Elemetal, NTR Metals & Provident Precious Metals
[Summary: 3 Elemetal (Provident Metals' ex-parent company) employees accused of laundering $3.5B of illegal gold]
[Elemetal Status: Elemetal Refining expects to pay customers in 6 months, gold/silver refining shut down]
[Provident Status: No known issues at Provident at this time; status is 'Do business with them, but be careful']
[Other related pages: Elemetal Vault, the Elemetal, NTR, Provident Companies]
[Oldest posts start from the bottom]
Miami Herald ArticleJanuary 16, 2018 5:10PM EST
The Miami Herald has put together an excellent series of articles about the illegal gold trade, as well as NTR/Elemetal's role.
Elemetal Refining Makes Another Small PaymentJanuary 16, 2018 5:00PM EST
I have heard that Elemetal Refining has made another small payment to its refining customers, who have been owed money for many months now. It sounds like this payment was roughly a whopping 1% of what customers were owed.
U.S. Indicts 4 Peruvians re: Elemetal Gold SmugglingJanuary 10, 2018 5:40PM EST
The Justice Department wrote yesterday that they have indicted 4 Peruvian citizens that took part in the multi-billion dollar gold smuggling operating that 3 Elemetal a/k/a NTR Metals employees plead guilty to last year.
They wrote: "On November 16, 2017, Pedro David Perez Miranda, a/k/a “Peter Ferrari,” a/k/a “Peter,” 57, of Lima, Gian Piere Perez Gutierrez, a/k/a “GP,” 33, of Lima, Peter Davis Perez Gutierrez, a/k/a “Peter Jr.,” 33, of Lima, and Jose Estuardo Morales Diaz, a/k/a “Pepe Morales,” 50, of Lima, were charged in a single-count Indictment for their alleged participation in a gold money laundering scheme (U.S. v. Miranda, Case No. 17-cr-20814). Gian Piere Perez Gutierrez and Peter Davis Perez Gutierrez were arrested in connection with this scheme."
The Justice Department says that the 3 Elemetal employees that plead guilty last year state that they had "conspired to purchase billions of dollars of criminally derived gold ... through Elemetal LLC, a dealer in precious metals ...".
Elemetal Refining: Yet More Money TroublesNovember 20, 2017 3:25PM EST
I reported last month that Elemetal Refining was unable to make the October payment, paying a paltry 6% or so of what they were supposed to.
Today, a customer reported that they received a letter stating that a further payment was made, which appears to be another one of these "tiny" payments. Again they say they have a goal of "paying all Ohio-refinery customers in full."
At the rate they are paying what they owe, it looks like it would take another 1-3 years for Elemetal to pay back customers in full.
Elemetal Vault: Doing OKNovember 3, 2017 9:00AM EST
I just heard a report from an Elemetal Vault customer who had silver stored for him. He sold the silver online, and requested a withdrawal. He ended up with the money in his bank account by the end of the day, ahead of schedule.
So while Elemetal Refining is effectively insolvent (it is still having troubles paying back customers who have been owed money for over 6 months), Elemetal Vault seems to be doing fine.
ISIS Entering Illegal Gold TradeOctober 18, 2017 8:35AM EST
According to CNN, "One official told CNN that ISIS is attempting to illegally infiltrate the gold mining industry in Niger to sell on the black market and finance world terrorism."
Let this serve as a warning to all gold refiners in the world: if you knowingly accept illegal gold to refine, the governments are watching and willing to take action. If it turns out you are accepting gold from known terrorist groups, your business is going to shut down overnight.
To be very clear, there is not even the slightest hint that Elemetal has dealt with any terrorist organizations, and with Elemetal's gold refining operations shut down, it is unlikely this will be an issue for Elemetal. This post is simply to help get this important piece of news out, that ISIS may be hoping to sell fairly large quantities of gold. And while the public might tolerate to some extent involvement with criminal organizations that are destroying the environment mining gold, there is no way the public will tolerate the support of terrorism.
Elemetal Refining: Now More Insolvent.October 18, 2017 4:30PM EST
In April, 2017, Elemetal Refining announced that it was insolvent (using different words, of course). They said that they would make 5 payments of 20% each to the refining customers, on April 28, June 15, August 15, October 16, and December 15. I had mixed reports on whether or not the June payment had been made, but the June/August payments appear to have been mostly made. In total, "approximately" 60% has been paid down.
Elemetal recently told refining customers that they are "pleased to report that paydowns will continue, though at a reduced pace." I wonder who is pleased by a company reporting that they are having further financial difficulties? One customer reported receiving only a small fraction of what they were owed for the October payment. Elemetal further says that they are developing an updated payment plan, in which they hope to make additional payments within 20-30 days, and have a goal of paying customers in full.
October 19, 2017 7:00PMM EST UPDATE: I have heard from an Elemetal customer that this most recent payment was about 6% of what the October payment was supposed to be. In other words, if a customer was owed $50,000, the October payment should have been $10,000, but was actually around $500-$600. Or if Elemetal owes all customers a total of $10,000,000 (as an example, not a real amount), they only sent out about $100,000 of the $2,000,000 in payments they hoped to have.
