Copyright 1994, 1995, 1996,1998, and 1999

By Academy Precision Materials (APM)

All Rights reserved

With the exception of the worksheet on page 8, no part of this guide may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of APM.

5th Printing, Revised May 1999

There is a saying in our business: "The one who has the gold makes the rules". Read this guide and it will be: "A properly informed purchaser makes the rules".

This guide is prepared for the first time buyer, as well as the experienced buyer who may not be aware of the options available for purchasing precious metals. This guide will also be a useful resource for the scientists and engineers, as it will help you get the most out of your budget and research dollars.

Purchasing precious metals is quite easy, once you know how they are sold. You will learn how to price precious metals, industry standards for purchase and pricing, as well as the most common errors made when purchasing precious metals.

We have enclosed a convenient worksheet for you to figure out how much your purchase will be before you place an order. Feel free to make copies of this worksheet, as it will save you money every time you fill one out. Please pay particular attention to the "precious metals market" explanation. This can be the single most costly error that most purchasers of precious metals overlook.

This is a sample RFQ and a sample Purchase Order. Your supplier must be able to answer all of these questions. If your supplier cannot answer these questions you should insist upon a fixed up front price with no adjustments. Please note the follow up questions and ‘Beware’ in each section of the sample RFQ. We are giving you the inside information so you don't have to be intimidated when buying precious metals. As an honest and established manufacturer we feel the more information you have the better our product will be. Do not be afraid to ask the "dumb" question when spending your money. Remember YOU are the customer and you make the decision where your money will be spent.

A) What metal? Gold, silver, platinum, etc.

B) What purity?

1. .999 (3 9’s) Typically for jewelry applications
a) Should be analyzed via AA* or ICP* with list of contaminants

2. .9999 (4 9’s) Thin Film Uses
a) Analyze with ICP* and list of contaminants

3. .99999 (5 9’s) Semi-conductor grade purity

BEWARE: a) Can only be analyzed with GDMS*

*Please refer to the glossary for explanation of these terms

Follow-up Questions:

a)Do you do the analysis at your facility? If not, who does your analysis?
b)If we disagree on analysis results, whom do you use for impartial 3rd party testing??
(Your supplier should give you at least 2 choices of "umpire" testing facilities)
c)Does the "loser" of the umpire sample pay the outside assay fee?

C) What market do you use for billing?

1) Markets are published daily in "The Wall Street Journal"
2) The published prices are the following:

** Daily Market Prices available on our website, www. apmtargets.com/apm

These are internationally recognized markets and are used daily for the purchase and sale of precious metals. Note the difference between the lowest and highest market. The most costly error you can make is not knowing at what price your product will be billed.

Beware: Do not ever issue a purchase order for a "prevailing market price". This is an opening to be overcharged.

D) What day will the price be determined?

- Day of shipment?- Day of delivery?- Day of order?

Beware - Day of your suppliers choice?

Note - When checking prices in "The Wall Street Journal" you are looking at the previous day’s price.

E) Fabrication Charge (the cost to make a target)?

- Will it be per troy ounce?- Will it be per piece?- Will it be per lot?

Follow-up Questions:

a) If fabrication is per troy ounce be aware that overshipments cost you more money. Insist the tolerances on your specifications are followed.

b) If you buy "per piece" or "per lot" you do not want to be undershipped. Make your supplier aware that you know the difference.

Note - Companies that price their products at the highest fabricated price may not include a surcharge but remember the 6% to 27% difference in the beginning price (see sample worksheet page 8). A base price quote plus 2 1/2% will be less than a fabricated price plus 0%.

F) Weight Per Piece
As described above, insist on a +/- weight variance that benefits you, i.e.: on a .250" x 8" diameter gold target, every two thousands of an inch equals one troy ounce of gold.)

In order to determine how much your purchase will weigh, follow the formulas below. The densities of common precious metals are listed as well.

Round Target
diameter X diameter X .7854 X thickness X density

Evaporation Wire or Pellets
diameter X diameter X .7854 X length X density

Planar Targets
thickness X width X length X density

Rotary Targets
outside diameter X 3.1416 X wall thickness X length X density

DENSITY

*Not precious metals, but added for the convenience of target purchasers.

