By Louis Golino for CoinWeek ….
On September 21, 2015 the Perth Mint began offering a new line of one-ounce silver bullion coins featuring a design that had appeared previously on Perth’s one-kilo and one-ton gold coins: a bounding red kangaroo against a background of stylized sun rays.
The series is known as the Australian Kangaroo, which is a bit confusing since the other Australian Mint, the Royal Australian Mint already produces silver kangaroo coins. Perth has also been issuing high-relief silver proof roos, as they’re known, for years.
The new coin, dated 2016 and carrying a face value of $1 (AUD), features a silver purity of .9999, or “four nines”; a special security feature (a micro-engraved letter “A” inside the first letter of Australian); and an unlimited mintage.
The mint announced in March that it is producing one million coins per month and had sold 7.5 million of them by then, which suggests that the total as of writing may be well over 10 million. That would make the coin probably the fourth best-selling silver bullion issue in the world (after the American Silver Eagle, the Canadian Maple Leaf, and the Austrian Philharmonic) during its initial run.
And notably in its own promotions, and those of the numerous dealers and distributors who sell it, the 2016 coin was explicitly billed as being the first year of issue. That matters to collectors and numismatists, who often place special value on the first coin of a series–even a bullion series.
Series actually began in 2015
Paul Maritz, a numismatist from South Africa, recently explained to me that the 2016 kangaroo is actually not the first coin in the series. As he explained on his web site, the series actually began with a coin dated 2015 that has several other differences with the 2016 issue.
It turns out that the 2015 issue was produced at the initiative of eBay and Bay Precious Metals (BPM), a division of Coins ‘N’ Things, a U.S. Mint-Authorized Purchaser and the largest supplier of precious metal planchets to the United States Mint.
In addition, only 300,000 of the 2015-dated kangaroos were minted by Perth on BPM’s behalf and, perhaps most interestingly, the coins were held back from sale by BPM since last year and were offered only this past May exclusively on eBay, with the first sales recorded on May 10.
As for the physical differences between the 2015 and 2016 issues, the 2015 coins have a silver purity of three nines rather than four and they have a different finish (frosted or matte rather than brilliant). There are also design elements–small wavy lines that circle around the outer edge of the design are present on both the obverse and reverse of the 2016 coin–that do not appear on the 2015 issue. Instead, the relevant area is blank and frosted.
In some ways the 2015 coin appears like a prototype, since it has a relatively unfinished appearance compared to the 2016 issue. For example, most Perth bullion series feature reverse proof surfaces rather than the duller matte finish of the 2015 roo.
Additionally, Perth explained that it decided to change the silver purity to four nines starting with the 2016 since 99.99% purity is the current world standard demanded by silver investors. In 2015, it was still producing coins with a purity of three nines.
Another interesting part of the story is that in August 2015 at a promotional event organized by BPM in conjunction with the 2015 ANA World’s Fair of Money in Chicago, attendees of a special dinner were presented with special pre-release 2016 coins, Intended as gifts and not for re-sale, the coins came in special presentation boxes and there may be only 100 of them in existence.
Two examples were sold recently on eBay for $200, which, depending on how many launch coins were actually made, will probably seem like a great bargain soon enough. It appears that the 2016 pre-release coins given at the BPM dinner in Rosemont do not differ from the regular 2016 issue.
Apparently no mention was made at the dinner that a 2015 coin had already been struck, so attendees of the dinner also thought the 2016 coin was the first of the series.
This story has a number of implications.
First, while it is increasingly common for both collector and bullion coins to be struck at the behest of specific coin dealers and companies by various world mints, it is unusual for a dealer or company to hold back their release until after the subsequent coin in the series. This is, as far as I know, the first time a major new bullion series turned out to have begun a full year earlier than buyers were initially told.
At the same time, 300,000 is a low mintage for a major bullion coin. The only current major world bullion series with a set mintage that low is Perth’s Lunar series II.
Some online commentators have expressed concerns about the discovery of the 2015 coin in recent weeks, with one silver stacking forum participant dubbing the affair “RooGate.”
