Elemetal Direct. Issuu 5

1. S U M M E R U P D A T E ISSUE 5 VOLUME 1 SUMMER 2016 + Elemetal Direct Division Profile Provident’s Egyptian Gods Series Anti-Money Laundering & Numismatic News

3. SUMMER 2016 ISSUE 5, VOLUME 1 4 Editor’s Note 6 Provident Metals 10 Elemetal Direct 16 AML Review 22 Metal Outlook 26 Numismatic 32 Executive Minutes

6. REFINING THE FUTURE DIAMOND Elemetal Diamond delivers outstanding customer service to clients across Elemetal and the gemstone industry at large. Our customers receive the utmost respect and professionalism throughout the transaction process, whether buying or selling diamonds or utilizing our stone removal services. We take pride in being your straightforward and transparent partner for gemstones. 214.956.5843 | elemetal.com/diamond ©2016 | All Rights Reserved | Elemetal LLC

7. ISSUE 5 VOLUME 1 Summer 2016 Provident Metals The retail side of our shop is very excited to bring you some new designs with an egyptian feel. REFERENCE GUIDE 4 Editor’s Note PAGE 6 6 Provident Metals 10 Elemetal Direct Elemetal Direct A full-service review of the what, why, and how’s of this important Elemetal Division. 16 AML Review 22 Metal Outlook PAGE 10 26 Numismatic AML Review 32 Executive Minute An important info piece for all customers dealing in precious metals, stones, and jewels. PAGE 16 Metal Outlook Louis Golino is back for another issue and provides a definitive preview of the metals market for the rest of 2016. PAGE 22 Elemetal Direct|3

8. EDITOR’S NOTE Summer update Summertime at Elemetal PRESENTED BY: Elemetal, LLC MARKETING DIRECTOR: Brad Hastedt LAYOUT DESIGN: Iain Duane Yu A bout a year ago, we launched this new publication as both an introduction and a rebirth of one of North America’s largest precious metals organizations. CONTRIBUTORS:Louis Golino, Royal Mint, Bradley Yates, Elemetal Diamond, Gareth Amon DISCLAIMER: Elemetal Direct is 100% American owned. As customers, vendors, and partners, you had been doing business with NTR, OPM, Echo, Bullion Group, or Provident Metals. All contents of Elemetal Direct are for information purposes only. Elemetal Direct does not guarantee the accuracy, completeness or timeliness of the contents. None of the information contained Back then, we announced to the world not just a new brand – but also a merging of synergies that positioned us to provide customers with a world-class experience at every spoke in the precious metals wheel. herein constitutes a solicitation, offer, opinion, or reccomendation by Elemetal Direct to buy or sell any security or commodity, nor legal, tax, accounting, or investment advice or services regarding the profitability or suitability of any security, commodity or investment. That was then. Now, we’re overjoyed to report our transition to a global Elemetal is progressing very well and we’re excited to keep proving to you a great service experience each time you give us an opportunity. All commentary and advice in this publication is of a general nature only, and doesn’t consider your individual circumstances or financial objectives. You should always consult a licensed financial advisor for your personal investment advice. Please do your own research. In this summer issue, we’ll focus on the folks from Elemetal Direct with a feature story on that division. Also, we have noted industry expert Louis Golino joining us again for Numismatic News as well as a look at the metals industry for the back half of 2016. And, we have a great review of Anti-Money Laundering laws and what to look out for in your business. Lastly, Provident Metals checks in with some great new product releases for this year. CONTACT US FOR ADVERTISING AND CONTENT Brad Hastedt bhastedt@elemetal.com So, please again take a few moments to read through this magazine – it’s produced with you in mind -- our core customer. Thank you for your business and your commitment to our company. We look forward to continuing to serve you. PUBLICATION INFO www.elemetal.com 15850 Dallas Parkway Dallas, Texas 75248 Alan Stockmeister Elemetal Direct is a bi-monthly publication only intended for Elemetal customers, vendors, and associates. Elemetal, LLC Editorial Staff 4| Elemetal Direct

9. REFINING THE FUTURE MINT As the first mint to produce a two troy ounce ultra-high relief silver round, Elemetal Mint sets the standard for first-in-class bullion. We are a market leader in specialty bullion categories, and we take pride in our ability to push the private-minting industry to new heights. With IRA- certified products and good delivery bars, Elemetal Mint leads the market in precision and quality at scale. 800.889.0396 | elemetal.com/mint ©2016 | All Rights Reserved | Elemetal LLC

10. PRODUCT SPOTLIGHT | PROVIDENT METALS 6| Elemetal Direct

11. PROVIDENT METALS | PRODUCT SPOTLIGHT F History meets myth with this series featuring iconic Egyptian figures, showcasing the fascinating mythology of one of the world’s oldest civilizations. Two designs will be released each year, and each ultra high relief round in the series will consist of two troy ounces of .999 fine silver. ans and collectors of Egyptian history rejoice! Due to the overwhelmingly popular release of the Provident Metals’ exclusive Cleopatra 2 oz Ultra High Relief Silver Round, bullion buyers can now look forward to a new series of collectible coins - The Egyptian Gods Series. In Ancient Egypt, life was infused with mythos; understanding the divine was essential in interpreting events, actions, and consequences in daily life. Gods and goddesses were given the physical characteristics of both humans and animals to express the types of power and emotions they embodied. The art and beliefs from the time period provide rich content for stunning silver rounds. Elemetal Direct|7

