15-Apr-2012

One of the most common misconceptions in the coin industry is what exactly a proof coin is. First and foremost, it is not a grading, it doesn't indicate a perfect coin, nor does it refer to a coin with specific features. A proof coin, essentially is a coin which the manufacturer describes as a proof coin - in general this term is assigned to coins of the best possible quality that the manufacturer can produce but if a coin is damaged after production, it doesn't lose its status as a proof strike, though this will significantly affect its value.

Proof coins have for decades been a popular way to collect coins as coins not only because of their sheer beauty, but because for many issues, proof strikes may be the only way to obtain a top quality coin. Business strikes are manufactured in bulk, in this process they tend to receive bagmarks, they may be struck from worn or damaged dies and even once released, they tend to circulate for some time before they end up in people's collections. Proof coins however, are the ultimate way a mint has to show off its capabilities, so they take every step in ensuring the best possible strike and the most mark-free surfaces possible. They are typically sold for higher than face value so it is rare that they enter circulation.

While today, proof strikes are usually manufactured in large quantities, in the early days, with a small collector market, proof mintages were low, for example just 400 proof 1927 Parliament House florins were produced. In 1955 however, the collector market was sufficiently large to produce larger quantities of proof coins, typically exceeding 1000. With an exception of the 1955 and 1956 Perth mint issues, proofs of the post-55 are reasonably common and so valuations in printed catalogues may seem high - this is because they refer to perfect proofs. Perfect proofs of the 1955-63 period are indeed rare due to the inadequate packaging provided with the proof coins.

Using the adjectival system, FDC is intended to describe a proof in as struck condition while aFDC is intended to describe an impaired proof. In practice however, FDC is used more liberally, in particular for pre-55 proofs due to the extreme rarity of perfect examples.

The numerical system used by PCGS & NGC grade all coins to the same standard, and grades proofs using the grades PR1 to PR70 with PR70 being a perfect proof. As the quality of production varies between mints and even between years, the adjectival grades translate differently for each year. Prices for proofs in numerical grades can be found at the Blue Sheet. The Blue Sheet prices proofs in all commonly found grades, rather than just perfect proofs.

**Collector Proofs from 1955 to 1963**

Both the Melbourne and Perth mints produced collector proofs from 1955 to 1963, each mint produced coins with certain characteristics so it is important to know what an original coin should look like when grading them.

**1955 - 1957 Melbourne mint issues**

The Melbourne mint proof strikes from 1955 to 1957 feature a deep mirror finish achieved by intense strike pressure. This of course is at the trade-off of cartwheel lustre which is minimal on these issues. These proofs were issued in nothing more than tissue paper so toning is common. Consequently, the silver coins were frequently dipped resulting in a dulled finish. Dulled pieces should be avoided where possible unless heavily discounted. These tend to grade around PR63-64 (worth 20-25% of an FDC example) depending on the severity of the dip. Toned coins are acceptable only if they still show their original, intense reflectivity beneath the toning. If this is no longer present, it may be a sign of a past dip.

Due to the minimal packaging, minute surface marks are common, in particular those caused by light cleaning. These should be avoided where possible and if only minor, the coin will still be worth 25-30% of the price of a perfect example. These tend to be quite minor and usually confined to the obverse due to the large open fields - if paired with originally reflective surfaces, it can be an affordable way to obtain a good looking example of the type.

A 1956 proof florin with original surfaces but some minor marks on the obverse, graded PCGS PR65

As-struck examples of the silver proofs will grade around PR66 or possibly even PR67. These however, are very rare and command strong prices accordingly.

Cleaned copper however, can be picked from a mile away and so once toned, these rarely found themselves cleaned. It is very difficult to find untoned examples of the 1955 and 1956 proof pennies and consequently, the term FDC is used far more scrupulously with these issues reserving the term for fully brilliant examples. Nevertheless, any coin will full brilliance tends to receive the FDC grading but they are worth every penny of the listed catalogue values with Blue Sheet values for coins graded PR65RD and up often exceeding listed McD FDC prices. These however, are very rare with PCGS having graded just 5 examples between the two dates. One must still take note of the surfaces - if marks are present the value will be discounted though not as severely as the silver proofs due to the scarcity of fully brilliant examples.

Toned copper tends to sell around the 20-40% range of McD book values and are generally less desirable to collectors as reflected in their pricing. Dealers tend to price these fairly though one must still be careful when purchasing on eBay as many sellers will quote full McDonalds prices and when paired with altered photographs, they can be made to look like they retain full brilliance.

Silver proofs of 1958 and 1959 tend to be in better condition despite similar packaging techniques as the dealer market (particular in the US) began to grow, the coins were better cared for. The surfaces are less reflective than the 1955-57 issues but display an increased degree of cartwheel lustre. Because of the decreased intensity of surface reflectivity, minor toning is generally less noticeable which has resulted in far fewer examples of these issues being dipped. Nevertheless, one must still be on the look out for dipped examples which again tend to grade at the lower end of the numerical grading spectrum resulting in values that rarely exceed 25%.

