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LMAO?!?!?? :nuts:

Theft possible in mystery of Mint's missing gold

Peter Koven, Financial Post
Published: Monday, June 29, 2009

At the Royal Canadian Mint, the big question remains unanswered: What the heck happened to our gold? After a thorough independent investigation, it still has no concrete answers and says a theft is possible.

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. Monday, it revealed that $15.3-million of precious metals is unaccounted for at its Ottawa facility.

Christine Aquino, director of communications for the Mint, said it is looking into "all" possibilities at this time, including the chance that someone pulled off an Ocean's 11-esque heist from a facility that ranks as one of the most secure in the country. It has even asked the Royal Canadian Mounted Police to do its own investigation.

"We're not going to discount anything," she said.

The one thing the Mint is confident of is that the problem is not accounting. Monday, 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 US$940.70 an ounce, that is worth nearly $16.5-million (the Mint's $15.3-million figure reflects prices at the end of last year).

While an outright theft of the Mint is not out of the question, experts said Monday that it is unlikely.

"Clearly the least likely scenario is that some guy in a trenchcoat walks out with a 400-ounce, 12.5-kilo bar and goes undetected day after day," said Jon Nadler, senior analyst with Montreal-based bullion dealer Kitco, which stores some gold at the Mint.

"That's the Italian Job scenario. I don't see that. We've been there [to the Mint], we've seen how fortress-like the place is."

The Mint has told its clients that all their gold is safe, and Mr. Nadler said he is not losing sleep over the facility's security procedures.

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. Ms. Aquino said that reviewing the Mint's accounting from prior years is very difficult because of staff turnover, changes in technology and a lack of supporting documents. She also said that its 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 US$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 our reporting systems and how we do business here," Ms. Aquino said.

"We're looking at that as one of the possible reasons for this occurrence."
 

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That is the most bizarre thing I have ever heard of!!! :eek2:

Now it is up to 20 million! link:
http://www.theglobeandmail.com/news/national/whos-minding-the-mint/article1201343/


The search for the mint's missing gold

Independent review of the Royal Canadian Mint's records shows accounting glitch is unlikely – so how did $19-million of the precious metal disappear?




Campbell Clark

Ottawa Last updated on Monday, Jun. 29, 2009 11:25PM EDT

The mystery of the mint's missing gold now looks less like an accounting glitch and more like the stuff of heist movies.

An independent review of the Royal Canadian Mint's records has concluded that the disappearance of 17,500 troy ounces of gold – worth about $19-million at current prices – does not appear to be an accounting error.

With that ruled out, it's seen as more likely that the metal was stolen from the mint's gold-refining operations, not only without anyone noticing, but with officials scratching their heads for months about whether there was really a theft at all.

In fact, despite suspicions of crime, they still don't know for sure.

The Mint alerted the RCMP to the missing gold on June 9.

In a joint statement last night, Transport Minister John Baird and Minister of State (Transport) Rob Merrifield said Mint executives' bonuses will be withheld until the matter is resolved.

“The Mint's still unexplained loss of precious metals is inexcusable,” the ministers said. “The Mint will be held accountable.”

From now on, they said, the Mint will have to give quarterly reports on inventory levels of all precious metals.

The mint refines so much gold, 5.4 million troy ounces a year, brought in as raw metal or scrap jewellery and turned into 400-ounce gold bars, that an error in processing or analyzing the metal could, in theory, account for losses. A spokesman for the Mint, Christine Aquino, said the Crown corporation won't “speculate” on whether it was theft, as they consider all possibilities.

But the independent review conducted by accounting firm Deloitte & Touche recommends security measures be analyzed for holes. In its own release, the Mint recognized, in bureaucratic language, that the report gives further justification for the June 9 decision to call in the RCMP.

Deloitte's special review and assessment

Download this file (.pdf)

“The involvement of the RCMP is indeed consistent with the Deloitte and Touche report, which recommended a more in-depth review of systems security and an assessment of potential inappropriate activity by both internal and/or external parties,” the Mint said.

All of the Mint's refining and gold-minting operations are conducted at a high-security facility on Ottawa's Sussex Drive, where sneaking away with the equivalent of 41 gold hefty bars was thought next to impossible.

The report heightened criticism from the opposition Liberals, who said the government dawdled after the discrepancy was first reported eight months ago, only calling in the RCMP three weeks ago. That made it clear theft was the likely cause, he said.

