Rosia Montana EIA received (March 30, 2006)

Gabriel Resources (GBU-T, GBRRF-O) has taken delivery of an independently prepared environmental impact assessment (EIA) of its 80%-owned Rosia Montana gold project in Transylvania, Romania.

The 10-chapter, 5,000-page document covers all aspects of the project from construction through operations and closure and reclamation. The EIA is the first in Romania following the European Union directive on the management of mine waste from extractive industries.

“This is a critical milestone in the process of developing Rosia Montana,” said Gabriel CEO Alan Hill in a prepared statement. Gabriel said that while its preparation took a few more weeks than planned, the result is a stronger oevrall product.

Gabriel says its next task is to communicate the development of Rosia Montana to Romanian authorities and to the Romanian public. To do so, the company has launched a broad-based media and communications campaign.

Pending translation of the full document into English, Romanian and Hungarian, Gabriel plans to submit it to regulators in April. Thereafter, the document will be open to a period of public consultation.

A recently updated feasibility study of Rosia Montana envisions an open-pit mine annually producing 500,000 oz. gold at total cash costs of US$237 per oz., over 15.6 years. The project centres on measured and indicated resources totalling 350.3 million tonnes grading 1.3 grams gold and 6 grams silver per tonne, based on 0.6-gram cutoff grade. Another 30.3 million tonnes of inferred resources grade 1.2 grams gold and 3 grams silver.

The strip ratio is estimated at 1.2:1, with ore run through a conventional mill with a carbon-in-pulp circuit. Payback of the estimated price tag of US$638 million would come in 3.8 years. The plan generates an internal rate of return of 18% at a gold price of US$500 per oz.

Also slated for April is an appeal of an earlier ruling by a local court that annulled the company’s required archeological discharge certificate. That action was brought by non-governmental organizations.

Assuming completion of the archeological discharges and government approvals of the EIA report, Gabriel expects to begin purchasing properties in the village in the third quarter of this year, putting the company on track to obtain construction permits later this year. Construction would take place over about two years, which means the first gold pour could conceivably come by the spring of 2009.

The resettlement program involves the purchase of 960 homes, of which 400 have been acquired to date, and is being conducted under World Bank and other internationally accepted guidelines.

Gabriel slightly trimmed its losses to $8.5 million (or a nickel a share) during 2005. The decrease reflects an increase in interest on higher cash balances. The company’s spending on development projects was also halved to $16.9 million, as efforts focussed primarily on permitting and communications. Looking ahead, expenditures are expected to rise owing to property purchases, equipment acquisitions, and construction preparations.

The company is well financed to complete permitting, with working capital of $52.9 million at the end of 2005.