Seven of the 11 authorized purchasers approved by the U.S. Mint to
purchase the 2010 America the Beautiful 5-ounce .999 fine silver
bullion coins did so by press time Dec. 17 amidst the expansion of
sales restrictions by Mint officials.
Most recently, Mint officials additionally barred the authorized
purchasers from selling any of the bullion coins to customers outside
the United States.
All seven authorized purchasers were confirmed by the Mint as of
close of business Dec. 16 to have placed orders for the maximum 3,000
coins for each of the five designs, or 15,000 coins total per firm.
Total sales to the authorized purchasers were 105,000 coins out of a
maximum mintage of 165,000 pieces as of Dec 16.
The participating dealers are:
➤ Coins ‘N Things, Bridgewater, Mass., atb.cntofma.com
➤ MTB, New York City, www.mtbcoins.com/
➤ Jack Hunt Coin Broker, Buffalo, N.Y., www.jackhunt.com/
➤ FideliTrade Inc., Wilmington, Del., http://fidelitrade.com/
➤ American Precious Metals Exchange, Oklahoma City, Okla., www.apmex.com/
➤ A-Mark Precious Metals, Los Angeles, www.amark.com/
➤ The Gold Center, Springfield, Ill., telephone (217) 793-8002
The first five authorized purchasers listed above placed their
orders on Dec. 10. Their acquisition cost for each 5-ounce silver coin
represents the London PM fix for Dec. 13, which was $29.33 per ounce,
according to Gordon Hume, the Mint’s deputy director of Public
Affairs, multiplied times five, plus the $9.75 Mint premium, for a
total cost to the authorized purchasers of $156.40 per coin, or $782
A-Mark and The Gold Center placed their orders with the Mint for
their maximum allocation on Dec. 13, and were subject to the Dec. 14
London PM closing fix, $29.88 per coin, according to Hume. Using the
acquisition formula, the $29.88 per ounce fix, times five ounces, plus
the $9.75 per coin premium, brings the total individual coin
acquisition cost to $159.15, or $795.75 per set.
Still to be added to the totals are the purchasers’ shipping and
Mint officials Dec. 10 restricted the authorized purchasers to
selling the coins to only the public; they may not sell the coins to
secondary market retailers. The authorized purchasers are also banned
from selling sets to their employees and relatives. The firms cannot
take more than a 10 percent profit over the cost of coin acquisition
from the Mint. Sales are limited to one coin of each design per household.
On Dec. 14, the authorized purchasers received another memo from
the Mint’s America the Beautiful silver bullion coin program manager,
Greg Hafner, announcing that sales to customers outside the United
States were prohibited.
“Term 1 in the Authorized Purchaser Agreement states ‘Authorized
Purchasers shall make available for sale to the public all 2010
America the Beautiful Silver Bullion Coins that they acquire,’ ”
according to Hafner’s Dec. 14 memo. “The intention of this condition
is to ensure that all 2010 America the Beautiful Silver Bullion Coins
minted and issued by the United States Mint are sold ‘to the public.’
Both references to ‘public’ mean the people of our nation – that is,
the American public.”
Six of the authorized purchasers that have already ordered coins
have indicated they will be selling the coins strictly as sets, not as
individual coins, because higher demand for specific coins could
otherwise leave them with less popular issues, according to the firms.
Most collector demand is for sets, though, the businesses note.
FideliTrade Inc. is the only purchaser to indicate thus far that
it will sell the coins as individual pieces; the firm is limiting
sales to one coin per customer and is not selling sets.
The coins’ order of popularity, based on collector inquiries,
according to some authorized purchasers and secondary market
distributors, are Grand Canyon National Park, Yellowstone National
Park, Yosemite National Park, Mount Hood National Forest and Hot
Springs National Park.
The remaining four authorized purchasers had until 3 p.m. Eastern
Time Dec. 17 to place orders for up to the maximum 15,000 coins each
is allocated. Any coins not ordered by that deadline were to be
reallocated for sale to interested authorized purchasers beginning on
Dec. 20, until all remaining coins are sold.
The other four authorized purchasers are:
➤ ScotiaMocatta, New York City, online at www.scotiamocatta.com/
➤ Prudential Securities Inc., New York City, telephone (212) 778-6667
➤ Dillon Gage Incorporated of Dallas, Dallas, www.dillongage.com/
➤ Commerzbank, New York City, www.commerzbank.com/
At close of business Dec. 16, Coin World was informed
that Dillon Gage planned to place its order Dec. 17 by the 3 p.m.
deadlines. Representatives of the other three firms could not be
reached for comments.
Some of the authorized purchasers posted notices on their Web site
that information would be forthcoming on their sites as to how the
five-coin sets would be offered for sale to the public. In some
instances, the authorized purchasers indicated to Coin World
that they already had sufficient pre-sale inquiries to absorb the
maximum allocation of complete sets even before receiving the coins.
Several of the authorized purchasers expressed their concerns with
Mint officials about hedging the price of silver, and whether they
could change the price they charged customers for the sets should the
price of silver go up or down. As of press time Dec. 17, Mint
officials had not answered Coin World’s questions on this point.
Sales start, then are halted
On Dec. 1, the authorized purchasers were informed that they could
place orders with the Mint for their maximum allocation on Dec. 6.
However, because of complaints from Mint customers that the coins were
being sold at 80 to 100 percent over the precious metal melt value,
Mint officials on Dec. 6 suspended the program until they could
re-examine the terms of sale.
Mint officials informed the authorized purchasers Dec. 9 that the
program would be reopened Dec. 10 with new restrictions on sales, with
all sales to secondary distributors eliminated.
The restrictions effectively negated orders at prices that
complaining collectors alleged constituted price gouging.
The authorized purchasers are also concerned about acquiring
sufficient packaging to ship thousands of individual coins with no
damage during transit to purchasing customers. The firms that sell to
secondary distributors rather than to the public had anticipated
shipping the coins in the original Mint rolls. ■