Those are both about small-time coin mining, an expression that refers to searching circulating coins for higher-than-face-value finds.
But there are big time players doing this.
In fact, when Dan Snyderman of CC Enterprises LLC saw my penny hoarding post he offered to answer any questions I had about industrial scale penny sorting.
His company takes in as much as 20 tons of pennies at a time, sorting them to separate out the pre-1983 pennies for sale to investors.
CC Enterprises deals with other coins as well.
I took Snyderman up on his offer and sent him a list of questions.
Here they are, along with his answers…
SG: Can you sum up in a couple sentences what your business does?
DS: We mine circulated coin to provide the public with access from pounds to literally tons filling freight trucks of coins for their metal and numismatic value.
SG: How did you get started?
DS: My business partner and I realized there was a rather unique market in coins, such as copper pennies, where excessive printing of the US currency has caused inflation so vast that the metal to make the one-cent coin was worth greater than the face value.
With our combined investment and banking knowledge, we literally coined the idea into a business that benefited not just ourselves, yet also the general public, who may not have access to coin on an commercial level.
SG: The auctions for pre-1983 pennies on eBay seem to be fairly inactive lately. Have your sales dropped off?
DS: The sales through our business do sell in quantities similar to eBay by the pound.
However, most of our sales are by the ton, and have actually increased.
The amount of copper pennies sold through our business are significantly greater in number than the amount sold on eBay.
Presumably due to greater growing economic uncertainty, people are seeking innovative solutions to hedge against inflation.
Just look at the stock market “flash crash” of 2010.
Also, and more significantly, the recent scare in Greece with the Euro has resulted in many people having greater concerns over keeping their wealth in a fiat currency (like the US dollar).
SG: Where do you get your supply?
DS: Federal Reserve money hubs.
SG: What percentage of the pennies you sort are pre-1983?
DS: It ranges, however, generally over 20%.
SG: I notice on your site that you sell unsorted wheat pennies too. Are these pulled from your general penny supply, and if so, how is that accomplished?
DS: Over the years, many people have requested we start selling not just unsearched copper pennies, and nickels, but also unsearched wheat cents.
They wanted a source they could trust the definition of unsearched without the drama and risk.
Though many people define unsearched coin differently, we found a rather agreeable definition that the general public liked, started purchasing from various sources around the country, and offer in 5 pound incremental quantities.
The feedback we have gotten has been fantastic, so we continue to offer them on our website.
SG: Can you tell me a bit about your sorting machines (size, cost, pennies-per-hour sorted)?
DS: We use rebuilt, industrial-scale sorting machinery that have been heavily customized.
The cost is a difficult one to answer, as my business partner is very skilled in machinery.
He has designed, and built, parts from the ground up.
One can’t put a price tag on that.
As far as pennies per hour, we can sort with our set of machinery approximately 20,000 coins per minute.
SG: Are your customers primarily interested in making a good return or protecting themselves from currency collapse, banking failures, etc.?
DS: We have variety of customers that buy for their own reasons.
Several of our customers simply purchase from us at wholesale pricing to retail in shops or digitally on the web.
Most, however, are simply looking for a safe place to create tangible assets.
It’s not so much a complete currency collapse or bank failure.
It’s the idea that if (or when in many peoples’ views) the next stock market crash occurs, it really isn’t about making money.
It’s about not losing as much money as everyone else.
What investment vehicles take a smaller hit than other investment vehicles.
Meanwhile, the fact that copper pennies, nickels, and silver are physical investment goods, one doesn’t have to worry about stock market closures and bank closures.
The events in Greece are an absolute perfect example of the advantage of having tangible assets at home versus in the bank that closes or puts limits on withdrawals.
Another ideology of some of our customers want to diversify their silver and gold investments into copper.
After all, if all you have is gold, and you believe the currency will become unusable, bank closure imminent, or currency devalued heavily, will you trade your gold coin for one loaf of bread in a barter system?
The idea is to be able to trade less valuable, smaller amounts for other goods.
SG: What’s your opinion (prediction) on the future price of copper?
DS: Copper is one of humankind’s most useful metals.
Short term copper prices are speculative at best.
However, the price of copper should realistically be above the cost to physically mine it out of the ground.
If copper mines are not profitable to produce, then they stop mining.
Supply would dwindle while demand stays constant or rises as the population of people increase.
Therefore, the long term projection should be at an increasing rate.
Useful items generally keep up, or outpace, in price with inflation.
SG: Do you buy pre-1983 pennies (already sorted), and how much do you typically pay (the spread)?
DS: We would consider buying copper pennies from the public, just like any tangible asset.
Since we are a wholesaler, it would, of course, have to be at a price reasonably lower than our per ton pricing.
SG: I see you also sell copper nickels and 90% silver coins. What’s your best seller?
DS: Copper pennies are by far the best seller.
The ratio of copper pennies to zinc pennies is becoming smaller and smaller.
It’s very obvious that it will soon not be worth sorting commercially.
Once larger sellers stop sorting, supply will drop dramatically and price has to sky rocket.
Or, the United States simply eliminates the penny from circulation, just like Canada did a couple years ago.
When Canada eliminated the penny, the trade value of the Canadian copper penny was selling for over the copper spot price value.
Everyone that bought Canadian copper pennies in Canada had their investments rise 50% over night.
Your Thoughts: Would you consider coin mining or penny hoarding?