Selling Placer Gold to a Refinery
There are a few different options on where to sell your gold. If you are a prospector who has accumulated a bit of placer gold that you need to sell for some quick cash, one simple place that you can sell it is to a refinery. Refineries will pay you for the actual gold content of the gold that you send in, and take a certain percentage for their profits.
It seems that many prospectors have had bad experiences sending their gold to refineries, and feel that they are not getting a fair price for their gold. There can be several different reasons for this, so let’s take a look at how the process works so you can get a decent idea of how much money you can expect for all that hard work.
First, it is important to understand that natural gold nuggets, flakes, and fines are not pure 24k gold, but actually can vary quite a bit in purity from different areas. Gold from some regions can run as high as 23k in purity, but I have also seen areas where the gold content is significantly less, sometimes as low as 14k to 18k. The average is generally somewhere in the range of 20k – 22k, but it is best to know exactly what purity your gold is so you can anticipate what a fair price is. The remaining content is generally copper or silver. Some refineries will pay you for silver content as well, but this generally only adds up to a few dollars per ounce and really doesn’t make for a very significant effect on the overall price you get for your gold.
Second, you should understand that the quantity of gold that you are selling will make a difference on the percentage of your payout. Many people do not understand this, but a refinery does not go out of their way to figure out the exact percentage of your gold for refining purposes on small quantities. It is not time well spent for them to go through the process on small batches of gold. The exact amount will vary from different refineries, so it is good to check with them. For example, if you bring in a quarter ounce of gold, the refinery is not going to go through a special smelting process for such a small amount of gold. They will do a simple acid test on your gold, but they are going to leave plenty of spread in their calculations to ensure that they are making money on the deal.
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Of course this seems simple enough, but you must understand that a refinery needs some profit margin to stay in business. Some refineries make wild claims about their payouts, but some critical thinking is in order here. If you think a business can have a building, cover permitting costs, hire employees, etc. on a 2% profit margin you are surely mistaken. Perhaps if they deal in huge volumes this may be possible, but I doubt it. Rather than chasing these mythical high payout percentages, I would recommend that you use a refinery that actually has a proven reputation so you can be confident that you are getting an honest payout. A refinery that takes 10% profit margins on 22k gold is still better than a refinery that takes 5% profit margin but lies and says that your gold is only 18k. Believe me, it happens all the time, and there are some refineries that seem to do this as a regular part of conducting business.
If you have placer gold, natural gold nuggets or gold in quartz specimens, you should really consider selling your gold to a collector rather than a refinery. The refineries are decent options if you need to sell your gold for some quick cash, but they are only interested in the gold content and that is it! A collector will often pay much more for placer gold, especially if you have attractive nuggets that are over a gram or two in size. If you have some nice nuggets, find a collector or mineral dealer who wants them and you will probably come out way better than if you send them off to a refinery.