12. PRODUCT SPOTLIGHT | PROVIDENT METALS The Cleopatra 2 oz Silver Ultra High Relief Silver Round was originally released as an independent design, and she quickly became a fan favorite. Coin collectors pleaded for an Egyptian themed series, and Provident Metals was happy to oblige. Egyptians in life. He provided enlightenment to those seeking goodness. On his 2 oz Ultra High Relief Silver Round, Anubis is featured as a man bearing the head of a jackal. Jackals were animals associated with death and the afterlife, so it was appropriate for the god of the afterlife to be associated with the grave-guarding animal. Many times, Egyptians perceived jackals, or even dogs, as a physical representation of Anubis, and interactions with these animals was seen as an auspicious event. Some astute buyers have asked, “why include Cleopatra? She wasn’t a goddess!” Well, wise Provident customer, you are correct. Cleopatra was not technically a goddess; however, during her marriage to Mark Antony, Cleopatra cleverly linked her identity with the goddess, Isis, to strengthen her rule. She appeared to her people in the garb of the goddess and erected statues of herself as the divine. She referred to herself as “Nea Isis” or “New Isis.” The goddess Isis represented maternal protection and life. While Cleopatra was Greek, she learned Egyptian and adopted much of the culture to align herself with the Egyptian people. Anubis stands alongside his Scales of Justice, used to weigh the hearts of the deceased. For Egyptians, every action was dictated by the desire to reach the afterlife. Anubis was the guide to reach that destination; therefore, he was greatly revered. Fascination with Egyptian mythology has been prevalent throughout history. The nature of the gods and goddesses, in addition to the artwork from this time period, create ample opportunity for stunning designs to impress even the most discerning bullion collector. Expert sculptor, Heidi Wastweet, brings her immensely talented eye for high relief design to the Egyptian Gods series. The designs featured in the series are brilliant on paper, but the ultra high relief techniques Wastweet uses to create these rounds make the designs absolutely breathtaking. To follow the design featuring one of the most highly regarded rulers in Ancient Egyptian history is no easy feat. When contemplating the design for the second round, the pious and superstitious nature that ruled in Ancient Egypt was considered. For Egyptians, death was not something to be feared if you were a good person. To die was to have the opportunity to pass to the afterlife and eternal comfort. A god who could help the Egyptians achieve this was a god worthy of veneration. Two designs will be released, annually, highlighting one of the most exciting time periods in history. Keep checking ProvidentMetals.com to see who’s next! Because of his importance in the lives of Egyptians, Provident Metals chose to feature Anubis, the god of the afterlife, on the second round. Anubis was often depicted as a guide for 8| Elemetal Direct

13. PROVIDENT METALS | PRODUCT SPOTLIGHT Elemetal Direct|9

14. COMPANY FOCUS | ELEMETAL DIRECT R E F I N I N G T H E F U T U R E Elemetal Direct is a network of direct-to-customer precious metal recycling locations streamlined to serve the market with rapid liquidity. 10| Elemetal Direct

15. REFINING THE FUTURE VAULT Elemetal Vault offers a new level of security and liquidity to all gold and silver investors. Using our proprietary web application, investors can quickly trade and store physically allocated gold and silver 24-hours a day with no commissions and no hidden fees. Because of our relationship with Elemetal, we are able to take bulk bullion directly from our refinery to the vault. Elemetal Vault is your destination for allocated bullion investment. 844.435.9879 | elemetal.com/vault ©2016 | All Rights Reserved | Elemetal LLC

16. COMPANY FOCUS | ELEMETAL DIRECT ELEMETAL DIRECT ABOUT US Our expansive network of stores gives us the unique ability to serve your precious metals needs conveniently, wherever you are. Whether you’re in Anchorage or Atlanta, Honolulu or Houston we have a store near you waiting to provide industry-leading turnaround on your recycled or “scrap” metal. Elemetal Direct delivers the highest level of integrity as we continue to grow and find new and exciting ways to serve the precious metals industry at large. We are Elemetal, and we are refining the future. WHAT WE BUY Elemetal Direct specializes in processing high-grade precious metals originating from the following sources: GOLD Karated scrap jewelry in any form, filings, grindings, dental gold and alloys, casting trees, casting grain, fine gold grain, gold ingots, and gold bullion and coins SILVER Sterling silver jewelry in any form, scrap silver jewelry, sterling silver flatware and hollowware, electrolytic silver, filings, grindings, dental silver and alloys, silver casting trees, silver casting grain, fine silver grain, silver ingots, and silver bullion and coins PLATINUM Platinum jewelry in any form, bench filings, grindings, platinum thermocouple wire, crucibles, catheters, medical platinum, platinum laboratory ware, platinum flake, platinum foil, platinum casting trees, and platinum bullion and coins PALLADIUM Palladium jewelry in any form, bench filings, grindings, palladium casting trees, casting grain, fine grain, palladium bullion, palladium dental scrap, and palladium bullion and coins ADDITIONAL SERVICES INCLUDE In addition to high-grade refining and services, we are proud to offer intermediate and low-grade refining services through Elemetal Recycling. Stone-removal for diamonds and other gemstones from all jewelry Refining of floor sweeps, bench sweeps, polishings, filters, and sink collections 12| Elemetal Direct

17. ELEMETAL DIRECT | COMPANY FOCUS TURNAROUND Product/Metal Walk In Mail In Gold < 1 Hour 1-2 Days Silver < 1 Week < 1 Week Platinum 1-2 Days 1-2 Days Palladium 1-2 Days 1-2 Days Stone Removal 2-4 Days 2-4 Days Gold Filled 2-3 Weeks 2-3 Weeks Sweeps 7-10 Days 7-10 Days DIVERSE SETTLEMENT OPTIONS Check Wire ACH Bullion Trade Pool Metal Exchange Elemetal Direct|13

18. COMPANY FOCUS | ELEMETAL DIRECT ELEMETAL DIRECT LOCATIONS Check elemetal.com to find the Elemetal Direct store nearest you! CONTACT ELEMETAL DIRECT MAIL PHONE WEBSITE directsales@elemetal.com 800-889-0396 elemetal.com/direct 14| Elemetal Direct

