Bullion coins and bars are generally classified into three categories, namely, brilliant uncirculated (BU), Secondary Market (SM) or circulated (C), and cull. Even for seasoned investors, these terms can be confusing. For example, how can a bullion coin be circulated? Bullion coins are not circulation coins, like currency. What is the difference between a secondary market coins, and a cull?

I will attempt to shed some light onto these terms in this short article. In addition, I will provide a few benefits to purchasing bullion that is not brand new (or BU) whenever they become available for purchase.

Brilliant Uncirculated (BU)

Allow me to start with definition. Brilliant uncirculated (BU) is essentially a condition or grade. Simply put, describes coins that are in the same original condition that they were in when the coins left the mint or refinery where they were minted. Another way to say it is that a BU coins retains all of its original mint lustre, and it has not been handled without gloves, and contains no marks from external sources (like fingerprints, colour changes due to oils on the skin, and so on). It may have knocked around in a tube or original packaging, but the coin doesn’t show evidence of use as pocket change as it were.

It is important to note that coins with milk spots are still considered BU, since these white spots often develop due to manufacturing issues that arise from refining and minting high purity silver coins and bars. The same applies for coins that have some tarnish. Silver tarnished, even if kept untouched for years after purchase.

Circulated (C) or Secondary Market (SM)

Circulated (C) or Secondary Market (SM) bullion refers to products that are not new, but ‘second hand’ (although I dislike the term for bullion products). At Silver-sphere, we often assist investors to offload their silver by purchasing from them. These coins are then sold as secondary market coins. SM coins can be in perfect condition, depending on whether the seller stored them correctly in a moisture free environment, and in their original packaging. For example, 1 oz bars are sold in clear vacuum sealed non-PVS plastic, so they cannot become secondary market bars since they are always protected and remain untouched. However, coins that are purchased as secondary market containing any number of quality faults are classified and sold as cull.


Cull is a term that describes a coin that is in exceedingly poor condition. These are the coins that some investors have used as chips on poker nights. The coin or bar may contain any number of defects, like structural imperfections, pitting, deep scratches, and even bent out of shape coins. Some may even consider a coin a cull is it is severely tones, although some coins fetch a higher premium if they tone evenly or the toning is a specific shade and colour.

So Where is the Value?

Now, with definitions out of the way, below are my personal thoughts on purchasing coins that are not BU.

In terms of coins that are cull, I would not recommend buying them for anything other than for melting. They are the best value for money, as they often sell at a few percent above the spot price.

However, SM coins present the opportunity to have the best of both worlds; they are generally in good condition and favourable priced. In terms of condition, coins may contain some light tarnish, toning, and even some milk spots, but are otherwise in very good condition (i.e. have not been dropped or scratched). In terms of pricing, secondary market coins are often at the same price level as our cost to import them new.

I want to conclude by highlighting an example of the price benefits of SM coin. A BU Canadian Silver Maple coin may cost R300.00 each (I am using this figure because it is nice and round). A SM Maple may be selling for R285.00 each. The saving is 5%. A 5% saving is a significant saving and may help you hedge against short term movements in the price. If prices drop by a few percentage points a day or two after you make the purchase, the saving on the SM coins means that you are still ‘above water’ as it were.

Moreover, the SM lower pricing also closes the price gap between our buying and selling price. For example, if you purchase a BU silver coin for R300.00 and sell a few days or weeks later, our buy back price will be around R270.00 each (provided the silver spot price and the exchange rate remain unchanged). However, if you purchase the same coin in SM condition for R285.00 each, and you sell back to us as per the previous scenario, the potential loss is only R15.00, as opposed to R30.00.

The above point is important, because when we make an offer on bullion coin buybacks, we do not differentiate between SM and BU coins in terms of price (unless the coins are cull). We pay the same amount on both coins.

Therefore, I personally believe that investors, collectors, and stackers should consider buying secondary market coins as often as they become available. The fact that they are in ‘like new’ condition, well priced, and close the gap between our buying and selling price, SM bullion is the most cost effective way of owning silver.