The RCMP and Quebec police have broken up a highly sophisticated counterfeit ring that was manufacturing fake loonies and toonies — a first in Canada, officials say.

RCMP Corporal Luc Bessette told CBC that the quality of the counterfeit $1 and $2 coins is astounding.

"The complexity of the operations and the end product that came out of that factory is the first time [we've seen] in Canada," Bessette. "They started from a sheet of metal, and they made the coins from A-Z. The sheets came in, and the coins came out," he explained.

RCMP stumbled on the operation by accident. On Sept. 14,police in Repentigny, a city northeast of Montreal, accompanied Revenue Quebec officials to a metal token manufacturing factory in an industrial park to carry out a search warrant for GST evasion.

When officials entered the factory, located at 119 l'Écuyer, Suite 400, they discovered coin-making equipment, buckets of coins almost ready for circulation,and raw materials. Officials contacted RCMP.

Bessette said he doesn’t know how many of the $1 and $2 coins have made it into circulation, but said the fake money can easily be mistaken for the real thing.

"According to our experts, it would be really hard for a normal person to make the difference between the two, the real ones and the ones made there. The quality was very good," and the counterfeit coins weighed the same as real currency, Bessette said.

It's not yet clear how many of the counterfeit coins are in circulation,how long the factory has been operating or how many coins it could produce.

The factory was registered as a numbered company.

It's the first time police have come across a counterfeit coin ring, Bessette said, and police still have many questions about what motivated its operators.

"The front was kind of normal, and I think that's why it's uncommon," Bessette said. "I think they would have to make many [coins] to make money."

"We can't tell now what kind of metals they were using, or what it was costing them, or how much money they would have made."

Police have arrested one person, who was interrogated and released.RCMP expect to make more arrests inthe coming weeks.