Gabriel Resources Falls Over Romanian Gold Mine Protests
After much unrest in Romania involving some of the biggest protests since the end of communism, a specially created Romanian commission overwhelmingly rejected Gabriel Resources Ltd.
The company's stock fell almost 9% on Monday as the news began filtering through. The general feeling is, despite an optimistic statement from the company, that this could be the end of the project.
Romanian government backtracks in the face of public opinion
Just moments before the commission returned its emphatic decision, Romanian president Victor Ponta said that government had changed its mind on granting permission for the mine , after 15,000 took to the streets in protest against the project. The ruling body has also been under pressure from environmental groups, farmers, celebrities such as Vanessa Redgrave, and business magnate George Soros.
The commission said that Romania stood to earn too little from the deal and recommended that the Canadian company’s license be declassified and made public .
Gabriel Resources still hopeful
Nevertheless, Gabriel Resources Ltd.
“The report of the special committee is a first step in defining the next phase of developing Rosia Montana. 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.”
ValueWalk asked if the project could realistically proceed given this week's developments:
“The Romanian government has said it intends to introduce a general gold and silver mining bill, which would leave the door open for the Rosia Montana? project. This is a legislation issue. What they have said is that a project as complex as this project requires more general legislation.”
The long-running debacle over Rosia Montana? has lasted some 14 years and cost the firm in the region of $550 million. Indeed, back in September, CEO, Jonathan Henry told Bloomberg thataGabriel Resources Ltd.
“We have a very, very robust case, and we believe we have claims up to $4 billion that we can send to the Romanian state.”
Is that still an option?
“We will keep all our options open, but we remain committed to working with Romanian government on a project which is key to the revival of Romania's mining industry, and designed to the highest environmental, and safety standards.”