Royal Canadian Mint MISSING Gold & Silver!

[maplesilverbug]

Gotta love government! They steal our money then loose theirs!

------
Canwest News Service -- OTTAWA — A significant quantity of gold, silver and other precious metals is unaccounted for at the Royal Canadian Mint.
(http://www.ottawacitizen.com/Business/Mint+account+missing+gold/1656084/story.html)
External auditors are investigating a discrepancy between the mint's 2008 financial accounting of its precious metals holdings and the physical stockpile at the plant on Sussex Drive in Ottawa.

The mystery raises possibilities from sloppy bookkeeping to a gold heist.

Officials with the commercial Crown corporation are saying little and refuse to confirm the amount and value of the unaccounted for gold, silver and palladium.

"An unprecedented demand in gold in 2008 has led to an unreconciled difference between the mint's financial statements and the physical count of precious metals. There's a difference there that we're looking into," Christine Aquino, mint spokeswoman, said in a prepared statement Tuesday in response to questions from the Ottawa Citizen.

"We're taking this very seriously. We're conducting a thorough review and we're expected to have that completed within the month. (It) includes the analysis of precious metal by-products and financial data. We've allocated all necessary resources to this review."

She stressed police have not been called into what mint officials consider an internal matter. She would not say whether the gold and other metals in question were part of the refinery and bullion operation or one of the mint's three other business lines: producing Canadian circulating coins, designing and producing coinage for foreign countries, and numismatics.

"We're looking at many different angles right now," she said.

The mint's Ottawa headquarters houses one of the world's leading gold and silver refineries, turning out almost 2.8 million Troy ounces of refined gold in 2007.

Another 369,000 ounces of refined silver were produced as a byproduct of refining the gold from a number of sources, including gold ore, scrap recyclers, financial institutions and industry. (A Troy ounce is the traditional unit of weight for precious metals and equals 1.097 ounces.)

The volume of precious metals refined in 2007 climbed by eight per cent over 2006, to 5.4 million ounces. Bullion and refinery revenues increased to $286 million. Total mint revenue in 2007 was a record $632 million. Annual figures for 2008 have yet to be released.

Further, production of the mint's Gold Maple Leaf coins last year surged by 325 per cent over 2007, fuelling the "unprecedented demand" for gold, said Aquino.

Stealing gold or other metals from the refinery would be a considerable feat.

"The rigour of our production standards is equalled by the stringency of our security protocols, which are implemented at every level of refinery operations," according to the mint's website. "The refinery is a restricted environment controlled by security personnel supported by state-of-the art surveillance technology."

It's not known when or what triggered the audit review or what external auditor is conducting the review.

The corporation's year fiscal 2008 runs Jan. 1 to Dec. 31 and its normal external auditor is the auditor general of Canada, who is required to audit the mint's year-end consolidated financial statements.

Security is paramount to the mint's success, including its reputation with foreign governments.

In 2001, during a court hearing for a mint employee convicted of smuggling counterfeit coins from the mint's Winnipeg plant, a statement from management said the theft could have "significant economic impact" for the Crown corporation because security breaches threatened future contracts.

The largest reported theft at the mint was in 1996, when a machinist at the Sussex Drive plant pocketed 85 ounces or eight bars of almost-pure gold called "anodes," the final step in the refining process before 24-karat ingots are made in an acid bath. He sold it for $8,000 to another man, who sold it to a company for $22,000. It was resold once more for $40,000.

A charge of theft against the man was later dropped for unexplained reasons and the mint was spared the humiliation of a trial that would have explained how the man snuck the precious metal past metal detectors, surveillance cameras and electronic sensors.

Prior to that, there were only two reported incidents of gold theft in the mint's 101-year history.

In 1988, a 23-year veteran janitor at the plant stole at least $30,000 in gold. The man worked in an area of the mint where objects that come into contact with liquid gold, such as tools, are crushed and recycled so the gold can be recovered. Police found he had more than $150,000 in unexplained income between 1985 and 1988.