Provident Bought Out By InvestorsSeptember 12, 2017 4:55PM EST
The news I heard about Provident was pretty accurate. Today they told customers:
"We have been acquired by a group of private investors. They have signed a management agreement with one of the largest bullion wholesalers in the world, Dillon Gage, through 2022 to help improve inventory management as well as fulfillment operations."
So although it appears that Dillon Gage did not actually purchase Provident Metals, a group of private investors did, and have contracted with Dillon Gage to manage the company for the next 5 years.
September 13, 2017 7:50AM EST UPDATE: Provident Metals has issued a press release.
Provident Sold to Dillon Gage?September 10, 2017 8:10AM EST
I have just heard that on Friday Provident Metals was sold to Dillon Gage. Dillon Gage is a well respected bullion wholesaler.
Although I cannot confirm this yet, Provident Metals did say that they were in negotiations to seek a new business partner.
2 Elemetal Employees Plead Guilty
"expanding investigation"September 6, 2017 7:30AM EST
Yesterday, 2 of the 3 Elemetal (NTR Metals) employees that were indicted for money laundering in March, 2017 plead guilty as part of a plea agreement. They face up to 10 years in prison (compared to up to 20 years prior to the plea agreement).
According to the Miami Herald, "both have agreed to cooperate in the expanding investigation into one of the biggest money-laundering schemes in South Florida history."
Court documents state that "Dozens of other individuals and entities both in and out of the United States were involved in the money laundering conspiracy." The documents also point out that illegal gold mining is a crime in Peru (legislative Decree 1102, Article 307-A), and that smuggling gold out of Peru is also a crime in Peru (law No. 28008, Chapter 1, Article 1).
The documents state that Elemetal hired the 3 employees to "buy as much gold as possible in Latin America and the Carribean." They state that each Elemetal client would need to be approved by Elemetal's Anti-Money Laundering (AML) Compliance Officer (well respected Steven Crogan). Early in the saga, the Compliance Officer rejected an account expected to bring in $250M annually because of the involvement of someone known by the Compliance Officer to be a "gold money launderer". The 3 employees then began opening accounts for the known gold money launderer using front companies. The front companies were "consistently bribing Peruvian customers (SUNAT) officials."
The records show that Samer Barrage received $1,307,759.37 in wages from Elemetal, and Juan Granda received $466,422.76.
The Miami Herald article says that prosecutors stated that the illegal gold went to Elemetal Refining (what used to be OPM), which I had assumed, but do not recall having seen stated previously.
The third defendant, Renato Rodriguez, has chosen to go to trial, rather than sign a plea agreement.
Provident Switches to Highland MintAugust 30, 2017 1:30PM EST
I have just heard that Provident Metals is no longer using Elemetal to produce their silver bars, and is instead using the Highland Mint.
Provident had presumably been using either Elemetal Refining or Elemetal Mint for their silver bars. Elemetal does not make it clear what the differences are (or were) between Elemetal Refining and Elemetal Mint. From the names it would sound like one does refining and one does minting. However, Elemetal Refining has made gold/silver bars long before Elemetal Mint existed (e.g. back as OPM), and it is unclear if Elemetal Mint ever operated at a separate facility.
Elemetal Refining Payment #3: OKAugust 16, 2017 1:10PM EST
I have just heard from an Elemetal Refining customer that they received their 3rd payment, which was due yesterday.
The next two payments are October 15 and December 15.
As a reminder, Elemetal Refining shut down its precious metals refining operations shortly after being de-listed from COMEX and LBMA. It was insolvent, unable to pay customers who had provided metal for refining. Rather than file for bankruptcy (where nobody seems to win), they offered a payment plan of 5 20% installments. I have heard from one person who either did not get the June payment or did not get it on time. However, it seems that most people are getting the payments according to this schedule.
OPM .9999 bar: Tests .99984July 28, 2017 10:30AM EST
There have been quite a few rumors of impure gold bars by Elemetal, NTR, OPM, and/or Provident. One refiner reportedly stopped accepting them due to impurities, and one major bullion dealer is advertising that they pay "a large discount to spot" for them.
I don't give much credence to most rumors, so I finally got my hands on a 1oz OPM bar marked .9999 that failed the Sigma Metalytics PMV test for .9999 pure gold. The PMV isn't designed to test exact purity, so further testing was needed.
I sent the bar off to Auris Noble. They did a destructive test, where they clipped off a small piece of the bar (~800mg). It was pickled in aqua regia to remove surface contaminants. The sample was then dissolved in acid, and run through an Agilent ICP-OES (a $100K instrument). The purity was measured per per ATSM B562-95(2012) specs for 99.99% refined gold.
The results were .99984. The results might have been somewhat lower (.9995+) if a different testing method had been used (the ATSM specs allow for certain impurities, such as platinum). Although .99984 is below what was marked, that is nowhere near the concern that it would have been at .997 as some people were expecting. At .99984, it would have 60% more contaminants than marked. But at .997, it would have 7000% more contaminants. Plus, for anyone concerned, the weight of the bar was just slightly over 1 troy ounce: enough so to ensure that even at .9995 fineness, the bar still originally contained a full troy ounce of gold.
