Gabriel postpones equity offering

Vancouver — A $10-million bridge financing has paved the way for Gabriel Resources (GBU-T) to postpone a planned equity financing until after a final feasibility study is complete on the company’s Rosia Montana gold project in Romania.

The company has inked an agreement in principle with Resource Capital Fund II for the financing facility, which will be used for general corporate purposes. The terms and conditions have not been finalized. Gabriel says a substantial portion will be converted into equity.

With its share price trading around $3.75, Gabriel has elected to delay a best-effort $10-million equity financing, which was announced last month. The junior was attempting to sell 4 million shares at a minimum price of $4.50 each. Gabriel expects to re-open the equity offering when GRD Minproc completes the feasibility study.

Rosia Montana encompasses the same ground worked by the Romans almost 2,000 years ago, by local miners in the medieval period, by the Austro-Hungarians before the First World War and by the communist regime in the second half of the past century.

The district reached peak production in the late 1800s, resulting in the development of several hundred kilometres of underground workings. Production fell dramatically in the latter years of the communist regime.

The last operating mine at Rosia Montana eked out a mere 12,000 oz. annually. This was due to a variety of problems that are typical of state-owned mines, such as poor grade control, high dilution, inefficient mining techniques and low recoveries.

By mid-July, Gabriel expects to have completed a feasibility study for a large open-pit operation. The company is confident that the study will confirm a major, world-class gold-silver deposit.

At last report, the project contained an overall resource of 344 million tonnes grading 1.3 grams gold per tonne, or about 14.3 million oz. gold and 67 million oz. silver. The bulk of this resource is in two main deposits — Cetate and Cirnic.