XAG Intrinsic Tender
Mark Bainbridge
Director – Gold Stackers Australia Pty Ltd
Overview
•
•
•
•
•
•

Face Values on legal tender bullion coins
Problems holding coins in SMSFs
How Intrinsic Tender came ...
What is Legal Tender?
Back when the system worked

AGW
Face Value
£ per Oz.

.2354 Oz.
£1
£4.248

Denomination
$ Face Value
$ per Oz.

.9677 Oz....
Modern Bullion Coin Face Values

1 Oz.

1/2 Oz.

1/4 Oz.

1/10 Oz.

$ Face Value

50

25

10

5

$ per Oz.

$50

$50

$40
...
Modern Bullion Coin Face Values

AGW

1 Oz.

ASW

1 Oz.

$ Face Value

$100

$ Face Value

$1

$ per Oz.

$100

$ per Oz.
...
Modern Bullion Coin Face Values

ASW
$ Face Value
$ per Oz.

5 Oz.
$8
$1.60
Modern Bullion Coin Face Values

AGW

1 Kg.

$ Face Value

$3000

$ per Oz.

$93.31
Modern Bullion Coin Face Values

AGW
$ Face Value
$ per Oz.

.2948 Oz.
$200
$678.43

AGW
$ Face Value
$ per Oz.

.2354 Oz....
Giveaway Time!
Self Managed Super Funds
• SMSF are pretty much the only way to hold
physical precious metals inside super.
• Recent regul...
The Regulation
SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS 1994 - REG 13.18AA
(1) For section 62A of the Act, this r...
The Regulation
Paraphrasing from REG 13.AA the following must be observed:
• Asset must not be leased to related party
• I...
The Confusing Bit
Is my fund's investment in bullion coin
considered to be a collectable and therefore
required to comply ...
The Inspiration
ISO 4217 Currency Codes
Code

Number

Currency

AUD

036

Australian Dollar

CNY

156

Chinese Yuan

EUR

978

Euro

GBP

...
The Solution
The Intrinsic Tender bullion rounds have a face value,
and because that face value is denominated in XAG, it
...
Mary had a little Lamb
Following on from the success of the Penny design, we
proceeded to produce a cheaper round to suit ...
The ones that got away
4 variants of the Ram Shilling were originally
commissioned, with encapsulated mirror
varieties tha...
Home.. Home on the Range
Designed by Australian artist Elise Martinson,
previously a coin designer for the Perth Mint,
the...
Limited Edition Symposium Round
• First Rounds to be minted with
the 2014 XAG reverse
• Strictly Limited to 1000
• Availab...
Coming soon in 2014
•
•
•
•

5 and 10 XAG bars produced in Australia
XAG variants from additional countries
Introduction o...
Where To Buy
State

Dealer

URL

Gold Stackers Australia Pty. Ltd.

www.goldstackers.com.au

Peter Strich Stamps and Coins...
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Gold 2013 Sydney - The Future of Hard Currency

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Presentation at the 2013 Gold Investment Symposium in Sydney, 16-17 October 2013. Presentation given by Gold Stackers Australia's Director, Mark Bainbridge.

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Gold 2013 Sydney - The Future of Hard Currency

