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Because you want to walk in knowing to ask:spread, slide, loss, convergence, and float.
Actually let’s look at that. As a basic introduction.
Spread: the difference between the value and the offered payment.
It is based on the materials value and not the commodities value.
We buy gold shops tend to be at 50% or worse. Most large refineries run between 80% and 92% if they’re not open to the public. Anyone tells you 96% or better is lying to you.
Slide: The percentage limit of gain or loss from the rate at the time of contract to the rate at the time of processing.
Less than 10% is fairly standard. I’ve seen 3-8.
Nearly everyone has a positive slide (the price dropped) but not everyone has a negative (they pay you more if the price goes up).
Loss: a flat rate fee up front or percentage of final assay. It covers the labour and materials of the processing.
Not all percentage vase loss fees are a sign of a bad situation but I do suggest you seriously reconsider.
You’ll find percent based loss on higher value materials, such as rhodium.
Convergence: the handling of non-target materials and distribution of recovery value.
Often found on very low value materials. But good to know at all levels.
To make an easy example, payout for brass and copper in gold plated jewellery.
Or steel from gold plated pins.
Finally, float: this is the hardest one to deal with. Commercial refining is a continuous process. Float is the amount of material that isn’t yours that will be part of the process. And there’s two percentages here.
The physical crossover level. How much of the previous process is your material added to. Which is also how much will be added to yours.
The other is the (new term: buffer) return level.
If you’re sale is 100lbs of gold plated copper 486DX4 pins at a 1.1:1 ratio and the previous is 100lbs if 18kt plated rings and the next is 100 lbs of 1.5:1 dental fillings… you see how that is important in timed assay pulls.
Both float values should be in writing. Often but not always depicted eg 50/90.
In this case there’s half the material left and half added after and the buffer is 90%. Meaning they could tweak the base estimate by 90%
In other words, run!
Such numbers are non-existent from any company looking to stay in business but it makes a nice scary example. No?
;)
It’s rare to find float beyond 5-15 percent or so in practice but it’s good to have it in writing. 5/20 is the worst I’ve seen from a high level non-public-facing company.
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