. And, in so doing, we changed the rentor from the bullion banks to the individual unallocated investors. That half percent cost, by the way, is lower than the high commercial leasing rates they would have paid under the old model.

So, as long as the client is willing to be flexible in terms of what form his unique ounces of precious metals are in from day to day, the client receives free storage and insurance, and the Perth Mint saves money over the previous model.

We were successful in reducing their costs… not in eliminating them.

Originally, free unallocated storage was available for silver too. However, in 2010, Perth Mint had taken in enough unallocated silver to where their inventory needs (expected worldwide demand for silver) had been met. So, this new model no longer represented a cost savings. Now, it was simply a cost.

So, with proper notice, they closed down unallocated free silver storage on April 30th 2011, and they began to offer pooled allocated silver (with the terms mentioned above) instead. All those holding free unallocated silver at that time were grandfathered until they either sold or took delivery.


Gold and platinum may reach that point someday as well, but they are currently nowhere near their inventory needs.

Long story short… you now know why I believe Perth Mint Certificates are the best kept secret in the precious metals market, they are exactly as good as advertised and they are particularly attractive given this high-premium precious metals environment we are experiencing today.

What to do next…


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