The lower denominations can be found in as struck condition with relative ease - these tend to grade around PR67 though the occasional piece may even grade PR68. A piece in such a grade will command a substantial premium, usually over double the price of a PR67. The shilling can sometimes be found in PR67 but the florin is very rare, usually exhibiting minor surface marks on the obverse with PR66 being the highest grade the piece can be readily acquired in.

A 1959 proof florin with original surfaces but some minor marks on the obverse, graded PCGS PR66

The bronze proofs however, are incredibly difficult to find with full brilliance. Most of the pieces were sold to American dealers and like the 1955-56 copper issues, the long journey at sea to the US resulted in minor toning before the American dealers were able to package the coins. This is particular evident in the 1959 penny which is near impossible to source with full mint brilliance with PCGS having slabbed just one coin in this exclusive designation. The 1958 penny and 1959 half penny do occasional turn up with full mint brilliance but these are still far and few between.

The FDC term is generally applied to any 1958-59 Melbourne proof which retains full mint brilliance though due to the rarity of fully brilliant examples, one may have to settle for toned examples which still tend to sell for around 25-40% of the FDC book prices. When buying toned examples, make sure that they retain their original reflectivity. They should be deeply reflective, like the 1955-57 issues. Examples which have toned beyond this point tend to sell for as low as 10-15% of the FDC book prices.

From 1960 to 1961 the Melbourne mint issued their proof sets (which only contained silver coins from this point) in plastic cases. These cases however, contained PVC which dulled the coins quite severely, particularly affecting the florin due to its large size. Which the PVC residue can be safely removed, once affected the coins are forever dulled. Luckily, some coins of each date were removed from these cases before pro-longed exposure but these still remain quite rare. To this date, PCGS has slabbed 108 proof florins from 1960 and 1961 with just 3 pieces remaining in their as-struck state (PR67).

A 1960 proof florin with original surfaces but some minor marks on the obverse at the base of the bust, graded PCGS PR66

When buying examples, make sure they retain their original intensity (which is similar to the 1955-57 issues), like the coin above though beware when buying on-line as this appearance can be faked very easily in photographs.

1960 and 1961 proofs are almost always called FDC due to the rarity of truly as-struck examples but unless genuinely as-struck, they are only worth a small fraction of FDC catalogue values.

1962 and 1963 Melbourne mint proofs were sold in black, open-air plastic cases. The threepence often came lose scratching against the other coins in the set, particularly affecting the florin due to its large size. Consequently only a small fraction of florins survived unscathed (PCGS has slabbed just 10 pieces in PR67, out of 151 slabbed). The threepence also commonly exhibits surface marks on the obverse but due to the higher mintages of the issues, in particular the 1963 issue, the coins are still readily available in PR66 and higher.

The coins of these dates were also prone to light toning and so one must be beware of dipped coins which tend to lack reflectivity. The 1962 issues have a more reflective finish (similar to the 1955-57 and 1960-61 issues) as the strike pressure was reduced for the 1963 (which are similar to the 1958-59 issues) to ensure the longevity of the dies (as the quantity needed was much higher).

The first Perth mint proofs were produced from 1955 to 1957 and feature a mirror finish with numerous surface hairlines. These issues were very rare with mintage figures for all three years being less than 500 but they were initially met with mixed opinions. The mirror finish with apparent surface hairlines had the appearance of a cleaned coin and consequently many were rejected, in particular by US dealers. Despite this, the 1957 issue of 470 coins were sold out with many orders not completed, these would be completed by producing re-strikes in 1959.

An original strike 1957 proof penny graded by PCGS as PR62RD

All three years tend to grade from PR60 to PR63 due to the surface hairlines and their unprotected surfaces made them prone to toning. Obtaining any of the years with full brilliance is enough of a feat but if they grade PR62RD or higher they are very desirable pieces that command very strong prices.

The Perth mint proof strikes from 1958 and onwards (including the 1957 re-strikes produced in 1959) bare a clear, brilliant finish paired with a matte relief. These issues are more often than not in superior condition with as-struck examples of each year relatively easy to acquire. Unlike the 1955-57 strikes, as struck examples of the 1957 - 63 issues tend to grade as high as PR67RD though a majority of coins graded FDC tend to grade around PR66RD.

A re-strike 1957 proof penny with peripheral toning and an obverse fingerprint graded by PCGS as PR64RB

When collecting these issues, one should always aim for coins with full mint brilliance and mark-free surfaces, free of spots and fingerprints. At the very minimum aim for PR65RD, purchasing higher graded examples when funds permit.

A 1963 proof penny graded by PCGS as PR66RD

Completing a high quality date set of post-55 collector proofs can be a costly experience, but rewarding one. A near perfect date set realised $30,290 in a Nov/2006 Noble's auction - today such a set would be worth about $70,000 - an appreciation of about 17% pa compounded. An set of imperfect proofs can be had for about $20,000 in today's market but with most of the demand (and rarity) directed at quality coins, an imperfect set can never be expected to appreciate as fast as a perfect one.

In any case, with such vast price differences between perfect and impaired proofs, it is important to either be able to grade proof coins or understand the grades applied by third party grading services.