Example A) .9999 Gold disc, .250" thick X 4" diameter
4 X 4 X .7854 X .250 X 10.180 = 31.982 troy ounces

Example B) .9999 Silver target, .125" X 4.475" X 14.75"
.125 X 4.475 X 14.75 X 5.525 = 45.59 troy ounces

G) Shipping and Insurance Charges
- How will your metal be shipped?- Federal Express and UPS specifically call out precious metals as insurable for $500.00.Don't let your vendor charge you insurance if you are not covered.- APM carries separate insurance for shipments via UPS or Federal Express. You are always fully insured from APM until you sign for it at your facility. Only then is it your responsibility.

Beware: Federal Express and UPS will allow you to insure any package for $50,000.00, however when a claim is made and the carrier discovers you shipped precious metals, they will refer you to the "Declared Value Limits" on each airbill - they will only pay $500.00 for the loss, thus the importance of fully-insured shipments.

Note - The U.S. Post Office will insure precious metals for $25,000.00 per package, but delivery time is not guaranteed and tracing while enroute is next to impossible.

SAMPLE PURCHASE ORDER

Now you have all the information needed to issue a purchase order. Here is what your completed purchase order should contain:

Material:	Fine Gold Sputter Target
Purity:	.9999
Certificate of Compliance/Analysis:	via ICP analysis with shipment
Size:	.125" X 4" X 10"
Tolerances:	.125" = +/- .010, 4" = +/- .010, 10" = +/- .015
Gold Weight:	50.90 troy ounces, +/- 1 troy ounce
Quantity:	1 piece
Fabrication:	$400.00 each
Metal Price:	London PM Fix as published in The Wall Street Journal, day of shipment
Surcharge:	2 1/2% of fine gold shipped
Shipping:	Federal Express Priority 1 - $35.00
Insurance:	$22.22

Remember, all pricing is not the same. Make your vendor commit to a price.

For practice, use the following two quotes to determine the best price using the precious metals purchase worksheet (page 8). Notice the difference in metal price and surcharge only.

Your total for Vendor A is: $15,639.67

Your total for Vendor B is: $16,070.80

A difference of : $ 431.13

Note - An uninformed buyer could easily purchase from Vendor B because there was no surcharge, when in fact it cost $431 more than Vendor A. It is worth an extra 5 minutes to work out all your numbers and compare your quotes equally.

Note: If a supplier quotes a fixed price, simply divide the fixed price by the target weight to determine your troy ounce price.

If you have any problems arriving at a final cost, please give APM a call at (800) 854-8595. Feel free to make copies of this page.

Courtesy of:

Reclaim and refining rates are quoted many different ways, but the bottom line is "What percent of my metal are you going to charge me? What is my cost?" Following are two examples that illustrate how to figure out your cost.

Example A)

Return: 41 T.oz pure gold target X $291.00 = $11,931.00 value

Charge 2 .5% reclaim charge (equals 97.5% return)

Market day of receipt: $291.00 per troy ounce

41 T.oz. X 97.5% X $291.00 = $11,632.73 return, Cost = $298.27

Example B)

Return: 41 T.oz pure gold target X $291.00 = $11,931.00 value

Charge: $25.00 assay fee

Charge: $11.00/T.oz net weight returned X 41 T.oz = $451.00

Reclaim Charge: 0% (100% return)

41 T.oz X $291.00 = $11,931.00 - $25.00 - $451.00 = $11,455.00 return, Cost = $476.00

Note: In example B you were given 100% gold credit, yet you paid more to refine

Reclaim and refining rates can be calculated many different ways. If you have any questions, please call APM (800) 854-8595 and we will help you figure out your bottom line cost and return.

Note - If your were sold a product at a fabricated market, make sure your credit is at a fabricated market as well. Don't lose money buying at a fabricated price and receiving credit back at a base price.

Listed below are independent assayers who can be used to settle disputes or perform assays on material received from vendors. It should be your policy to double-check your vendor at least once every six months to be sure the purity you order is the purity you receive. APM does not recommend or endorse any of the companies listed below; they are presented strictly for the convenience of the reader.

