Royal Canadian Mint Reveals How It Lost Gold

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"As a result of these findings, executives will not receive any discretionary bonuses for 2008."

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.

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. Thatís the equivalent of almost 44, 400-ounce bars and worth more than $20 million in today's prices.

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.

The mint blames the situation on an explosion in the demand for gold in 2008, which pushed sales up by 250% and placed a huge strain on its gold refinery.

". . .we've learned a lot of lessons," said Christine Aquino, mint spokeswoman. "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."

"Despite the explanations I am disappointed that errors have occurred," Minister of State (transport) Rob Merrifield said in a press release.

"As a result of these findings, executives will not receive any discretionary bonuses for 2008. In addition, I will continue to require the Mint to report quarterly on inventory status as well as update me on how they are implementing the processing, accounting and security recommendations put forward by the reviews. I will continue to hold the Mint accountable."

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