Royal
Canadian Mint’s Tungsten Twostep?
Back in 2009, the Royal Canadian Mint [RCM]
claimed that it had lost $15 million worth of gold bullion. What ensued from
the time the loss was made “public” can best be described as a ‘fumbling
exercise’ where – initially - different accounts were put forward as to the
reason for the loss. Finally, public
catcalls regarding this loss at one of the world’s most renowned Mints led to
an official investigation by the Royal Canadian Mounted Police [RCMP].
In the end, we were all told that this loss
was due to honest miscalculations and blunders, or in other words – LAX
CONTROLS.
Lax
Internal Controls at the Royal Canadian Mint?
It's elementary(?), Watson -- (December 21, 2009) A series of miscalculations and blunders
in its gold refinery dating back to 2005 were responsible for 17,500 troy
ounces of gold going missing from the mint's Sussex Drive inventory count last
October, the mint announced in a 12-page report. That's the equivalent of
almost forty-four 400-ounce bars and worth more than $20 million in today's
prices.
More
than $3 million in government gold was unwittingly sold off at a fraction of
its value as refinery slag, while $8 million more was miscounted and never left
the Royal Canadian Mint, the Crown corporation revealed today in a full
accounting of how it lost track of a fortune in gold for a year.
The
mint said a 14-month hunt to find out what happened to the precious metal now
"fully accounts" for the missing gold, though it admits almost 3,500
ounces unwittingly sold off in slag to U.S. re-refiners will never be
recovered.
"These
reviews have bolstered our reputation by strengthening the mint's accounting
practices, vindicating our security systems and confirming that our technical
procedures and expertise in other areas are superior to industry
standards."
-end-
As evidenced from the Royal Canadian Mint’s 2009
Annual Report – the mint has been an ISO
member since 1999. Furthermore, the mint
“upgraded” it’s Ottawa operation’s ISO designation to the ISO 9001: 2008
standard - IN 2009. Achieving this
standard requires a rigorous 3rd party audit.
Also worthy of note, the 2009 RCM Annual Report
contained NO REFERENCE to AN investigation by the RCMP – its conclusion or its
results - nor ANY mention what-so-ever of the $15 million loss in the bullion
department. It’s like it never happened.
Contents of ISO 9001
….Before the certification body can issue
or renew a certificate, the auditor must be satisfied that the company being
assessed has implemented the requirements of sections 4 to 8. Sections 1 to 3
are not directly audited against, but because they provide context and definitions
for the rest of the standard, their contents must be taken into account.
The standard specifies that the organization
shall issue and maintain the following six documented procedures:
·
Control of Documents (4.2.3)
·
Control of Records (4.2.4)
·
Internal Audits (8.2.2)
·
Control of Nonconforming Product / Service (8.3)
·
Corrective Action (8.5.2)
·
Preventive Action (8.5.3)
In addition to these procedures, ISO
9001:2008 requires the organization to document any other procedures required
for its effective operation. The standard also requires the organization to
issue and communicate a documented quality policy, a Quality
Manual (which may or may not include the documented procedures) and numerous
records, as specified throughout the standard.
The picture below would suggest that the ISO
9001 designation really means something to the folks who run the RCM – since
they have proudly sewn its facsimile into the garments worn by the folks who
handle their bullion – as evidenced in both their 2009 and 2010 Annual Reports:
If the RCM had internal controls “lax enough
for the accidental discarding of $15 million worth of gold” – dating back to
2005 - they would have been UNCOVERED IN THEIR 2009 ISO AUDIT and they would
never have received their ISO 9001: 2008
designation.
So
What Does Make Sense?
The tungsten gold
thing has recently been back in the news.
Reports of 10 oz “salted bars” in N.Y. have surfaced, but, to date….no
one has admitted to finding a large bar – like a 400 oz “good delivery” bar.
My research and
contacts in the international bullion business tell me they do exist and these
bars are “silo-d” around the world.
