Royal Canadian Mint Struggles To Make Money:

I don't know what the real reason they are losing money, but the article concentrated their reporting on the following things:

1) "Formerly successful lines of business" - it does not specify what those lines were or why they shut them down (unless they are talking about the face value coins).

2) Face value coins - poor sales and high returns. "...the market price of silver was significantly less than the face value of these coins", so they stopped making them. (Maybe the fact that you couldn't spend them at face value and banks didn't want them had something to do with that.)

3) They wrote off $65.5 million against a $62 million expense for Their Winnipeg plant's "beefing up". I'm guessing that the elimination of the cent had something to do with the lack of need for the increased capacity.

4) Hospitality & Travel expenses were poorly managed to the point that they let 11 Mint Employees travel to Mexico. The beef seems to be about the undisclosed cost of post-conference expenditures. The entire trip cost $1,450 a person (or about $16,000). $16,000 is a tiny expense in relation to their multi-billion dollar revenue.

5) $6.5 million for office renovations.

6) Last but not least...the government made the mint artificially stop reporting any revenue for the production of circulation coins. Oh, they still have to make them, the mint just can't count any profit they make. (This order has since been rescinded).

Thanks DBM. That's as strong a critique of RCM that one might expect, coming from the CBC.

If this quote is correct, the intentional distortion of facts is an example of what's gone wrong with RCM. It was obvious through their aggressive advertising that the face value program targeted unsophisticated buyers who though they were buying X worth of silver. That RCM now uses silver price as the reason the program became unpopular is almost hilarious.

"At Oct. 1, 2016, the market price of silver was significantly less than the face value of these coins," the mint said in a release Friday, explaining its weak third-quarter sales. "Effective Jan. 1, 2017, the mint is no longer selling face value coins."
http://www.cbc.ca/news/politics/roy...on-1.3998738

CBC's article will get a lot more attention than this --

Strong foreign circulation coin and bullion sales help sustain overall Mint profitability in 3rd quarter of 2016
http://finance.yahoo.com/news/stron...0000220.html

We need to raise taxes and bail them out so they can make even more coins!

Sure why not. After all, to the 3rd q, RCM only managed to pay their sole shareholder (Govt of Canada) a paltry 31 million in dividends.

I really enjoyed the common sense comments already posted.

As with everything else nowadays, businesses have lost the tried and true formula for prosperity. Its no longer about making a quality product and offering at a less expensive price so volume produced pofit. Nowadays its all about soaking the masses for everything they can, spending money not already in the pocket, and then whining b/c they don't have enough profit.

The RCM seems to be following the business model that has driven the US away from profitability in the last 10 years or so. And I also note, just like our corrupt media, they blame it on people who would rather balance a budget than continually spend, spend, spend. Will people nowadays never learn?

Reading the 3q financial statement - my impression, not saying I'm right - aside from other examples of wasteful spending, is that in the past RCM allocated allowances for redeemed face value coins on the same percentage basis as redemptions for all other NCLT. Now is that foolish or what. Face value redemptions, no expiry date of course would lead to much higher redemptions than other NCLT that fall under RCMs satisfaction guarantee. It took RCM four years or more to figure that out?

If this were a publicly traded company, shareholders would be absolutely outraged at the utter level of incompetence if not outright deception.

But because RCM is a Cdn government entity, its what we've come to expect.

They need to figure out some way to both appeal to those who value coins for their intrinsic collectibility while boosting their profit, hence ultimate sustainability as a source of coins for collectors of coins. Just puzzlin' the ol' puzzler. But in reflecting on this article (thanks for posting DBM) it occurs to me that nclt coins would be the most likely source of profitibility going foward as face value of the coins is, more so than other types, like clt, seperate from the metallic content. Is that right?