Karat Chat

Market Crashes, Broken Tractors, And Gorilla Heads: Steph Mazzone Reflects On Thirteen Years In The Precious Metal/gold Refining Industry

A lot can happen in thirteen years, especially in the topsy-turvy world of precious metal/gold refining. But even knowing that, when Frank Curren sat down with Steph Mazzone to reflect on her thirteen years in the biz, he was surprised by the wild tales she unleashed.

It’s been thirteen years, Steph! How did you get started at Pease & Curren? It was before my time.

I started in November 2006 as a temp. Another saleswoman was on maternity leave, so I came in to pick up the slack. I was coming from selling to the industrial and motor oil industries, which was a lot less exciting. When I started here, I was selling only to jewelry manufacturers and retailers. Not too long after, in 2007, the price of gold took off and everything changed. I was hooked and never left.

Changed how?

You had the Great Recession, beginning in 2007 with the collapse of the housing market and everything that followed. As real estate went down, stocks went down, and the banks were in turmoil, people turned to precious metals like gold as a way of investing and preserving their wealth. The price of gold went through the roof through 2011 and everyone was refining everything they had to realize these gains. Suddenly pawn became a huge industry for refiners as the public needed an outlet to sell their gold to and cash in.

Pease & Curren was what I would call one of the three elite gold refiners. For me this meant that instead of dialing out like a normal salesperson, I was just answering the phone, which was ringing off the hook. It was an amazing time.

What did that kind of frenetic atmosphere do to the industry?

Most operations would just do an X-ray, which is less accurate, and pay people right away or soon after.Gold refiners, or buyers calling themselves “refiners”, were popping up left and right. And for many of them, it became much more about grabbing metals and paying quickly. Most operations would just do an X-ray, which is less accurate, and pay people right away or soon after. People were getting paid so much more because of the prices that they often didn’t realize that they were getting paid less through these sloppy diagnostic and refining processes. Ohio Precious Metals, which had been one of the elite refiners I was talking about, became NTR, and set up lots of locations where they could just do X-rays. Now they are in trouble with the Feds for money laundering.

Pease & Curren never really got into that kind of business, because the fire assay is our strength. It allows us to get the most accurate read on what precious metals a customer’s lot contains, and to pay our customers on everything.

And how has the gold refining industry changed again from then to now?

Well, what goes up must come down. Now that the price of gold is so much lower, especially compared with stocks and other investments, refiners are really forced to compete on service and process. We are all chasing the same gold. Many refiners haven’t made the cut, and we have seen so many bankruptcies and other problems. Republic Metals is an example. There have been others and there will be more. The World Gold Council estimates that there is four times as much precious metal refining capacity as there is demand. Some people can’t handle this kind of industry, but I love it because I hate to be bored.

What sets Pease & Curren apart from some of these other refiners?

I would say the relationships that we have developed over our one hundred-plus years in business is most important. With the industry in so much chaos, the smart customers really don’t want to be shipping to newer gold refiners or those that cut corners. A lot of people lost of a lot of money to the Republic Metals bankruptcy. So, when we tell people that we have been in business for a hundred years, it gets their attention. And after so many years, we really have a huge amount of institutional knowledge. A long-time customer service representative like our Deb Deblois has seen it all and has solved so many problems. It is really the opposite of the kind of customer service you get when you call the cable company.

We take pride in recovering everything, and I am not sure that that is universal. If you think choosing a refiner is just about the percentage they say they pay, you’re kidding yourself.And customer service is not only a matter of convenience. When Samuels, a large retail jewelry chain, went bankrupt, they faced a really tight Bankruptcy Court deadline to liquidate all of their assets. They hadn’t thought about the refining until late in the process. Our whole team, from customer service to production, came together to get the materials in here and process them quickly and accurately to meet that deadline. We couldn’t have done that without our collective experience.

But what really sells is our process. Take our low-grade incineration work. We use a designated incinerator for each customer’s lot. We don’t “stack lots”, a term you hear when refiners start talking to each other. Not stacking lots means your results and your metals are really yours, and not potentially someone else’s. We burn the container with the lot, which means you don’t lose any gold that would stick to the sides. We take pride in recovering everything, and I am not sure that that is universal. If you think choosing a refiner is just about the percentage they say they pay, you’re kidding yourself.

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How do you advise people who are watching precious metals and trying to predict what will happen with their prices?

A lot of people ask me about that, and I mostly say “just don’t”. You can’t really predict what the price of gold is going to do. Sure, you can look at the price of the dollar. Since gold and the dollar are both ways that people store wealth, their prices tend to have an inverse relationship. When the dollar is weak, people rush to gold.

Theirs Was a Serious Conversation Indeed

But really, you can’t predict. A market is at a certain price because half of the market thinks it should be higher, and half lower. Your father, Kip Curren, once told me that precious metals take the staircase up, and the elevator down. So, if you try to wait for a particular price, you’ll likely miss your market. I say refine your gold and take your money when you have enough volume for it to make sense. Use the money to invest diversely. Unless you really know your stuff, waiting for a price can be a sucker’s game.

What do you love about the industry? What has kept you in it for so long?

Its diversity. One moment I am talking with a top executive from a large retail jewelry chain. We are figuring out how to minimize their costs and optimize their returns. How to track their results from store to store so that they can ensure that all of the stores are taking scrap seriously and so that they can give bonuses to local managers that pay attention and acquire lots of scrap. The next moment I am talking to a customer who is having trouble starting his tractor.

His tractor?

Yeah, I could hear popping in the background as the engine failed to start. There was a rooster crowing, too. He told me he was trying to get his tractor started so he could drive over his silver and flatten it to make shipping easier. We figured out how to get him the container he needed so he didn’t have to run the metals over. [Laughter] I love talking to different kinds of people and solving different kinds of problems.

And it doesn’t just go one way, either. Another time, a customer was having a really difficult time extracting his sink sludge for refining. I called another customer of mine who I knew had the same kind of plumbing system in his facility, and got the right advice. There’s nothing you can’t tackle with the right relationships – even sink sludge!

What is the strangest thing you have seen in the refinery?

The gorilla head filled with diamonds, hands down. It came from Georgia. The head was made of gold with diamonds encrusted throughout, and ruby eyes. [Steph makes a gesture with her hands that looked like Atlas palming the globe]. Ugly, but gorgeous. You know?

Do you have a picture?

No [laughter]. Some things you hate to refine. But refining’s what we do. So the gorilla head is lost forever.

When she is not at the refinery, Steph tends to her horses. You can chat with her by clicking on the link to the bottom right.

Before joining Pease & Curren, Frank Curren was a litigator for an anti-poverty non-profit.