SOUTH AFRICA S LEADING SOURCE

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1 The Coin Report SOUTH AFRICA S LEADING SOURCE OF COIN NEWS SECOND QUARTER 2012 / SECOND QUARTER 2013 JUNE 2011 / JUNE 2013 A Newsletter published by The South African Coin Corporation (Pty) Ltd. MANDELA R5 SELLS FOR R The Mandela R5 90th birthday coin above that sold for 2.5 million rand. By Mark T Andersen A specimen of the finest known uncirculated Mandela 90th birthday rare R5 coin in the grade of MS-69 has recently sold for the huge sum of R2.5 million rand. It has appreciated at the unprecedented rate of 49.9 million percent since its release in 2008 an annual performance of 12.4 million percent! Making it the fastest appreciating rare coin in the history of the world! Former President Nelson Mandela was at the Union Buildings in Pretoria to receive South Africa s highest award, The Order of Mapungubwe (platinum) from President Thabo Mbeki. 10/12/02 Photo Sydney Seshibedi / Sunday Times). People, man, legend. BEFORE YOU BUY ANY COINS, CALL US AND WE WILL GIVE YOU A FAR BETTER PRICE SUBJECT TO STOCK AVAILABLILITY WE ARE THE LARGEST RARE COIN DEALER IN SOUTH AFRICA EDITOR IN CHIEF: Mark T Anderson Managing Editor: Mariam E Bashir Assistant Editor: Gordon R Byars

2 THE RARE R5 90TH BIRTHDAY PROOF AND UNCIRCULATED COINS ARE THE FASTEST APPRECIATING RARE COINS IN THE HISORY OF THE WORLD With the sale of an uncirculated specimen of the rare R5 Mandela 90th birthday coins in the grade of MS-69 for 2.5 million rand and the sale of several proof 70's at R These coins are internationally acknowledged as being the fastest appreciating rare coins in the history of the world. The MS-69 grew at a staggering 49.9 million percent in total or 12.4 million percent per annum and the proof 70 at 1 820% in total or 607% per annum. This is a trend that we expect to continue for many, many years ahead. We are projecting that the proof 70 Mandela R5 90th birthday coins will be selling for R at the end of the year and R1 million rand at the end of We are projecting that the proof 69 Mandela R5 birthday coins will be selling for R at the end of this year. The South African public en masse without any encouragement at all absorbed a staggering 5 million units of the R5 90th birthday Mandela coins when these coins were issued to the banks for circulation. To put this statistic into perspective we have never ever heard of any population anywhere in the world absorbing the total issue of any currency coin issued for public use ever. The domestic demand for the rare R5 coins and also specifically for the R5 90th birthday Mandela coins has never been engineered nor created by any one person. It is an enormous market force that is present in South Africa and also in all countries out of South Africa. Simply put it is the desire of all peoples to collect and invest in anything that is directly related to Nelson Mandela. When these coins were released there was almost a national mass hysteria by all South Africans to get as many specimens of these coins as they could. Demand for these coins was so great that it soon became abundantly clear that none of these coins would ever even get placed into circulation. The South African public made it very clear that they were collecting these coins and placing them away for the future. Even the South African Finance minister and also the Reserve Bank Governor urged South Africans to place these coins in circulation so that they could be used to celebrate Nelson Mandela's birthday through their being used in our daily transactions with money. But South Africans who had been collecting every single R5 Mandela coin minted since 1994 were not going to listen to the Finance Minister or the Reserve Bank Governor and ensured that virtually none of these coins were circulated. So powerful is the natural instinct of South Africans to invest and collect in these coins any recommendations counter to investing or collecting these coins is met by deaf ears. South Africans were certain that these coins would be worth far more than there face value in the future and they were not 1 going to use them as money, period. This is one of the most powerful market forces behind the Mandela R5 coins that being that South Africans intuitively felt that they would be of great value someday. They were not wrong. Today you will not get a single specimen of the birthday Mandela R5 coins at anywhere near their