Do you know how to choose the right precious metals refiner for your scrap and waste metal products?
This is an important decision, and it can have an impact on both the size of your return and the safeguarding of your precious metal assets. Regardless of who you ultimately choose to work with, the more information you have, the better your overall business relationship will be. With that in mind, we have come up with the:
7 most crucial questions that you should ask before choosing a precious metals refiner
Question #1: From start to finish, how long will the refining process take?
The refining process for precious metals can take anywhere from several days to several weeks to complete – it all depends on the material being handled. High purity karat gold and scrap silver can be processed much more quickly than low-grade sweeps or electronic circuit boards. Platinum and Palladium often take much longer due to the complex nature of those elements. Recovery of metals from nonmetallic materials also require a longer processing period as there is more preparation that has to be done, such as incineration or chemical dissolution.
The quicker the turn around time, the sooner you will get paid. However, faster doesn’t always mean better. A refinery that offers “same day service” may ultimately be taking shortcuts that are not in your best financial interests.
Question #2: What fees are you charging me?
You must have a full understanding of each and every charge related to your refining lot – and always get everything in writing. The
complexities of dealing with different types of materials means there will often be varying charges – even for the same service. The costs for refining gold from karat scrap are quite different than the cost for refining gold from electronic circuit boards. Refiners may try to entice you to do business with them by offering you “flat fee” processing with no additional charges. The numbers may look good, but often if it seems too good to be true….well, you probably know the rest of the saying.
It is not uncommon for a custom refining quote to include charges for labor and processing, incoming weight, assaying, fine metal return, interest on advances, and other items. Many of these items may also be negotiable.
Question #3: Will we receive our original materials back in their pure form after refining?
Yes and no.
When we return pure gold or silver to you, we are furnishing it from our large inventory of precious metals. After final sampling, assay determination, and settlement, your material is combined with other material and further refined in larger, more economical batches. We are able to supply you metal from our current inventory immediately, even if it could take more time for your material to be refined completely. So, you receive pure metal, but may have not come from your exact shipment. Of course, none of that applies if you are being paid by check or bank wire.
Question #4: What analytical method(s) will you use to determine the value of my lot?
Maybe this should be question #1, as this could mean the difference between great results and bad results for your shipment. You must know how your refinery will actually analyze and value your material.
Fire assay, also known as cupellation, is the gold standard (no pun intended) method that has been accepted by the precious metals industry. With a fire assay, precious metals such as gold and silver are separated from non-precious metals by fusion using a lead oxide based flux. When performed properly by a skilled technician, a fire assay is accurate to 1 part in 10,000.
Platinum, palladium, and low grade materials need to go through a separate process called inductively coupled plasma optical emission spectrometry or ICP-OES. In a nutshell, ICP uses high temperature plasma (at about 7000 k) to excite atoms and ions that emit electromagnetic radiation. The wavelength readings and their intensity are indicative of the concentration of the elements within the sample. This process is more time consuming and expensive to perform due to the complex preparation the sample must go through before being analyzed.
Be very wary of any refinery that uses x-ray fluorescence (XRF) for your final settlement. XRF, while being non-destructive and very quick to provide results, does not have anywhere near the accuracy of a fire assay or ICP process. In our laboratory, we use x-ray fluorescence machinery only as part of an initial cursory evaluation of a sample – basically to get a quick and dirty view of what metals are present. This is particularly useful if we are providing you with an advance. We then only use fire assay or an ICP process for actual analysis.
Here is more on the analytical processes we use in our laboratory.
Question #5: How can I trust your assay results?
In short, you shouldn’t. Wait…did a gold refinery actually just tell you not to trust them? Kind of, and here is why:
While most refineries are not out to deceive you, at the end of the day there are actual human beings running things, and mistakes can happen. While most aim to minimize any errors, the law of large numbers dictates that something can happen once in a while. You should always ask for a sample of your material back so that you can have a third-party analysis performed. Most companies will not have any problem with that request, and many such as ourselves, will invite you to actually watch the sampling process occur. Once you have that sample, there are many assaying companies across the country that will analyze your sample for a nominal fee.
Once you have your results and we have ours, we compare both to ensure that the right analytical determination has been made. This is the easiest way to provide fairness and transparency during the entire refining process. Reconsider your decision to work with any company that won’t provide you with a sample.
Question #6: How are disputed assays settled?
In the previous question, we told you why you should always take a sample of your material for third-party analysis. So you have your results, but they differ from the refinery’s, and you are not satisfied. Now what?
The refinery you work with should have ‘splitting limits’. Splitting limits determine what the range would be for a difference in assays to be “split down the middle”. Assays performed by each party will almost never agree exactly – this is due to different lab conditions, processes, and just plain statistical variation. For instance, you have scrap gold melted and assayed, and the refinery assay comes to 57.60% gold and your third-party assay comes to 57.80%. The refinery may, with your agreement, settle the lot at 57.70%. Why would you want to agree to this? An “umpire” assay can cost from several hundred to $1200 or more.
What is an “umpire” assay?
When a refinery takes a sample of material, it is usually divided up into three parts. One part of the sample goes to the refinery’s assay lab, one part goes to the customer, and one part is sealed in tamper evident storage in the event of a discrepancy. If the customer and the refinery cannot come to an agreement on the assay, they will have the sealed sample sent to another third-party assayer – sometimes even a COMEX certified assay lab. That lab will analyze the sample and report back the final results. Those results will then be used for settlement.
But here is the kicker: Whoever’s results are furthest from the “umpire” results will usually pay all the costs for the umpire assay. These days, unless the assay discrepancy comes out to more than 1 ounce of pure gold, it is generally cheaper to split the difference. In the end, both sides need to weigh whether it is worth it to pursue an “umpire” settlement.
Question #7: Our product was made to precise standards, and we conduct quality control to validate content. Can we calculate the result from scrap according to the material specification?
It is really tough to give an answer to this question, as it depends on a number of different factors:
1) How well was the scrap material segregated from other materials?
2) Were adequate internal controls put on high-grade materials to ensure that no low-grade substitution occurred?
3) Was any “off-spec” material inadvertently added?
4) Was the material contaminated with oils, grease, dirt, filings, or solder splashes prior to being sent off for refining?
5) Were all shipping containers properly tared and accounted for prior to shipping?
Any one or a combination of these factors may cause the results to vary from your product specification. At the end of the day, good record keeping can prevent you from being surprised at your refining returns.
In Conclusion: Be well informed before choosing a precious metals refinery.
It is not just about one company charging “X” while another charges “Y”. The more information you have, and the more satisfactory answers you have to the questions above, the easier it will be to choose a refiner for your gold, silver, platinum, or palladium scrap materials.
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