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
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.
For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter, just click here.
To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address.
For those readers who are also interested in the nuclear power sector that is currently coming back into fashion, you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.