face value when it has been kept in good condition and not touched by hand. The rare R5 Mandela coins dominate the South African rare coin market. They account today for 90% of all of the rare coins that are sold in South Africa. The market for the rare R5 Mandela coins is in its infancy only being a mere 18 years old. With the market for the rare R5 Mandela coins continuing to grow at an exponential basis with no slowing at all. Most of the specimens of the 5 million rare R5 Mandela Birthday coins have been purchased from banks in bags of as little as 10 coins. These coins due to the education of the investors and the collectors of the rare R5 coins by S A Coin have been untouched. The education being the we told all investors and collectors of these coins that in order to get graded and have a rarity value the coin must never be touched by hand. At this time over units of the birthday rare

3 coins have been graded through PCGS, NGC and ANACS the world's leading grading companies. This number is growing by the thousands of units per month. The rare R5 90th birthday Mandela coins are the most numerously graded rare coins of all of the rare coins in South Africa. This is very important and also of great benefit to the entire market for the rare R5 Mandela coins. Whilst a rare coin is only as rare as its numbers are small and its having the highest grade possible. Proof coins and also uncirculated coins are graded on a ten point scale from in the case of proof coins, proof 70 to proof 60. And in the case of mint state or uncirculated coins from mint state 70 to 60. The grade of 70 being a perfect grade and 60 being the lowest grade. For many that are unaware of how the rare coin market works they may find that they think that the graded number of units is a negative. It is quite the contrary. It is true to say that rare coins are only as rare or few their numbers and as high as their grade. In other words it would be best at all times to buy the coin with the highest grade. But the market force that has an enormous influence on the market for any rare coins is the number of investors and collectors in a market for they greatly influence the prices of the coins that are the most rare. For example there are only 12 MS-69 rare R5 90th birthday Mandela coins in the highest known grade making them extremely rare with over of these coins graded in total. This is the largest number of investors and collectors participating in the entire South African rare coin market in any specific sector. It is also important to note that that the number of submissions is growing by thousands of units per month. There are simply no other South African rare coins that can even hope to try and compete with this enormously powerful statistic. The most powerful statistic is the 5 million units that have been placed away by the South African public. Which means that in all likelihood that we will see in the next couple of years up to units being graded with that number increasing to as many as 1-2 million units in the future. The more of the coins of any issue that get graded the more powerful the market for those coins. The is largely accounted for in the lower grades of the coins with the numbers getting smaller and smaller as they get to the grade of 70. It is therefore of great benefit to all of the investors and collectors that invest in the mint state and proof rare R5 90th birthday rare Mandela coins as they have a recent massive foundation of over graded units in just 3 years. Simply put you have taking into consideration that investors and collectors of the R5 90th birthday Mandela coins have more than one coin and there are over coins graded in mint state there are potentially investors and collectors in the market place. The estimated number of being 75% of This is the largest number of investors and 2 collectors of any segment of the South African rare coin market. A statistic that is growing by thousands per month. All of whom would like to buy the best graded coins if they are able to do so. In the mint state coins the finest known are 12 specimens in MS-69, 97 specimens of the MS-68 making those coins extremely rare and of the MS-67. Therefore the total pressure of the of the mint state coins places the greatest pressure on the 12 specimens of the mint state 69 coins driving their prices higher and higher as the number of graded units continues to grow. This is where a huge opportunity awaits