So why did this bar fail the PMV for .9999 fine gold, and show just outside the expected results for .999 fine gold? Because of the iron content. The bar tested as 0.00815% iron, whereas ATSM specs only allow 0.00200% iron. Although OPM is not required to follow ATSM specs, from what I understand iron reacts with gold in a way that alters the resisitivity. Even with the iron, the PMV did behave pretty much as one would hope: it failed the .9999 test (the bar tested just under that), and was just outside the expected results for .999 (while it was .999 fine, the PMV suggests further testing given these results).
This certainly does not prove that all OPM, Elemetal, NTR, and Provident gold and silver bars are fine. However, it does help show that the main tools used to detect fake gold aren't very accurate for determining fineness (e.g. distinguishing between .999 and .9999 fine gold).
If anyone has any details about bars they believe may be impure, the anonymous tips page can be used to get either E-mail me or send information anonymously.
OPM/Elemetal/NTR Serial # TesterJuly 20, 2017 9:45AM EST
There has not been much news about Elemetal lately.
In the meantime, I now have the details behind the OPM 1oz gold bar serial numbering system. The bars sold from around January, 2013 through around August, 2015 have 10-character serial numbers in the format A00000000A. They include a checksum, making it quite difficult to come up with valid serial numbers (without knowing the formula).
I have set up a simple page that lets you test to see if the serial number on an OPM, Elemetal, or NTR appears to be valid. It can also check bars with the serial format 00-00000, although those are trivial to fake (the first 2 digits are the year). But the 10-character OPM serial numbers are very, very hard to fake, as the checksum is very thorough. So while B15202129R is a valid serial, B15202130R is not valid (it fails the checksum). The chances of making up several correct bar numbers (without knowing the checksum formula) is close to impossible.
AP's 'News' on NTR MetalsJuly 10, 2017 7:30AM EST
Yesterday, the Associated Press (a national news 'wire service' that supplies news to thousands of newspapers, radios, TV stations, etc.) wrote an article titled 'US prosecutors: illegal gold used in money-laundering scheme'. It appeared on the Washington Post website, ABC News, Fox News, CNBC, and at least dozens of other websites.
So what is this news? Nothing! As far as I can tell, this is all news that did appeared in national media more than 3 months ago. I do not see a single piece of information that was not known 3 months ago.
The Fall of Elemetal?June 29, 2017 2:30PM EST
It appears that Elemetal has been silently dismantling its empire over the past 6 months or so (well before the news of the $3.5B of illegal gold purchased by the 3 Elemetal/NTR employees came to light).
The first clue should have been that was that John Loftus, founder of NTR Metals (which basically morphed into Elemetal) became the CEO of DGSE (which Elemetal has been the majority shareholder of since 2012 or earlier) in December, 2016. Within 2 months, Loftus announced that DGSE was in negotiations to buy Elemetal Recycling, for about $20M.
The 8 Elemetal companies are:
UPDATE July 4, 2017 12:35PM EST: I was able to contact someone at Elemetal familiar with what is going on, who did not respond by the time I published this. After looking at the post, he chose not to provide any comments.
LBMA's Reason: Not Responsible GoldJune 28, 2017 12:35PM EST
At a conference in Singapore on June 5, 2017, LBMA's CEO Ruth Crowell gave an update on London markets.
In it (at around the 11:35 mark), she discusses their de-listing of Elemetal. It had been widely assumed that they were de-listed for the $3.5B of illegal gold they bought. Ms. Crowell confirmed this, by stating "We delisted a refiner called Elemetal. They are based in the United States. This is for falling afoul of our responsible gold guidelines due to their ongoing FBI investigation."
Please note that while taken as it was spoken it implies that Elemetal is under investigation, that may have been misspoken. We know that 3 Elemetal (a/k/a NTR Metals) employees were arrested and indicted, and Elemetal assisted in the investigation of the employees. However, I have not seen anything (public or otherwise) stating that Elemetal (the company, as opposed to individual employees) is/was under investigation. It certainly is a possibility, but not one that is publicly known, and I doubt that her statement really meant that LBMA knows Elemetal is under investigation.
Have You Received Elemetal Refining Payments?June 28, 2017 9:25AM EST
On April 28, 2017, Elemetal Refining paid their customers 20% of what they were owed.
The next payment was scheduled for June 15, 2017, with another 20% to be paid.
If you are an Elemetal Refining customer, could you please let me know if you got that payment? I had a report from someone who did not. You can either send an anonymous tip or E-mail.
UPDATE June 29, 2017 1:35PM EST: I have now heard a report from someone saying that they did receive the June 15, 2017 payment on time. Any other updates would be appreciated!
Elemetal Refining's President GoneJune 28, 2017 9:15AM EST
I just found out that Elemetal Refining's President, Conor Dullaghan, left Elemetal Refining on June 22, and is no longer working with the Elemetal companies.
Dr. Dullaghan's name appeared in the Elemetal/NTR saga when a letter surfaced that he had sent to Elemetal Refining customers, letting them know that Elemetal could not pay them when due, and would pay them over 6 months.
Purity LawJune 28, 2017 8:45AM EST
Many people are wondering about what the laws are regarding purity of metals. My standard disclaimer applied: I am not a lawyer, and cannot provide legal advice.
