El Salvador lawmakers overturn mining ban Bukele called absurd
El Salvador became the first country in the world to ban all forms of metals mining in 2017.
Shares of Canada’s Gabriel Resources have climbed 16% in the week since plans by its 80%-owned Rosia Montana Gold Corp to build a massive gold mine in Transylvania received public backing from the Romanian president.
Gabriel first obtained the concession in 1999 and has already spent $500 million advancing the project and has another $175 million left, but needs several more environmental approvals to establish an open-cast mine (pictured) which once in production will be Europe’s largest producing 500,000oz/year.
Gabriel Resources (TSE:GBU) was trading lower on a generally positive day on the markets on Wednesday, but has added a net 16.3% on the Toronto bourse over the last five trading days, bringing its market value to $2.74 billion. If Rosia Montana should go ahead, analysts say the company would become a takeover target for larger players with more financial muscle – the mine would take in excess of $1 billion to build. Romania is also looking to renegotiate its profit-sharing arrangement with Gabriel.
Three other Canadian companies – Valhalla Resources, Carpathian Gold and European Goldfields – are active in Transylvania. The world’s largest gold miner Barrick Gold Corp has a 9% stake in Carpathian it picked up in July and has an exploration deal with Valhalla.
Bloomberg reports Romania’s Environment Minister last week ordered Gabriel to lower its proposed cyanide level in a tailing pond to below half of the European Union’s maximum allowed level and set aside $160 million in environmental guarantees. Gabriel has set aside $35 million for what it calls “rescue archaeology” at the site that dates back to the first century.
The Globe and Mail reports Gabriel Resources has had no fewer than six CEOs who had tried to get the project off the ground, and that boss No. 7, Jonathan Henry, believes he will be the one to break the extraordinary run of bad luck and bad strategy: ““If the Romanian government did not want this project, we’d know by now,” Henry said in a recent interview.
UPI.com quotes President Traian Basescu: “I think the Rosia Montana project must be made. Romania needs it, on condition that the terms relating the sharing of the benefits from the operation of the gold and silver reserves of Rosia Montana be renegotiated.”
