Sunshine mint, safe??

[SILVERKING16Member]

Hey everyone,

Question:  im somewhat of a newbie, only been in silver for about a year, and I just just discovered that sunshine mint supplies the blanks to make american eagles. Now my type of investing is to get the silver itself, not any collectible, numismatic, or any other coins…..Im strictly stacking for the silver itself so all i want is to obtain as much pure silver as i can.. So by doing this, i have no interest in american eagles, maple leafs, australian…etc because you pay a much higher premium….With this reasoning would it be a safe bet to just buy all my silver in sunshine mint rounds or bars. I mean if you trust the american eagles to not be fakes or counterfeited, then its safe to say the sunshine rounds and bars are safe as well, correct??  As always any input is greatly appreciated. Thanks in advance.

SK16

[AGXIIKMember]

Silver King   earlier this year when Doc and  Bull Run were setting up the SD Bullion site they were looking into the best way to secure low cost silver products. I had just sold my Canadian property and wanted to invest those proceeds into silver.  Sunshine Mint was the primary site for this.  After Doc’s research we found that this mint was the best price around.

 I bought a hefty amount,  a got a good  price for the silver plus the minting costs.  It was about 94 cents over spot, reasonable for the amount requested.  Sunshine has their own branded .999 rounds which are quite attractive, as one would expect of a mint.  The only real additional cost was the shipping and insurance which was not free by any means.  That cost added about 21 cents per oz.  Overall, my experience was satisfactory and the process from order with wire transfer for payment to delivery was about 3 weeks.

Since that time Doc found a lower cost means to get rounds such as the buffalo and at a price that can be about 99 cents over spot with most of the mailing costs absorbed by the seller.   I prefer generic .999 rounds as they are the best bang for the buck.  I do like American Eagle Silver coins to since they are eligible for IRAs but my silver purchases are  4 to1 in favor of good quality 1 oz rounds over AEs. Call me cheap but rounds are about $1.50 less per oz for the same .999 silver coin. The difference?  An eagle on the front of the coin.    I also bought some 100 oz bars just for the heck of it.  They make good door stops.

[Flying WombatMember]

I’ll add to AGXIIK’s sound comments.

Generally speaking, it’s wise to stick to well known makers of generic rounds.  Sunshine Mint rounds clearly fall into my top ten list in that regard.  They’ve been around for a long time, and were very popular in the late 1970s and 1980s.  They are well known and respected within the coin and bullion world.  As a result, when you are in a position to sell these coins back to that world, you’ll be treated better.  If you walk into a coin shop with 100 “Happy New Year 2012″ generic rounds made by a lesser known mint, who knows how much of a haircut you’d take in terms of a discount to spot buy-back price.

Engelhard generic products of any sort are another good “generic” form of silver to go after.  Johnson Matthey too. 

Also, under no circumstance should you consider buying sterling silver rounds (0.925 fine) by any mint unless you’re able to get those rounds or bars at a massive discount to spot.  40% off spot would make me motivated to buy them, but that’s probably about it.  Why?  Because when you go to a coin store to sell them, you will be faced with buy-back offers 40% below spot — give or take a few percentage points depending on the coin shop in question.  As but one example, The Franklin Mint has produced a huge number of these sterling rounds and bars over the years.  You’re going to see them.  Beware. 

I’ve had some coin stores offer only 90% of spot on reasonably well known 0.999 fine products such as stuff produced by Northwest Territorial Mint — which is certainly very well known in the industry and indeed, a large mint.  It’s just best to try to stick to the very top of the food chain.  Sunshine Mining, Engelhard, Johnson Matthey, etc…

As a general rule, going for the most silver you can get for your fiat is a good policy — as AGXIIK explains above.  There’s nothing wrong with buying higher premium items too, but you need to be reasonably certain that the higher premium is not a temporary phenomena.  The built-in demand for American Silver Eagles, for example, will likely maintain a buy-back market price with a significant premium over spot.  That’s the key.  You always have to study what the buy-back market conditions are like over the long-term and make your best estimate as to how that relates to the specific product you’re buying. 

Many people in our community love to buy things like the African Elephant coin at 10 to 15 percent premiums over spot and they even mistakenly call these things numismatic or semi-numismatic coins.  Well, with mintage numbers well north of 500,000 and most of the coins collected and housed in perfect and near-perfect condition, there’s no way on earth a real coin collector would call those coins semi-numismatic.  Years from now, when people go back to the market to sell those coins, they’re going to find they’ll be lucky to be offered spot and no premium on the buy-back.  There are exceptions, of course.  In fact, I’ve accumulated a specific non-numismatic coin produced out of the Perth Mint that will likely command a 40% premium over spot in a few years.  Don’t ask me which coin.  I’ll tell all in 2013 when they stop producing it.  <grin>   

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