South African Reserve Bank admits Mint made under-spec proof Krugerrands

pmbug

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Further to the media statement issued by the South African Reserve Bank (Bank) on 8 December 2011 regarding technical issues within the operations of the SA Mint Company (SA Mint), investigations into the matter have revealed that some of the proof Krugerrand coins casted between April 2011 and May 2011may not meet all the required quality specifications.

Based on information that there had been fluctuations in assay results in the production process starting from April 2010, a conservative approach was adopted to analyse results from 01 April 2010 until 31 October 2011, the latter date being one on which new quality control measures were introduced. The extended period was adopted merely as a precaution.

It is important to distinguish between bullion Krugerrand coins and proof Krugerrand coins. The SA Mint is involved in the production and distribution of proof Krugerrands, which are targeted at the collectors’ market and are produced in much smaller quantities than bullion Krugerrand coins. During the period 01 April 2010 to 31 October 2011, a number of gold blanks of different sizes were manufactured by the SA Mint. As a further precautionary measure, it was deemed important that an intensive assessment of all Krugerrand proof coins that were still in the stock of our dealer network be undertaken.

The verification process indicated that some coins appeared to be under specification to varying degrees. The SA Mint and the Bank contacted relevant local and international dealers, and also held meetings with dealers to inform them of this possibility. An offer was made that, should any of the dealers have reasonable concerns that some proof Krugerrand coins may not comply with all required quality criteria, they could return such coins to the SA Mint. Arrangements were to be made for the exchange of any such coins for new ones and all related costs would be for the account of the SA Mint.

Concurrent with the investigation into proof Krugerrand coins, the SA Mint investigated the evidential theft of R5 circulation coins. This crime was ostensibly committed by a number of employees who appeared to have acted in collusion with what appears to be a syndicate-style operation that included external parties. Appropriate steps have been taken and all evidence gathered has been handed over to the Police’s Directorate for Priority Crime Investigation (“the Hawks”).
http://www.resbank.co.za/Publicatio...22e-7125-4e55-bb65-56fd3333371e&sarbitem=5019

:paperbag:
 

DCFusor

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Tungsten wouldn't make them underweight.

Now - one would have to bet that somebody did cost out the gold at full weight. If the coins aren't - then there is missing gold or money, and wonder just where that went?

That would be the real story.
 

pmbug

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Well, the press release already mentions a separate investigation which found employees connected to organized crime. Is it so hard to imagine they were skimming the missing gold?
 

DoChenRollingBearing

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Tungsten with a patina of gold would be hard to detect (yes DCFusor, I recognize that they would be very hard to MAKE):

(19.30 - 19.25) / 19.30 = 0.0026 = 0.26% (density difference Au vs. W)

0.26% * 33 grams = 0.085 grams (approx. weight difference in Krugerrands)

My cheapo Chinese weight scale only goes down to 0.1 gram.
 

judeye

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The coins are NOT underweight in any way, shape or form, they are under-spec. They weigh exactly the same as any of the Krugers available.

This is just bad reportage from TimesLive. Now people will just weigh their coins, see the weight is right, and forget about it.

I should know, I have all 6 of those coins in my posession and I was the one who did the initial tests, both Fire and Niton assays.

Here is the correct story as reported by CNBC Africa and Forbes magazine. (still loading)

[ame]http://youtu.be/y9PuUBd8wCY[/ame]
 

ancona

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Thanks for the post judeye. I like to see errors pointed out and corrected. It is an important part of discussions if you ask me.
 

pmbug

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Thanks judeye! My bad on the thread title. I've fixed it now.

Is that you in the video? Beautiful view from the yard/pool!
 

judeye

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Thanks PMB... that is my view.... I'm one lucky chap.

It's not your fault... the TimesLive crew tried to beat CNBC and Forbes and got it screwed up. The Times went with the underweight story and it went viral worldwide.
The in-depth account will be in Forbes May issue I believe. They've been onto this story for a few months now.

Cheers

P
 

pmbug

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Was the Reserve Bank's press release correct about the underspec manufacturing only affecting the proof coins? Were the coins you tested proofs or bullion production?
 

pmbug

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Whoa! In that video, at the 1:48 mark, one of the tests shows 94% silver. That's a long ways off from a simple mistake in my book!
 

judeye

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Whoa! In that video, at the 1:48 mark, one of the tests shows 94% silver. That's a long ways off from a simple mistake in my book!
Oddly enough, silver seems to be problematic with the Niton gun. We have not figured it out yet but the manufacturers are attending to it right now. (It seems to behave badly with shiny silver)
 

gold editor

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One thing puzzles me: judeye has six coins, and the SA Mint admitted to six coins out of some 90 returned. We saw at least two duds in the video in the section with Jaco Le Roux, as well as this coin registering 94% silver - but with the screen resolution it is hard to see whether it is a krugerrand. So how many duds are being admitted? It occurs to me that these may be dud forgeries, i.e. someone has contrived to steal stamps in order to forge krugerrands, and slipped up on the composition of metals on these few coins. A skimming operation at the mint seems unlikely, though not impossible of course.
 

pmbug

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Not sure how it works with the SA Mint, but generally proof coins are sold directly to the public - not through distributors.
 

white&yellow999

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Thanks for the vid... I guess it goes without saying but I will say it, I'm going to steer clear of any 2011 Krugerrands... although they did say the SA Mint would exchange any that prove faulty so thats fair I guess.
 

benjamen

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Interesting, a 21.22 karat coin that is supposed to be 22 karat. Does anyone know the official tolerance for deviation is on Krugerrands?
 

pmbug

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judeye:

Was the Reserve Bank's press release correct about the underspec manufacturing only affecting the proof coins? Were the coins you tested proofs or bullion production?
 
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