Gabriel stumbles on Romanian goldmine project

Initiatives

Canadian mining company Gabriel has been forced to scale back a provisional Romanian goldmine project, as it was unable to ascertain the necessary permits in time, the company announced in a press release.

As mentioned in its Q3 press release of November 6, 2007, the Company - through its 80% interest in its subsidiary Rosia Montana Gold Corporation (RMGC) - 19% owned by the Government of Romania - has been assessing all current activities. In light of the suspension of the central review process, the company announced plans to scale back activities.

To date, the company has spent over $300 million on the development of the Rosia Montana project, identifying and defining the resource, designing a model mine, and conducting activities ranging from archaeological research, permitting, engineering, to purchasing of homes and ordering long-lead-time equipment. Gabriel CFO Richard Young stated his company has the necessary resources and determination to carry through its Romanian endeavor. The company has filed a lawsuit against the Ministry of Environment with the Bucharest Court of Appeal against the Ministry’s decision to suspend the review process. There is no basis in law for any of these actions,” Young adds.

„Most disappointing of all,” says Gabriel Resources CEO Alan Hill, „is that we must let a lot of our staff go, as most of our activities have been stopped with the suspension of the EIA review process. „Unfortunately, the company also has no choice but to suspend its land acquisition program” Hill continued. To date, 73% of the properties within the project footprint have been bought on a „willing buyer, willing seller basis, in compliance with World Bank resettlement guidelines. The program will be suspended in February 2008, with the exact date decided in consultation with affected stakeholders.

Hill confirmed that little further work on the development of the mine can be done until the Ministry of Environment reconvenes the Technical Advisory Committee (TAC) to complete the review of the project EIA. As a result, the company initiated the legal procedure concerning staff retrenchment, by notifying the local union and concerned authorities about its intention to retrench a significant proportion of its staff. Overall, it is expected that approximately two-thirds of RMGC's 325 full-time jobs will be cut. (miningmx)

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