That said, there is an old U.S. law from 1906 that requires gold to be no less than .003 below what is marked, and silver to be no less than .004 below what is marked. So for .999 or .9999 fine gold, it would be required to be .996 or .9969. For .999 or .9999 fine silver, it would be required to be .995 or .9959.
Of course, there are other laws that might apply as well.
... and the .997 fine '.9999+' gold bar.June 27, 2017 8:45PM EST
I've been a bit stuck with my reporting, having to be extra careful, because most of the information I have has come to me anonymously, and the bit of non-anonymous information hasn't been the incontroverable proof people have been looking for.
But today I found out that someone I know had a 1oz gold Elemetal bar (made in 2016) tested with an Olympus XRF tester, using the Olympus "Precious Metals" test. The bar was was marked ".9999+ FINE GOLD" (with the certificate stating ".9999 FINE GOLD").
Using the Olympus "Precious Metals" test, it reported that the bar was .997 fine, with a +/- of .0001 (.9969-.9971).
Again, anyone with XRF or assay results of Elemetal, NTR, OPM or Provident bars, I would love to hear from you (you anonymous tips page or E-mail the address on the tips page).
Kitco's ResponseJune 26, 2017 1:10PM EST
I just got the official line from Kitco. They wrote: "We have received news that Elemetal refiner’s Comex status has been revoked for the time being. Because of this, any customer selling bars under their brands will be bought at a lower price as none of these bars will be resold to our customers, only melted."
As most readers are aware, COMEX suspended warranting of Elemetal bars just about 3 months ago. They did not suspend OPM bars (which are listed as "no longer produced"), and NTR/Provident bars were never COMEX approved.
When buying bars from Kitco, they specify that they sell bars from "selected reputable refiners", whereas when selling bars to Kitco they do not specify what brand(s) are acceptable. Until now, that is.
UPDATE June 26, 2017 1:10PM EST: I have heard that Kitco is paying $1 below spot for NTR/Elemetal/OPM/Provident silver bars (versus $.25 under spot for others), and $20 below spot for NTR/Elemetal/OPM/Provident gold bars (versus $7.50 under spot for others).
Kitco Doesn't Want NTR/Elemetal/OPM/Provident BarsJune 23, 2017 8:50PM EST
I had heard from several sources that there was an issue with impure Elemetal, NTR, and OPM gold (and possibly silver) bars. I had been told specifically that Dillon Gage's refining department was refusing to accept these bars. When I asked, the person responding asked his boss how to respond, but they never did. I got quite a few tips from people who gave pretty compelling evidence of impure bars.
Now, however, there is official confirmation of a problem (not necessarily impurity), as Kitco's buyback pages for gold and silver bars now states in large bold letters "Note: The following brands carry a large discount to spot. Please call us for a live indication of our bid on the following items: Elemetal, OPM, NTR & Provident Metals."
Although there could be other reasons for this, it is sounding more and more like there are impure NTR/Elemetal/OPM bars. Of note is that they are now including Provident Metal bars, as well as silver.
Again, if you have any information that might be useful, feel free to leave an anonymous tip.
Elemetal Vault: Tips WantedJune 12, 2017 3:35PM EST
Have you had any dealings with Elemetal Vault recently? If so, could you please let me know (the tips page lets you leave anonymous tips, or you can send me an E-mail).
I would be interested in hearing if transactions went smoothly (or were delayed), whether you got responses quickly or if they were slow in responding, as well as any other information you may wish to share.
"We've decided to clean house!"June 9, 2017 4:20PM EST
Provident Metals has sent an E-mail to customer that hopefully is a typical marketing puffery:
"Our boss is in England and won’t be back until it's too late! We’ve decided to clean house. Over 200 products available AT OR BELOW COST now through June 30. No code necessary! Shop now and SAVE BIG during our "Summer Vault Blowout!"" (that's actually from their website; the E-mail was slightly different).
Of course, I am certain that Provident's President and CEO Joe Merrick is well aware of this sale.
Provident Metals and Elemetal Vault Split UpMay 15, 2017 9:00AM EST
Starting Wednesday, "Provident Metals will no longer accept Elemetal Vault account balances" according to their blog.
Previously, Provident Metals had pushed Elemetal Vault as their storage solution. With Elemetal Vault, you could buy or sell a specific amount of gold or silver, which you would own as a fraction of a large bar. You could later convert the metal to items sold by Provident Metals.
Starting Wednesday, however, converting the metal to items sold by Provident Metals will no longer be an option. You will be limited to either getting Elemetal gold/silver bars, or cash.
Dillon Gage Rejecting Elemetal/NTR/OPM Bars?May 10, 2017 3:15PM EST
Questions still remain regarding the purity of Elemetal, NTR, and OPM bars.
The first I heard about potentially impure Elemetal/NTR/OPM bars was from someone who told me that Dillon Gage has stopped buying back these bars, because Dillon Gage had discovered that the bars were not pure (less than .999 fine). I contacted Dillon Gage to ask if they were no longer buying back these bars (not mentioning the purity issue), and the person who received the E-mail deferred to the VP of Trading (I was Cc:'d), asking "how do you want us to respond?". Nobody responded, even after I sent a follow-up E-mail. Huh.
