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Certificate Programs – An Exception to the Rule

By: Danielle Dwyer-Psarras

-- Posted 1 February, 2007 | |

Over the years, the terms “unallocated metal,” “pool accounts” and “certificate programs” have attracted some controversy.  I often receive questions from our clients and readers regarding the Perth Mint Certificate Program (PMCP) and whether the related risks of traditional certificate programs apply.  I am here to set the record straight.  The answer to this question is:  The Perth Mint Certificate Program is an exception to the rule.


As an approved dealer of the PMCP I mainly want to address why the Perth Mint is able to offer free unallocated storage, which was recently disputed in an article written by Mr. Ted Butler.  I have asked for a formal response from the Mint to help defend our position on why we here at Euro Pacific Capital feel that the PMCP is the very “Best Way to Buy Precious Metals” and their response is as follows:


As a manufacturer of precious metal products and a refiner of precious metals, the Perth Mint needs a sizeable quantity of physical gold and silver to support its operations.  When a client purchases metal from the Perth Mint, the Mint immediately purchases a like amount from the open market.  This metal is normally purchased in London and then either the physical metal is shipped to Perth or swapped for physical in Perth.  The physical metal held in Perth is used as work-in-progress inventory, finished coin and bar inventory and serialized London Good Delivery Bars.  As this metal would otherwise have been leased in from counterparties at commercial lease rates, the use of depositors’ metal to support inventory represents a cost-saving to the Perth Mint, hence its ability to offer the zero storage charge.


The Perth Mint holds full inventory confirmations on a quarterly basis and is subject to comprehensive and rigorous audits. The Perth Mint Depository programs are not permitted to, and do not, run short positions under any circumstances The Perth Mint does not lease metal out to mining or exploration companies and does not undertake precious metal derivative transactions.


The Perth Mint’s investment policies as described above are clearly described on its website at

An added benefit to the Perth Mint Certificate Program is that your metal is fully backed and guaranteed by the Government of Western Australia which is further insured by Lloyds of London. Not only is the State of Western Australia, Australia’s wealthiest State, but they are AAA-rated by the U.S. international credit rating agency, Standard & Poor’s.

In addition, Americans also face the potential risk of government confiscation.  Having some gold safely stored in Australia may be one way to guard against such actions.  A significant number of PMCP clients are United States based, who look for a politically and economically stable offshore location for their precious metals given that the United States did confiscate gold in the 1930s.  It is important to note that the Perth Mint is a State Government body and therefore is not controlled by Australia's Federal Government or the Reserve Bank of Australia. Confiscation is the preserve of Federal Governments.  Finally, if things really get bad here it’s comforting to know that you can flee with nothing on you, but still have tangible assets waiting for you in Australia.

All in all it is agreed that there are general concerns about pool and unallocated accounts where it cannot be established if the operator is backing its liabilities to investors. Therefore, it is extremely prudent for investors to research and question any program or facility they are investing or planning to invest in.


To begin your research on The Best Way to Buy Precious Metal, go to our webpage at


Danielle Dwyer-Psarras
Investment Consultant/Precious Metals Manager
Euro Pacific Capital, Inc.
Toll-free: 800-993-8350
Direct: 949-863-9500 ext. 237




Danielle Dwyer-Psarras Investment Consultant/Precious Metals Manager
Mrs. Dwyer-Psarras manages the firm’s precious metal, Perth Mint Certificate Program.

Prior to joining Euro Pacific, Dani worked in various capacities within the financial services industry. While her investment career began in 1999 with the Newport Beach branch of Hambrecht & Quist, she later spent 4 years as an investment advisor at Smith Barney in Irvine, CA. To more fully utilize her business management skills, Dani joined Fidelity National Information Solutions (NYSE symbol: FNF) as Director of Marketing and Business Operations. Upon the expiration of her contract with FNIS, she decided to return to the financial services industry and joined Euro Pacific Capital in March of 2004.

Mrs. Dwyer-Psarras holds a Bachelor of Science in Economics and International Business from Babson College in Wellesley, MA. She holds Series 7, 63 and 65 licenses.

-- Posted 1 February, 2007 | |

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