[maplesilverbug]

The missing bullion saga continnues...

------------------

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. (http://www.vancouversun.com/Business/Mint+looks+gold+freezes+worker+bonuses/1663848/story.html)

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.

Aquino denied the freeze on employee bonuses is punishment for the unaccounted-for gold, noting the mint has been named one of Canada's top 100 employers by Maclean's magazine for three consecutive years.

The mint employes 865 people at its Ottawa headquarters and at a second plant in Winnipeg. Almost 70 per cent of the workforce is unionized. The Government Services Union local at the Ottawa mint refused to comment on the situation.

© Copyright (c) Canwest News Service

[maplesilverbug]

Part 3...and still no gold found! Realize that the "special auditors" have been searching for FOUR MONTHS! Perhaps they should try looking at the end of a rainbow...?

----------------

OTTAWA — The world-class reputation of the Royal Canadian Mint is under increasing strain, with mint officials refusing to rule out thievery to explain a significant quantity of unaccounted-for gold. (http://www.vancouversun.com/Business/Mint+refuses+rule+theft+gold/1667854/story.html)

The mint this week revealed that external auditors have been working since early March to determine whether theft or an accounting error is behind an "unreconciled difference" between the mint's 2008 financial records and its physical stockpile of gold and other precious metals at its downtown Ottawa headquarters, about one kilometre from the prime minister's residence on Sussex Drive.

Insiders say the unexplained difference could amount to as much as several million dollars. [2,700+ ounces?]

The government and mint CEO Ian Bennett have promised to make the auditors' findings public within two weeks. Police have not been asked to investigate.

In the meantime, the commercial Crown corporation is saying little beyond noting there was a 352 per cent increase in production of its Gold Maple Leaf coins last year.

"Doing business with the mint is still safe," said Christine Aquino, mint spokeswoman.

Notably absent, however, is any expression of optimism the affair will turn out to be a case of sloppy bookkeeping or another accounting mix-up.

Asked this week to acknowledge the mint is fairly confident the unaccounted for gold has not been stolen, Aquino replied: "We really want to wait for the review before we make any conclusions. We don't want to come to any conclusion until then."

She declined to answer the same question again Friday, saying in a statement: "We'll be making further comments once the review is completed and we release the results publicly."

It's too early to know what, if any, fallout the affair might have on the mint's thriving international coinage business line.

As one of the most innovative and technologically advanced mints in the world, its Winnipeg plant last year produced almost two billion circulating coins for 16 nations, including Papua New Guinea, Fuji, Paraguay, Oman, Panama, the United Arab Emirates and the Philippines.

In all, 65 countries have called on the mint to make their coinage over the years.

Opposition MPs say to maintain international confidence, and if the auditors' preliminary findings are leaning toward an accounting error over a criminal act, the government and the mint must move quickly and not wait for the auditors' final report later this month.

"If it's just a question of shoddy accounting, then he can't wait a month for this to happen. He's got to be able to clear the air for Canadians and those other countries that are our clients," said Liberal MP Joe Volpe, referring to Minister of State for Transport Rob Merrifield, responsible for the mint.

"Whether there's two, or whether or three or seven or more zeros behind the (unreconciled) amount, it all translates into the word 'significant' and that translates to loss of credibility. This has got to be dealt with today; it can't wait. We're talking about the national mint."

Opposition MPs raised the issue in the Commons again Friday.

"We do take this issue very seriously," responded Brian Jean, parliamentary secretary to Minister of Transport, Infrastructure and Communities John Baird.

"We want to assure all Canadians that an external audit is being done and once that is done, we will make the findings in the result of that public."

© Copyright (c) Canwest News Service

[maplesilverbug]

Wow. That's 18,000 ounces of gold "unaccounted" for!
Eight (8) months into it and they still can't find where it all went.
I say they never do find it.
This would make for a good "Crime of the Century" t.v. show!