20. INDUS TRY NEWS | ANTI-MONEY LAUNDERING Anti-Money Laundering Dealers in Precious Metals, Stones, or Jewels By Laura Goldzung Bill LeRoy Dealers of precious metals, stones or jewels can be drawn into money laundering schemes, for example, by criminals who use dirty money to buy gold coins, diamonds or other gems. The money launderer then resells the coins or gems and introduces the proceeds into the financial system as supposedly clean money. OVERVIEW Money laundering isn’t just a worry for banks – many small businesses are touched by money launderers. Dealers in precious metals, stones or jewels are especially vulnerable. It is critical to understand how it can happen to your business and how to avoid it. Here are factors that may indicate a transaction is designed to involve a dealer in money laundering: Precious gems are often smuggled, stolen and traded in the black market in countries around the world and then used in money laundering schemes. “The characteristics of jewels, precious metals and precious stones that make them valuable,” warns the U.S. Department of Treasury, “also make them potentially vulnerable to those seeking to launder money.” • Payment is made with large amounts of cash; multiple or sequentially-numbered money orders, traveler’s checks or cashier’s checks; or through third-parties; • The customer of supplier is unwilling to provide complete or accurate contact information, financial references, or business affiliations; Money laundering begins with the commission of a crime that produces ill-gotten funds. The perpetrator then processes this “dirty” money through a series of transactions intended to “cleanse” it so that it appears to have resulted from legal activities. • The customer or supplier attempts to maintain a high degree of secrecy about a transaction, such as requesting that normal business records not be kept; There is no one single method of laundering money – it may involve other individuals, businesses and companies. However, one constant remains: The funds need to be washed. • Purchases or sales are unusual for the particular customer or supplier, or type of customer or supplier; • Purchases or sales don’t conform to industry practice. 16| Elemetal Direct

21. REFINING THE FUTURE DIRECT Our expansive network of stores gives us the unique ability to serve you conveniently wherever you are. Whether you’re in Anchorage or Atlanta, Honolulu or Houston, there is an Elemetal Direct store near you waiting to provide industry-leading turnaround on recycled or ‘scrap’ metal. Elemetal Direct delivers the highest level of integrity as we continue to grow and find new and exciting ways to serve the precious metals industry at large. 800.889.0396 | elemetal.com/direct ©2016 | All Rights Reserved | Elemetal LLC

22. INDUS TRY NEWS | ANTI-MONEY LAUNDERING The USA PATRIOT Act and the U.S. Bank Secrecy Act requires all dealers in precious metals, stones, or jewels to have a comprehensive Anti-Money Laundering program. Designating a compliance officer who is familiar with the regulatory requirements will go a long way to protecting you from regulatory risk. Simply appointing personnel with no experience will not serve you well in the long run. A dealer is defined as a person or entity that purchases at least $50,000 worth of covered goods AND sells at least $50,000 worth of covered goods during the preceding calendar or tax year. The Financial Crimes Enforcement Network (FinCEN) defines covered goods as: You must protect your firm from all risk -- reputational, operational, credit and regulatory. Your AML compliance program should inform your overall risk management program. • Jewels Dealers in precious metals, gems and jewelry may not be prepared to demonstrate their AML program to banks. • Precious metals Banks typically require their dealer-clients to provide a copy of their AML program and policies in order to continue their banking relationship. The U.S. Commerce Department has determined that the jewelry business is “high risk,” triggering certain obligations on banks, including monitoring jewelry and precious metal dealer clients for compliance. • Precious stones • Finished goods that derive 50 percent or more of their value from jewels, precious metals or precious stones contained in or attached to the finished goods. (“Finished goods” include, but are not limited to, jewelry, numismatic items, and antiques.) In addition to AML compliance, dealers are subject to Office of Foreign Assets Control (OFAC) sanctions screening as required by the U.S. Treasury. Failure to comply with AML or OFAC requirements may result in criminal and civil penalties. Both the IRS and the state where you conduct business will perform periodic examinations, and a review of your AML compliance program will be included. Banks will ask to see dealers’ documented AML Program and Policy and may even require the review of the dealer’s independent test report. This will ensure to them that the dealer is meeting its regulatory obligations. The AML Program fails to offer adequate training. An AML compliance program must contain four pillars, which includes policies, procedures and internal controls; designation of a compliance officer; training; and independent testing. Training is a key driver that advances the ability to detect unusual activity. Front-line personnel are often the first point of contact with potential money laundering and fraud, and it is essential they be educated on red flags common to dealers. Having controls in place that include any red flags or suspicions is the first important step to maintaining an effective AML program. Dealers are expected to have a reasonably designed compliance program tailored to their business. It should begin with a risk assessment and then meet the “four pillar” requirements: 1. Written policies, procedures and internal controls. 2. Appointment of a compliance officer. 3. Provision of ongoing AML training for appropriate personnel. 4. Independent testing on a periodic basis. Dealers in precious metals, gems and jewelry may be confused as to whether they are subject to regulations. COMMON PROBLEMS Regulatory rules apply to “dealers” in “covered goods.” Covered goods include jewels, precious metals and precious stones, and “finished goods” (including but not limited to, jewelry, numismatic items, and antiques) that derive 50 percent or more of their value from jewels, precious metals, or precious stones contained in or attached to such finished goods. It is often difficult to understand and monitor the risks inherent to dealers in precious metals, gems and jewelry. It is critical that a risk assessment be completed to keep up with AML regulations as well as changes in the business or customer activity. A risk-based approach should be built on sound foundations; effort must first be made to ensure that the risks are well understood. As such, a risk-based approach should be based on an assessment of threats. This is true whenever a risk-based approach is applied, at any level. KEY TRENDS Technology advancements and innovations have increased the size and sophistication of criminal enterprise. Developing a risk assessment of a firm’s customer market will provide the foundation for designing the compliance program. Both the risk assessment and the compliance program should be reviewed and updated according to risk – no less than annually. These changes have created the need for new regulations and risk mitigation efforts by institutions and organizations subject to AML. For example, the use of international ACH transfers, remote deposit capture, mobile phone payments and the changing payments landscape, along with other technology innovations, present potential risks that require careful and thoughtful consideration. Dealers in precious metals, gems and jewelry often struggle to keep up with regulatory change. It’s simply not enough to establish an AML compliance program and have a compliance officer manage it. No AML program can remain static. It is a regulatory expectation that AML compliance programs will be modified and updated in response to changes in regulations and the business of the firm. If you conduct business using advanced payment systems, for example, be sure these processes are reflected in your risk assessment and that the controls to mitigate such risk are among your AML compliance policies. 18| Elemetal Direct

