Gabriel Resources Ltd.
TSX : GBU
December 04, 2007 09:00 ET
Gabriel Announces Plans to Scale Back Activities at Rosia Montana
TORONTO, ONTARIO--(Marketwire - Dec. 4, 2007) - Gabriel Resources Ltd. (TSX:GBU) -
As mentioned in its third quarter press release of November 6, 2007, the Company - through its 80% interest in its subsidiary Rosia Montana Gold Corporation (RMGC) - 19% owned by the Government of Romania - has been assessing all current activities. In light of the suspension of the EIA review process, the Company today announced plans to scale back activities.
To date, the company has spent over US$300 million on the development of the Rosia Montana project, making a significant contribution to the Romanian economy, identifying and defining the resource, designing a model mine, and conducting activities ranging from archaeological research, permitting, engineering, to purchasing of homes and ordering long-lead-time equipment. "We are a financially strong and secure company," states Gabriel CFO Richard Young, "and we are prepared to ride this out until the permitting process recommences. We are willing to take the necessary measures, however difficult they may be, to ensure the Company's long-term viability to permit and build a model mine at Rosia Montana. Our human and financial resources will be allocated to those areas that help us obtain our permits". The Company has filed a lawsuit against the Ministry of Environment with the Bucharest Court of Appeal against the Ministry's decision to suspend the EIA review process. "There is no basis in law for any of these actions," Young adds. "We will challenge in court any actions by Government officials that do not uphold the law."
"Most disappointing of all," says Gabriel Resources CEO Alan Hill, "is that we have reached the point where we can no longer employ people when we do not have work for them to do. As a result, we must let a lot of our staff go, as most of our activities have been stopped with the suspension of the EIA review process. Our effort and resources will be focused on getting the EIA back on track and getting this project permitted."
"Unfortunately, the company also has no choice but to suspend its land acquisition program" Hill continued. To date, 73% of the properties within the project footprint have been bought on a 'willing buyer, willing seller' basis, in compliance with World Bank resettlement guidelines. The program will be suspended in February 2008, with the exact date decided in consultation with affected stakeholders.
Hill confirmed today that little further work on the development of the mine can be done until the Ministry of Environment reconvenes the Technical Advisory Committee (TAC) to complete the review of the project EIA. "There is no point in continuing with engineering, procurement of long-lead-time equipment, and full staffing given that most of the permitting activities have been stopped," he said.
As a result, the company initiated today the legal procedure concerning staff retrenchment, by notifying the local union and concerned authorities about its intention to retrench a significant proportion of its staff. Overall, it is expected that approximately two-thirds of RMGC's 325 full-time jobs will be cut.
One of the largest programs that will be suspended is the company's rescue archaeological program. Assisted by as many as 360 local residents of Rosia Montana during the active field phase each summer, staff were also in the process of preserving the 41 designated historic structures in the town, in an effort that has been acknowledged by the Council of Europe as an "exemplary project." The actual renovation had, in fact, started, and the first restored historic structure will be inaugurated in early 2008.
The Company will continue to operate its educational and youth partnership programs, which have already assisted about 300 children and 40 teachers in the Rosia village and surrounding area. The Christmas children's gift-giving program will also continue in Rosia Montana, Abrud, Campeni and Bucium.
The Good Neighbour program, which provides food, basic services and emergency help to the elderly and disadvantaged, will also continue. Said Hill: "Our Good Neighbour program ensures that all residents of Rosia Montana have adequate food and wood for heating their homes, that the elderly and isolated have transportation to doctors when needed, and have help with basic functions - like shoveling snow in the winter and bringing in wood to keep the fire fed."
"The Rosia Montana gold project is a Romanian project that has been designed to meet all Romanian and EU laws, without exceptions or exemptions," said Gabriel CEO Alan Hill. "Gabriel Resources is strongly committed to continue supporting the project and to ensure that the benefits it will bring to Romania and its people are realized."
Gabriel is a Canadian based resource company committed to responsible mining and sustainable development in the communities in which it operates. Gabriel is currently engaged in the exploration and development of mineral properties in Romania and is presently engaged in the development of its 80% owned Rosia Montana gold project.