--------------------

OTTAWA — On government orders, the Royal Canadian Mint has called for a criminal probe into as much as $20 million in unaccounted-for gold and precious metals at its Sussex Drive headquarters. (http://www.ottawacitizen.com/Business/Mounties+probe+Mint+missing+millions/1679471/story.html)

The looming police investigation comes eight months after the Crown corporation first learned it had lost track of the riches last October. The Citizen revealed the mystery last week.

The call for a police investigation is the third effort to determine whether theft or an accounting error is behind an “unreconciled difference” between the mint’s 2008 financial records and its physical stockpile of gold and other precious metals.

An internal “precious metals reconciliation” project was initiated by the mint last fall. In March, with that reckoning apparently no nearer to finding answers, an external audit was commissioned. Its findings are expected next week.

But junior Transport Minister Rob Merrifield told the House of Commons Tuesday, “this morning I found out that the mint will not be able to reconcile all of the missing money with the audit,” suggesting its findings will be inconclusive.

“I’ve instructed the mint to bring in the RCMP to examine this matter in a fulsome way,” he said, responding to a question from a Bloc Québécois MP.

A short time later, mint officials dispatched a letter to federal police. The RCMP said it will review the “information/allegations” in the letter to determine whether there are sufficient grounds for an investigation. If so, it could be conducted by the RCMP’s commercial crime section, or possibly Ottawa police, or maybe a joint effort.

Just hours earlier, mint CEO Ian E. Bennett and other senior executives addressed hundreds of upbeat mint employees and announced the Crown corporation had exceeded profit targets for 2008 by a record 122 per cent.

Marc Brûlé, chief financial officer, also told employees the precious metals reconciliation effort has been unable to determine what happened to the gold, which was first noticed during a routine “count” in October.

“There’s been lots of work done, but it’s not complete yet. Many people have been putting in lots of hours working on this process and trying to find out answers to that,” he said to workers gathered in the auditorium of the National Galley of Canada, neighbouring the mint. Winnipeg mint workers listened in via a video link.

Bennett began his remarks on a cautionary note.

“I want to start off by saying that the likelihood that sensitive information was leaked to the press from within the mint is very disappointing. I cannot begin to understand the motives for doing such a thing, but I do understand this is something which flies in the face of the mint’s values and all that we stand for.

“Each of us, as employees of the mint, should not speculate as to the conclusions (of the audit), which could risk the reputation of organization.”

Neither he nor Brûlé indicated the audit’s finding could be inconclusive. Officials have only said 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.

“It is precisely because I value the reputation of the mint and of its employees that I requested an external audit into the discrepancy of our precious metals inventory,” continued Bennett. “This is also why I am also committed to take steps to prevent its reoccurrence.”

In the Commons last week, Merrifield suggested the government wasn’t aware of the situation until the Citizen reported it a week ago today and he called Bennett, “to find out what has been going on.”

Until the matter is settled and the mint’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. The target for 2008 was $36.3 million. The actual, but as yet unaudited, profits appears to have been $44.2 million.

“This anticipated result will translate into an additional bonus for employees as a just reward for producing this excellent result,” said Bennett.

If Auditor General Sheila Fraser signs off on the year-end financials, employees could see the money in July.

© Copyright (c) The Ottawa Citizen

[fansubs_ca]

I remember a story I once heard (don't know if it was true or not, but it
seemed plausible) from annother one of the local ham radio operators.

Allegedly many years ago a shipment of gold going though the Winnipeg
airport had went missing. There was an investigation, authorities looked
high and low for it, nobody could find it or indentify anyone as having
stolen it. Eventually insurance paid out and it was written off. Then
about 6 months later as the weather was cooling down in the late fall
someone went to close a hanger door and had to move a box that was
being used to hold it in place. They noticed it was really heavy and
wondered what the heck was in it.