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24. INDUS TRY NEWS | ANTI-MONEY LAUNDERING Dealer to dealer transactions are considered low risk. It stands to reason that dealers doing business with other dealers are low risk. Why? Because each dealer, as required by law, is required to have a reasonably designed AML compliance program. As long as each has an AML program in place, each dealer can be confident that internal controls are in place to identify and mitigate any potential money laundering risk. Before conducting business with any dealer, be sure to request an AML Certification Letter, one that states the dealer is in full compliance with the regulatory requirements under the law requiring the AML compliance program. RISKS AND OPPORTUNITIES Risks • Criminal and civil penalties for the institution as well as for individuals Regulatory changes continue and compliant dealers must be prepared to meet the changes. • Reputational and financial risk to the institution Regulatory changes and modification of existing rules – whether from FinCEN, OFAC or others– require close attention and the fine tuning of systems, training personnel and other compliance program elements. FinCEN’s guidance indicates there many institutions subject to AML compliance programs that are not maintaining adequate AML programs and are subsequently facing sanctions by regulators. Opportunities • Harnessing efficiencies by combining resources and IT systems to monitor for anti-money laundering and anti-fraud • Protecting the integrity of the financial system • Helping to protect your business from financial losses and reputational exposure • Protecting your customers from falling prey to criminal activity Dealers are facing Title 31 examinations by the IRS. The IRS is the examining authority for AML compliance programs for dealers. The IRS will notify a dealer that it plans to examine the business, a process commonly known as the Title 31 exam. Examiners will visit for a period commensurate with the size of the institution. Skills • Experience working in the Compliance Department of a financial institution • Other related compliance or oversight experience Examiners will request documentation supporting your program including but not limited to: • Regulatory experience • Certification from an AML association • AML compliance manual containing policies, procedures and internal controls;designation of and resume of compliance officer; • AML training program materials and proof of training for appropriate personnel; • Report from independent audit and testing performed; • Customer due diligence; • Reporting requirements; • Record keeping and other documentation as requested. Of particular interest will be reporting of large cash/cash equivalent transactions – those over $10,000. The IRS reviews receipts of cash payments that require the filing of the Form 8300 form. They review books and records, including bank statements, to make this determination. Failure to file the 8300 can result in fines, penalties and, in extreme cases, criminal prosecutions. When all is said and done, the IRS will submit a report of its findings and the dealer must resolve any outstanding matters while tracking any corrective actions until complete. 20| Elemetal Direct

25. ANTI-MONEY LAUNDERING | INDUS TRY NEWS DEFINED TERMS RESOURCES - RECOMMENDED WEBSITE Bank Secrecy Act • AML Audit Services, LLC http://www.amlauditservices.com The Bank Secrecy Act of 1970 (or BSA, or otherwise known as the Currency and Foreign Transactions Reporting Act) requires financial institutions in the United States to assist U.S. government agencies to detect and prevent money laundering. • Financial Crimes Enforcement Network (FinCEN) Precious Metals/Jewelry Industry Home http://www.fincen.gov/financial_institutions/pmj/ • Internal Revenue Service (IRS) Anti-Money Laundering Compliance Program http://www.irs.gov/irm/part4/irm_04-026-005.html#d0e1657 Specifically, the act requires financial institutions to keep records of cash purchases of negotiable instruments, and file reports of cash purchases of these negotiable instruments of more than $10,000 (daily aggregate amount), and to report suspicious activity that might signify money laundering, tax evasion, or other criminal activities. (Source: Wikipedia http://en.wikipedia.org/wiki/Bank_ Secrecy_Act) • Internal Revenue Service (IRS) Penalties for Form 8300 http://www.irs.gov/Businesses/Small-Businesses-&-Self- Employed/Form-8300-Penalties-Increase • Jewelers Vigilance Committee (JVC) http://www.jvclegal.org/index.php?categoryid=347 FinCEN Learn More The Bank Secrecy Act of 1970 (or BSA, or otherwise known as the Currency and Foreign Transactions Reporting Act) requires financial institutions in the United States to assist U.S. government agencies to detect and prevent money laundering. If you are a dealer in precious metals, stones or jewels, and want to learn more about the requirements and best practices to maintain an Anti-Money Laundering Compliance Program, or need information about independent testing services or custom training or keynote presentations, drop an email to info@amalausitservices. comor call 800-870-8076. Specifically, the act requires financial institutions to keep records of cash purchases of negotiable instruments, and file reports of cash purchases of these negotiable instruments of more than $10,000 (daily aggregate amount), and to report suspicious activity that might signify money laundering, tax evasion, or other criminal activities. (Source: Wikipedia http://en.wikipedia.org/wiki/Bank_ Secrecy_Act) ABOUT THE AUTHOR Laura H. Goldzung, CFE, CAMS, CFCF, CCRP is President and Founder of AML Audit Services, LLC (“AMLAS”), a boutique consultancy specializing in independent testing for anti- money laundering compliance programs for bank and nonbank institutions, and serves as its principal examiner. In addition, her expertise includes custom training, and compliance IRS The Internal Revenue Service (IRS) is charged with examining non-bank financial institutions including Precious Gems Dealers. The examination is known as a Title 31 exam, and is conducted periodically to ensure compliance with AML obligations under the BSA and its promulgated regulations. (Source: IRS http://www.irs. gov/irm/part4/irm_04-026-005.html#d0e1657) OFAC consulting services, which includes design and development of Bank Secrecy Act/Anti-Money Laundering and Anti-Fraud compliance programs, risk assessment and analyses, remediation and corrective action programs, and expert witness services. Ms. Goldzung has worked with financial institutions that have been referred to enforcement for BSA/AML violations, helping them to bring their AML programs into compliance. The Office of Foreign Assets Control (OFAC) of the US Department of the Treasury administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United States. In a career spanning more than more than 35 years across multiple sectors of the financial services industry, Ms. Goldzung has worked in a variety of executive leadership roles. Since founding AMLAS, she has co-created sector-specific compliance officer certification programs and tours internationally presenting various AML/Fraud topics for industry-leading organizations, and has authored a number of articles on the topic of AML. Ms. Goldzung serves on a variety of industry task forces and committees, and contributes to a number of compliance, industry and university education programs. OFAC acts under Presidential national emergency powers, as well as authority granted by specific legislation, to impose controls on transactions and freeze assets under US jurisdiction. Many of the sanctions are based on United Nations and other international mandates, are multilateral in scope, and involve close cooperation with allied governments. (Source: Treasury.gov website http://www. treasury.gov/about/organizational-structure/offices/Pages/Office-of- Foreign-Assets-Control.aspx) Elemetal Direct|21