Others asked, for example, if they would have purchased the 2016 coin if they had known it wasn’t the first issue. Still others pointed out that in Perth’s official mintage and sales documents posted online (source: PDF), the 2015 coin is listed as the “red kangaroo”, a reference to the design and not the actual name of the coin (which, they argue, is misleading).
All things considered, the issue seems to be more about what information was shared with collectors rather than how the actions of BPM and Perth may have impacted sales or prices, as some collectors have speculated in the forums. Perhaps Perth was able to sell more of the 2016 coins because it was believed to be the first year of issue for the series, but it is impossible to prove a negative.
Regarding the relationship between Perth and Coins ‘N’ Things (the parent company of Bay Precious Metals), a Silverstackers forum administrator from Australia noted:
“No mystery, CNT are the biggest distributor of precious metals in the US. They are Perth Mint’s largest customer in North America, and it is public information that CNT hold[s] the exclusive distributorship for Perth Mint gold and platinum products in the US.”
I would also note that this is certainly not the first time a U.S. dealer has had Perth produce coins on its behalf since Asset Marketing Services did that with the Australian Wedge-Tailed Eagle program, for example. There was a gap of a number of months from the time some of those coins were sold in the U.S. until they were sold to Australians, but it was not the same situation, as they were still sold in Australia the same year they were dated, and buyers knew exactly when the series began.
When Paul Maritz asked Perth about the delay, he was told that the decision on when to release the 2015 coin was strictly BPM’s.
Perth Mint announcement
To clarify what happened with the silver kangaroo series, I reached out to the Perth Mint and to BPM with several questions including (among others) whether buyers should have been notified when the 2016 coins were marketed that they weren’t actually the first issue and how BPM’s purchase of the entire mintage and its plan to distribute it exclusively via eBay was possible since Australian law requires that 10% of the mintage of all legal tender Australian coins be sold within the country.
Neither Perth nor BPM responded to my questions. However, on June 16 Perth’s media office notified me that it was releasing that day the following statement:
“The Perth Mint is pleased to advise that 50,000 2015 Australian Kangaroo 1 oz silver bullion coins out of a total mintage of 300,000 will be available for sale in Australia next month.
Manufactured from 99.9% pure silver, this release is the limited forerunner [italics added] of the annual Australian Kangaroo 1 oz 99.99% pure silver bullion coin, first issued in 2016. A high quality silver product competitively priced close to spot, it’s ideal for anyone seeking exposure to silver in the form of official legal tender.
The coin’s reverse features The Perth Mint’s iconic ‘red kangaroo’ design on a symbolic sunburst. The words AUSTRALIAN KANGAROO 2015 1 oz 999 SILVER and the Mint’s ‘P’ Mintmark are inscribed in a frosted ring surrounding the main design (Observers will note that the frosted ring and its obverse equivalent have been replaced on the first annual ‘four nines’ release with a delicate wavy-line pattern).
Visible with the aid of a magnifying glass, the letter ‘A’ is micro-engraved within the first ‘A’ of Australia to verify the 2015 coin’s authenticity.
The Australian Kangaroo 2015 1 oz Australian Kangaroo silver bullion coin will shortly be available either individually, in tubes of 25 coins, or in monster boxes containing 250 coins, direct from The Perth Mint and leading Australian bullion coin dealers.
A further announcement will be issued nearer the time of release.”
The announcement from Perth means that only 250,000 coins are available outside the Australian market. While there is no guarantee these coins will carry a substantial premium in the future, it is worth considering that Perth’s Lunar and Kookaburra coins with similar mintages have done well over time. And raw coins at what BPM is currently charging on eBay are certainly an inexpensive way to stack silver.
Nevertheless, both Perth and BPM would have better served their retail customers and collectors by notifying them earlier on about the 2015 coins and their release plans. And while it’s impossible to say for sure, the concerns of collectors may have played a role in the announcement by Perth that 50,000 coins will be sold in Australia starting in July, especially given the timing of the announcement coming right after the issue drew a lot of criticism online. Paul Maritz, in correspondence with the author, said he doubts it would have happened otherwise but again one can’t prove a negative.
By now, astute collectors are familiar with dealer-initiated coin programs, but buyers of a new coin series should know at the time of purchase exactly what they are getting.
Australian Silver Kangaroo Coins Currently Available on eBay