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« The Italian Job | Main | The DOW Pops above 8800 Suggesting Continuation of the Rally »
Tuesday
Jul212009

First Majestic Silver Corporation: Silver Sales Direct to the Public

FM Logo.JPG



On Saturday morning we had a telephone conference with Keith Neumeyer, the President and CEO of First Majestic Silver Corporation (TSX: FR) and Dan McIntyre Investor Relations regarding their direct sales of silver to the general public.

One of the reasons for this call was that one of our readers who goes by the name of Cam alerted us to this service being provided by First Majestic after we had published an article about my children buying physical silver coins and paying what we thought was a large premium to boot. Their procurement method was to use a website called nzsilver.com and the cost was NZ$41.40 with another $2.00 for shipping.

Now using the xe currency converter this coin retails here in New Zealand at NZ$41.40
or
US$26.1234,
CAN$30.2843,
GBP 16.029
AUS$32.7617
CNY178.497
etc.

Now if we visit the web site of First Majestic and click onto the tab marked Bullion Sales you will see that they have an easy to use order form together with the price of silver at top of the page. You can purchase silver in the form of coins, bars and ingots, however there is a limit of 300 ounces per customer. The Bullion Sales page is about to be revamped to include a shopping cart facility which should add to the ease of making a transaction and also reduce the administrative time consumed by the present method.

At the time of writing the price of silver is quoted at US$14.74 an ounce and according to Kitco silver closed in New York on Friday at US$13.41 so you are paying a premium of around 10% on top of which you need to add postage.

As an example of costs to ship to this part of the world Dan referred us to this order:

We have shipped several orders to NZ, and to give you an idea on shipping rates, we had a client order 288 ounces (our maximum order is 300 ounces) and the shipping was USD $165 through UPS.

Therefore, you are only looking at a $.60- $0.65 cost per ounce to ship.


So if we add $0.65 to todays quoted cost of silver we come up with US$15.39 an ounce, which is dramatically cheaper then the price my children achieved as regular everyday shoppers.

In conversion with Keith and Dan they informed us that they originally started this service for their own share holders because of the difficulty in obtaining physical silver. Sales are growing and currently stand at 12% of production with sales projections expected to hit 20% by the end of the year.

From what we have gleaned so far this looks to be a competitive way of acquiring the physical metal and well worth checking out before you make a purchase.

The second part of our conversation covered some of the exciting developments that are taking place within the company and we will post our findings shortly, so stay tuned.


Have a sparkling week.

Any thoughts – then fire them in.

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Reader Comments (9)

distributing physical from the smelter-gate is a good first step. I have often wondered what it would be like to pay dividends in bullion at some preferred price schedule, and extend it to employees.

Imagine the process efficiencies and possible innovations that this would bring out of employees' heads and expertise! Plus what it would do to the share-price of such a company!
Just a thought.

July 22, 2009 | Unregistered CommenterLester

Look for more companies to adopt this model. Pan American sells private label bullion also. This is also another crack in the dam that is the paper silver markets.

Love the bullion based dividend idea Lester. Sign me up!

July 22, 2009 | Unregistered CommenterRich

Glad to hear folks in NZ have a "new" reasonable source to obtain bullion...be advised buyers who only purchase say 30 ounces will end up paying higher-per-ounce shipping due to the nature of such things...I suggest several buyers pool their purchase into one shipment (this is a no-brainer) and benefit from that...yes indeed, another crack in the paper markets! Keep up the good work gentlemen...Snakeman Scott in the USA

July 22, 2009 | Unregistered CommenterSnakeman

Thanks for the info but at the time of my writing this email First Majestic charges $15 for a 1 once round plus shipping. Pan American Silver thru the Northwest Territorial Mint is quoting a price of $14.66 including shipping. The price is even lower for larger purchases.

Thought you might want to be aware of this if you are not already.

July 22, 2009 | Unregistered CommenterL

Perth Mint does not charge a premium to Australians and New Zealanders. They do charge around 3% to people from other countries.

I am surprised UPS will deliver, I thought it had to be registered mail all the time!

July 22, 2009 | Unregistered CommenterO

Team,

Thanks for taking the time to add your comments, the more we get the better informed we are and hopefully we can secure a good deal when buying physical silver.

July 22, 2009 | Unregistered CommenterGold Prices

Thanks for looking at First Majestic Silver, I have had Shares in the company for over a year. They have done everything that they said they would do since I bought them.
They have increased there Silver reserves significantly and increased their production at all three mines. They also find creative ways to add to the bottom line like selling bullion.

July 22, 2009 | Unregistered CommenterRandy Anderson

Bob,

Majestic is marketing silver through Northwest Mint.
I assume you are familiar with the delivery practises reputation
of Northwest Mint. The delivery may be hard coded on the web
for 2 days or 7 days, but don't be surprised if that dosn't evolve
into ..........12-14 weeks or.......................longer.

July 26, 2009 | Unregistered CommenterM

There is a huge choice of places that deal in bullion coins online.

I’d most recommend you buy silver bullion is make a research and investigate at google. You can find a site that contains tons of useful information on buying silver coins and allows you to bid on a wide range of gold & silver bullion coins in an auction format. This virtually guarantees you’ll find the coin you’re looking for at a fantastic price!

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