  1. 1. XAG Intrinsic Tender Mark Bainbridge Director – Gold Stackers Australia Pty Ltd
  2. 2. Overview • • • • • • Face Values on legal tender bullion coins Problems holding coins in SMSFs How Intrinsic Tender came about Local and Overseas Versions Marketplace acceptance Intrinsic Tender moving forward
  3. 3. What is Legal Tender?
  4. 4. Back when the system worked AGW Face Value £ per Oz. .2354 Oz. £1 £4.248 Denomination $ Face Value $ per Oz. .9677 Oz. $20 $20.67
  5. 5. Modern Bullion Coin Face Values 1 Oz. 1/2 Oz. 1/4 Oz. 1/10 Oz. $ Face Value 50 25 10 5 $ per Oz. $50 $50 $40 $50 AGW
  6. 6. Modern Bullion Coin Face Values AGW 1 Oz. ASW 1 Oz. $ Face Value $100 $ Face Value $1 $ per Oz. $100 $ per Oz. $1
  7. 7. Modern Bullion Coin Face Values ASW $ Face Value $ per Oz. 5 Oz. $8 $1.60
  8. 8. Modern Bullion Coin Face Values AGW 1 Kg. $ Face Value $3000 $ per Oz. $93.31
  9. 9. Modern Bullion Coin Face Values AGW $ Face Value $ per Oz. .2948 Oz. $200 $678.43 AGW $ Face Value $ per Oz. .2354 Oz. $25 $106.20 AGW $ Face Value $ per Oz. 0.5 gram $2 $124.41
  10. 10. Giveaway Time!
  11. 11. Self Managed Super Funds • SMSF are pretty much the only way to hold physical precious metals inside super. • Recent regulations treat bullion coins and bars differently. • Upshot seems to be that you are required to store your coins separately and have them insured.
  12. 12. The Regulation SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS 1994 - REG 13.18AA (1) For section 62A of the Act, this regulation applies to investments involving any of the following ( section 62A items ): (a) artwork; (b) jewellery; (c) antiques; (d) artefacts; (e) coins, medallions or bank notes; (f) postage stamps or first day covers; (g) rare folios, manuscripts or books; (h) memorabilia; (i) wine or spirits; (j) motor vehicles; (k) recreational boats; (l) memberships of sporting or social clubs.
  13. 13. The Regulation Paraphrasing from REG 13.AA the following must be observed: • Asset must not be leased to related party • Item must not be stored in private residence of related party • Decision on storage of item must be documented • Item must be insured in fund's name • Item must not be used by related party • Transfer of asset to related party requires independent valuation FULL TEXT : http://www.austlii.edu.au/au/legis/cth/consol_reg/sir1994582/s13.18aa.html
  14. 14. The Confusing Bit Is my fund's investment in bullion coin considered to be a collectable and therefore required to comply with the restrictions contained in regulation 13.18AA? FROM: Scenario questions for investments in collectables and personal use assets made after 1 July 2011 Coins are collectables if their value exceeds their face value. Therefore, if bullion coins have a value that exceeds their face value and they are traded at a price above the spot price of their metal content, they will be a collectable and your SMSF must comply with regulation 13.18AA in relation to the investment. SOURCE: http://www.ato.gov.au/Super/Self-managed-super-funds/In-detail/Assets-and-investments/Collectablesand-personal-use-assets---questions-and-answers
  15. 15. The Inspiration
  16. 16. ISO 4217 Currency Codes Code Number Currency AUD 036 Australian Dollar CNY 156 Chinese Yuan EUR 978 Euro GBP 826 Pound Sterling USD 840 United States Dollar XAG 961 Silver (One Troy Ounce) XAU 959 Gold (One Troy Ounce) XDR 960 Special Drawing Rights XPD 964 Palladium (One Troy Ounce) XPT 962 Platinum (One Troy Ounce)
  17. 17. The Solution The Intrinsic Tender bullion rounds have a face value, and because that face value is denominated in XAG, it can never be worth more than it’s face value. Therefore you get to store it at home for your SMSF. Front Back Mintage Mirror Frosted 500 Mirror Mirror 500
  18. 18. Mary had a little Lamb Following on from the success of the Penny design, we proceeded to produce a cheaper round to suit bullion investors rather than coin collectors. The XAG Ram was designed to be sold in tubes, and therefore save on capsules. It was double frosted to reduce fabrication costs as much as possible. Still production costs were too high for a competitive bullion coin, and they couldn’t compete effectively with cheaper bullion from the United States. Front Back Mintage Frosted Frosted 300
  19. 19. The ones that got away 4 variants of the Ram Shilling were originally commissioned, with encapsulated mirror varieties that would appeal to collectors. They were discontinued due to minting difficulties, and have since become highly sought after in the collectible market. Front Back Mintage Value Obtained Frosted Mirror 25 $200 Mirror Frosted 25 $230 Mirror Mirror 12 $690 (Sep 2013)
  20. 20. Home.. Home on the Range Designed by Australian artist Elise Martinson, previously a coin designer for the Perth Mint, the XAG Buffalo was designed to clearly indicate that this round was US manufactured. With a price point cheaper than US Silver Eagles, suddenly we had a product that appealed to bullion investors. The entire 2013 run was sold out within 6 months. Front Back Mintage Mirror Mirror 16,000
  21. 21. Limited Edition Symposium Round • First Rounds to be minted with the 2014 XAG reverse • Strictly Limited to 1000 • Available now from the registration desk Front Back Mintage Mirror Mirror 1,000
  22. 22. Coming soon in 2014 • • • • 5 and 10 XAG bars produced in Australia XAG variants from additional countries Introduction of XAU denominations Gold Symposium “Gold” rounds for Symposium 2014.
  23. 23. Where To Buy State Dealer URL Gold Stackers Australia Pty. Ltd. www.goldstackers.com.au Peter Strich Stamps and Coins www.peterstrich.com.au New South Wales Bullion Money Pty. Ltd. www.bullionmoney.com Western Australia Bullion Bourse Pty. Ltd. www.bullionbourse.com Queensland Maggies Bullion www.maggiesbullion.com Victoria ... and most importantly here at the registration desk here at Symposium.
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