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

1. XAG Intrinsic Tender
Mark Bainbridge
Director – Gold Stackers Australia Pty Ltd

2. Overview
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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. What is Legal Tender?

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. 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. Modern Bullion Coin Face Values
AGW
1 Oz.
ASW
1 Oz.
$ Face Value
$100
$ Face Value
$1
$ per Oz.
$100
$ per Oz.
$1

7. Modern Bullion Coin Face Values
ASW
$ Face Value
$ per Oz.
5 Oz.
$8
$1.60

8. Modern Bullion Coin Face Values
AGW
1 Kg.
$ Face Value
$3000
$ per Oz.
$93.31

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. Giveaway Time!

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. 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. 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. 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. The Inspiration

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. 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. 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. 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. 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. 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. Coming soon in 2014
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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. 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.