World Coins

Canada completes melting of gold coin hoard

One-third of all Canadian 1912, 1913, and 1914 gold coins have now officially been melted.

More than 215,000 $5 and $10 coins were melted during a 10-day period early in June, according to sources in Canada.

Alex Reeves, senior manager of Communications with the Royal Canadian Mint, confirmed that the final day of melting was June 12.

The coin melt comes more than 30 months after the RCM and the Bank of Canada announced sales of 30,000 specially selected coins from a hoard stored in a Bank of Canada vault since World War I. 

All 30,000 of the coins offered to the public sold out, with two dealers in Canada — Sandy Campbell and Ian Laing — saying they bought more than half of them from the RCM. 

Laing, owner of Gatewest Coins in Winnipeg, Manitoba (and Albern Coins in Calgary, Alberta), spoke exclusively to Coin World about the hoard dispersal.

“This is a once-in-a-lifetime thing and this is the end of it for Canada. There’s no more out there,” he said.

The melt required many days because of the sheer volume of coins, according to Campbell, who owns Proof Positive Coins.

“It was a lot of coins and they couldn’t physically melt them any faster than that,” he said.

The total gold weight of coins melted was approximately 95,586 ounces, which was valued at $113,060,275 U.S., at the closing market rate of gold on June 12 ($1,182.80 U.S. an ounce).

A breakdown of the figures follows.

The RCM melted 35,341 of the .900 fine gold $5 coins, each weighing 8.36 grams, for a total gold weight of approximately 8,550 ounces, with a bullion value of $10,112,966 U.S.

The mint also melted 179,881 of the .900 fine gold $10 coins, each weighing 16.72 grams. The total amount of gold recovered from the $10 coins was approximately 87,036 ounces, worth $102,947,309 U.S. 

The coins were held at the RCM until the final accounting, which took place this spring. Only then did the RCM receive the go-ahead from the federal Finance department to melt them.

Reeves said of the delay in melting the coins after sales ended: “They’re not our coins. We needed the green light from the asset holder.”

Before the hoard sale was announced, the issue of what happened to the 1912 to 1914 gold $5 and $10 coins was an oft overlooked footnote in the annals of Canadian numismatics. Though researchers like James Haxby had identified the whereabouts of the coins in his 1983 book Striking Impressions: The Royal Canadian Mint and Canadian Coinage, there was not broad awareness in the market.

“They’ve been a legend for the last 100 years,” Laing said. “Every 20 or 30 years someone would discover that they were there.”

When Canada’s government decided to unload its gold reserves from 2000 to 2005, the 1912 to 1914 coins were spared, and were all that was left. 

In November of 2012, the Bank of Canada and RCM announced that 30,000 of these coins were “hand-selected for sale by the Mint as high-quality treasures of Canada’s numismatic past.”

With limited tutelage, Mint employees selected what they deemed as the best coins, in two separate categories, for each denomination and year.

The categories were dubbed “hand selected” and “premium hand selected,” with the latter group sold at a premium over the more abundant “hand selected” pieces.

According to Reeves: “As we’ve said since the very beginning, ‘unfit’ coins have been melted. Only coins with a high-quality appearance were sold as collectibles. Other coins with surface marks or noticeable wear caused by handling or environmental changes over the last 100 years were melted down and converted into a tradable, liquid asset for the Government of Canada, which owns the coins as assets held in the Exchange Fund Account. In addition, we have retained a few high-quality examples for loans to museums and archival purposes.”

The Mint made it clear when announcing the public sale of the coins that melting the majority of coins would help preserve the overall value of coins in the hands of collectors.

Until the melt was confirmed, there was speculation that more could surface, Campbell said.

“It was a burden on our market and it had to go,” he said. “These coins could not have been absorbed by the numismatic market without a huge dropoff [in value]. And nothing was really gonna happen until this melt happened.”

Laing echoed him, noting that collectors “now have a chance to see what the existing picture is. Now that these are melted collectors know what they’re dealing with” as far as surviving mintages.

Many of the coins were submitted to third-party grading services, and Laing and Campbell specifically sent what they deemed were the nicest ones to Professional Coin Grading Service.

Anything that has been decent has pretty well gone through PCGS,” Laing said.

There was some criticism from collectors of Canadian coins for the scattershot quality of the coins, regardless of the classification that the briefly trained Mint employees assigned. 

“The quality was all over the place,” Laing said. “You could get a junk one in the premiums and get a gem in the select.”

Laing said that certified examples are worth more in the market today because they’re a known quantity. 

“You don’t know what you’re getting with the raw coins,” he said. 

“The average grade on the premium coins was better than Mint State-63+, and the average grade on select coins was [MS] 62 to [MS] 63. We didn’t even bother to have many of these coins graded.”

However, Laing said that the RCM did no worse or no better than any mint would have done.

“No mint is capable of grading coins for the most part, if you’re talking about numismatic coins from a century ago,” he said.

The hoard has affected the market in several ways, according to Laing and Campbell.

Before the hoard’s release, no 1913 and 1914 $5 coins had been graded Mint State 65 or higher.

Today, two 1913 and three 1914 $5 coins from the hoard were graded MS-65 by PCGS, according to Campbell.

Ten MS-65 1912 $5 coins were in the market before the hoard's release, and the hoard included another nine examples.

Since the hoard’s release, 1912 $10 coins in high grades are worth more, because no 1912 $10 coin from the hoard graded higher than MS-64. 

Most of the high-grade examples of 1914 gold $10 coins came from the hoard, Campbell said. 

The largest number of the highest grade coins are 1914 gold $10 coins, since 309 MS-65 examples came out of the hoard, joining only one example known before the hoard.

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