American Buffalo gold coin buyers profit

Mint sales total $3.33 million; top grades at premiums
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Published : 08/26/13
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The U.S. Mint sold $3.33 million worth of Reverse Proof 2013-W American Buffalo 1-ounce gold $50 coins at the American Numismatic Association World’s Fair of Money in Rosemont, Ill.

The Mint’s total revenue generated from the sale of 1,000 of the Reverse Proof gold coins on Aug. 13 and another 1,000 coins on Aug. 16 accounts for more than 90 percent of the more than $3.68 million the Mint recorded in sales for all U.S. Mint numismatic products at the convention.

The ANA convention was the first time collectors and dealers could buy and immediately receive the product since the coins went on sale at noon Eastern Daylight Time Aug. 8. None of the orders placed online at the Mint’s website or through its telephone ordering system had been shipped by the end of the convention.

Buyers who patiently stood in line Aug. 13 at the ANA convention for the chance to purchase the Reverse Proof coins were limited to five coins at $1,640 per coin. It took just five hours for the initial inventory of 1,000 coins to be exhausted.

U.S. Mint officials arranged for the shipment of another 1,000 coins from the West Point Mint for delivery early Aug. 16.

Several hundred of the coins sold Aug. 13 were flipped by their owners for a quick profit, when eager dealers on the convention bourse were willing to pay premiums of $50 to $100 per coin for eventual resale. Most customers in line purchased the maximum five coins per person for a total purchase price of $8,200.

The dealers who acquired the coins immediately submitted them to Numismatic Guaranty Corp. or Professional Coin Grading Service, for grading and encapsulation. Both grading services created special grading inserts indicating the provenance of being sold at the ANA convention.

Significant premiums

Of these coins, the Proof 70 coins were eventually being retailed for between $2,400 and $3,000 at the show, online and over cable television networks.

Prices have since risen to between $3,000 and $4,000 for Proof 70 coins certified by either NGC or PCGS with the ANA show provenance label, through retail and online sales outlets, including eBay.

Lee Minshull from Lee Minshull Rare Coins, Palos Verdes, Calif., said part of the resale premium for the coins he purchased Aug. 13 can be attributed to the certificate of authenticity. Like many others who purchased the gold coins, Minshull had the certificates signed and dated Aug. 13, 2013, by Acting U.S. Mint Director Richard A. Peterson.

By 8 a.m. Central Daylight Time Aug. 16, two hours before the convention opened to the public, a line of more than 200 people with early access to the bourse had already formed in front of the Mint’s booth.

Those in line for the second batch of 1,000 Reverse Proofs were restricted to buying three coins per person. The Mint’s charge per coin had climbed to $1,690. The price was raised $50 Aug. 14 in accord with the Mint’s pricing grid for coins containing precious metals, because of the increase in the spot price of gold.

Most of those in line took advantage of the three-coin maximum for a total purchase price of $5,070. Selling the second batch of 1,000 coins took five and a half hours, according to U.S. Mint officials.

Some of the same dealers who purchased coins from the original buyers on Aug. 13 increased the premiums they were paying for coins that collectors and dealers secured Aug. 16 at the Mint booth. The premiums being paid ranged from $150 to $225 per coin.

Peterson was not present at the show Aug. 16 to sign and date any of the certificates of authenticity for coins sold at the Mint booth that day.

Premium product

David Hendrickson, president of SilverTowne L.P., said he purchased more than 500 Reverse Proof American Buffaloes from the total 2,000 coins the Mint offered. To acquire coins from the Aug. 16 batch, Hendrickson raised his premium to $150 per coin. He had paid $100 premiums to acquire coins from purchasers of the Mint’s Aug. 13 allotment.

Of the total number of coins he was able to acquire, Hendrickson said 60 to 70 percent were graded Proof 70 by NGC. The coins were being sold at retail prices in the $3,000 range, he said. NGC Proof 69 examples were offered for sale for $2,200 to $2,300 per coin, he said.

He said the coins were being sold over the Silvertowne.com website, by telephone and on the Coin Vault cable television channel.

John Maben from John Maben Rare Coins/Modern Coin Mart in Sarasota, Fla., said his goal before the ANA show was to secure from 100 to 150 of the Reverse Proof coins. Maben said he was able to accomplish that goal Aug. 13.

Maben said he did not aggressively pursue any of the coins from the Mint’s Aug. 16 offering. Since he already has 1,000 coins on order directly from the Mint, Maben said he did not see a need to acquire pieces beyond his original goal.

Maben said of the Reverse Proof coins he secured Aug. 13, he divided the submissions between NGC and PCGS for certification.

Maben said he wholesaled approximately 60 coins combined, certified either NGC Proof 70 or Proof 69 to another, unnamed dealer on the ANA bourse.

Approximately 40 of Maben’s coins that graded PCGS Proof 70 were offered to customers on his firm’s waiting list at $2,849 per coin, with the allotment selling out in 90 minutes, Maben said.

Maben said he has retained the coins certified PCGS Proof 69 and plans to hold on to them to evaluate market movement before deciding what to do with the coins.

Minshull said be purchased between 100 and 150 coins Aug. 13 at a $100 premium per coin. He acquired another 250 coins on Aug. 16, starting out with a premium of $150 per coin, later increasing to $200 per coin over the purchase price charged by the Mint. For some purchases, Minshull said, he paid a premium of $250 per coin.

All of the coins he acquired have already been sold wholesale, Minshull said Aug. 21.

Sales of the coins continue at the Mint. With the spot price of gold rising again, the retail price of the Reverse Proof American Buffalo coins was raised another $50 per coin on Aug. 21, to $1,740.

The Mint has established no set maximum mintage. Orders are being taken by the Mint through 5 p.m. Eastern Time Sept. 5, with production to meet the total number of coins ordered by the close of the sales period.

The Mint’s website at www.usmint.gov has a sales odometer that posts cumulative sales daily, Monday through Friday. Monday posts include all sales recorded after Friday’s afternoon post, those on Saturday and Sunday, and through the afternoon on Monday.

As of Aug. 21, the U.S. Mint had posted sales of 37,710 coins from all venues. ■

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