Royal Canadian Mint Releases Missing Gold Findings

OTTAWA, ON — The Royal Canadian Mint today released the findings of a third party review related to the unreconciled difference between the Corporation’s rolling inventory and the physical count of precious metals for the 2008 fiscal year.

The scope of the review, conducted by Deloitte and Touche, was to specifically determine if the unreconciled difference in gold was the result of an accounting or transaction recording error.

The report concluded that "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 schedules, or an accounting error in the recordkeeping of transactions during the year."

The Deloitte and Touche report identified three other areas for consideration:

1. A technical review of operations – As the Mint applies scientific processes and formulae to various aspects of refining, such as process losses, the Mint may wish to review and update its benchmarks and/or third party studies regarding such technical processes and formulae.
2. An accounting review of prior periods - Precious metal reconciliations have been performed by the Mint twice annually in prior years. Although, in theory, revisiting prior period reconciliations could explain the difference, it would be difficult to complete such a review due to the passage of time, the availability of supporting documentation and the turnover of Mint staff.
3. Security reviews - A more in-depth review of systems security and an assessment of potential inappropriate activity by both internal and/or external parties.

"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," said James B. Love, Chairman of the Board of the Royal Canadian Mint.

"In response to the report’s recommendations, the Mint has engaged third parties to assist the Corporation in its review of specific aspects of its operations, including refinery processes and internal controls," said Ian E. Bennett, President and CEO of the Royal Canadian Mint. "We have also requested the RCMP’s assistance to investigate the matter and the Mint has committed to fully co-operate with them."

The amount of the unreconciled precious metals at this stage is approximately $15.3 million. Mr. Bennett emphasised that "the Mint will aggressively continue its efforts both internally and with outside experts to determine the sources of the unreconciled difference."

In the interim and on the basis of the Deloitte and Touche report, the Corporation has notified its insurance carriers that it intends to file a claim under its "All Risks" insurance policy which, if successful, will largely offset the amount of any unreconciled difference.

The full Deloitte and Touche report and executive summary are available on our website at www.mint.ca. Accompanying these documents is a backgrounder on the Royal Canadian Mint’s refinery operations and key questions.

About the Royal Canadian Mint

The Royal Canadian Mint is an ISO 9001-2000 certified company, recognized as one of the largest and most versatile mints in the world. With facilities in both Ottawa and Winnipeg, the Mint is a commercial Crown Corporation which produces and manages the distribution of circulation coins and provides advice to the Government of Canada on matters related to coinage.

The Mint also designs, produces and markets numismatic coins and gift products and also manufactures coins and blanks for countries around the world. The Mint operates full-service gold and silver refineries, offers storage services to Canadian and international customers and produces precious metal products for the investment community. For a complete overview of the Mint’s products and services, visit www.mint.ca.

# # #