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Gabriel Resources (TSE:GBU) is on damage control after the parliamentary commission shot down its proposed massive gold mine in Rosia Montana, Romania.
The company’s share price dropped by 11% after the announcement on Monday, but has regained those losses almost entirely after reassuring share holders that all is not lost.
In a statement issued Tuesday, Gabriel said that the parliamentary commission tasked with reviewing the project did not reject the plans. Rather, the commission found that existing mining laws are not broad enough to make decisions on gold and silver mines.
Quoting the commission’s report, Gabriel highlighted the finding that “existing mining law is not sufficient to legislate for the scale and complexity of the Project.”
The commission proposed the rejection the draft law which would have enabled the mine, and instead recommended the creation of a “new legal framework applicable to gold and silver mining projects.”
Gabriel says that it “welcomes any initiative that accelerates the development of an enhanced mining law” and legislation that would allow for a “strong mining industry in Romania.”
“The report of the Special Committee is a first step in defining the next phase of developing Rosia Montana,” CEO Jonathan Henry said in a statement. “Gabriel will now assess the impact of the Report and we look forward to participating in the creation of a modern mining industry in Romania. Our goal remains to bring the Project through to a reality that will significantly benefit Romania and the people of Rosia Montana.”
The company has also threatened to sue the Romanian government. In September, Henry said they had a “very robust case” for up to $4 billion in claims.
But even in the absence of a flat-out rejection, the Rosia Montana gold mine is far from production. According to the Globe and Mail, Gabriel has spent more than half a billion dollars on the project over the past 14 years, and the commission’s rejection will delay approval by several months at best.
Meanwhile, the CEO of Rosia Montana Gold Corporation – Gabriel’s 80%-owned Romanian subsidiary – told AFP reporters that the suggested new legal framework would help the project move forward and “start production in the first half of 2014.”
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7 Comments
somebody
Bring on the new legislation. Let’s have specific provisions
to prevent the sorts of environmentally reckless practises that were used
during socialist times to build some appalling mines in that part of the world.
Under the current legislation it is still a real possibility that these same
mistakes can be repeated, this time on a much larger scale.
As an industry we have failed to gain the trust of the general
public in this matter, and have nobody to blame but ourselves. Maybe if we are
legislated into obedience things might actually change for the better. Bring it
on.
Catalin Hosu
It is clear from the Special Commission’s ruling that this is a rejection of the Draft Law was not a rejection of the Roşia Montană project. Their conclusions suggest they recognise the huge importance of mining in Romania. We now have the potential for a new legislative framework be put in place for the implementation of large scale mining projects, like Roşia Montană, across the country.
http://www.rosiamontananews.com/special-commission-recognises-importance-of-mining-in-romania/618
Alvin
They will not sue anybody because they do not have a case let alone a ‘robust case’ . It is just another corporate big fat lie .
Everybody can read about their dodgy agreements with the government and other institutions and they needeed a special law to exempt them from environment and many other regulations and laws because they could not fulfill the legal requirements . There are many final decisions ruled by courts against them so it is clear how well they can comply with all the legal requirements.
If you will (and want to ) properly analyse this company (and projects) You will surely see that it is just a bubble that will explode soon in the ( remaining) investor’s pockets … I can only hope that you aro not one of them 🙂
frankinca
Even at an older age, I think the time spent in preparation is the basis of a better project. Not knowing where all the money went means salaries for PR and the like and not engineering and the study of local economic realities and the idea of fulfilling them with long term mining operation.
Leonid Budge
$457 million in taxes
$590 million in royalties
$1.246 billion to the State as dividends
$3,257 million in wages, salaries, fuel, consumbale, mostly spent in Romania
$2,101 million in capital
Gabriel get to keep 26% of the revenue
Leonid Budge
Romania desperately needs this development. The average wages per day
is less than most in Canada spend on a good bottle of wine. romania is
the poorest country in Europe. Romania needs money for health care and
money for education. What Romania DOES NOT need is more poorly paid
jobs picking mushroom and seasonal berries. Romania need well paid jobs
that make a contrinution to romanian society it needs Rosia Montana and
it needs it today.
Leonid Budge
Gabriel Resources simply needs to be persistent. the Government of
Romania knows that it must develop Rosia Montana or close the door on
massive opportunity. The direct and indirect contributions to the
romanian Economy are likely more than $30 billion dollars. Romania can
not walk away from an environmentally good project – a project which
cleans up a mess from mining dating back to Roman times.
Be patient Gabriel you will succeed and the people of Romania will be forever grateful for …