those for those invest in the rare R5 Mandela 90th birthday proof coins. They only minted of these coins as opposed to 5 million of the mint state coins. There have already been graded by PCGS, NGC and ANACS over of these specimens. These means that there are very few of these coins left to be graded. Which means that few coins will enter the market place placing a very large amount of demand and pressure on a small amount of coins. In proof 70 there are only 58 making them extremely rare, in proof 69 there are and 996 in proof 68. The coins that are offering the greatest opportunity for profit in the Former South African President Nelson Mandela holds a R5 coin during its launch at the Madela foundation in Johannesburg, South Africa, Monday 7 July 2008, to celebrate Mandela s 90th birthday. The coin features a portrait of Mandela, and will go into circulation on Friday 18 July 2008, Mandela s birthday. (AP Photo/Jerome Delay) # Johannesburg # ZAF

4 marketplace this year are the proof 70 birthday Mandela coins and also the proof 69 birthday Mandela coins. For they are at the very apex of the most rare of all of the rare R5 Mandela coins that have been minted to date. With only of these coins minted. They minted over of the proof R5 Mandela 1994 Inauguration coins and over of the Mandela R5 Presidential coin. We are projecting that the proof 70 birthday Mandela coins will be selling for R at the end of the year and the proof 69 coins at R It is also very important to note the their is no tax paid on the profits that you make from any of the R5 Mandela coins. These are one of the only tax free investments in the country that you can buy. They have the unique intersect of high growth coupled with low risk and no taxes paid on the investment whatsoever! PERFORMANCE Average annual percentage growth of eight of the Mandela rare coins over the past seven years. TYPE Finest known proof Mandela PF-69 Mandela PF-68 Mandela MS-65 Mandela MS-64 Inauguration PF-69 Inauguration PF68 Inauguration MS-64 Inauguration MS-63 Source of data: S A Coin NO. OF COINS GRADED BY NGC AND PCGS GROWTH THE RARE R5 MANDELA SETS & THE RARE R5 MANDELA 90TH BIRTHDAY SETS here are certain mechanisms that determine all markets. In the rare coin market it is not only important that you buy the highest grade coin that you can to get the highest growth. It is also important that you form a set of coins that you are buying. Coin investing and also collecting has always achieved the highest growth by forming a complete set of the coins that you are investing or collecting in the highest grades possible. Essentially what long term investors and collectors would be doing is forming a complete R5 Mandela set. This would be a single example in the highest grade that you can afford of one of each of the Mandela coins that was ever struck in both proof and also uncirculated or mint state. That would mean that you would have in a complete rare R5 Mandela set a mint state R Inauguration coin, a proof R Inauguration coin, a mint state R5 Mandela Presidential coin, a proof R5 Mandela Presidential coin, a 90th birthday R5 Mandela mint state coin and a proof 90th birthday R5 Mandela coin. This would mean that a complete rare R5 Mandela coin set would consist of 6 coins in total. That means that all of the people that are investing and collecting in the rare R5 Mandela 90th birthday sets should have a proof R5 Mandela birthday coin as well as one that is in mint state in the highest grades you can afford. Whilst a complete rare R5 Mandela set would consist of 6 coins many investors and collectors will be initially compiling sets of the year that the start buying. In the example of the 3 R5 birthday Mandela coins this would be a mint state version and proof version of that year. This is where you can start to see the potential of the proof Mandela birthday coins. In the future most of the rare R5 Mandela coins will be marketed in the form of complete sets because they are more valuable than single coins. This means that there will be considerable pressure on the prices of the minted Mandela birthday proofs by the 5 million mint state Mandela birthday coins chasing coins to form a complete Mandela set. There will only ever be complete Mandela sets out of 5 million potential partnering coins. Complete sets of any coins are known to sell for up to 50% above the prices that you could get for the coins if they were sold separately.

