Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Gabriel Resources (TSX-V:GBU), the miner that sued Romania for $4.4 billion in alleged losses related to its halted Rosia Montana gold and silver project, said Tuesday its top executive, Jonathan Henry, was leaving the company to “pursue other opportunities.”
While Henry has resigned from his position as President, Chief Executive Officer and Director, he’ll continue to act as a consultant, Gabriel Resources said in the statement.
Non-Executive Chairman of the Board, Keith Hulley, will assume the position of interim CEO until a permanent replacement is found, the company said.
Gabriel continues to seek $4.4bn in compensation for alleged losses related to its Rosia Montana gold and silver project, which Romania refused to approve following relentless protests.
Since Gabriel is principally involved in pursuing its arbitration claims against Romania, Henry told Gabriel Resources he would like to apply his knowledge and experience to other interests and challenges, the statement said.
The miner’s suit against Romania suffered a fresh setback last month as the country told international arbitrators they weren’t entitled to hear Gabriel’s claim. Before that, the company had said it expected the hearing on the merits of its suit, filed last year at a World Bank’s tribunal, to take place in December 2019.
After spending about 15 years and $700 million trying to build its flagship $2bn Rosia Montana mine, the Toronto-listed company locked-horns with the government of the European country, which yielded to environmentalists’ pressure and halted the project on concerns over the use of cyanide in the extraction process.
Opponents to the project also claimed that Rosia Montana Gold Corporation (RMGC), majority owned by Gabriel Resources, incurred in money laundering and tax evasion.
Bucharest officially withdrew its support for the project in 2014, after revoking a bill that would have allowed the mine to go ahead.
Gabriel tried reaching an “amicable solution” with the Central European nation, but the lack of answers pushed it to seek international arbitration.
The open pit operation would have been Europe’s largest gold mine and, according to the company, it would have injected up to $24 billion into Romania’s economy.
The damage claim represents roughly 2% of the nation’s gross domestic product of about $220 billion (187.5 billion Euros) recorded last year, based on data from its National Institute of Statistics (INS).
Earlier this month, UNESCO postponed a session to evaluate Rosia Montana nomination as World Heritage site, following Romania’s pressure to revoke the application submitted by the country’s former government, as it’s believed the listing would benefit Gabriel Resources.
