Melting down coins for raw materials

One of my players brought up the desire to hoard piles of silver coins and have them melted down into raw silver to forge weapons out of. Is this something that is plausible, and if such, how many coins would you wager are necessary to forge say a dagger?

As a rough estimate you could use encumbrance, even though it's abstracted.  You could say that since it's 1000 coins to a stone and 6 items to a stone, then it's ~167 coins worth of metal to make one item.  This gives the materials cost of a silver weapon as 16.7 gp which compares to the 30 gp list price of a silver dagger.

That breaks down, though, when you look at silver tipped arrows which have a list price of 5 gp each.  A bundle of 20 is one item, but most of that encumbrance is not from the silver.

the most common abstraction used around here is to allow for raw materials to account for 25% of the cost of the item, with the remainder having to be paid to the silversmith.

So, traditionally, a master silversmith with his two journeymen and 4 apprentices is producing about 120gp of silver goods per month.  it's assumed they're spending 25% of their time bartering their services in order to buy enough silver to produce the final goods that they can sell.

Since 120gp would be 4 silver daggers, we assume that requires 30gp worth of silver to make, or 300sp (assuming the only value is that it's silver and not in the coinage itself), or 75sp per dagger, but really most of the effort is in the smithing, which someone without proficiencies would likely be unable to do by the rules.  But, if you melted down silver, you could have a silversmithy's employees churn out 5 silver daggers by supplying them with a melted block of 375sp and 115gp for their labor.