Mint makes changes after gold goes missing

The Royal Canadian Mint says it “has learned some valuable lessons” after losing track of some 17,500 oz. of gold in 2008.

In March 2008, the Mint’s managers informed the board of directors that its stock-keeping records for 2008 reflected a higher amount of gold than the physical amount of gold on hand at a level much higher than the acceptable tolerance level of 500 oz.

After an extensive array of audits and reviews by four outside firms, including an RCMP criminal investigation, it was determined that accounting and auditing procedures were up to snuff, security was stellar and that no gold had been stolen.

Instead the amount of gold consumed in various processing activities had been estimated incorrectly. It’s natural to lose some gold in the refining process.

A technical and engineering review found that the Mint underestimated the physical gold on hand balance in an October 2008 count of slag by-products processed internally by 5,400 oz.

Another 3,600 oz. of gold was attributed to gold consumed in by-products externally and 350 oz. of gold consumed in byproducts internally.

The Mint also conducted an aggressive recovery program sweeping and cleaning its buildings and equipment ahead of schedule, recovering 1,500 oz. of gold.

And a review of accounting procedures and transactions dating back to 2005 identified 6,650 oz. gold.

To make sure this doesn’t happen again, the Mint is now doing its precious metal stock count every quarter instead of twice a year and added an extra three days for counting.

Refining of all slag by-products will be done internally to avoid large accumulations of slag.

A new metal comptroller and additional material management staff were hired, updated accounting measures are being followed and the benchmark estimates used for process losses have been updated.

The Mint pointed out in its report that 2008 was an exceptionally busy year. Profit grew 133% to $55.3 million over 2007 as a result of the world financial crisis.