26. ELEMETAL CAPITAL | MARKET OUTLOOK Precious Metals Update: Experts Bullish on Gold Outlook A as much 24% when it reached $1300 in the spring, compared to a low of $1060 late last year, and even after retreating to $1260 at the time this is being written, that is a 19% gain for the year compared to the stock market, which is virtually unchanged. Silver has fared just as well, reaching as much as $17. By Louis Golino to suppress financial and commodity markets, including precious metals. But over time as more negative data about the U.S. economy has emerged such as the slowdown in job growth in May, the prospect of much more in the way Fed rate hikes in the near future seemed less likely. That view is further reinforced by the economic situation around the world that is marked by continuing low growth and high unemployment in many countries and growing uncertainty about the outlook for trade, economic stability, and peace. fter a four-year bear market capped by a new low for spot gold in December 2015, this year gold and silver have staged an impressive comeback. In fact, so far gold is one of the best-performing assets classes of 2016, having risen For the past several years financial and commodity markets have been driven in great part by speculation about whether and when the Federal Reserve would finally begin to start normalizing interest rates. After over seven years of keeping rates close to zero, towards the end of 2015 the Fed signaled that it believed the U.S. economy was finally doing well enough that it could begin raising rates, but only by a very small amount at least initially. RISING RATES AND GOLD Experts such as Jeff Nichols and Mike Fuljenz note that the mainstream financial press continues to be confused about how rising rates affect gold, which they note has historically performed best during periods of rising rates.In each major case in recent decades when interest rates were increased, gold prices either held firm or increased substantially. When the first small rate hike finally came in December, the world did not collapse, but concerns about subsequent hikes did help 22| Elemetal Direct

27. REFINING THE FUTURE RECYCLING As the electronics-recycling industry continues to evolve, it is becoming increasingly difficult to differentiate a true recycler from a typical collector. Elemetal Recycling has raised the standard and redefined what it means to be a true end-of-life recycler for circuit boards and electronic waste. We are committed to maximizing our US-based operations and meeting rigorous industry standards to safely and securely meet our partners’ needs. 855.230.4040 | elemetal.com/recycling ©2016 | All Rights Reserved | Elemetal LLC

