Thieves might have smuggled mint gold in acid, experts say

OTTAWA -- Was $15-million worth of gold stolen from the Royal Canadian Mint by dissolving it in acid, rendering it invisible to metal detectors?

Two gold-refining industry sources say gold chloride dissolved in an acid solution can be unrecognizable to metal detectors, such as those guarding the mint's high-security Sussex Drive refinery in Ottawa -- and the method might explain the recently announced disappearance of more than half a metric ton of gold from the mint's inventory.

"It could be taken out in that form . . . in a liquid chemical form," one U.S. refining executive said.

A similar method was used to hide two Nobel laureates' gold medals from the Nazis when Germany occupied Denmark in 1940.

The mint dissolves gold in hydrochloric acid as part of the process to refine the precious metal to 99.99 and 99.999% purity, the finest gold in the world. The process electro-chemically disintegrates the metal into imperceptible particles of gold chloride suspended in the black-coloured acid solution.

"Being a high-security facility, the mint does not discuss its various security procedures and protocols," Christine Aquino, mint spokeswoman, said. "But I can confirm that we have methods to detect such a liquid."

The alternative -- spiriting even minuscule quantities of solid gold from one of Ottawa's most secure buildings -- seems all but impossible, save for a Hollywood-style heist plot, which seems almost as improbable.

"It would be highly unlikely that it would easily get out of the mint" in a solid form, the U.S. industry source said.

Stone-faced armed guards in RCMP-look-alike uniforms staff the high-security area containing the gold and silver refineries and coin-production shops. Workers wear metal-free uniforms. Any metal in their bodies, from dental work to surgical implants, is noted in a computer and electronically compared every time they arrive and leave.

To lessen the likelihood of an inside job on the shipping/receiving dock, guards are assigned that duty on a random basis. What's more, only certain armoured-car companies are permitted on the property, and drivers must match photographs on file with mint security before heading off with bullion and coins.

Within the gold refinery, thousands of ounces are "in process" at any one time, amounting to several million ounces annually. Exacting efforts are made to retrieve every speck. Everything from the ductwork and crucibles used to handle molten gold, to rags and tissues that come in contact with the metal, are routinely scoured and processed for trace amounts.

And everywhere, unblinking security cameras watch and record every move in the multibillion-dollar enterprise.

So how then, did the mint lose track of 17,514 ounces of gold, and a smaller but undisclosed amount of silver and other precious metals?

That's the equivalent of almost 44,400-ounce gold bars, worth about $15.3-million. It apparently vanished between April and October, 2008, around the same time a new computerized inventory system was being implemented.

Almost 16,500 of the ounces disappeared from the gold refinery, a couple of orders of magnitude greater than the gold typically lost during the refining process.

An eight-month hunt by mint staff and external auditors ruled out recent accounting, bookkeeping and other internal errors. They're continuing to hope, and investigate the possibility, that production miscalculations or accounting errors before April, 2008 will explain the puzzle.

But with the most obvious possible explanations now discounted, speculation grows about a massive and clever theft.

The Deloitte auditors, however, were not asked to probe that scenario. Instead, the mint has asked the RCMP to investigate. But for unexplained reasons, the Mounties' commercial-crime section in Ottawa continues to review the request -- the federal government ordered the mint to call in police -- and has yet to open a criminal investigation.

With the mint also planning to file an insurance claim for the missing fortune, it's likely its insurance carriers would first dispatch their own forensic accountants and other experts to investigate before cutting a $15.3-million cheque.

The Nobel Foundation website details how prize medals belonging to German physicists Max von Laue (1914) and James Franck (1925) were hidden from the Nazis at the Institute of Theoretical Physics in Copenhagen during the Second World War by dissolving them in aqua regia. After the war, the gold was recovered and reconstituted, and the Nobel Foundation presented the men with new Nobel medals.

In the mint case, could the acid solution be somehow siphoned off and taken from the mint unnoticed, and the gold reconstituted at another location?

The electrolysis room is about two metres below grade. High windows facing Sussex Drive are sealed. There are no floor drains. And, as always, a security camera stares down from the ceiling.

If that's not daunting enough, there's the math of gold electrolysis: each litre of hydrochloric acid contains about three ounces of gold. Based on the 17,500 ounces reported missing, it would take 25 working years to steal one litre a day, hidden in a bottle of some sort.

A more plausible alternative would be to sneak a few far larger quantities out, presumably in metal or plastic drums from the shipping area and -- somehow -- cover up the thefts by replacing the gold anodes and acid from other parts of the refinery.

The mystery continues.