The story offered
for public consumption by the Royal Canadian Mint about how they “lost” $15
million bucks worth of gold bullion back in 2009 – put simply - is a DOG
THAT DOES NOT HUNT - unless you believe that dogs can and really do eat
homework.
FACT:
The Royal
Canadian Mint At A Glance
The Royal Canadian Mint functions as a commercial Crown
corporation, directed to conduct its affairs “in anticipation of profit”, as
mandated by s. 3(2) of the Royal Canadian Mint Act. As a result, the Mint does not rely on any
taxpayer support to fund its operations.
Although the Mints stores large quantities
of gold within its high-security facility in Ottawa, on behalf of customers and for its own operational needs, the Mint does not store any
gold constituting reserves of the “national treasury” or the Bank of Canada.
Back in 2009 there were widespread reports of
physical stocks of gold bullion being “very tight” as evidenced by the suspension
/ curtailment of U.S. Gold Eagle
Production by the U.S. Mint:
2009 American Gold Eagle
The 2009
Gold Eagle had its product options significantly curtailed from the
previous year. Strong worldwide demand for precious metals created sourcing
problems for the United States Mint that impacted both bullion and collectible
coin offerings.
The
United States Mint offered the one ounce version of the bullion coin throughout
most of the year. The offering was subject to order rationing from the
beginning of year until June 15, and then once again from December 15 through
the end of the year following a brief suspension. The fractional weight 2009
Gold Eagle coins were available briefly during the month of December when the
US Mint offered a limited quantity of 1/2 oz, 1/4 oz, and 1/10 oz coins.
In
October, the US Mint announced the cancellation of the the planned collectible
versions of the 2009 American Gold Eagle. Collectors had been expecting one
ounce 2009-W Uncirculated Gold Eagles and a full range of 2009 Proof
Gold Eagles. In the same announcement, the US Mint also cancelled the
collector versions of the 2009 Silver Eagle….
Back in 2009, Royal Canadian Mint was facing
unprecedented demand for gold Maple coins with little to zero “working stock”
of gold bullion to make them. At the
time, the Mint’s ability to access gold bullion was impaired due to the fact
that the Canadian Government had previously sold all of its 660 metric tonnes
of sovereign gold bullion.
Here’s where we deduce why the Royal Canadian
Mint circulated a “false, incredulous story” about how they lost $15 million
worth of gold bullion:
“In the face of unprecedented demand for gold maple coins and with
physical supplies of gold being tight in 2009 – it makes sense that the RCM
would have “borrowed” gold bullion from one of their customers whom they store
bullion for. I have been told by
industry insiders that the RCM does not assay gold bars when they take them in
for storage. When the RCM tried to melt
these bars, they were revealed to be tungsten – which melts at a much higher
temperature than gold. This created a
very awkward situation for the RCM – having to tell one of their customers that
they had stored salted [tungsten] bricks of gold. Can any of you imagine what would have
happened if the offending counterparty simply stated, “they were pure gold
bricks when we gave them to you for safe keeping”? To prevent a scandal of all scandals from
ensuing, the RCM simply says, “We’ll eat the loss on the bars we tried to melt”.
This makes sense. This is ALSO consistent with the RCM’s later
action – in 2011 – when they launched a gold ETF - as a means of securing
dependable working stock [or monetization of additional tungsten, perhaps?] for
its gold
maple coin program:
Royal Canadian Mint's gold-backed ETF alternative raises $600 million
November 24, 2011
The Royal Canadian Mint has a hit on its hands after raising $600
million from the sale of its exchange traded fund alternative, exchange traded
receipts backed by physical gold bullion held in the mint’s facilities in
Ottawa, Ontario……
There no doubt will be charlatans in both the
mainstream as well as the alternative press who will claim that none of this constitutes
evidence to ANYTHING.
Everyone is free to come to their own
conclusion[s] whether or not serial, deceiving or fallacious tales involving
officialdom’s accounting of gold constitute evidence of wrongdoing or not.
On our little blue planet, when people are
shown to be lying – there is usually a very good reason and it’s usually
because they are hiding something.
Source: KirbyAnalytics
