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Rome – Gabriel Resources Ltd.’s 15-year effort to develop Europe’s biggest gold mine suffered yet another setback when a Romanian parliamentary commission overwhelmingly rejected a draft law that, if passed, would have allowed construction of the $1-billion (U.S.) project.
But Toronto-listed Gabriel said the rejection of the draft bill does not mean that the proposed Rosia Montana mine in Transylvania is dead.
A spokesman noted that the draft law was turned down because Romania wants broader legislation to deal with all gold and silver mines, not just the Rosia Montana project. The draft bill dealt only with Rosia Montana.
“The commission believes the bill under consideration does not entirely meet all the complex requirements on the conduct of business in mineral resources exploitation in Romania and therefore proposes its rejection,” Attila Korody, one of the 19 lawmakers on the commission, told Reuters Monday evening.
Gabriel chief executive Jonathan Henry, who is based in London, is to issue a statement by Tuesday that will say the company would welcome a legislative framework that would open up Romania to gold and silver mining.
Gabriel shares fell in Toronto trading Monday, but not to the point that suggests investors have given up all hope. The shares fell about 11 per cent, to 82 cents (Canadian), giving the company a market value of $353-million. In late 2010 and early 2011, when it appeared the Rosia Montana mine would go ahead, the shares traded as high as $8.
Still, the rejection of the draft mining law will likely delay approval for the project by several months or much longer. Garbriel’s Rosia Montana mine has been story of endless false starts and dashed hopes. It has spent $550-million (U.S.) in project development and legal fees since the mid-1990s with nothing to show for it.
The Rosia Montana project has been held up by well-organized and well-funded protesters, ranging from local farmers who do not want their properties seized to make way for the enormous mine, to billionaires such as George Soros and celebrities such as Vanessa Redgrave, for about 15 years. Gabriel has gone through six CEOs since the company’s launch, each of whom was convinced he could make a breakthrough.
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