5 WHY THEIR WILL ALWAYS BE A GARGANTUAN DOMESTIC MARKET FOR THE RARE R5 MAN- DELA COINS AND THEY HAVE THE POTENTIALTO BE THE MOST RARE AND SOUGHT AFTER RARE COINS IN THE WORLD There are few incontrovertible facts that anyone that is a participant in the R5 rare Mandela coins should be aware of. Firstly the R5 Mandela rare coin market is a creation of all South Africans and a significant amount of the international community. It was South Africans that started the rare R5 Mandela market 18 years ago with the mass collecting of the 1994 inauguration R5 coin that was minted for Nelson Mandela in Without anyone telling South Africans they started to collect every single specimen of the R5 Mandela inauguration coins that they could. Soon after the coins release these coins were so widely collected that you could not readily find one in your change. The demand for these coins was so high that at one stage it was nwidely commented through the South African public that the coins were worth R50. A whole R45 over their face value the very year that they were minted. So when asking who the investors and collectors are of the Mandela R5 coins it is virtually all of the 60 million South African's in our country. FILE - This Feb. 29, 2008 file photo shows French President Nicholas Sarkozy, left, and his new wife Carla Bruni posing with former South Africa President Nelson Mandela during their visit of the Mandela Foundation in Johannesburg, South Africa. Sarkozy is on a two-day official visit in South Africa. French President Nicholas Sarkozy announced Wednesday that he will seek a second term desoite years of low popularity ratings, pledging to boost its lagging economy and protect France s way of life. (AP Photo/Remy de la Mauviniere, File) # Johannesburg # ZAF This posed a significant market force or all of the participants in the South African rare coin market to identify. Namely that there was a very large domestic demand for South African rare coins that had any association with Nelson Mandela both locally and also internationally. It was S A Coin that with the sale a few years later of graded rare R5 Mandela proof coins that educated the country as to how to determine if the R5 Mandela coin that they had was indeed rare and sought after. This was simply done by informing investors and collectors in rare R5 Mandela coins that the coins had to be untouched by human hand and then graded. If any of the coins that they had were circulated i.e. passed from hand to hand they were worth their face value of R5. But if the coins were untouched and they were graded they would be sold for a price far and above their face value. It is also important to note that there is no way that the grading statics can be manipulated They are compiled by the largest grading companies in the world. The grading of all of the coins of a particular series of coins like the R5 Mandela coins allows all of the participants of that market to easily see which of the coins are the most rare. The coins with the highest A COMPLETE MANDELA RARE R5 SET 4

6 grades are always the coins that have the smallest number graded. The coins with the lower grades always have the largest number of coins graded. All rare coins in the United States the worlds largest rare coin market are graded by three major US grading companies they are PCGS, NGC and ANACS. These are the only grading companies that S A Coin uses to have the R5 coins graded. The vast majority of all of the coin dealers in the United States only sell coins that have been graded by the three aforementioned companies. S A Coin did not create R5 Mandela coin market. This was done by millions and millions of South Africans that decided that these coins would possibly be rare in the future and command a price above their face value. South Africa has a population of around 60 million people and a very significantnumber of South Africans hold R5 Mandela coins. S A Coin was the first company in South Africa to introduce to the country the grading systems that protect the coins and allow investors and collectors to determine whether a coin is rare or not. Quite simply put if all of the R5 Mandela coins were ungraded and not placed into the internationally recognised and accepted grading capsules they would not be rare but all command the same price. Once the coins are graded from in the case of the uncirculated coins from mint state 70 to mint state 60 and in the case of the proof coins from proof 70 to proof 60. This allows all of the investors and collectors to see how many of the coins are available in the various grades. available to the public. The coins of the highest grades have the smallest number. With the coins of the lower grades having the highest numbers. The lower the number of any particular coin graded the higher the price that will be attained for that coin. The reason that the rare R5 Mandela coins have the capability and the potential to be the most rare and sought after coins in the world is simple. All the people of South Africa and the world have shown already that there is an enormous global market for rare Mandela coins. The only Mandela coins that are rare or that have the ability to be rare are the Mandela R5 coins. This is because as I have said before it is only currency coins that bear the image of Nelson Mandela or that are associated with him that can become rare. There are a plethora of Mandela coins and medallions that have been produced by the South African mint and various