It’s one of those terms that shows up sometimes in conversations about precious metals, or buried in product descriptions: LBMA Good Delivery refinery. But what does it mean?
The LBMA is the London Bullion Market Association. It’s an international trade association for those involved in the bullion investment market–particularly gold and silver–and includes refiners, dealers, banks, mining companies, private investors and others. It’s based in–you guessed it–London, England, but has a global reach.
One of the roles of the LBMA is to vet the quality of gold and silver that is used on their exchange, much in the same way Comex verifies gold and silver products that move through that market: In order to guarantee investors are receiving a high-quality product from Comex, each bar must pass a rigid qualification test, and once a bar is included in the Comex market, it must remain in the chain of control in order to keep that qualification.
The Comex Good Delivery standard is excellent, but the LBMA Good Delivery standard is even more stringent. It’s considered the global standard of absolute excellence.
What It Takes
To be included on the LBMA Good Delivery list, a refiner must:
- Have an established track record of at least three years of producing gold or silver
- Produce 10 tons of gold and 50 tons of silver, minimum, per year
- Have a tangible net worth of at least £15 million ($24 million)
- Demonstrate evidence of their ownership structure and directors
- Provide, if required, a suitable letter of endorsement, e.g., from the central bank or an acceptable commercial bank in their country of operation.
Additionally, the product put forward for inclusion on the LBMA Good Delivery List undergoes testing and must include a full set of information.
For gold, a bar must have:
- a serial number
- an assay stamp of the refiner
- a fineness mark (to four places)
- the year of manufacture
It also must:
- contain between a minimum of 350 troy ounces (10.9 kilos) and a maximum of 430 troy ounces (13.4 kilos)
- Must have a top surface of 255 x 81 mm
- Must have a bottom surface of 236 x 57 mm
- be 37 mm thick
Similarly, for silver, a bar must have the same marks as a gold bar, with the weight being an optional addition, and must:
- contain between 750 troy ounces (23 kilos) and 1,100 troy ounces (34 kilos) of silver
- be at least .999 fine
- measure between 250 and 350 mm long
- measure between 110 and 150 mm wide
- be between 60 mm and 100 mm thick
For the Consumer
What you’ll notice about the standards for gold and silver is their size: they’re really big, heavy bars. And, just like with Comex Good Delivery bars, a consumer can’t actually take possession of them without invalidating the certification.
However, it makes sense to buy products from the LBMA Good Delivery refiners. The top-quality products are vetted by the LBMA, and you can be confident that all their products meet a similarly high standard, without requiring a massive purchase.
Current LBMA Good Delivery refiners for gold include:
- the Perth Mint
- the Royal Canadian Mint
- Johnson Matthey Ltd
- Heraeus Precious Metals
- Rand Refinery
- PAMP SA
- Valcambi SA
- Metalor USA
LBMA Good Delivery refiners for silver include:
- the Perth Mint
- Johnson Matthey
- the Royal Canadian Mint
- Heraeus Precious Metals
- Rand Refinery
- PAMP SA
- Valcambi SA
- Metalor USA
LBMA Good Delivery is the best standard in the world for gold and silver bullion. As such, products from these refiners sometimes carry a higher premium, but it’s for a reason: it’s among the best in the world.
