The decade-long effort by Canadian mining company Gabriel Resources Ltd. to open Europe's biggest gold mine has taken a significant step forward with the news that the Romanian government has reopened the project's crucial environmental review process.
The announcement pushed up Gabriel's Toronto-listed shares by almost 20 per cent, their biggest gain in almost a year.
Gabriel said that the Romanian Technical Analysis Committee, consisting of members of several government ministries, confirmed the continuation of the review process that was suspended in 2007, effectively stopping all development work at the Rosia Montana project, located in Romania's Transylvania region. Gabriel owns 80.5 per cent of Rosia Montana, whose ore bodies have been mined since ancient Roman times and are estimated to contain more than 10 million ounces of gold.
The company did not say how long the review could take. While Gabriel CEO Jonathan Henry said he is "very encouraged" by the reopening of the review, there is no guarantee it will result in the issuance of mine-construction permits. Gabriel, which has had no fewer than six CEOs since the late 1990s, has predicted the start of gold production several times in the past decade, only to run into debilitating political and regulatory roadblocks.
Gabriel's Rosia Montana project has triggered widespread European and Romanian opposition from environmental, human rights and heritage groups. They have argued that the mine, which would use cyanide-based gold leaching, is a potential environmental disaster and that the construction of the vast mining site will destroy unique Roman underground mining galleries, push residents out of their homes and bury historic villages. Gabriel says its mine will meet the toughest European Union environmental standards and bring desperately needed investment and jobs to a region suffering from poverty and high unemployment rates.
Gabriel is about half owned by hedge fund Paulson & Co., American resources investor Thomas Kaplan, Israeli diamond magnate Benny Steinmetz and Denver's Newmont Mining Corp. , the world's second biggest gold-mining company.