Upon them looking the gold was found. :D

Maybe the mint should check if they've got any really heavy doorstops
or paper weights lying around or maybe check toilet tanks to see if a
bar was used as a water displacer so the toilet would use less water
when flushed. ;)

[Gen Ripper]

Funny, very funny. A mint basically has 3 jobs, minting, distribution and accounting. They fail the accounting aspect. I will give them high marks on distribution, they just forgot to send the bill. ;)

That would be a great plot for a movie, dissolve the gold in acid. Drive the toxic waste to central America, for "disposal".

[maplesilverbug]

Mint moves to halt possible 'run' on gold...and Nadler speaks! (http://www.ottawacitizen.com/Business/Mint+moves+halt+possible+gold/1690805/story.html)

-----------------

OTTAWA — To halt a possible “run” on the gold it safeguards for private businesses, the Royal Canadian Mint is reassuring customers their deposits are fully accounted for and in secure vaults as the investigation continues into as much as $20 million in lost precious metals.

Since the scandal broke last week, some precious metals market advisers have been trying to instigate “some kind of a run” on the custodial accounts of the Ottawa mint and other mints around the world, said Jon Nadler, senior metals market analyst with with Montreal-based Kitco, one of the world’s leading precious metals bullion dealers.

“I cannot name names, but I’ve seen a number of forums and blogs and newsletter alerts from people who claim to be market analysts and saying, ‘You should take delivery of everything that’s in storage, no matter who you keep it with because of things like this,’” Nadler said in an interview Friday, calling the tactic “pathetic.”

The federal government this week ordered the mint to call for an RCMP criminal probe, after a four-month external audit was unable to reconcile the unaccounted-for gold and other precious metals at the mint’s Sussex Drive headquarters. Mint insiders tell the Citizen the missing metals could be worth as much as $20 million. The RCMP continues to review the request for an investigation. The audit findings are expected to be made public next week.

In the cut-throat world of international bullion refining and minting, any loss of confidence in the mint’s reputation as a world-class operation could threaten future business.

For Kitco, which stores some of its gold and precious metals at the mint as well as some of its clients’ metals, the unaccounted-for gold mystery is “clearly not an issue,” said Nadler.

Letters, he said, were sent to the company and other custodial customers June 4, a day after the Citizen broke the story, in which mint chief operating officer Beverley Lepine assured them, “all individual customer holdings and metal deposits entrusted with the Royal Canadian Mint are secure and have been fully accounted for.”

Whatever the outcome of the audit and anticipated police probe, people knowledgeable with mint operations say it’s unlikely the gold was stolen, and certainly not all at once.

Referring to the blockbuster 2003 gold-heist movie The Italian Job, Nadler said, “people tunnelling under vaults and making off with mass quantities of gold and walking out the front door, this just doesn’t happen.”

[ed. -- much easier to run a car company into the ground, repeatedly, then sit back and wait for the government to give you 500 times that amount in tax-payer cash!]

In a Friday blog posting on the website of the International Business Times, Nadler wrote: “Some over-zealous alarmists need to get a grip and learn how vaults, insurance policies, and such operate in the real world. Until then, we can only call them saboteurs. Anyone who listens to them is sadly misinformed.”

In the later interview, he said, “I can appreciate this atmosphere of post-Madoff mania, but at the same time, when you have a government entity that you’re dealing with and they have a hundred years of track record under their belt, your worry level is certainly misplaced. We’re quite comfortable sleeping at night and so are our clients.”

[ed. -- yeah, because we all know how honest and trustworthy our governments are and have been over the last 100 years!]

Meanwhile, mint chairman James Love says one possible, but unconfirmed, explanation for the mystery is a programming problem with a new computer system used to track the mint’s precious metal reserves.

In a media interview this week that attracted scant coverage, Love said, “it’s still possible that it is some sort of a programming error in that system. Obviously frauds and security breaches happen, so we haven’t ruled anything out. But we simply don’t believe that that’s the sort of thing that happened.”

