Canadian mint blames accounting errors for missing gold

By Daniel Leblanc
The Globe and Mail, Toronto
Friday, November 27, 2009

http://www.theglobeandmail.com/news/politics/missing-gold-never-left-the...

It was the mystery of the missing gold -- some $15-million worth -- and the Mounties were on the case. They descended on the Royal Canadian Mint, seeking a culprit in the touchy tale of 17,500 ounces somehow vanishing from the Crown corporation that refines the stuff.

This week, the RCMP rendered its verdict: No heist. In fact, say third-party experts who also snooped around within the Mint's fortified walls, the explanation is more banal, if no less bewildering: accounting errors and processing losses -- gold disappearing on the books and in the chlorination baths.

Some of it may even be recoverable.

That would be good news for the Mint, which faced the humiliation this spring of searching for the equivalent of 41 bars of gold, before calling in police to see if brazen criminals had been at play.

The Harper government is expected in coming weeks to announce the results of recent accounting and technical reports by the third-party experts, after the Office of the Auditor-General approves the Mint's long-delayed 2008 financial statements.

But the broad lines of the reports are already circulating within government circles, with more precise details to be made public in mid-December.

"The Mint has put forth an explanation for where [the largest portion of] the metal is," a government official said yesterday. "It will come from a few different places, some accounting and some processing."

Accounting problems refer to mistakes in the formulas used to measure how much gold enters the Mint, in varying levels of purity, and how much goes out after being refined.

Government officials and experts added that some of the gold was also lost in the refining process, and there were hopes it could be recovered.

At least one company quietly approached the Mint this summer, stating that the chlorination process used at the Ottawa plant is outdated and offering its expertise to get back some of the precious metal.

Given that recent Mint accounting review went back to 2005, there are questions whether the amount of lost gold might be even higher.

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