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Saturday, February 12, 2011

Precious metal buyer's business is good as gold

Winnipeg Free Press - PRINT EDITION
By: Martin Cash
Posted: 02/9/2011 1:00 AM

KMG sees dramatic growth

MICHAEL Gupton wants to buy your gold, but he does not want to be associated with the TV hucksters who are all over cable television these days.

Gupton has just moved his three-year-old home business, KMG Gold Recycling, into commercial space near Winnipeg's Confusion Corner because of the phenomenal growth he's had over the last three years.

Michael Gupton holds remains of rings and coins brought in by sellers.

Michael Gupton holds remains of rings and coins brought in by sellers. (PHIL.HOSSACK@FREEPRESS.MB.CA)

Tips to sell your precious metals

$1 worth of old U.S or Canadian silver nickels, dimes, 50-cent pieces or silver dollars is worth about $13.

Try to determine how much precious metal is contained in the objects you're selling.

Most jewelry would be either 10- or 14-karat gold. Pure gold is 24 karats, so 10-karat gold is about 41.7 per cent gold.

You can get a fair approximation of the weight by using a kitchen countertop scale accurate to the hundredths of an ounce.

But there has also been dramatic growth in business in general, dominated, it seems, by garish sales pitches from operators that may give some of us pause.

Gupton, a former gold prospector, claims to pay the highest prices in Canada -- no less than 81 per cent of market prices for precious metals.

As well as honesty and integrity -- KMG won a marketplace excellence award in 2010 from the Better Business Bureau -- Gupton says he offers higher prices partly because he has access to his own refinery.

"We try to educate the consumer," Gupton said.

"It they want the most money, they have to deliver their metal to a refinery."

KMG pays a minimum of 81 per cent (there was another operator offering 80 per cent in the fiercely competitive Vancouver market) if Gupton does his own speculation as to the quantity of precious metal contained in a piece of jewelry or metal object.

But he'll pay 97 or 98 per cent if he sends it off to his own refinery on the West Coast (the customer does have to pay a refinery fee).

His business regularly accesses enough material to produce between 100 and 200 ounces of fine gold every two weeks. At $1,350 an ounce, that's worth as much as $270,000.

Gupton says he stands by his claim of paying more than anyone else in the business because he has sent metal off to some of the others. On lots that he has paid $100, he said others have offered him between $20 and $50.

He said he was surprised one company that paid him only $50 was one of the country's oldest and most prestigious jewelry retailers.

Gupton said the fact his company runs its own refinery adds a level of integration others can't provide and a level of certainty that lets KMG pay a higher price.

"We are a primary refinery," he said.

"When we melt the metal down, the zinc, tin, lead, manganese and other metals are boiled off and we are left with ingots that are predominantly gold, silver and copper."

That is then sold to a secondary refinery that produces pure gold and silver and then it is sold back into the market to jewellers and the mint.

Christine Aquino, director of marketing for the Royal Canadian Mint, said the Crown corporation does buy precious metals from the secondary market.

"The amount we buy depends on our own capacity and also the quality of the metal," she said. "We have certain programs on the go, but when we have the capacity we will buy on the secondary market."


Posted by Mike Gupton at 9:33 AM