A-Mark Precious Metals (AMRK) Takes Majority Stake in SilverTowne Mint

August 31, 2016 4:09 PM EDT

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A-Mark Precious Metals, Inc. (Nasdaq: AMRK) has acquired a majority ownership stake in Indiana-based SilverTowne Mint and entered into an exclusive supplier agreement with Asahi Refining USA Inc. a subsidiary of Asahi Holdings (TSE: 5857), a global refiner and producer of precious metals.

Founded in 1973 in Indiana, SilverTowne Mint is a leading producer of fabricated silver products. Over the last 12 months, the company has produced approximately 12.5 million ounces of silver, and has the capacity to produce up to 20.0 million ounces annually.

Under the terms of the agreement, Asahi Holdings, which refines in excess of 75 million ounces of silver annually, will act as the exclusive supplier of LBMA-approved silver feedstock to SilverTowne Mint. The arrangement will provide SilverTowne Mint with a consistent supply of silver feedstock, enabling the mint to produce significantly more fabricated bullion annually, which A-Mark will then distribute exclusively throughout Asia, Europe and North America.

A-Mark’s many customers are familiar with the SilverTowne brand. With this new stake, it is anticipated that A-Mark will increase its purchases of fabricated silver products from SilverTowne Mint as well as providing SilverTowne customers with A-Mark’s full range of products and services.

SilverTowne Mint designs and produces more than 25 different fabricated silver bullion products and more than 300 different seasonal and topical specialty products. A-Mark intends to leverage SilverTowne Mint’s longstanding fabrication capabilities and extensive coin die portfolio to expand its custom coin programs, as well as introducing innovative, new custom products for individual customers.

SilverTowne’s current management team will continue to be involved in the newly acquired SilverTowne Mint under the new ownership structure. David Hendrickson, who has served as President of SilverTowne since 2010 and guided the company’s growth during an ever increasing competitive environment, will also serve as chief relationship officer of SilverTowne Mint to support the management team and growth of the new joint venture. Jamie Meadows, who most recently served as Vice President and General Manager of SilverTowne, will assume the role of President of SilverTowne Mint and will continue his role of developing and implementing strategies to grow the mint operations. Also, Brent McCormick, another former SilverTowne executive who managed day-to-day operations during a period of significant growth, will serve as Vice President of Mint Operations.

“It’s a remarkable opportunity for SilverTowne to join forces with A-Mark,” said Hendrickson. “We are excited to provide our customers with the product selection, and finance and service options that will be available to them through our partnership with A-Mark. As a family owned and operated business for three generations, I’m proud of what we have accomplished within our industry, but I’m even more excited about the level of service we will be able to provide to our customers as a result of this joint venture with A-Mark.”

Greg Roberts, CEO of A-Mark Precious Metals, commented: “The acquisition of SilverTowne Mint is truly unparalleled in the mint fabrication industry. SilverTowne Mint will be one of the most efficient vertically integrated mints in North America, benefiting from Asahi’s global refining capabilities as part of the strategic supplier agreement and A-Mark’s industry-leading distribution network.

“The acquisition also provides A-Mark with two world-class traders in Rita Graft and Patty Roberts, who have 47 years of combined experience and will join our international trading team. In addition, the numerous operating synergies between A-Mark and SilverTowne will significantly expand our capacity to meet unforeseen surges in demand during volatile market environments, such as the one we experienced last August and September.

“Most importantly, our exclusive distributorship with SilverTowne will enable us to sell a greater amount of silver per year to fulfill the increasing demand of our existing customers and service a broader range of potential customers. This helps us further establish our reputation for being not only one of the leading bullion trading companies, but also a full-service precious metals provider with a complete array of value-added services, including financing, storage, and logistics.”

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