Further, the issue may be traced to a decision not to re-refine an estimated 90 tonnes of slag for residual gold not captured during the initial refining process. Because of the huge demand for gold last year, there was no time, explained Love.

“An estimate was made at the year end as to what the value of the gold in this slag would be, and it was thought that this could explain a significant portion of this reconciliation difference. The amount of gold that was determined to be in that slag was significantly higher than the estimate that was originally used,” he said in the report.

“That went a significant distance in reconciling the rolling inventory to the physical count, but certainly not far enough from our point of view.”

It’s not clear what happened to the slag.

The initial discrepancy at issue was less than 0.5 per cent of the gold that had flowed through the facility last year, Love said.

Nadler said though he is not privy to the external audit findings, “I’m reasonably sure that it’s an accounting issue and literally a reconciliation issue, where a shipment was either short or diverted or what have you. Even if it’s proven to be actual malfeasance, I’m sure that the coverages that they have in place are ample to make (up) any particular shortfall.”

imacleod@thecitizen.canwest.com

© Copyright (c) The Ottawa Citizen

[Nomen luni]

one possible, but unconfirmed, explanation for the mystery is a programming problem with a new computer system used to track the mint’s precious metal reserves.The old classic; blame the computer. My Nan was once shocked to read the words "Satan is Lord" bang in the middle of a local newspaper article on an unrelated subject. The next week, an apology was reported, blaming a computer glitch!

“I cannot name names, but I’ve seen a number of forums and blogs and newsletter alerts from people who claim to be market analysts and saying, ‘You should take delivery of everything that’s in storage, no matter who you keep it with because of things like this,’” Nadler said in an interview Friday, calling the tactic “pathetic.”Funny... sounds like good advice to me, and if the depositories are playing by the book, they should have nothing to worry about.

[maplesilverbug]

Gotta love lazy ass bureaucrats!
"It was too busy and we couldn't handle it!"

Ever hear of a "Third Shift"?!?

It wasn't worth $7 million to find a way to re-refine the slag?!

And what of the other $13 million?!?

Perhaps they should apply for a bailout...

----------

OTTAWA - An estimated $7 million worth of Royal Canadian Mint gold was disposed of in refinery slag, leaving as much $13 million in precious metals still unaccounted for, a mint employee told a group of visitors Tuesday.

During a public tour of the historic Sussex Drive plant, a mint tour guide volunteered to the group, which included a reporter, that an internal investigation has determined an estimated $7 million in gold was not captured in its refining process last year.

Senior mint officials later would not confirm or deny the young guide’s remarks or say what happened to the resulting slag, including whether it may have ended up as garbage or was sold to recyclers.

But last week, mint chairman James Love said a huge demand for mint gold last year meant it didn’t have time to re-refine, as it usually does, an estimated 90 tonnes of slag for residual gold.

“An estimate was made at the year end as to what the value of the gold in this slag would be, and it was thought that this could explain a significant portion of this reconciliation difference.”

“The amount of gold that was determined to be in that slag was significantly higher than the estimate that was originally used,” Love said in a media report.

The mint guide said each “batch” of slag is now thought to have contained about five ounces of gold, not the original estimate of about two ounces. The mint will not define what constitutes a “batch.”

The federal government last week ordered the mint to call for an RCMP criminal probe, after a four-month external audit was unable to reconcile the unaccounted-for gold and other precious metals at the mint’s Sussex Drive headquarters. Mint insiders tell the Citizen it could amount to as much as $20 million.

The RCMP continues to review the request for an investigation. The audit findings are expected to be made public soon, a mint spokeswoman said Tuesday.

The mint refines gold in five major stages, explained on its website.

Doré bars in purities ranging from five per cent to 95 per cent are melted in a furnace. Dip samples are taken from the molten gold to determine its purity.

Chlorine gas is then injected into the molten metal mix. All impurities and metals but gold float to the surface to form a slag of molten chloride. The resulting .995 fine gold (99.5 per cent pure) is poured into an anode mould.

