Gabriel scales back at Rosia Montana

The fallout from the Romanian government’s suspension of the environmental impact assessment for Gabriel Resources (GBU-T) Rosia Montana project is beginning to be felt.

The company, which has an 80% interest in the project (the Romanian government holds a 19% stake), says it will slash jobs and stop acquiring land at Europe’s largest undeveloped gold project.

Despite Gabriel spending over US$300 million on the development of the project, and complying with all EU best corporate practices, the Minister of the Environment decided to suspend the EIA process.

Saying it can’t employ people when there is nothing to do, Gabriel will cut roughly two-thirds of the 325 full-time jobs at the project.

Gabriel’s land acquisition program has also been suspended. So far the company has managed to buy 73% of the properties within the project area.

Despite the cutbacks Gabriel says it is still financial strong and will ride out the current situation.

“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,” says Richard Young, Gabriel’s CFO in a prepared statement. “Our human and financial resources will be allocated to those areas that help us obtain our permits.”

The suspension of the EIA process led Gabriel to file a lawsuit against the Ministry of Environment with the Bucharest Court of Appeal.

“There is no basis in law for any of these actions,” Young says. “We will challenge in court any actions by government officials that do not uphold the law.”

For the EIA process to go forward the Ministry of Environment must reconvene the Technical Advisory Committee (TAC) to complete the review of the project EIA.

Also being suspended is Gabriel’s rescue archaeological program which employed up to 360 locals during the summer. The program had a mandate to preserve the 41 designated historic structures in the town.

Those opposed to the mine argue that it would destroy ancient Roman mine sites and harm the environment.

Gabriel says it will continue with its educational and youth partnership programs.

In Toronto on Dec. 4, Gabriel’s shares gained 1 to $1.41 on roughly 9.2 million shares traded. The company’s shares have traded between $5.70 and $1.27 over the last year. It has roughly 255 million shares outstanding.