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 Replies: 18 / Views: 3,891 |
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New Member
Canada
44 Posts |
Does the RCM melt coins down, I am talking mostly about the high grade silver or gold coins, I see some are not sold out and was wondering what happens to them?  *** Moved by Staff to a more appropriate forum. *** |
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Pillar of the Community
Canada
2366 Posts |
On the NCLT side they may not even produce them all up front but do multiple smaller production runs depending on demand. On the circulation side they actively remove the more valuable metals from circulation through the Alloy Recovery Program (ARP).
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New Member
 Canada
44 Posts |
so say the mintage run is 7000, they may run off 3500. sell them and then take orders for the rest. if no more sell are made you'll see a "40 PERCENT REDUCTION IN MINTAGE" as with the Specimen Set - Blue Jay (2015) I know that the RCM mint is not allowed to hold coins, but the bank of Canada is.and so does the Canada post office.(Canada post is the only one I seen that puts some of there silver coins on sale 40% off was the last ones 2012 coins) I found this out a few years ago with the 1912 gold coin, I see some dealers are going in and get choice hand pick and put them up for sale. |
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Pillar of the Community
Canada
2845 Posts |
It indeed appears RCM mints smaller lots of NCLT and increases the availability of their products, upon demand. Canada Post is a licensed agent of RCM so, just like dealers, if they need to put items on sale for less than issue price, that's their peragative. The Bank of Canada does not hold NCLT although I believe the Finance Minster is still responsible for overseeing RCM operations as it's a Crown Corp. Of interest, Charlton categues lists Quantity Sold versus mintage so at some point in time, RCM obviously releases those numbers. I've never looked back to determine how often maximum mintage is reached, but I'd think it's not often. While it may appear to be a good thing when actual mintage is reduced, what it really indicates is simply low demand because far more eyes are upon all new releases than the secondary market. |
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Pillar of the Community
Canada
1747 Posts |
Burg, also for circulation coins, they have what is called the ARP (Alloy Recovery Program) which has been around for a number of years. when old coins are sent back to the mint, they are melted for their alloys.
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Pillar of the Community
 Canada
5585 Posts |
The NCLT stuff that the RCM puts out is many times face value than scrap value. They wouldn't melt the stuff down unless there was absolutely no more profit to be made through multiple discounts. You are paying significantly more than scrap value for newly minted NCLT. Almost across the board you can buy them at 40-50% of issue price after 3-4 years down the road .. and that's still letting the dealers make money, and the RCM has already made money from the dealers who buy at steep discounts. Edited by okiecoiner
10/26/2015 5:21 pm
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Pillar of the Community
Canada
2845 Posts |
Redeemed X for X likely do get melted. However if It's true that it only costs 4 to 6 cents to mint loonies and toonies, add the worth of silver and a $20 for $20 coin probably still costs the mint much less than $10. The greater the denomination, the higher the profit. Even if it's redeemed they get their silver back to melt and sell once again, recouping the redemption cost and even increasing it if sales of higher denomination X for X are more lucrative. RCM has become a highly efficient profit driven money machine according to their published financial statements - they have somehow become very proficient at wringing out every last cent (nickel?) in what they do. As in any business, that means minimal waste. |
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Pillar of the Community
Canada
5324 Posts |
Beg to differ, the RCM only returns 2.5 to 3% returns on sales the last many years operating as a legal monopoly, their dealers make 15 to 30% something is wrong. |
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Pillar of the Community
Canada
2845 Posts |
Quote: Beg to differ, the RCM only returns 2.5 to 3% returns on sales the last many years operating as a legal monopoly, their dealers make 15 to 30% something is wrong. Going by memory after looking at their financial statements in the past....but as I recall RCM is not allowed to profit on coins minted for the BofC. Yet their cost of operations is not differentiated between the various lines of business. Is my understanding wrong? If that's the case, their return on sales cannot be accurately measured. |
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Pillar of the Community
Canada
5324 Posts |
Total income versus profit or loss, equal about 2.5 to 3% last few years, for instance in 2012 RCNA taking the mint tour asked what it cost to make the new security loonie, guide went to a supervisor came back at around 16 cents, my guess the BOC pays the RCM around 20 to 25 cents a loonie |
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Pillar of the Community
Canada
2845 Posts |
According to RCMs 1st 1/4 financial statement, in 2014 the Royal Canadian Mint Act was amended so that RCM does not profit from mintages for the BofC, the supply of Canadian coin is it's primary mandate. During this particular quarter the % of that business was indicated to be 18.8% although I'd expect the volume to be cyclical. http://www.mint.ca/store/dyn/PDFs/R...sh_final.pdfTo my view, RCM is far more profitable than I'd expect of a Crown Corp and part of that profit is obviously driven by high priced collectables. |
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Pillar of the Community
Canada
5324 Posts |
Take a look at 2012 or 2013 annual reports profits are about same percentage, if the RCM can not now profit from minting coins for BOC, it should make less profit in 2014 |
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Pillar of the Community
Canada
2845 Posts |
Yes the problem is in comparisons but not enough information to draw conclusions as to where profit is derived, Even for year to year comparisons. Since RCM carries 4 distinct lines of business - Cdn coin, Collectables, Foreign Coin and bullion/refinery - that also makes it impossible to compare to industry standards. The lines between the various operations are not clear - for example cost saving technological advances and employment expenses relative to Cdn coin mint production likely impact their Collectables bottom line as well. Am I correct in assuming you believe RCM is not as profitable as they ought to be? If so, what improvements stand out? With respect to NCLT it's my opinion the cost has been steadily increasing in comparison with flat or falling billion prices. |
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Pillar of the Community
Canada
5324 Posts |
For 2012 and 2013 the RCM made about 2 to 3% of total revenues, not many business can work on these thin margins, must have too much overhead, giving too much dealer incentives, as the auditor general recently stated with the RCM taking their spouses on junkets. Since the drop in bullion, and no price adjustments for NCLT coins, one can assume that profit is else ware in the company. The large dealers get 30.00 on a 100.00 coin |
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Pillar of the Community
Canada
650 Posts |
I have always wondered where the difference in cost of production and face value gets accounted for.
If you do the math,adjusting for cost to produce ,I came up with 120 million in 06 [my sample year].
Does this end up as a credit in favor of the mint or Bank of Canada or ?
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Pillar of the Community
Canada
2845 Posts |
According the Royal Canadian Mint Act the RCM is simply the supplier of circulated coin in specific denominations instructed of them, by order of the Governor General in Council. The circulated coin is then turned over to the Minister of Finance or designate (see Section 7). Within that same Act, RCM is not to anticipate a profit - but how the actual cost of coin is determined (steel prices, etc) would be sort of interesting to know because it would appear from RCM financial statements they are paid something, at least cost. But since RCM does not profit from circulated coin - either the Bank of Canada or some other fund under that arm of the govt obviously incurs the sizeable gain created by the difference in cost and face value. Royal Canadian Mint Act: http://laws-lois.justice.gc.ca/eng/...ullText.htmlSample order: http://gazette.gc.ca/rp-pr/p2/2015/...s153-eng.phpInteresting to reflect - in the early days the denomination and weight/size of coins were directly related to the actual bullion value. Edited by wildflowerAB
10/28/2015 09:31 am
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Replies: 18 / Views: 3,891 |
Posted 10/26/2015 3:42 pm