So I'm stuck on that lead, even though logic suggests that if this were not true, Dillon Gage would immediately respond saying so (who turns down extra business?). But since their response was not to respond, I cannot say for certain that they have detected enough impure bars to warrant rejecting them (any info, please E-mail or send an anonymous tip).
What I can say is that after I requested information from the public on Elemetal/NTR/OPM purity, I have had 4 people come forward. One says he has assayed many of the Elemetal gold bars, and they are usually pure (my emphasis), and believes they fail bullion verification devices because of irregular minting processes. Another states that XRF consistently shows Elemetal bars as having 0.3% to 0.8% copper (which translates to .992-.997 fine or lower). Another mentioned some OPM gold bars testing .999 fine with XRF, but changed color when heated, and testing as .950-.980 fine (if true, it suggests that the impure bars were plated with .999 fine gold).
The final person tested a wide variety of Elemetal/NTR/OPM silver products (using electrical resistivity), which all tested fine. He also tested 10 OPM/NTR gold bars, of which 9 passed. One, however, failed. The results suggest that the bar is gold, just almost certainly less than .999 pure.
My recommendation is that if you have any Elemetal/NTR/OPM bars, you test them using whatever tools you have easily at your disposal. My sense is that there are quite a few impure gold bars out there (.950-.998 fine or so), but that silver has been spared. At these levels of purity, I imagine it would require XRF testing or an actual assay (melting the bar) to determine the exact fineness. Measuring the weight/dimensions or an acid test would not be accurate enough.
Still Wanted: Metal Purity InformationMay 5, 2017 3:20PM EST
I am still looking for information on Elemetal/NTR/OPM metal purity.
If you have tested any Elemetal/NTR/OPM bars or rounds, using any testing method ranging from assaying to XRF to a Sigma Metalytics tester to acid testing, I would be very interested in hearing the results (good or bad). Any information would be helpful, but especially useful would be the type of metal (e.g. gold or silver), the purity shown on the bar/round, how it was tested, the brand (Elemetal, NTR, or OPM) and the results.
Specifically, I have heard several reports of testing with less-than-pure results (e.g. .997 fine instead of .999 fine). I am trying to determine if this might be something as simple as a bad batch, a testing method that has false positives, poor quality control, etc.
You can either E-mail me or send any information anonymously, using the anonymous tips page.
Wanted: Metal Purity InformationMay 2, 2017 7:45PM EST
If anyone has had Elemetal, NTR, or OPM bars tested for purity/fineness, I would be interested in hearing the results.
You can either E-mail me or send any information anonymously, using the anonymous tips page.
Lawsuit DismissedApril 28, 2017 8:10PM EST
The glass company that sued Elemetal Refining, LLC (see below) has voluntarily dismissed its case, with each side to pay its own attorney fees. No reason was given for the dismissal.
Although this could be done for any reason, it is likely that the metal was returned to them. Alternatively, it is possible that the glass company chose to accept the Elemetal Refining payout schedule.
Elemetal Refining Payments BeginApril 28, 2017 8:55AM EST
Last night Elemetal Refining, LLC sent a letter to customers, letting them know the expected payment plan.
20% of the amount owed customers will be paid out today.
Elemetal Refining, LLC then expect to make additional 20% payments by June 15, August 15, October 16, and December 15. That would mean that all customers would get 100% of what they are owed before the end of the year.
It spreads the payments over 8 months, rather than the 6 months originally planned. However, the fact that the first payments will be made today is highly encouraging. Customers of Tulving, Bullion Direct, and NWT Mint would have been very, very happy if they could have received a 20% payment immediately.
Elemetal Capital Performs Surprise InventoryApril 26, 2017 2:00PM EST
Elemetal Capital customers found out this morning that for the next 2-3 weeks Elemetal Capital will be "performing an inventory audit", and not accepting any bullion sales to them. Any customers sending them bullion in the meantime have their metal forwarded to Elemetal's scrap processors and will be paid the lower scrap rates.
Elemetal Capital is the subsidiary of Elemetal that focuses on physical metal trading, metal derivatives, and foreign exchange. It was also previously known as NTR Bullion Group.
It is not uncommon for privately held companies to conduct inventory audits, so this could have been ordered by management. And inventory audits do require a method to keep newly purchased inventory separate from the inventory that is being valued. Sending the metal to scrap processors would be an excellent way to treat newly purchased inventory in this case, except that it could significantly hurt Elemetal's business for those few weeks: some people will feel ripped off, some may switch to another wholesale bullion dealer.
What is surprising is that it appears no notice was given to customers. Not even a day or two to give customers who sell in batches to send what they have. This suggests an urgency behind this audit.
If anyone has more details about this beyond the E-mail that was sent to customers (or anything else you think I should know about), feel free to E-mail me or use the anonymous tips page.
April 24, 2017 5:10PM EST UPDATE: I have heard that Elemetal Capital is actively selling metal, as of at least a few hours after their E-mail to customers.
... and the Lawsuits BeginApril 24, 2017 8:50PM EST
A few hours ago, a glass company that uses silver in coating glass products filed a lawsuit against Elemetal Refining, over about $650K of metal they claim that Elemetal refuses to return to them.
