Many beginning coin collectors believe mintage figures are a sure way to determine which coins can be rated as common, scarce or rare. As it turns out, practices such as hoarding, melting, distribution methods and other assorted factors can result in situations where availability of certain coins is actually far greater or less so than the mintage would suggest. Things become even more complicated when reviewing availability in a particular grade or range of grades.
In this article, I'll take a look at modern Royal Canadian Mint products and their mintages. For my purposes, I'll define modern as those sets and single coins issued by the RCM since 1965.
Unlike coins produced to be used as money, modern mint products are sold to collectors who don't plan to spend these coins. Most of these coins were provided in special packaging intended to preserve them. For these reasons, the vast majority of modern mint products remain in "as minted" condition. Certainly some coins may be mishandled by collectors or improperly stored, but when compared to the number of pieces minted this often ends up being an insignificant portion of the original production.
What can significantly influence the ratio of pieces possibly available to collectors as compared to the original mintage of a modern issue is melting of the coins to obtain the precious metal they contain. The 1967 Canadian $20 gold commemorative coin can be used as a prime example. As of this writing, the value of gold bullion is about $420 US per ounce. This coin contains roughly one half ounce of pure gold. Currently, interest in this coin among collectors is modest at best. As a result, dealers are finding it necessary to sell these coins at around the bullion value or even slightly less. Those who bought these coins originally from the RCM are now in a position to sell them for a nice profit based only on the value of the gold the coin contains. As a result, it's safe to say that a good number of these coins, and like issues are finding there way to the melting pot. For this reason, the number of 1967 $20 gold commemorative coins available to collectors is now considerably less than the original mintage figures would suggest. How many coins may have been destroyed via melting will never been known. Based on my experience, I'd guess less than half of the original mintage of 334,000+ may still be available to collectors. Based on current demand, this supply seems more than adequate.
What can have a profound influence on the availability of many modern issues is how they were originally distributed. In my opinion, distribution methods can be far more important than mintage figures when determining the availability of modern mint products in the marketplace. I'll provide two examples as illustrations.
In the mid to late 1960's Canadian Proof Like sets were a hot item. Dealers and collectors were ordering huge numbers of sets knowing they could sell them for a profit the day the coins arrived. These items were often traded in bulk lots. When the speculative bubble burst, many investors were left holding quantities of these sets. Even 40 years later, it wouldn't surprise me to receive a call from someone wanting to unload hundreds 1965 PL sets.
Currently the majority of speculators and serious investors are ignoring Royal Canadian Mint products. While there have been some exceptions, historically the majority of these items are now worth less than the original issue price. The majority of people who are buying these products do so because they want them as collectables. Many of these mint customers hope that some day their purchases will have appreciated in value, but I think it's fair to say that speculators and investors are not dominate in the marketplace. The modern mint customer tends to order only those products they intend to keep. They are not purchasing for immediate resale. This results in the supply of material being thinly scattered. Based on my experience, with the exception of a few mass marketers, most dealers also order modest amounts of new mint products. This is very different from the marketplace of the 1960's and 70's where dealers were often prepared to stock vast amounts of mint products and do business with customers who were interested in buying dozens, if not hundreds of a particular set.
So what does all of this have to do with mintage figures? Let's say the RCM decides to produce a new product and limits the mintage to 20,000 units. Based on previous production and current collector demand, this would seem like a reasonable amount of material. There may well be more than 20,000 collectors worldwide who would like to add one of these coins to their collection. Let's say that 20,000 different customers order one each of this new product. Such a situation would mean any customer who missed out on the original offering would be required to wait until one of the lucky buyers was ready to sell. And how would this anxious collector be able to locate the motivated seller?
To examine the other side of the coin, let's suppose the RCM creates a new issue and decides to limit the mintage to only 10,000 units. Sensing an opportunity to quickly profit from this opportunity, dealers purchase the bulk of the mintage. Dealer A has 2500 units in stock. Other dealers have dozens or hundreds of the product to sell. In this case, even though the mintage is half that of the product that was thinly disturbed the supply available to collectors is far greater. Based on this example, a mint product with a mintage of 20,000 ends up being far more difficult to locate than a product where half as many were made.
When considering the aftermarket purchase of modern mint products the wise collector might first look for those items dealers can't or won't bother to make available. These are often the odds and ends that come to a dealer when they purchase a collection. Many of these sets are bulky and are difficult to display and cumbersome to take to shows. Often the potential profits available to dealers are minimal. It makes far more sense to buy a single coin that could yield a $100 profit than to process and sell a large box of mint products with the hope of making the same amount of money.