28. ELEMETAL CAPITAL | MARKET OUTLOOK Several examples from these two experts support that view, as does the fact that in the months since the December 2015 rate hike, gold has gone back into a bull cycle. currency deprecation that reduced incomes and other factors producing less demand in India. RISING SALES OF PHYSICAL METALS First, in the late 1970s, when rates got as high as 20%, gold rose from its government-set level of $35 an ounce to $850 in 1980. Then from December 1986 to September 1987 the Fed raised rates from, 5.875% to 7.25% and gold rose from $391 to $465; from February 1984 to February 1995 rates went from 3.25% to 6% and gold rose from $370 to $390; a similar modest increase was seen from June 1999 to May 2000 when rates were again raised; and finally from June 2004 to June 2006, the Fed raised rates 17 times from 1% to 5.25% and gold went from $395 to $613. The World Gold Council noted that demand in 2016 hit its second-highest level ever, which is reflected in very strong sales of physical bullion. Demand has definitely been on the rise this year for physical precious metals, especially with investors continuing to become more and more concerned that the so-called paper market for metals is on the verge of collapse with the highest levels of leverage ever seen. The day of reckoning for the paper market is the event long-term bulls have been waiting for, and some people believe it could happen soon. The key monetary issue affecting gold prices, according to Nichols, is not nominal interest rates set by the Fed, but the real rate taking into account inflation, which though still modest, is rising. Major mints this year have all been reporting record demand for bullion coins. For example, at the U.S. Mint sales of gold coins are roughly twice the level they were at this time last year, and sales of silver coins are at comparable levels on track for a new record level of sales for the American Silver Eagle coin of probably more than 50 million pieces. Nichols and Fuljenz and other long-term precious metals watchers are very bullish about precious metals, especially gold, for the remainder of 2016 and for the coming years. Nichols, for example, sees the possibility of gold surpassing its all-time high of $1924 a year from now and going even higher in the coming years. At the Royal Canadian Mint sales records are also being broken and supplies are getting tight with first quarter silver sales reaching a new record of 10.6 million ounces and sales of gold coins also up considerably. Many major banks that issue gold price projections are more cautious but still much more bullish than in the recent past. The key factors that support thestrongly bullish long-term perspective are primarily: a supply crunch, demographic trends, rising investment and physical demand, safe-haven demand, financial and geopolitical uncertainty, and the rising role of China in the gold trade. And holdings in exchange traded funds are up 25% this year in response to concerns about negative interest rates in Europe and Japan. Mark Wayne RISING UNCERTAINTY SUPPLY CRUNCH AND DEMOGRAPHICS Financial and geopolitical uncertainty have clearly been on the rise in recently. Almost a decade after the start of the great economic crisis that began in 2007, most of the world is still struggling to boost growth and continues to rely on unusual economic tools like low interest rates and negative rates. A supply crunch has been building for several years in gold because the spot price has been too low to support much mine production and many companies have had to close mines. In addition, the other sources of supply, which are gold recovered from old jewelry that is refined, and the re-sale of bullion coins and bars, also suggest both a continuing supply crunch and a substantial shift in ownership as investors in the West have sold to buyers in the East. Then there are the numerous geopolitical crises from the war in Syria to ISIS and other terror threats, and now there is a new factor, the rise of renegade GOP presidential candidate Donald Trump. As Nichols notes, Western investors and institutional speculators (hedge funds, bullion banks, etc.) have little long-term commitment to gold, and they have been selling to buyers mainly in China and India. And those buyers as well as some central banks and wealthy individuals who own large amounts are unlikely to sell unless prices reach levels far above the 2011 high of $1924. Some analysts have been pointing out that Trump’s political ascendancy has been one of several factors that have rattled global financial markets, which has been bullish for gold, and if he were elected to office, even greater economic uncertainty and turmoil such as possible trade wars that could ensure if his views were translated into policy might lead more people to seek the relative safety of gold. Demographic trends are related to the shift in ownership since population growth and the rise of the middle class in countries such as China, India, and Mexico, among others, is an important factor supporting long-term demand as individuals in those countries seek to preserve their wealth. A final factor contributing to increased global uncertainty is the prospect of Brexit, i.e., the British referendum on whether to leave the European Union. Opinion is presently rather evenly divided, but if Brexit were to occur, most economists believe it would be very disruptive to the British and global economies. In fact, the June Fed meeting will be held on the eve of the referendum and if polls remain close, the Fed is not likely to raise rates for fear it could exacerbate the economic turmoil that may come from Brexit. In the short-term, however, as some other analysts note, there has been some movement of gold back to Western countries from the East as a result of Chinese economic turmoil and 24| Elemetal Direct

29. MARKET OUTLOOK | ELEMETAL CAPITAL SAFE-HAVEN DEMAND the focal point for the gold market continues to shift from the West to the East. China is clearly using its gold to increase its role in the global economy and is believed to favor some kind of eventual gold-backed currency. And this points to another bullish factor, rising safe-haven demand, which is tied closely to all the rising uncertainty in financial markets and politico-military conflicts around the world, and even the recently leaked Panama Papers that revealed how many of the world’s wealthiest and most connected people try to hide their assets. Gold provides a level of anonymity that private bankers such as those in Switzerland and elsewhere no longer do. OUTLOOK All the developments discussed above are supportive of a bullish long-term outlook for gold way above current price levels. CHINA’S ROLE To be clear, some big players in finance such as Goldman Sachs are not nearly as bullish on near-term prices as experts on metals are, which is usually the case. There tends to be a bias against gold and other precious metals among large bank and financial analysts compared to those people who have spent decades focusing specifically on precious metals. In addition, there is the enormous increase in the role China now plays in the world economy and in particular in the gold market and gold production. China is now the world’s largest producer of gold and has one of the largest gold reserves in the world. It also recently launched its own gold exchange in Shanghai and a Yuan-denominated gold fix that competes with the London gold fix, which is when the world’s leading banks involved in the gold trade agree on the price of gold each day. As for the rest of 2016, the consensus appears to be for gold to be in the $1250-1400 range with the possibility of a breakout above those levels if some of “black swan” events like a Trump win in November and Brexit come to pass, or if the combination of rising demand and a supply crunch produce the perfect storm. The Chinese gold fix will be set twice daily, which how the London fix works, and it will be based on prices for a 1 kilo-contract of gold traded by 18 members of the Shanghai Gold Exchange. Conor Dullaghan Experts believe that in the short-term the Chinese gold fix would not have a very large impact, but that over time it will, especially as Elemetal Direct|25

