02 Apr 3 Tips for working with a precious metals reclamation refiner
The refining of precious metals is often a complex process and businesses such as yours can be losing money with every transaction if you’re not careful.
While there are, unfortunately, a few different areas where money is typically lost, you want to first address your relationship with your refiner. Here are 3 critical tips to making sure your arrangement with your refiner won’t cost you in the end.
#1 Contracts are critical
Maximizing your returns happens if and only if you protect yourself legally right from the beginning of your relationship with a refiner.
Contracts are the best way to ensure you and your refiner are protected and on the same page. A good contract will clearly outline the terms and conditions of your arrangement. Make sure you review the contract thoroughly to ensure you understand it and agree with it before you sign. If you’re confused about a clause, engage a trusted legal representative to review it.
#2 Higher upfront fees shouldn’t deter you
When it comes to maximizing your metal returns, don’t price shop on upfront costs. In fact, it’s typically the refiners with lower upfront fees that make up for the price savings by lowering the value of your returns.
Upfront fees typically include:
- Smelter processing costs
- Refiner costs
- Metal borrowing interest from beginning to the refining return
- Additional future costs to be settled upfront
In refining, if the upfront fees seem too good to be true, it often is. Refiners lure you in with low costs but then make up the difference exponentially by giving you a lower value on your returns. The real money that you make is in the value of your metal and artificially lowered value can cost you far more than higher upfront fees.
#3 Minimize risk by preparing for a claim
When you plan ahead for challenges before a discrepancy arises, you can make a level-headed decision. If you have a conflict with your refiner, there are steps you’ll have to take to properly contest your claim.
The first step is to engage an umpire. Often times the umpire can resolve issues. But when that’s not possible, it might be necessary to enter a legal process.
At this point, your lawyer will guide you through the more complex process of resolving your claim legally.
The Bottom Line
The bottom line isn’t simply the money you receive from your precious metals. The bottom line is that you need to enter into an arrangement with a refiner whom you can trust. Negotiating the contract is just the first part of the process.
To read about protecting your metal before and during refining process, read our 12 Little Known Secrets to Maximize Your Precious Metals Return.