mints around the world. None of these coins or medallions will ever be rare or have the ability to be rare for they are not official currency coins that can be used as a commercial currency. This means that the only coins that can be marketed in South Africa or abroad as rare Mandela coins are the R5 Mandela coins. Nelson Mandela is a global icon and not just a South African one and as such their is huge demand for anything that is related or associated with Nelson Mandela from the international community. A hand painting by Nelson Mandela was recently sold for The Mandela R5 coins provide the only reasonably affordable collectable that is directly associated with Nelson Mandela. The domestic market for the rare R5 Mandela coins was created by South Africans and not by any company or individual. S A Coin has only played a role to market to the general public in South Africa and abroad the rare R5 Mandela coins that they desired. This has been done in the form of graded coins that are internationally acknowledged by the vast majority of all of the coin dealers of the entire world that invest and collect in rare coins and market these to their clients. S A Coin over the past 5 years has sold over R100 million rand of the rare R5 Mandela coins. Mandela R5 coins account for over 90% of all of the rare coin sales in South Africa. The R100 million rand in sales pales in comparison to the multi billion rand international and domestic In other words investors and collectors can determine how rare a coin is. The amount of coins graded is referred to as a population number. All of these statistics are made readily In this photo provided by the Nelson Mandela Foundation on Tuesdat 21 June 2011, US Firts Lady Michelle Obama (left) with former South African President Nelson Mandela, at his home in Houghton, South Africa. First Lady Michelle Obama and her family met with Nelson Mandela during a private visit at the former South African president s home. Mrs. Obama, daughters Malia and Sasha, and her mother, Marian Robinson, were viewing some of Mandela s personal papers at his foundation Tuesday when, according to White House officials, he sent word that he wanted to meet them. It was Mrs. Obama s first meeting with the prisoner-turned-president. (AP Photo/Debbie Yazbek, Nelson Mandela Foundation) EDITORIAL USE ONLY # Houghton # ZAF 5

7 market that has been created by South Africans. The rare R5 Mandela coins have made thousands and thousands of South Africans and international collectors and investors in these coins vast amounts of money. This will continue to be the case for decades and decades to come. THE R5 MANDELA COINS ARE A NATIONAL HERITAGE CREATED BY SOUTH AFRICANS FOR SOUTH AFRICANS OVERWHELMNGLY SUPPORTED BY MOST SOUTH AFRICANS The R5 coins and also the R5 rare coin market was created by all South Africans and not by any single individual or company. In 1994 South Africans decided that they would mint a national currency coin the 1994 Mandela R5 inauguration coin. It was then some 18 years ago that began the phenomenon and powerful market force of all South Africans collecting each and every single R5 coin that was ever minted for Nelson Mandela. The first R5 coin minted for Mandela was initiated by government leaders that decided to commemorate the inauguration of South Africa's very first black president. But this was also the very first currency coin ever minted to commemorate the inauguration of any South African President. South African leaders bestowed an enormous honour to President Mandela. The minting of a coin in refection of national thanks of all South Africans for the massive contribution of South Africa's greatest leader. South African governmental leaders initiated the minting of the coins, South Africans designed the coins and then the entire South African public then collected these coins without any encouragement to do so. FOR USE AS DESIRED, YEAR END PHOTOS - FILE - This file photo provided 21 June 2011 by the Nelson Mandela Foundation, shows US First Lady Michelle Obama (center), accompanied by her daughters, Malia (left) and Sasha, meet former South African President Nelson Mandela, at his home in Houghton, South Africa. (AP Photo/Debbie Yazbek, Nelson Mandela Foundation) EDITORIAL USE ONLY # Houghton # ZAF It is South Africans that have therefore shown that unanimously that their favourite South African coins by an overwhelming majority are the Mandela rare R5 coins. The R5 Mandela market is just like a force of nature supported by over 60 million South Africans. All of the South African R5 coins that were ever minted are a South African national heritage. Speaking negatively or making ridiculous comments about the Mandela R5 coins is just the same as attacking our national rugby or soccer side. You may criticize the way that our national teams may play, or even the way that players may play but South Africans as all other countries always support our national teams. South Africans are not obligated to invest or collect any of these coins but imparting disparaging or untrue views about or on these coins is simply unpatriotic and definitely very un South African. When South Africans were urged by the Finance Minister and also the Reserve Bank Governor to spend the Mandela R5 birthday coins to celebrate the 90th birthday of Nelson Mandela they refused to do so. Preferring to collect the coins and preserve them for future generations. A far better way to honour Nelson Mandela on his