“You can no longer ask, ‘Is it possible that happened?' They've already answered that question – it is,” said Liberal MP Joe Volpe.

“What in heavens name is going on? There's a Keystone Cops thing going on now, but there's also a gross indication of total incompetence.”

The Mint discovered after its October, 2008, inventory that it was missing 17,500 troy ounces of gold – gold is now worth $1,085 an ounce – but has been struggling to see if it was a paper error or a real one. The Mint counts its gold every six months.

The Deloitte study ruled out accounting errors of various kinds, either from the way Mint employees recorded the ins and outs of gold over a six-month period, or the way they counted it in October.

What Deloitte cannot say for sure is whether previous physical counts of the inventory were done correctly, although the report said the firm had analyzed available records to see whether those previous results were reasonable. And presumably, red flags would have been raised if a previous count showed far more gold than the Mint thought it had.

Because of the complexities of refining operations, the physical count of gold is rarely exactly what the paper records indicate, but the discrepancies are always much smaller, within 1,000 ounces.

Deloitte's report said it wasn't able to test the complex series of scientific calculations and estimates involved in refining gold, so errors could account for some of the shortfall. But the margins of error for most processes are typically small – the Mint could not have lost all of the missing gold by producing bullion that was purer gold than usual, for example.

The report suggests that the Mint consider reviewing its processes and its calculations.

But it also suggests that the Mint look at whether somebody could have accidentally, or deliberately, manipulated the agency's records.
 

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15.3, then 16.3, now 19 million.

I'll bet you 17,500 troy ounces of gold that it will reach 25 million by next year.
 

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I'm mystified at all the shoulder shrugging and confusion over this issue. How could an inventory be out THAT MUCH? Do they just jot things down on bits and pieces of paper? One would expect the system to be HIGHLY accurate.
Well, to be fair... the inventory isnt off by that much. The missing total amounts to 0.32% of their total inventory. Its like finding a needle in a haystack.
 

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But, it is something like 47 heavy bricks of gold. One could say that is not a lot compared to what goes through there in a year, but this is not apples we are talking about, it is gold. I have never heard of this happening before in a mint, either here or in other countries.
 

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But, it is something like 47 heavy bricks of gold. One could say that is not a lot compared to what goes through there in a year, but this is not apples we are talking about, it is gold. I have never heard of this happening before in a mint, either here or in other countries.
We can lose a whole skid of stock at Canadian Tire in a single day. 47 bars of gold over a period of several months for the mint is nothing. It could have been something as simple as melting more gold (even small amounts can add up over time) by accident, or making a mistake while receiving. When something like this happens, it takes a long time to correct the error and account for the missing stock.

Seeing that the Mint goes through their inventory every 6 months is kind of scary though. It makes it so much more difficult to find the mistake.
 

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Discussion Starter · #8 ·
^^ Some Mint officials are suggesting that the high turnover of gold lately could have caused part of the screw up. Usually they purify the slag left over from smelting a couple times, but this was neglected. Don't know how they left 17,500 ounces in "slag" however.
 

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Sorry, but losing a skid of merchandise is not the same as losing 47 heavy bricks of gold,
and it is definitely not a "normal" thing to happen at a national mint. One keeps track of gold in a completely different way than one keeps track of a shipment of Iam's dogfood. Banks, for example, do not "lose" $20,000,000 worth of cash every year simply because they handle billions of dollars. I think this definitely needs some clear explanation.
 

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Guys, guys, guys... this is Canada.
There was probably an 18 year old security guard protecting the whole joint.
Although we've had self rule for 142 years, we're still trying to figure out how to be a grown up nation.

Embarrassing for Canada, YES. Will it happen again? Probably.
 

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Taller Better, Huhu, Vid... congradulation boys! We did it!! Now, it is time to re-invest our 17 million into the Canadian forum. Finally, Thank you the Canadian forum for providing us millions of photos and plans of the facility. We could of not done it with out you guys! :clap:

Ps: Congradulation Oaronuviss, you are getting your self a new laptop.
 

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Taller Better, Huhu, Vid... congradulation boys! We did it!! Now, it is time to re-invest our 17 million into the Canadian forum. Finally, Thank you the Canadian forum for providing us millions of photos and plans of the facility. We could of not done it with out you guys! :clap:

Ps: Congradulation Oaronuviss, you are getting your self a new laptop.
Oh so I was right?
:cheers:
 
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