Canadian Mint Can’t Account For Missing Gold

Canwest News Service reports that the Canadian mint can't account for missing gold.

(emphasis mine) [my comment]

Mint looks for gold, freezes worker bonuses
By Ian McLeod, Ottawa Citizen
June 4, 2009 9:01 PM


Gold coins to be melted down at the Royal Canadian Mint. External auditors are investigating an 'unreconciled difference' between the 2008 financial accounting of the mint's precious-metals holdings and the physical stockpile of gold, silver and palladium at its Ottawa. Stealing it would be a considerable feat, requiring state-of-the-art technology.
Photograph by: Pat McGrath, Ottawa Citizen

OTTAWA — The Royal Canadian Mint is withholding employee bonus pay as special auditors enter a fourth month hunting for unaccounted gold that insiders say could be worth as much as several million dollars.

The Ottawa Citizen reported Wednesday that external auditors are investigating an "unreconciled difference" between the 2008 financial accounting of the mint's precious-metals holdings and the physical stockpile of gold, silver and palladium at its Ottawa headquarters. The mystery raises possibilities from sloppy bookkeeping to a gold heist.

Stealing gold or other metals would be a considerable feat, one that would have to evade state-of-the-art security technology.

"We're one of the most secure facilities in Canada," Christine Aquino, mint spokeswoman, said Thursday. "Doing business with the mint is still safe, and this review will likely give us some suggestions on how to improve our processes."

The mint has delayed asking federal Auditor General Sheila Fraser to sign off on the Crown corporation's consolidated financial statements for 2008, as required by law, and senior government and mint officials have been secretive about the probe.

Police, at least for now, have not been asked to investigate.

Instead, external auditors have been working since early March to reconcile the precious-metals discrepancy, apparently without success. Even retired mint employees have been quietly brought into the plant on weekends to try to solve the discrepancy, according to a source.

The mint is located in downtown Ottawa, about one kilometre from the prime minister's residence on Sussex Drive.

Details of the external audit are expected to be made public within two weeks. Until then, the mint refuses to confirm the quantity of precious metals, believed to be mostly gold, or monetary value involved. It also won't say what triggered the review.

Officials will only say the discrepancy may be related to an unprecedented demand for gold in 2008, including a 352 per cent surge in production of its popular Gold Maple Leaf coins.

In recent years, the mint has become a rich source of cash for the government, generating a net income of $21.6 million in 2007 on record revenue of $632 million. The government, meanwhile, collected a handsome $74.3 million seigniorage, which is the difference between the value of money and the cost to produce it.

Until the matter is settled and the corporation's 2008 financial statement is finalized, employee performance bonuses are frozen. The bonuses range from four to nine per cent of an individual's salary, and are paid when the workforce meets or exceeds annual corporate profit targets.

"Bonuses are not paid until the financial statements are final," said Aquino. "In good faith in March, we paid a partial bonus to employees. We didn't have to do that, but we did.

"Once our review is complete and the books are closed for the year, it is possible that additional bonuses will be paid," provided the 2008 profit target was reached.

My reaction: An audit of Canada's gold reserves uncovers several million dollars of unaccounted gold. I wonder what an audit of the Federal Reserves holding of precious metal would reveal. How big would the 'discrepancies' be?

1) External auditors are investigating an 'unreconciled difference' at the Canadian Mint between the 2008 financial accounting of the precious-metals holdings and physical stockpiles.

2) External auditors have been working since early March to reconcile the precious-metals discrepancy, apparently without success. Even retired mint employees have been quietly brought into the plant on weekends to try to solve the discrepancy.

3) Stealing gold or other metals from the Canadian Mint would be a considerable feat that would require evading state-of-the-art security technology.

4) The mint refuses to confirm the quantity of precious metals or monetary value involved. It also won't say what triggered the review.


Conclusion: This missing gold is very interesting for several reasons:

1) "Several million dollars" of gold is probably about a ton, and a ton of gold doesn't just 'disappear'.

2) It would be next to impossible for an employee to
evade state-of-the-art security technology and smuggle out that much gold.

3) External auditors have been investigating for four months, so this isn't the result of some small accounting error either.

Either the Canadian Mint deliberately overstated it gold holdings, or a large amount of gold was sold off the books. Both of these would require collaboration of official high in the mint and possibly the Canadian government.

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6 Responses to Canadian Mint Can’t Account For Missing Gold

  1. Gert says:

    South African Banks stopped selling Krugerrands years ago because of theft of their employees.

  2. dashxdr says:

    An employee could steal a little bit every day and accumulate a ton over time.

  3. Anonymous says:

    Thanks for another great news piece. However if you do the math there is not a ton of gold missing. 1000 ounces of gold equals about $975000. So it's just a few thousand ounces that are unaccounted for.

  4. Bron says:

    This is a very interesting story. Understanding how a mint and refinery work I have a few theories as to what their problem is, but how you can do a stocktake at year end (31 Dec) and still be trying to work out what is going on in May does not say much about their metal control processes.

  5. GOld Bullion says:

    We love finding articles and we wanted to let you know, we will pass your site on in our email newsletters to our clients which collect gold . Thank you

  6. Gold says:

    The Gold Canadian Maple Leaf is a very beautifully designed gold coin and I just got one,

    Canadian Maple Leaf Coins

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