In the arrangement they had with Elemetal Refining, the glass company would use pure silver as part of the process to coat glass, and then send Elemetal the impure silver that resulted for refining. Elemetal would refine it, the glass company would sell part of the silver to cover Elemetal's fees, and Elemetal would return pure silver.
The glass company states that the silver was always their property, and the only time the title would transfer to Elemetal is when the glass company sold Elemetal some of the silver to cover the fees (in fact, exhibits include a trade confirmation showing the metal to cover fees being sold to Elemetal -- something that likely could not be done if the glass company was not the owner of the metal). The glass company alleges that Elemetal has refused to return the metal.
This is different than the refining that I believe Elemetal Refining normally does, where someone sells them scrap silver/gold for cash. In that case, the title transfers to Elemetal (the question being when; Elemetal stated that they believe it is on delivery to Elemetal). However, in this case, in theory, the glass company should be receiving exactly what it sent (minus impurities, and some extra silver to pay for refining). That does suggest that the title would not transfer. On the other hand, it was based on an oral contract (the standard Elemetal Refining contract seems to apply to Elemetal paying for the metal to be refined, not returning pure metal). And the exhibits show that Elemetal refers to the glass company's metal being "credited to pool account to be returned" (suggesting it would be Elemetal's metal).
This does bring up some interesting questions. If this is all true, is the metal actually owned by the glass company? And if so, why is it not being returned? Was there a lien on this metal? Was the metal given to (or sold, with the proceeds going to) one of Elemetal Refining's banks?
2 of 3 NTR Metals Miami Employees Ordered DetainedApril 20, 2017 2:45PM EST
Two of the three NTR Metals Miami employees that were arrested and charged with conspiracy to commit money laundering were ordered to be detained without bond, due to their flight risk.
NTR Predicted Elemetal Refining DemiseApril 18, 2017 3:50PM EST
Starting in late 2014, a group in Colombia claiming to be "working for peace" started E-mailing NTR employees in Colombia (including one of those that was arrested last month), and then published a defamatory website in late 2015 about NTR Metals and their operations in Colombia -- accusing them, among other things, of participating in money laundering and financing terrorism. NTR Metals, of course, denies these allegations. They even initiated a lawsuit in Colombia to try to track down an punish the people responsible for the defamation.
A legal representative for NTR Metals wrote, in Spanish, in February 2016: "It is also not surprising that [the defamers] would try to generate a hostile environment toward the oversight authorities so that they would start investigations against my clients and, with that, finish off its business."
So if NTR's prediction was correct, the shutdown of the Elemetal Refining gold and silver refining business was a result of defamation, not improper business practice.
Some More DetailsApril 18, 2017 2:35PM EST
Here are some other details I have discovered recently:
Elemetal Vault Metal SafeApril 14, 2017 5:00PM EST
I previously had concerns regarding the Elemetal Vault metal, thinking it was at the Brinks vault at Elemetal Refining.
I have just been told by Elemetal Vault that the metal purchased by Elemetal Vault customers is located in a Brinks vault in a different state. They also clarified that their client's metal is not (and can not be) subject to any lien.
This relieves most of my concern regarding Provident Metals and Elemetal Vault, LLC.
DeletedApril 13, 2017 11:30AM EST
On Monday, Provident's President and CEO Joe Merrick wrote a blog post addressing NTR's issues.
I posted a comment the next day, asking if he could confirm that there were no liens on their stored metals program (Elemetal Vault). Someone there gave a vague response, but did not address my question. I then posted a second comment in response explaining the importance and asking for further clarification (and sent an E-mail to their media address). The stored metal is in a vault that has metal that 2 banks have liens on, so this is more than a trivial question.
For nearly 48 hours, my second post would show up in my browser as "Pending Moderation", so presumably the public could not see it. But within the past 3 hours, my second post does not even show up in my browser. So they have gone from not answering my question (non-action) to deleting it (an intentional action).
I really want to give Provident the benefit of the doubt here, but they are making it harder and harder to do so. As with my last post here, until Provident responds, I cannot recommend that people do business with Provident Metals. That may change, of course, but that is my stance for the time being.
[April 14, 2017 5:00PM EST Update: The Elemetal Vault metal is in a Brinks facility in a separate state, and not subject to any liens]
Provident Quiet on Stored MetalApril 12, 2017 5:45PM EST
I mentioned that on Monday Provident blogged about the NTR issue. I commented, requesting clarification on metal stored by Provident's customers (which sits in the very vault that is at the center of the NTR Metals controversy). They gave a vague "Oh, that's not us" response. I asked for clarification, and checked with Elemetal Vault, and after more than 24 hours have not received a response from either.
So let's take a closer look at this. Provident is a subsidiary of Elemetal ("An Elemetal Company"), and offers customers storage at Elemetal Vault, another subsidiary of Elemetal. Elemetal Vault's metal is stored at Elemetal Refining, in Jackson, Ohio. Two banks have liens on metal at that location, Elemetal Refining is shutting down their gold and silver refining business (after allegedly refining more than $3.5B of smuggled gold). The situation is bad enough that Provident blogs about it to do damage control. Two companies that had reputations similar to Provident went belly-up after lying about stored metal. So when I ask about the possibility that metal that Elemetal says is owned by customers might be subject to the lien, Provident does what? They don't respond. Nor does Elemetal Vault. No answer.