Next, in a step that was not done with the 90 tonnes of slag in question, soda ash is added to the molten chloride slag recovered from chlorination. The reaction causes gold particles to collect in a silver-gold alloy “button” that settles at the bottom of the crucible.

The gold anode is placed in a bath containing a solution of hydrochloric acid and gold chloride. The anode is then subjected to an electric current. The anode dissolves, and the dissolved gold plates onto a titanium cathode. Impurities (mostly silver) fall to the bottom of the cell or form soluble chlorides. This process brings gold to .9999 purity. It is then cast into bars of various sizes or turned into granulation gold.


© Copyright (c) The Ottawa Citizen

[maplesilverbug]

If it was a work-a-day peon (or outsider) who pulled this off -- bravo!
If it was just more CEO greed a la AIG et al...I guess now they are stealing "real" money now too.

-------------

OTTAWA - An unprecedented audit of the Royal Canadian Mint (http://www.ottawacitizen.com/Business/Audit+raises+spectre+massive+mint+heist/1745110/story.html) has failed to find $15.3 million in missing gold and suggests it could have been stolen in what would be the greatest gold theft in Canadian history.

The results of the long-awaited independent audit found no accounting, bookkeeping or other internal errors to account for 17,514 troy ounces of gold missing from the mint’s Sussex Drive inventory. That’s the equivalent of almost 44, 400-ounce bars and worth $19 million in today’s prices.

A further but undisclosed quantity of silver also is missing.

“The unaccounted for difference in gold does not appear to relate to an accounting error in the reconciliation process, an accounting error in the physical stock count, or an accounting error in the recordkeeping of transactions during the year,” the report by Deloitte and Touche concludes.

It recommends the mint review security to “identify theft opportunities … and… potential inappropriate activity by both internal and/or external parties.”

Calling the mint’s loss “inexcusable,” the federal government has ordered the mint to withhold executive bonuses until the matter is resolved.

“The mint will be held accountable,” Transport Minister John Baird and junior Transport Minister Rob Merrifield said in a statement late Monday.

The mint will also be required to report on precious metals inventories on a quarterly basis, the ministers said.

The RCMP has yet to announce whether it will open a criminal probe into the mystery. The federal government ordered the Crown corporation to call in police June 9 after a series of Citizen reports revealed mint officials have been quietly searching for the gold since October. The Mounties’ commercial crime section in Ottawa continues to review the request.

Gold closed Monday at $1,089 Cdn an ounce, making the lost gold worth $19 million in current prices.

The report values it at $15.3 million based on a 2008 selling price [C$873/oz -- approx. US$800 in 2008 dollars]. The mint will file an insurance claim and record the missing metal as a loss in its 2008 financial statement, which still needs the approval of federal Auditor General Sheila Fraser.

[ed. - Wow! I am definitely going to give that scheme a go next tax season! Open a business, have all my cash just "disappear", wait almost 3 months before reporting it to the cops, then file for insurance AND claim it as a loss! Oh right, different rules for "Gov't & Co." than regular working tax payers.]

The missing gold initially amounted to about 21,500 ounces, until it was determined that 4,000 more ounces than initially estimated had left the plant in tonnes of slag produced during the refining process. That gold, amounting to about $4.3 million at current prices, was apparently recovered from an outside refinery.

The Deloitte and Touche investigation suggests most of the remaining missing gold, 16,494 ounces, came from the mint’s gold refinery, one of the largest in the world. But the report notes that lot control of the gold only exists as it begins the refining process and again when it is converted into finished goods.

“Work in progress in between these stages is not subject to lot control physically or in the system,” says the report.

What’s more, in the summer of 2007, the mint installed a new computer system. The report doesn’t go into details, but an executive with one of the mint’s big commercial customers, Montreal-based precious metal bullion dealer Kitco, has told the Citizen there have apparently been technical problems.

