Gabriel holding thumbs ahead of Minister's visit
miningweekly.com
By: Liezel Hill
23rd March 2009
TORONTO (miningweekly.com) – Toronto-based Gabriel Resources is hopeful that a visit this week by Romania's Environment Minister to the company's Rosia Montana project will precede the long-awaited resumption of the mine's environmental permitting process, outgoing CEO Alan Hill said on Monday.
Hill has resigned as CEO, partly for medical reasons, and has been replaced on an interim basis by director Keith Hulley, who will spend much of his time in Romania, focused on the permitting process, chairperson Mike Parrett said.
Minister of the Environment and Sustainable Development Nicolae Nemirschi has scheduled a trip to Rosia Montana on March 26, Hill reported, although he declined to speculate on the reason for the official's visit.
Nemirschi's predecessor suspended the review of the environmental-impact assessment (EIA) for Rosia Montana in September 2007, and Gabriel has been trying since then to have the process restarted, while simultaneously battling various legal challenges to the mine from nongovernmental organisations, as well as members of the Romanian government.
However, the company and its investors are hopeful that the new coalition government formed in December last year will be open to restarting the so-called technical analysis committee (TAC) process “in the near term”, Hulley said on Monday.
The change of government also means that the sponsors of two Bills aimed at blocking the Rosia Montana mine are no longer Members of Parliament.
While Gabriel searches for a permanent replacement for Hill, Hulley's attention will be focused on the permitting process.
He will also need to oversee a decision on the scope of an engineering, procurement and construction management contract for Rosia Montana, as the firm has considered conducting some of the work itself.
Meanwhile, efforts will continue from Toronto, led by CFO Richard Young, towards financing the mine, Parrett said.
The project is now expected to cost some $1-billion to complete, including interest, financing and corporate costs, Gabriel said earlier this month. The previous estimate – published in 2006 – called for $750-million.
Still, the latest number was compiled using fourth-quarter 2008 input prices, many of which have since softened, and so the company is hopeful that the final cost may be lower.
Once the TAC process restarts, and assuming no further obstacles, Gabriel expects that it would take at least six months to complete the EIA approval process, finish buying the properties that it needs, receive all other permits and approvals, including initial construction permits, complete a control estimate and finance the project.
Gabriel said on March 5 that it plans to fund about 25% of the capital required for the project from equity, and the balance through, including senior and subordinate debt, by-product offtake agreements, vendor loans and possibly European Union (EU) grants.
Gabriel holds an 80% stake in the Rosia Montana Gold Corporation, and Romanian State-owned enterprise Minvest SA owns 19,3%.
The Rosia Montana deposit contains proven and probable reserves of 10,08-million ounces of gold and 47,67-million ounces of silver, calculated using a gold price of $735/oz.
The project has faced opposition in part because of Gabriel's plans to use cyanide mining, but the company maintains that its mine plan will strictly adhere to EU guidelines on the use of cyanide, which were adopted as domestic law in Romania in August this year.
The project is estimated to produce 626 000 oz/y of gold during its first five years of operation and an average of 511 000 oz/y over its 16 year mine life.
Shares in Gabriel Resources slid 3,8% on Monday, to C$2,78 apiece by 15:07 in Toronto.
Edited by: Liezel Hill |
