Royal Canadian Mint’s Tungsten Twostep?

By Rob Kirby:

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 ISO 9001 accredited Royal Canadian Mint?

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.

 Click here for more on the RCM’s Tungsten Two-Step:

16 comments on “Royal Canadian Mint’s Tungsten Twostep?
  1. Bruce says:

    http://en.wikipedia.org/wiki/ISO9001#Contents_of_ISO_9001
    (emphasis mine)

    Certification

    ISO does not itself certify organizations. Numerous certification bodies exist, which audit organizations and, upon success, issue ISO 9001 compliance certificates. Although commonly referred to as ‘ISO 9000′ certification, the actual standard to which an organization’s quality management system can be certified is ISO 9001:2008. Many countries have formed accreditation bodies to authorize (“accredit”) the certification bodies. Both the accreditation bodies and the certification bodies charge fees for their services. The various accreditation bodies have mutual agreements with each other to ensure that certificates issued by one of the Accredited Certification Bodies (CB) are accepted worldwide. Certification bodies themselves operate under another quality standard, ISO/IEC 17021,[28] while accreditation bodies operate under ISO/IEC 17011.[29]

    An organization applying for ISO 9001 certification is audited based on an extensive sample of its sites, functions, products, services and processes. The auditor presents a list of problems (defined as “nonconformities”, “observations” or “opportunities for improvement”) to management. If there are no major nonconformities, the certification body will issue a certificate. Where major nonconformities are identified, the organization will present an improvement plan to the certification body (e.g. corrective action reports showing how the problems will be resolved); once the certification body is satisfied that the organisation has carried out sufficient corrective action, it will issue a certificate. The certificate is limited by a certain scope (e.g. production of golf balls) and will display the addresses to which the certificate refers.

    An ISO 9001 certificate is not a once-and-for-all award, but must be renewed at regular intervals recommended by the certification body, usually once every three years. There are no grades of competence within ISO 9001: either a company is certified (meaning that it is committed to the method and model of quality management described in the standard) or it is not. In this respect, ISO 9001 certification contrasts with measurement-based quality systems such as the Capability Maturity Model.
    ~~~~~~~~~~~~~~~~~~~~
    At the end of the day, I don’t think ISO 9001 counts for much, except more profit-making for those that give the awards/certification. Like most things, they end up meaningless in the end and the right things just need to be in-place once every few years for the certification body to pass you. Presumably, anway.

    In other words, hope you like tungsten!

  2. ronron says:

    that,s why i like old gold coins. the 67, 20 dollar being my favorite.

  3. dk says:

    Counterfeiting is becoming a larger issue. This will increase transaction costs in buying and selling. Obviously, you want to purchase only from reputable dealers. That creates a real problem when we want to sell gold. An individual will never be considered a reputable dealer. Tungsten is a two-edged sword. While it signals a major shortage of gold, it also signals a potential major disruption in the confidence in the gold market.

  4. ronron says:

    what,s going on in lebenon?

  5. Okay … that Canadian Gold may be laced with Tungsten … but Uncle Ben says all Du German Tungsten opp’s I mean Gold stored in the vaults of the NY FED all meet “Good Delivery” standards …. Uncle Ben says there’s absolutely no need to audit Du German Tungsten opp’s I mean Gold, as Uncle Ben’s word is better than Gold!.

  6. wauhoo says:

    Did you notice this?
    “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.”
    Canada has no sovereign gold??? Cross them off your “safe haven” list when the SHTF.

  7. BetterThanNoSN says:

    “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.”

    Sooo, whats to stop the RCM from acquiring said persons actual gold and then ‘breaking’ the bad news that they weren’t real???

  8. General Rasta, SLA says:

    I wonder if Eric Sprott still thinks it’s a good idea to trust the Canadian banking system or the RCM to be the custodians of his PM trusts?

    yeah, me neither.

  9. Nathan el Corochio says:

    What are the odds that tungsten will go up. Dont they use it in lightbulbs and drill bits. Maybe Tungsten is the new silver.

  10. snoop diddy says:

    an ISO auditor would not test the gold but rather the processes used to verify it etc. It doesn’t mean much imo unless the auditor once every ~3 years found some reason to rip them a new asshole and then it would be a month for reply to a major any non-conformances before they then ask more questions and it would be a long process before it actually approached anything criminal unless there was a report to the police or other investigators as nothing to do with ISO9001. If they’re in the tungsten business they would have no trouble covering up any other area which was not conducive to their front as a gold supplier making it more difficult. But it could possibly mean implication of more people under ISO certification imo than a core group.

  11. snoop diddy says:

    unless of course the auditor suspected criminality they would be obliged to report it but lets assume some level of criminal competence by those engaging in the alleged fraud.

  12. Inez Cargill says:

    This is absurd. Why haven’t they checked it before anyway? Customers are lead to believe that they are having quality kind but instead would be very disappointed about this.

  13. Danny Cunnington says:

    Well the Chinese are apparently melting and recasting everything they get from the world into 1 kilo bars with Chinese stamps and serial numbers. They claim this is for standardization. Put another way, the Chinese don’t trust gold bullion from the west. Western vault checks reveal a total absence of these Chinese bars so they are recasting everything and keeping it in China.

    Of course western gold hasn’t been audited or checked for many years. What an incredible coup if it turns out that western gold is missing and what remains is fake. This would be the mother of all scandals and quite impossible to white wash. In a world of failing confidence it would leave China and Asia in general as the sole source of economic legitimacy.

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