30. NUMISMATIC NEWS | LIBERTY CENTENNIAL LIBERTY CENTENNIAL GOLD COINS A most beloved classic U.S. coins with Liberty-themed designs are also being honored this year. By Louis Golino s my previous article in the spring issue discussed, 2016 is a year marked by several numismatic anniversaries. But this year it is not just modern coin that are being feted with special issues. Three of the The Liberty dime and Walking Liberty half dollar were designed by acclaimed American sculptor Adolph Weinman, while the Standing Liberty quarter was designed by Herman MacNeil. From the beginning the Mint’s plan was to issue the gold versions of these coins in the same size as the originals with inscriptions added for the weight, fineness, and metal*; with respective weights of one-tenth, one-quarter and one-half of an ounce of gold, which means they would also need to be thinner than the originals that weighed more; in gold because Congress has broad authority to strike gold coins; and as business strike coins rather than proofs to keep them consistent with the original coins. Just as all Americans treasure the pursuit of liberty, collectors of American coins have always been strongly attracted to the theme of liberty as represented on coins in the allegorical form of Lady Liberty, the personification of our most-cherished ideal and in many ways the founding concept of our country. So it comes as no surprise that whether one is an older collector who first started assembling sets of silver coins from change, or a younger collector born long after the switch to clad coinage, coins with Liberty designs on them have always had huge aesthetic and symbolic appeal. The gold dimes, which were released on April 21 at $205 each, appeared to have sold their entire mintage of 125,000 coins in less than an hour. The day after the release the Mint announced that initial sales were 122,510 coins, and no additional coins have yet been offered by the Mint, though officials there say they are working to make them available at a later date. In addition, since the initial release several thousand coins have been returned either for quality issues, or because the buyer decided they did not need as many coins as they originally purchased. As of May 17, over 7,000 coins remained unsold, although some portion of those coins will not be resold since it is Mint policy not to recycle coins with problems. Last year the U.S. Mint proposed issuing solid gold versions of the three Liberty-themed silver coins that debuted in 1916, the Mercury, or Winged Liberty, dime, Standing Liberty quarter, and Walking Liberty half dollar. This program smartly capitalizes on the long-standing nostalgia of collectors for these iconic and classic coins. 26| Elemetal Direct

31. LIBERTY CENTENNIAL | NUMISMATIC NEWS DIFFERENCES WITH ORIGINAL ISSUES engraving machines. When finer details were required, such as those found in the original Mercury Dime, that detail had to be hand scribed into the tooling by artisans of the day. This hand scribing of additional detail in the tooling stage was phased out many years ago. The current digital process enables the Mint to achieve very high levels of detail. However, coin diameter, coupled with the physical limitations of milling steel hubs/dies while trying to achieve fidelity of detail, are all connected. Some limitations in detail achieved are inherent in the process.” The gold dimes are a bit smaller in both thickness and diameter compared to the originals. The 2016 coin has a thickness of 1.19 millimeters (.047 inch) and a diameter of 16.5 millimeters (.065 inch), while the 1916 coin’s dimensions were respectively 1.35 mm (.053 inch) and 17.9 mm (.705 inch). Collectors initially expressed disappointment that the gold tribute dime is not a faithful replica of the original because of the differences in its dimensions compared to the original silver coins, but when they saw the coins in hand, most people were no longer concerned about the slight difference in size, which is not very noticeable. A much larger concern, one expressed by numerous collectors and media analysts as well as some dealers, is that the coins carried a much too high household limit of 10 coins. Dealers typically use their employees and family members, and also their customers in many cases, to get around such limits. This enables them to obtain thousands of coins in many instances, which makes it harder for the average collector to order any, especially for a high-demand item like the gold dimes. Another issue is that collectors noticed that some of the details seemed weaker such as in the hair and the wings of the cap on Liberty and that the bands on the fasces on the reverse appear not to be what are known as “full bands” on the silver coins, meaning the lines on the bands are not distinct and clear. In addition, Mint officials provided the following explanation as to why the coins had to be made smaller than the original 1916 silver issues: “We used a planchet we had already developed so as not to incur additional costs. The 2016 Mercury Dime Centennial Gold Coin is struck on a 1/10 ounce .9999 fine 24-karat gold planchet that is approximately 10% smaller in diameter compared to the 1916 Mercury Dime. In an effort to Mint officials explained why this happened to the author, noting both technical differences in coin production processes now compared to 100 years ago and the limitations of the small size of the gold dimes: “In 1916, only certain levels of detail were able to be machined into hubs/dies by the Janvier transfer Elemetal Direct|27

32. NUMISMATIC NEWS | LIBERTY CENTENNIAL This coin is without question popular among collectors who love the classic liberty design, and it will likely remain that way since it appeals to both modern and classic U.S. coin collectors and is more affordable than other popular numismatic releases. Of the three centennial gold coins it is the one with by far the most accessible price-point, which means a greater number of collectors could afford it than will be able to afford the other two centennial gold -coins coming soon. For these reasons the coin should indeed remain in demand over the long haul like other popular modern issues that reuse classic designs. Ian Russell, president and CEO of Great Collections, an online auction company that sells a lot of modern U.S. issues, noted: “There is routinely a lot of interest in the first few days, while major dealer and wholesalers balance their positions. Sometimes, like the 2009 Ultra High Relief gold double eagle, there is constant demand (that continues to build), and I think this is one of those coins. I can see all Mercury dime collectors wanting one. It’s a low price point compared to many other recent gold coins (like the JFK, High Relief and so forth). Mr. Russell also agreed with those who say the household limit of 10 coins was too high. GOLD QUARTERS AND HALF DOLLARS The Mint has been unusually tight-lipped about its plans for the higher-demand numismatic releases of 2016 with most of these issues still not listed with actual release dates on its online product schedule for the year. This has been a source of frustration for collectors, who are eager to find out when these coins are going to be available and trying to budget for them, which is much easier to do with advance notice. faithfully execute the original 1916 design, the Mercury Dime scan data was scaled down to the 1/10th ounce planchet size. When the tooling subsequently milled, the overall result was softening detail fidelity because the finish cutter diameter could not fit completely into all of the finer detail points found in the 1/10th ounce size design.” The Standing Liberty quarter designed by Herman MacNeil occupies an important place in U.S. numismatics in part because the version issued in 1916 featured a bare-breasted Liberty, which was then covered for the 1917 and subsequent issues. Many people believe that was done because the partial nudity offended some people, but the true reasons for the changed design were related to the fact that the U.S. was then at war. According to a 1979 article in Coins magazine by Ray Young: “If Liberty was going to stand up to her foes, she should do so fully-protected—not ‘naked to her enemies.’ Thus the war probably had much more to do with the change than any alleged ‘public indignation.” “We are currently evaluating the next generation of microscope scanning technology which will enable us to capture accurate detail from coins & dies down to the 1/10th ounce range. This is emerging, state-of-the-art technology. Future programs should not be limited by current technical scanning limitations.” GOLD DIME AFTERMARKET The gold version of this coin will contain a quarter of an ounce of gold. As of the time of writing it has not yet been released and still has does not even a release date. It is expected to be very popular with collectors, as were the gold dimes, but will carry a price tag of $460 if gold is between $1200 and $1250 per ounce when the coin is released. That is similar to the cost of $5 gold commemorative coins and still within the reach of many collectors. Retail prices for the gold dimes initially reached the $300 level with examples graded mint state or specimen 70 going for $400 and up, but subsequently the ungraded coins came down to the $250 level and coins in the top grade came down to about $300. That was not surprising given the large number of coins issued. 28| Elemetal Direct

