Rosia Montana EIA received (April 24, 2006)

Gabriel Resources (GBU-T, GBRRF-O) has taken delivery of an independent 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 adoption of 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,” Gabriel CEO Alan Hill said in a statement. Gabriel said that while its preparation took a few more weeks than planned, the result is a stronger overall 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 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 envisages 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. 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%, based on 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 restart purchasing properties in the village in the third quarter of this year, putting the company on track to obtain construction permits by year-end. Mine construction would take place over about two years, which means the first gold pour could come by spring 2009.

The resettlement program involves the purchase of 960 homes, of which 400 have already been acquired. The program 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 focused primarily on permitting and communications. Looking ahead, spending is expected to rise owing to property and equipment purchases, as well as preparation for construction.

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