In my opinion, this is pretty damning. If Elemetal Vault metal is not actually owned by customers, this would appear to be a massive fraud -- and would be extremely damaging to Provident Metals. If I ran Provident, I would immediately respond, either with an answer, or giving a high priority to getting a detailed response.
Despite no signs of financial trouble at Provident Metals itself, until Provident responds, I cannot recommend that people do business with Provident Metals.
[April 14, 2017 5:00PM EST Update: The Elemetal Vault metal is in a Brinks facility in a separate state, and not subject to any liens]
Elemetal Refining UpdateApril 12, 2017 4:15PM EST
According to an article at the Times Journal (a Jackson, Ohio newspaper; subscription required), Alan Stockmeister (the Chairman of the Board for Elemetal Refining, LLC) met with local media.
According to the article:
Another OPM Lien: Metal Leased from MitsubishiApril 11, 2017 8:35PM EST
I've finally managed to access Ohio's liens, and uncovered a lien that Mitsubishi International Corporation has against metal it leases to Elemetal Refining (f/k/a OPM). The original lease agreement was dated March 28, 2016, so this is quite new.
Why OPM was leasing metal is beyond my expertise. But like the Provident Metals lien, this lien applies to metal likely held in Elemetal Refining's vault, the same place where Elemetal Vault's metal is held. This adds fuel to the fire regarding whether a bank or other company may believe they have a lien against Elemetal Vault metal. From what I can tell, assuming Elemetal is honest, this should not be possible. However, if a lien does exist -- which Provident has not yet shown it is concerned about -- it would be a very serious problem for Provident's customers who use Elemetal Vault.
[April 14, 2017 5:00PM EST Update: The Elemetal Vault metal is in a Brinks facility in a separate state, and not subject to any liens]
Elemetal Vault: Is Their (Your) Metal Gone?April 11, 2017 7:10PM EST
Provident Metals, like many dealers, offers a storage option: Elemetal Vault.
With Elemetal Vault, the metal is allocated but not segregated. The "not segregated" means that all the metal is lumped together (there is no box with your name on it). The "allocated" means that you are the "legal owner" and it is your "legal property" and you "[have] title to" metal. In this case, the metal is large bars: you might own 1 ounce of a 100oz gold bar. Maybe one person owns the other 99 ounces, maybe 99 others each have 1 ounce. But if Elemetal Vault is telling the truth, you have title to 1% of that bar.
The concern here is that the Bank of Nova Scotia has a lien on metal (a right to keep the metal until a debt is paid) that it consigned to Provident Metals and "certain of its affiliates" (Elemetal Vault is an affiliate of Provident Metals). Despite Provident Precious Metals, LLC being listed as the debtor on the lien, the address is not that of Provident Metals: it is that of Elemetal Refining and OPM, where Elemetal Vault is located. And we have heard that the Bank of Nova Scotia has come after bars at that location. If all the paperwork is done properly, all should be fine. But the obvious question is whether the Bank of Nova Scotia may think they are entitled to the Elemetal Vault bars (if the bank is combing through the vault, they certainly are asking this question!). If that is the case, it could boil down to whether Elemetal Vault properly transferred ownership to customers (if so, customers are in somewhat good shape; if not, they might get nothing).
Remember, Bullion Direct and NWT Mint lied to customers regarding their stored metals. So far, no Bullion Direct customers and only a handful of NWT Mint customers have seen any of their stored metal. Both Bullion Direct and NWT Mint were in business longer than NTM/Elemetal/Provident. I am not suggesting that Elemetal or Provident would lie, but a prudent investor must assume the possibility of a lien exists.
So I asked Provident if there might be a lien on these bars, and they responded without providing an answer, passing the buck to Elemetal Vault ("we are a load out option for Elemetal Vault and can’t speak on their behalf"). This is very disconcerting. If Elemetal Vault's metal is subject to a lien (and there is evidence that suggests this could be the case), Elemetal Vault would be a complete lie, and it would to me seem like Provident would be selling a fraudulent product. And Provident doesn't want to know the answer? It is clear that Elemetal has been seriously harmed by the gold smuggling allegations (which 3 Elemetal employees are facing jail time for), and hurt badly enough that Provident is publicly addressing the issue. So why do they not find the answer? Is this a "Don't ask, don't tell" policy (like the gold smuggling appears to have been), or just a lower-level employee responding to this serious issue? Does Provident care if their customers might not actually have their stored gold?
I will, of course, update when I hear back from Provident.
OPM To Shut Down [High Grade Refining]April 9, 2017 8:20PM EST
There were rumors that OPM (Ohio Precious Metals, an Elemetal company) had shut down operations, and this appears to have been confirmed from a letter sent to Elemetal Refining customers.