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34. NUMISMATIC NEWS | LIBERTY CENTENNIAL The Mint displayed an example of the gold quarter in late April at the Central States Numismatic Society coin show in Illinois, which led many people to think the coin would be released soon after since that is what happened when the gold dime was displayed in March at a coin show in Baltimore, Maryland. is one of the reasons it was chosen to appear in modified form as the obverse of the American Silver Eagle, the U.S. Mint’s flagship bullion coin issued since 1986 that dominates the world bullion coin market. The cost of the gold version of this iconic coin that will contain three-quarters of an ounce of gold will be $865 if spot gold is between $1200 and $1250, which will undoubtedly result in smaller orders and likely a smaller overall maximum mintage than the dimes and quarters, but again no information has yet been provided by the Mint. It is noteworthy that the coin displayed featured not only the original design with the uncovered breast, but that it also seemed to have what numismatists call a “full head,” which seemed to bode well for those who want to see all the details of the original silver coins on the gold tribute pieces. Collectors have reacted very positively to the example that was displayed at the coin show, which was photographed by Thomas Uram, President of the Pennsylvania Association of Numismatists, and shared with the numismatic media. The 2016 Liberty centennial gold issues will each likely remain highly popular and widely collected coins for many years to come irrespective of short-term price gyrations. But collectors will probably want to be cautious about purchasing graded examples. But as of early June there was still no information forthcoming from the Mint, including the mintage and whether the household limit would be reduced. And based on what the Mint said about the small planchet size being an issue in terms of reproducing some of the finer details of the original silver dime issues, collectors have also been eager to find out if the larger size of the quarter would mean all the details would be captured on the quarter, but that too could not yet be ascertained. The portion of gold dimes submitted for grading that were graded at the highest level of mint state or specimen 70 is in the neighborhood of 90%, which strongly suggests that the overall quality of those coins is very high. Hopefully the same will be true of the gold quarters and halves as well, and that means buyers would be advised not to pay a lot for graded specimens. Weinman’s Walking Liberty half dollar is the most well-known and probably most popular of all classic U.S. silver coins, which 30| Elemetal Direct

35. REFINING THE FUTURE CAPITAL Elemetal Capital is a full-service trading firm making continuous liquidity available to our partners in the precious metals industry. As the wholesale distributor for the entire Elemetal family of companies, Elemetal Capital focuses on physical metal trading, metal derivatives, and foreign exchange. As a market maker in all major gold, silver, platinum, and palladium products, we are proud to service all of your bullion needs. 877.956.7606 | elemetal.com/capital ©2016 | All Rights Reserved | Elemetal LLC

36. EXECUTIVE MINUTE A Happy Summer to all of you and your families during this hot time of year. Hopefully you’re staying cool and getting in a lot of great family time and relaxation. One year into the new era at Elemetal and we are seeing great success. None of it would be possible without you – our customer and partner. Keep all of your questions and concerns (and business!) coming our way. The Elemetal team is dedicated to making your experiences with us the best-in-class. It has been a full year since our launch of our re-branding effort, One Elemetal. Our transition has gone very well and everyone on our team is pumped up to bring you great service and products the rest of this year and into 2017. Elemetal can truly bring you a world-class experience in every facet of the precious metals chain. To sum up, a favorite quote of mine from Henry Ford that I’ve used before and I’ll use again now is ”Coming together is a beginning. Keeping together is progress. Working together is success.” We value our relationship with you and thank you for your business. There are a lot of cool things we’re working on for you this year at Elemetal. New products at Provident, a newer location for Recycling, and cool new opportunities for Diamond. MARK WAYNE Corporate Vice President Elemetal, LLC One of these cool developments has been the new Elemetal Diamond App! This application provides access to information for all of your diamond needs. Obtain quotes on your single stones; view our current melee pricing indications; send us images and descriptions of your finished jewelry; request packing lists and shipping labels; and view our single stone inventory. For more information on this great addition to our lineup, please visit http://elemetaldiamondapp.com/ 32| Elemetal Direct

37. REFINING THE FUTURE REFINING Elemetal Refining sets itself apart from others in the industry by using state-of-the-art refining techniques. We refine scrap metals from a variety of sources to 99.99% pure gold and 99.9% pure silver. Elemetal Refining upgrades impure metals to fine products through a host of unique processes including pyro-metallurgical, mechanical, and chemical-refining circuits. We are leading the way in precious metals refining to bring our timeless industry into the 21st century. 800.889.0396 | elemetal.com/refining ©2016 | All Rights Reserved | Elemetal LLC