Gabriel scraps $28m bought-deal financing

Gabriel Resources (GBU-T) has scrapped plans for a bought-deal offering of 10 million shares priced at $2.80 apiece.

The move follows reports that Romania’s prime minister dismissed a positive government report on Gabriel’s 80%-owned Rosia Montana gold project as “ambiguous and not convincing.”

Gabriel says it decided to cancel the offering in order to give investors time to digest the news.

A parliamentary commission’s report said the mine would benefit Romania if promised standards were maintained. Nonetheless, the prime minister has asked the environmental and interior ministers to investigate the project’s environmental impact.

Says Gabriel CEO Oyvind Hushovd: “Gabriel believes the development of the project is good for Romania and its economy, and Gabriel’s development plans for the project are environmentally sound. The company is preparing its environmental impact assessment in accordance with all Romanian requirements, as well as all European and international environmental standards.”

The report will be put before the parliament in September.

Gabriel’s plans at Rosia Montana call for mining via four pits at a throughput rate of 13.3 million tonnes per year to produce an average of 533,000 oz. gold annually over 16.4 years. Production would average 679,000 oz. gold annually during the first five years, when head grades would be higher (T.N.M., May 5-11/03).

The operation will employ a cyanide-destruction circuit using the SO2/Air process to ensure environmental protection.

Meanwhile, Gabriel says it is filing a preliminary prospectus for an offering of around 10 million shares on a marketed basis, with RBC Capital Markets acting as sole manager. RBC was also the underwriter for the cancelled offering.

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