“We have actually halted the signing of new accounts (for precious metal storage at the mint) as of December, January specifically because they wrote to us and said, ‘Look, we’re revamping IT all the way in the back office and it’s going to be enhanced, so don’t take any new accounts for the time being’,” Jon Nadler told the Citizen this month.

Meanwhile, a huge world demand for gold last year, and especially the mint’s Gold Maple Leaf coin series, pushed production up by 352 per cent. “There was just a lot of precious metals coming in and out of this facility as we fulfilled orders and customers’ needs,” said Christine Aquino, mint spokeswoman.

Profits also soared last year, to a record (and unaudited) $44.2 million, well above the corporate target for 2008 of $36.3 million. It’s not clear how the official $15.3 million loss will affect profits.

The biggest gold heist in Canadian history is thought to have been a 1966 robbery at the Winnipeg airport of ingots destined for the Ottawa mint. Winnipegger Ken Leishman, who gained national fame in the 1960s and 1970s as the “Flying Bandit” for crimes in which he used a plane as an escape vehicle, is credited with masterminding the heist. It reportedly netted him and two other men $4 million in gold.

Despite the growing possibility the latest gold may have been stolen, too, the mint in a statement Monday did not acknowledge such, saying, “it’s not clear at this stage whether any physical gold is missing from the mint’s inventory.”

In a statement, mint chairman James B. Love said, “as a Crown Corporation, we understand that Canadians hold us to a high standard of accountability and the mint’s board of directors will continue to work closely with management in ensuring that this matter is pursued vigorously.”

More outside experts are to be brought in to pursue three new avenues of investigation, including security. Another will be a technical review of operations, including the scientific processes, formulae and benchmarks the mint uses on various aspects of refining such as process losses. The third area will be an accounting review of precious metal counts going back beyond 2008. The auditors and mint officials acknowledge, however, that will be difficult given the passage of time, the availability of supporting documents and the turnover of mint staff.

Still, “we’re not giving up on this,” said Aquino. “We are going to pursue these other three avenues and exhaust them and then, hopefully, we can find an answer.”

The mint reconciles its rolling precious metals inventory every April and October in a complex and time-consuming process. Some of the gold belongs to the mint, while some belongs to customers who store it at the mint.

Account records are checked against physical stock. The April 2008 count was fine. But the second count in October could not reconcile tabulations of the mint’s own gold with the physical stockpile. The difference represented about 0.32 per cent of the total gold throughput for 2008. Customers’ gold and other precious metals were not affected.

Mint officials investigated and called in Deloitte and Touche in mid-March. On March 23, Merrifield, who is responsible for the mint, was advised of the situation.

The federal Liberals Monday attacked the government for allowing the mint to wait so long before being ordered to call in police.

“The Harper government has lost more than just $15 million in precious gold bullion,” Liberal critic for Crown corporations Joe Volpe said in a statement. “They’ve lost precious time. Why did the government wait 10 full weeks from the time they learned of the lost gold before calling in the RCMP? [Because gov'ts are slow, fat, and bloated!]

“All along the mint has left open the possibility that gold has been stolen — a startling admission that seems more likely given this report,” said Volpe. “Instead of immediately chasing down all possible leads, the government may have given those responsible the equivalent of a head-start for their get-away. Instead of taking immediate action, they sat around playing keystone cops, while more gold was potentially exiting the building.”

The audit also found numerous instances in which the mint either under- or over-valued amounts of precious metals it was dealing with in various transactions, ranging from a few ounces to a few thousand.

For example, 2,608 ounces of precious metal was shipped out of the mint, but the auditors apparently could not identify to whom, though there appears to be no question the transaction was aboveboard.

© Copyright (c) The Ottawa Citizen

[akak]

I blame Jon Nadler for the missing gold --- he was desperate to fill the huge gap in Kitco's pool account, to replace all the IOU's that they hold instead of the real gold that was long ago sold or loaned out.