birthday than by just spending coins. The call by some of our most powerful national leaders fell on the deaf ears of all South Africans. It is also true to be said that the sometimes diffident and just ridiculous comments opinionated by a very small and insignificant amount of individuals on the R5 Mandela coins will be dealt with even less merit than those accorded to the Finance Minister and the Governor of the Reserve Bank. The support for the Mandela R5 coins is from our great nation as a whole. Time and time again South Africans have absorbed all of the currency coin Mandela R5's that the South African mint has ever minted. The mere fact that you hardly ever see a Mandela R5 coin in your change is reflective of enormous market force created by over 60 million of us. That market force is quite simple and is that the whole country sees the Mandela R5 coins as being special and different from all other South African coins. These coins are earmarks to the greatest achievements and milestones of South Africa's greatest leader. It can also not be denied that there is strong belief by all South Africans that collect the Mandela R5 coins that these coins will be of value in the future. This was an instinctive 6

8 thought by the whole country well before any rare coin companies began to market these coins. It was not a thought that was misplaced. Today we have a rare Mandela R5 90th birthday coin that was recently sold for R2.5 million rand. A world record price! This sale more powerfully than anything illustrates the massive market forces in South Africa and overseas that exist for all of the rare R5 Mandela coins. South Africa's very first currency coins minted 120 years ago are only today beginning to get sold for prices of around R2 million. Yet the rare Mandela R5 coins have attained this in a matter of years. In order to have a subjective examination of the Mandela rare R5 market you would have to know what the basis of a rare coin is. The basis of every single rare coin in the word is that it is firstly a currency coin that could be used at the day of its minting as a national currency in the country as its origin. Secondly is that the coin is of the highest quality that was struck at the time or simply put in the highest grade. The very nature of investing in or collecting of rare coins is the preservation of a countries coins in the highest quality possible. These immutable rare coin laws are the same for every single country in the world. It matters not how old a rare coin is, merely that it satisfies the laws aforementioned. The rare R5 Mandela Former president of South Africa Nelson Mandela (left), chats with Britain s Prime Minister Gordon Brown and his wife Sarah during a meeting at a hotel in central Lomdon Tuesday 24 June Mandela is in London To attend events celebrating his 90th brithday which is next month. (AP Photo/Dylan Martinez/Pool) # Lomdon # GBR XEN coins as defined fulfil all of the necessary criterion as internationally accepted as denoting a coin rare. These coins in high grades are not only rare but extremely rare! This fact has already been internationally ratified by some of the most powerful numismatists in the world. More of the rare R5 Mandela coins have been invested in and collected by than all of the other South African rare coins combined by the international community. A very significant mark of faith by the global community if ever there was one. he very foundation of the rare R5 Mandela coins is the man to which the coins are associated Nelson Mandela. The reason that this market is so powerful and that it will be everlasting in the annuls of time is the desire of all the peoples of the world to celebrate the life and achievements of this great man. The powerful human urge to collect and remember the greatest men of all time is as old as civilization itself. As you are unable to change the course of a river preset to run a path conjunctively with the magnetic fields of the earth on which we live you would not be able to change ever for any South Africans or the peoples of the world the desire to invest and collect the rare R5 Mandela coins. The market for these coins has and continues to grow and expand at a faster pace than any other rare coins in the world. These coins are not only the fastest appreciating rare coins in the world they are also the fastest expanding in the world in terms of the numbers of investors and collectors that are globally added to this market every single month. ACKNOWLEDGEMENTS The South African Coin Corporation wishes to thank the following people, organisations and publications for their assistance in providing numismatic and other information:- NGC (Numismatic Guarantee Corporation of America) and PCGS (Profession Coin Services). S A COIN TEL: (011) FAX: (011) info@sacoin.co.za INTERNET ADDRESS: The South African Coin Corporation (Pty) Ltd registration number: 95/0648/07 DISCLAIMER While every precation is taken to ensure the accuracy and the soundness of the material that is contained within this newsletter, no liability whatsoever arising shall vest in The South African Coin Corporation (Pty) Ltd as a result of any error and/or inaccuracy and/or incorrect information and/or recommendations that are given from any of the material contained in this publication. The material in this publication may not be reproduced or copied in part or in any manner whatsoever without the Corporation s prior written permission first had and obtained. 7