The letter specifies that they expect to pay Elemetal Refining, LLC customers within 6 months. It refers to O.R.C. 1302.42 stating that title of metal sold to Elemetal Refining, LLC vests when the metal is delivered, and states that their bank (presumably the Bank of Nova Scotia) has a first lien on the metal. They also point out that bankruptcy was considered, but it would immediately halt payments and could delay the process for years (and cost millions of dollars, which they do not mention, but we know from Tulving, Bullion Direct, and NWTM's bankruptcies).
Please note that it is unclear exactly how far this issue reaches. Elemetal Refining, LLC is its own company, so it could be limited just to Elemetal Refining, LLC (the old OPM). Presumably, the metal in the Elemetal Vault (which appears to be located in the Elemetal Refining, LLC facilities) is not covered by the bank's lien (if so, there would be disastrous consequences). Fortunately, Provident Metals appears to be getting orders out in a timely fashion.
April 12, 2017 4:20PM EST Update: Elemetal Refining, LLC is not planning to shut down completely, just to shut down the high grade gold and silver refining. See the 'Elemetal Update' of 12 Apr 2017 above for further details.
Anonymous Tips WantedApril 9, 2017
I am looking for anonymous tips regarding Provident Precious Metals, NTR, and Elemetal.
Whether you work for them, work for a company that does business with them, are part of an investigative agency, or just heard something, I'm happy to hear from you. Getting tips helps me get a sense of the severity of issues at a company, and can sometimes provide me with information customers want to hear. The form also allows for attachments.
You can submit tips at this page. You are also welcome to E-mail me (I am very careful to protect my sources). Typical tips I have received for other companies range anywhere from experiences with the company to other places I should be looking to various files (financials, E-mails, etc.). I'm not Wikileaks; I will not normally post any documents that were not intended to be public (but appreciate receiving copies).
NTR/Elemetal's IssuesApril 9, 2017
Elemetal (a/k/a NTR Metals) has serious issues, that surfaced in March, 2017.
It all started on March 9, when Bloomberg wrote an article How to Become an International Drug Smuggler. It outlined a 23-year-old from Chile who smuggled $80M of illegal Peruvian gold, and how the Miami branch of NTR Metals (Elemetal) bought $3B of mostly illegal gold in the past 4 years. The gold smuggler said damning things about NTR: he said that he told two NTR employees that the gold was contraband, and that they helped him falsify customs paperwork. The two salesmen emphatically denied the allegations, so maybe it was a smuggler lying to make himself look bigger than he really is.
But the day after that article was published, the U.S. Attorney started an indictment against 3 NTR/Elemetal employees, including the two salesmen mentioned above, with the criminal complaint accusing them of money laundering (including such texts as "We need more Peruvian gold from Bolivia and Ecuador. Can u make it happen?", less than 2 months after receiving an article detailing illegal gold mining in Peru and gold smuggling through Bolivia).
Then, on March 31, for reasons unknown, the LBMA dropped both OPM (Ohio Precious Metals, an Elemetal company) and Elemetal from their "Good Delivery" list. Later that day, COMEX said they would no longer register (warrant) Elemetal bars. In the past 10 years, COMEX has only suspended warranting of 1 other company (ME Alcoa Aluminum), also for reasons unknown. COMEX gave a cryptic reason for the LBMA removal: it followed an "active review under their Incident Management Process." This is very, very serious.
One website reported an "unsubstantiated report" that Scotia Bank recalled its line of credit to Elemetal, that Elemetal is shutting down OPM operations, and returning all product to Scotia Bank. We cannot assume unsubstantiated reports to be true. However, what is known is that Scotia Bank had a lien on metal consigned to OPM (the lien is in Provident's name, but refers to Provident's affiliates and the mailing address is OPM's). That, combined with the LBMA/COMEX news, makes this extremely plausible.
Next, there is a lawsuit (dating a few years back) by a coin retailer, accusing NTR of encouraging the company to speculate in the futures markets, simply to profit from trading. One of the two owners had as much as $6M of futures contracts in play.
I have also heard from an NTR customer (a coin dealer) that late last year there were multi-week delays in getting orders, and excuses -- similar to what I would hear regarding Tulving, Bullion Direct, and NWTM.
However, despite these issues with Elemetal, I want to reiterate that I do not see the warning signs with Provident Precious Metals that I did with Tulving, Bullion Direct, and NWTM. I always recommend not storing metal with the dealer you buy metal from, so I wouldn't personally store metal with Elemetal Vault (see my write-up here). However, I would personally be much more thorough before placing orders with Provident (e.g. checking the latest news each time), and being careful how I pay (a credit card is safest, a bank wire allows quickest shipment).
Page StartedApril 9, 2017
I have started this page about Provident Metals (Provident Precious Metals) due to a number of serious concerns regarding their parent company, Elemetal (Provident Metals is also known as Elemetal Online).
Elemetal is a conglomerate of bullion companies, including NTR Metals, OPM, and Provident, now all using the Elemetal name.
First, let me say that Provident does not have the red flags that Tulving, Bullion Direct, and NWT did (serious delays in shipping orders). That suggests that Provident is in acceptable financial shape, and if they are getting all orders shipped out quickly, it strongly limits the number of customers who would lose money in the event of a bankruptcy (for customers purchasing metal for delivery; Elemetal Vault is a separate story).
Link to upcoming page on Impure bars
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