Ledoux & Company
359 Alfred Avenue
Teaneck, NJ 07666
(201) 837-7160

Jacobs Assay Office
1435 South 10^th Ave
Tucson, AZ 85713
(520) 622-0813

Inspectorate Griffith
Brookside Office Park
272 Chauncey St,Unit 4A,Box 12
Mansfield, MA 02048
(508) 339-5762

Sheilds Metallurgical
422 South Varney
Burbank, CA 91502
(818) 954-9866?

Legend Metallurgical Lab
125 Manuel Street
Reno, NV 89502
(702) 786-3003

Northern Analytical
23 Depot Street
Merrimack, NH 03054
(603) 429-9500

GLOSSARY

AA (Atomic Absorption) - AA is fast and reasonably inexpensive for assay testing. It has limitations in measuring certain impurities and is limited to a detection limit of approximately 1 - 10 parts per million (ppm). AA is used mostly for assay of jewelry products, karat gold, sterling silver and coin silver.

Assay An analysis of a sample to determine purity and contaminants.

Assembly A combination of a backing plate and a sputter target.

Backing Plate Usually made of copper, the backing plate serves as a barrier between the power source and sputter target, either for cooling or other purposes.

Bonding Joining a backing plate and a sputter target to make an assembly.

Certificate of Analysis Certification in detail listing not only the specification in the purchase order, but other contaminants as well. Usually the contaminants are as important as the purity of the precious metal as they can affect the performance of the end product.

Certificate of Compliance Certification that states a finished product meets the specification per the purchase order. Test analysis is not included.

Fabrication Usually associated with the actual direct labor to manufacturer a finished product.

GDMS (Glow Discharge Mass Spectroscopy) - GDMS is very accurate, typically having a detection limit on the order of 1 - 10 parts per billion (ppb). GDMS is expensive and generally used on very pure metals that exhibit 99.999% minimum or greater overall purity. Mostly used for targets in microelectronic applications where transition or alkali metals need to be tightly controlled.

ICP Inductively Coupled Plasma) - ICP can measure a very broad range of elements to a detection limit of 0.1 - 1 ppm. ICP analysis is more expensive that AA analysis. Most precious metal sputter targets are analyzed using ICP

London PM Fix London sets two gold prices each trading day, the AM (morning) Fix and the PM (afternoon) Fix.

Markets London, Handy & Harman and Engelhard all set daily prices for precious metals. These are used to calculate buy and sell prices all over the world.

Planar Meaning four sided, as in the shape of a square or rectangle.

Precious Metals Gold, silver, platinum, palladium are the most common. Rhodium and other platinum group metals are sometimes included.

Purity The level of contaminants are determined in order to give the level of purity.

Reclaim Metal that contains no contaminants other than those originally shipped. This material can be melted and remanufactured into another usable target after assay.

Refining Metal that has been contaminated and no longer meets the specification, such as silver and zinc co-sputtered. This must be refined to remove the contamination and upgrade the precious metals to the desired purity level.

Return Sometimes referred to as "metal accountability". The charge a reclaimer/refiner charges to buy your metal. A return of 97% means the charge is 3%.

Running Market Active daily traders in precious metals price products on a running market. The precious metals prices are like stocks in that the price changes constantly throughout the day.

Surcharge Cost associated with producing precious metals products.

Target Any material used as a consumable in a sputter system.

T.oz. Troy ounce, there are 14.583 troy ounces per pound.

Umpire Testing An assay performed by an impartial third party to resolve disputes. The umpire assays the disputed sample and gives results to both parties.

At Academy Precision Materials (APM), we have refined the art of making targets by serving as a one-source solution for design, manufacture and delivery of high-precision, precious metal targets. APM can meet all your needs because APM handles all of the functions required to produce your targets, including manufacturing, bonding, backing plates and reclaim. We deliver your finished target on time - exactly as ordered. E-Beam sources and evaporation materials are available as well.

APM, a one-stop, full-service solution for your entire precious metals requirements.

APM is also very proud to be part owner of:

Thermal Conductive Bonding (TCB)
1340 Tully Road #308
San Jose, CA 95122 408-920-0255

Metallic and elastomer bonding for all target materials.

Design capabilities which ensure the most efficient use of your precious metalsAccuracy on every order, every timeReliability and quality which are built into every product we manufactureTimeliness you can depend on

Call APM toll-free at (800) 854-8595 ISO 9002 registered or contact us via e-mail at apm@academycorp.com