Gabriel Resources has $175 million war chest for ancient Roman gold mine

More recently the site was a Romanian state-owned open pit operation (pictured) and Gabriel Resources has set aside $35 million for what it calls “rescue archaeology” .

The company needs several more endorsements, zoning permissions and reviews before it could start mining what is believed to be one of the richest gold and silver deposits in Europe.

Gabriel Resources listed in Toronto lost more than 6% in early afternoon trade on Wednesday to trade at $7.20, more than erasing its gains since the archaeological permit was granted. The little-traded company has a market capitalization of $2.5 billion and has been listed since 2000.

Gabriel Resources said Rosia Montana has gone through over 40 years of state-owned underground and open-pit mining. These historical activities, conducted with few environmental controls, have created a network of more than 140 kilometres of underground workings, and have become an extensive regional source of acid rock drainage (acidic water with heavy metal content).

Highlights of Wednesday’s statement:

Permitting for the Rosia Montana gold and silver mining project (“Project”) remains the core focus of the business. The following recent progress has been made:

Ongoing engagement with the Technical Analysis Committee (“TAC”) through its review of the Rosia Montana Environmental Impact Assessment (“EIA”).

Award of the Archaeological Discharge Permit for the Carnic open pit (“ADC”) in July 2011.

The amended Zonal Urbanization Plan for the Industrial Area of Rosia Montana (“Amended PUZ”) is progressing with six further endorsements granted in the quarter and 19 of the 22 required endorsements having now been received.

The Zonal Urbanization Plan for the Protected Area of the Historical Centre of Rosia Montana (“PUZ Protected Area”) is ongoing, with 10 of the 12 required endorsements having now been received.

Gabriel is maintaining its commitment to the Project and its cultural heritage through its ongoing restoration of the historical town centre of Rosia Montana and its undertaking to provide co-operation and future funding at a regional and national level to protect and restore Romanian cultural heritage.

$176.4 million of cash and short-term investments held at June 30, 2011 following the receipt of proceeds from a warrant exercise.

In July 2011 the Company increased its ownership interest in the Project to 80.69% through the acquisition of a minority shareholding for a net cash consideration of US$1.15 million. Minvest S.A., a Romanian state-owned mining company, holds the remaining 19.31% interest.

Jonathan Henry, Gabriel’s President and Chief Executive Officer, stated:

“We continue to make good progress on the permitting of the Rosia Montana gold and silver mining project. The recent granting of the archaeological discharge permit for the Carnic open pit represents an extremely important milestone as we continue to maintain a pro-active dialogue with all the stakeholders in addressing the key issues. The Company’s public information campaign continues to focus on the significant employment opportunities as well as the far reaching economic benefits that will arise from the Project.”

For the complete press release click here.