By Chris Woltermann, World Coin News
July 05, 2013

We can take two important lessons from the decision by Numismatic Guaranty Corporation to recognize a variety within the proof mintage of South Africa’s 1994 Presidential Inauguration 5 rand. Both lessons go to the heart of numismatic science.

 The first distinguishes between true coin varieties, which result from differing dies, and error coins struck with a worn and/or clogged die deceptively giving them the appearance of a variety. Our second lesson stresses the judgment needed to identify a variety in a type coin’s population not previously thought to be variegated.

 These are complicated matters that I came to understand after adding examples of the Inauguration R5 to my collection. Join with me as I recount my growth as a knowledgeable collector.

 The Inauguration R5 straddles the great divide in South African history. Minted to be the apartheid era’s final coin, it honors the country’s newly inaugurated black president, Nelson Mandela. The coin is a one-year type whose 10 million business strikes made it a viable circulating medium.

 Its diameter of 26 millimeters makes it slightly larger than the similar U.S. quarter dollar. Both coins have copper cores, but the R5 is plated with nickel, not the copper-nickel alloy of its American counterpart.

 Obverse and reverse designs of the Inauguration R5 are as depicted by the photographs accompanying this article. The photographs are of two proof coins in my collection.

 Little need be said about the obverse. It features the old South Africa’s coat of arms bracketed by the country’s name in English and Afrikaans. The initials of the designer, A. L. Sutherland, appear to the upper left of the date.

 The elegant reverse is far more interesting. To avoid confusion later on, be aware that the initials of the designer, Susan Erasmus, are visible below the right side of Pretoria’s Union Building on both coins. On the NGC-designated No Steps variety, however, the initials are too faint to be discernible in my photograph. I attach no significance to this localized weakness in an otherwise sharp strike.

 Study the foreground immediately below the building’s central entrance on both coins. Note the absence of steps on one coin and their presence on the other. The difference constitutes the basis for distinguishing NGC’s No Steps variety from what I call, albeit without NGC’s imprimatur, the With Steps variety.

 Was NGC’s recognition of the No Steps variety warranted? Or did NGC’s staff make too much of die-impaired error coins? Let’s look at my coins for evidence.

 Under magnification, my With Steps R5 reveals just partial steps, ostensibly struck by a worn and/or clogged die. Additional die use arguably could have eliminated any trace of steps on later strikes.

 Many interested parties long thought in this vein. Van Rensburg’s South African Coin and Banknote Catalogue 2002-2003 provided a clear photograph of a No Steps proof. Yet, according to NGC’s Max Spiegel, his firm delayed recognition of the No Steps variety until early 2007.

 The argument adducing an impaired die should be given its due. Evidence of excessive wear is overwhelming. Note the rim cud on my With Steps R5 at the 12 o’clock position. Only a chipped die could cause this.

More evidence, not discernible in my photograph, is the field’s wavy appearance, called die chatter, the result of a die loosened from its setting by repeated use. Could still heavier use account for my No Steps piece?

 Not likely. Look closely at the coin. In addition to no steps, and in contrast to the With Steps R5, there’s no flagpole with flag over the building’s central dome nor a chimney on the roof line immediately to the right of the right-hand tower.

 No tell-tale evidence suggests that the steps, the flagpole with flag, and the chimney vanished because of a deteriorated or overly polished die. The weakly struck designer’s initials are not counter indicative.

 I conclude that differing dies struck the With Steps and No Steps proofs. NGC correctly recognized the No Steps Inauguration R5 as a variety.

 It seems to be a variety confined to proof strikes. Neither NGC’s graders nor my South African contacts nor I have encountered a No Steps example in Mint State.

 The No Steps proofs are rare coins. According to census data updated June 3, 2013, NGC has graded altogether 2,497 Inauguration R5 proofs. Of these, only 218, all attributed since early 2007, are of the No Steps variety.

 Probably there are relatively few No Steps examples among the Inauguration R5s that NGC graded before recognizing the variety. NGC will re-encapsulate and correctly attribute any such coins at no charge.

 Valuations reflect the rarity of the No Steps variety. Compared to the more common With Steps proofs, No Steps specimens sell for about three to four times as much.

 NGC-graded Proof-69 Ultracameo examples of the No Steps and With Steps varieties sold last March on eBay for $1,375 and $418.75, respectively. Two months later, equivalent NGC-graded pieces were offered for $1,875 and again $418.75 via eBay’s Buy It Now option.

 Prices for both varieties are almost certainly poised for significant appreciation. The No Steps variety’s prices will likely increase proportionately more, perhaps much more.

 Both varieties appeal to the Nelson Mandela enthusiasm prevalent in South African, and more recently, in global numismatic circles. Although the Inauguration R5 has been a relative laggard in the series of Mandela R5s, perhaps because it does not bear his portrait as seen on its 2000 and 2008 successors, it began the series concurrently with his presidential inauguration.

 The scope of the Mandela series is seven coins, not the six with which we are left absent the Inauguration No Steps R5. There are Mint State and proof strikes for each of the years 1994 (With Steps), 2000 and 2008. Then there’s the seventh coin, the proof Inauguration No Steps, now likely the rarest Mandela of all.