Penny Wise

Everyone's got a jar full of pennies and nickels laying about.

The coins you don't want to carry in your pocket but they grow in quantity every time you go to the store. The rise in metal prices makes certain coins worth more than face value.

Pennies minted in 1981 and prior are 95% copper and 5% zinc. $1.60 in pennies weigh roughly 1 lb. Copper spot price as of January 19, 2012 is $3.72 lb.

A nickel is 75% copper and 25% nickel and the metal value is about 5.5 cents and more than the metal value of quarters. Two nickels have more metal value than the current $1 coins like the Sacagawea, Susan B. Anthony and the Presidential Dollar.

Kyle Bass, the "controversial" hedge fund owner acquired 20 million nickels or $1 million worth in 2011.

A good reference site for current metal value of coins is Coinflation.

The Treasury Department issued a prohibition in 2006 making melting of pennies and nickels illegal with penalties of up to 5 years in prison, $10,000 fine and confiscation. A good article on why the Treasury made this prohibition is here.

The thinking is that sooner or later US will stop making pennies as Canada is already considering making melting pennies legal.

Interesting discussions in coin forums here and here on this topic.

A good project for your kids is to go through the pennies before taking them to the bank for exchange. Coins and pennies especially are really dirty and hands should be washed after handling them.

There are copper penny sorting machines available for the serious hoarder that cost several hundred dollars. However it should be possible to make one yourself for fun and profit at a small fraction of that amount.

The main component is the coin comparator, the gizmo used in vending and arcade machines to differentiate fake and real coins by sensing their electro-magnetic signatures. It can be purchased used for around $20 on ebay. Here are some videos of home made contraptions on YouTube.