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OTTAWA: Where has all the Gold gone? That is the million dollar question haunting the Royal Canadian Mint.

The mint has no clear answers to the missing gold from its Ottawa facility. For the past few months, the Mint has tried to get to the bottom of an unprecedented scandal in which some gold it was supposed to have in its inventory for the 2008 fiscal year has seemingly disappeared. It later revealed that $15.3-million (2008 prices) of precious metals is unaccounted for at its Ottawa facility.

The company is now looking into all possibilities, including theft. One thing the Mint is confident of is that the problem is not accounting. It released a 54-page independent report by Deloitte & Touche LLP that determined there were no counting mistakes that could explain the $15.3-million discrepancy in inventory.

Deloitte went to great lengths to make sure no accounting errors were made — it even checked out the precious metals content in the Mint’s chlorination slag (a byproduct of the refining process).

Deloitte said that 17,500 troy ounces of gold, or 0.32% of the Mint’s stock, is unaccounted for. At today’s spot gold price of $940.70 an ounce, that is worth nearly $16.5-million.

While an outright theft of the Mint is not out of the question, experts said it is unlikely.
The Mint has told its clients that all their gold is safe.

To figure out where the gold went, Deloitte suggested that the Mint undergo technical reviews, security reviews and prior-period accounting studies. The Mint plans to follow those recommendations.

But getting to the bottom of what happened may not be an easy task. Reviewing the Mint’s accounting from prior years is very difficult because of staff turnover, changes in technology and a lack of supporting documents. The company’s security standards are top-notch and there are no known issues with it. The Mint has suggested that the problem may have come about as a result of a red-hot gold market.

Last year, spot Gold prices rose above $1,000 an ounce for the first time ever as the global financial system unraveled and gold reclaimed its traditional role as a safe haven in times of turmoil. That led to an unprecedented demand for gold coins and bars, and many dealers reported shortages as they tried to meet demand.

That also affected the Mint, which was processing far more gold than it was used to. The amount of precious metal coming in and out of this facility put a lot of stress on the reporting systems and how the company does business.

Royal Canadian Mint produces all of Canada’s circulation coins, and manufactures circulation coins on behalf of other nations. The mint also designs and manufactures: collector coins; gold, silver, palladium, and Platinum (1989–1999) bullion coins; customized medals, tokens, trade dollar watches, and, for a brief time, high end jewellery featuring coin designs. It further offers gold and Silver refinery and assay services.

The RCM is a Crown corporation that operates under the legislative basis of the Royal Canadian Mint Act. All monies in Canada are technically issued with the authority of the Canadian monarch; however, all operations are overseen by the President and CEO, or Master of the Mint, who is the senior executive officer of the organization, reporting to a Board of Directors appointed by the Minister of Public Works and Government Services.

The RCM has been at the forefront of currency innovation. Among the mint’s technical innovations are its plating process, which consists of a multiply technology that allows electromagnetic signatures to be embedded in the coins, assuring readability in the coin-processing industries. Another innovation was the world’s first coloured circulation coin, the 2004 Remembrance Day 25¢ piece, with a red poppy on the reverse. Further innovation was achieved with the adaptation of the physical vapour deposition technology to coat its dies, extending the life of the die beyond that of past chrome-coated dies.

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