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By Bret Evans
In the last week of March, the Royal Canadian Mint (RCM) released its much-awaited 2008 annual report.
Delayed by almost one full year, the report was held up due to delays in reconciling a $15-million gap in gold inventory at the Mint. The report was actually finalized in January and turned over to the government, but could not be released until tabled in the House of Commons.
Some information had already leaked out, so collectors knew that the report would show big profit, and huge bullion sales.
"Every business line surpassed its annual targets," Master of the Mint Ian Bennett wrote in his comments. "To keep pace, we needed to increase our staffing level, and by year-end had reached the highest number of employees in our history: 865."
Total sales for the year was $1.4 billion, largely driven by a red-hot bullion market.
The Crown corporation showed a 266 per cent increase in bullion and refinery revenues, to $1.04 billion from $283.9 million in 2007.
The demand placed "additional stress on our operations," creating "significant inventory reconciliation challenges," the report said.
The Mint produced and sold 896,701 ounces of gold bullion in 2008, a 222 per cent increase from 278,616 ounces in 2007. Sales of silver coins were also up, from 3.5 million ounces in 2007 to 8.8 million ounces in 2008.
The RCM wasn't the only mint to be scrambling for precious metal. During much of 2008, the United States Mint was struggling to keep up with demand for silver coins.
The Mint reported that 2008 was the second consecutive record year for profitability, with $55.3 million in income before tax, compared with $23.8 million in 2007. The 2007 figure has been adjusted by the reduction of $6.9 million for inventory errors, and the 2008 figure included a write-off of $3 million for gold sold for below melt value to a U.S. refiner.
The Mint produced nearly two billion circulating Canadian coins, generating $186.5 million in revenue and $36.4 million in seigniorage for the Government of Canada.
Numismatic revenue, which includes the extensive Olympic program, went up in 2008 to $67.56 million, a 19.9 per cent increase. Within that division, the sale of giftables, again including many Olympic products, increased 29.7 per cent to $4.8 million.
In 2008, the Mint struck 1.7 billion coins for 16 countries, compared to 2.2 billion coins for 12 countries in 2007. Revenue from foreign coin orders dropped 14.2 per cent to $98.7 million. However, the report said that since 12 countries chose to order plated coins, the operating margins for the Mint were higher.
One of the key business areas for the RCM is e-commerce.
The Mint's web traffic increased by 14 per cent in 2008, online orders increased 45 per cent, and the value of online sales went up 31 per cent.
A number of capital improvements took place in 2008.
The Mint installed a new high-speed blanking press and seven new coin presses in Winnipeg. The wrap-and-roll operation at the plant also completed its first year of operation.
The production of circulating coloured coins went international with an order from Papua New Guinea for 50-toea coins. The order was produced using a new robotic coin-orienting system that went into operation in 2008.
April 27 to May 10, 2010 issue of Canadian Coin News
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