TORONTO--(Marketwire - Aug 3, 2011) -
For Immediate Release 3 August 2011
TSX Trading Symbol: GBU
Gabriel Resources Ltd
SECOND QUARTER REPORT
Toronto, Ontario, Canada: August 3, 2011
Highlights
* Permitting for the Rosia Montana gold and silver mining project
("Project") remains the core focus of the business. The following
recent progress has been made:
o Ongoing engagement with the Technical Analysis Committee ("TAC")
through its review of the Rosia Montana Environmental Impact Assessment
("EIA").
o Award of the Archaeological Discharge Permit for the Carnic open pit
("ADC") in July 2011.
o The amended Zonal Urbanization Plan for the Industrial Area of Rosia
Montana ("Amended PUZ") is progressing with six further endorsements
granted in the quarter and 19 of the 22 required endorsements having
now been received.
o The Zonal Urbanization Plan for the Protected Area of the Historical
Centre of Rosia Montana ("PUZ Protected Area") is ongoing, with 10 of
the 12 required endorsements having now been received.
* Gabriel is maintaining its commitment to the Project and its
cultural heritage through its ongoing restoration of the historical
town centre of Rosia Montana and its undertaking to provide
co-operation and future funding at a regional and national level to
protect and restore Romanian cultural heritage.
* $176.4 million of cash and short-term investments held at June
30, 2011 following the receipt of proceeds from a warrant exercise.
* In July 2011 the Company increased its ownership interest in the
Project to 80.69% through the acquisition of a minority shareholding
for a net cash consideration of US$1.15 million. Minvest S.A., a
Romanian state-owned mining company, holds the remaining 19.31%
interest.
Jonathan Henry, Gabriel's President and Chief Executive Officer,
stated:"We continue to make good progress on the permitting of the Rosia
Montana gold and silver mining project. The recent granting of
thearchaeological discharge permit for the Carnic open pit represents
an extremely important milestone as we continue to maintain a
pro-active dialogue with all the stakeholders in addressing the key
issues. The Company's public information campaign continues to focus
on the significant employment opportunities as well as the far reaching
economic benefits that will arise from the Project."
Further commentary on operations and results in the second quarter of
2011 is given below. The Company has filed its Interim Financial Report
and Management Discussion & Analysis on SEDAR at www.sedar.com and
these documents are also available on the Company's website at
www.gabrielresources.com .
For further information on this press release, please contact:
Jonathan Henry Bobby Morse
President and Chief Executive Officer Buchanan
Gabriel Resources Ltd Tel: +44 20 7466 5000
Mobile: +44 7798 801783 Mobile: +44 7802 875227
bobbym@buchanan.uk.com
About Gabriel
Gabriel is a Canadian-listed resource company engaged in the
exploration and development of mineral properties in Romania. The
Company is presently in the permitting stage and preparing to develop
its 80.69%-owned Rosia Montana gold and silver project. Gabriel is
committed to responsible mining and sustainable development in the
communities in which it operates. The Project is anticipated to bring
US$19 billion to Romania as potential direct and indirect investment
according to 2010 estimates from British-based Oxford Policy
Management. The Project will generate thousands of jobs while observing
all Romanian and European environmental laws and also helping preserve
important historic buildings as well as local cultural heritage. For
more information please visit the Company's website at
www.gabrielresources.com .
Financial Performance
* The second quarter net loss was $3.5 million, or $0.009 per
share, primarily reflecting stock based compensation and corporate
costs of $5.2 million offset by foreign exchange gains and interest
receivable of $1.7 million.
* A total of $13.5 million was spent on development projects during
the quarter.
Liquidity and Capital Resources
* Cash, cash equivalents and short-term investments at June 30,
2011 totaled $176.4 million.
* The capital cost to complete the development of the Project -
including interest, financing and corporate costs - is currently
estimated at approximately US$1 billion.
Political Environment
* The Romanian Government continued to implement austerity measures
intended to reduce Romania's budget deficit and comply with the
requirements of the International Monetary Fund emergency aid
programme.
* While some political and NGO opposition to the Project exists, a
broader understanding of the employment, economic, cultural development
and environmental issues and benefits of the Project represents a key
factor in the ongoing permitting of the Project among Romania's
governing authorities.
Environmental/Permitting
* On April 5, 2011 the Ministry of Environment ("MOE") extended the
deadline for the public submission of observations and questions for
the TAC process by one month to May 5, 2011. In order for the Company's
Romanian subsidiary, Rosia Montana Gold Corporation ("RMGC"), to
progress certain issues raised by the TAC through this process, there
have been no further TAC meetings since March 2011.
* Recent statements made by Government officials in Romania have
indicated that over 500 questions raised in the recent public
submissions need to be addressed by RMGC, a process which has now been
initiated. Additionally, the statements noted that the Romanian
Government is also waiting for a letter from the Hungarian Government
with respect to its opinion of the EIA and the Project, which is
subject to a deadline of August 9, 2011. The Company believes both
issues will need to be resolved to the satisfaction of the MOE before a
further TAC meeting is to be convened.
* The Company does not know how many further meetings will be
required by the TAC to review and assess the Project's EIA or how long
this process may take. Ultimately, the EIA must be approved by a
Cabinet decision of the Romanian Government. While the EIA is the most
important project approval, significant recent progress has been made
in respect of other permitting activities.
* In the second quarter of 2011, RMGC secured six further
endorsements for the Amended PUZ, and now holds 19 out of the total
number of 22 endorsements necessary for its approval. By the end of
June 2011, RMGC had obtained 10 endorsements out of the total of 12
endorsements necessary for the final approval of the PUZ Protected
Area.
Archaeology and Preservation of Cultural Heritage
* An archaeological review of the historical mining activity at
Rosia Montana is a critical step in the granting of the construction
permit to build the Project. The Company submitted documents in 2010
to obtain a new archeological discharge certificate for the Carnic open
pit. The National Archaeology Commission of Romania met on July 12,
2011 and recommended approval of the ADC to the Alba County Directorate
for Culture and National Patrimony. On July 14, 2011, the Alba County
Directorate for Culture and National Patrimony issued a new ADC to RMGC
for the Carnic open pit, which complements those it already holds for
the Cetate and Jig open pits.
* The Company has continued maintenance work on 160 houses located
in the historical center of Rosia Montana, with the aim of preventing
any deterioration. This emergency conservation work will continue
through a multi-year program, set to run in parallel with the
construction and the operation phases of the Project. This is just one
element of a commitment of approximately US$140 million to be invested
over all phases of the Project in local heritage and culture in and
around Rosia Montana, together with funding research, appraisal and
consolidation-restoration works of historical monuments across Romania
included in the National Program for the Restoration of Historical
Monuments. This commitment includes the establishment of a special
commission, to include independent experts, which will monitor the work
undertaken by RMGC.
Employment and Economic Benefits for Romania
* Given the critical importance of sustained economic development
for Romania, the Company continues to draw public and political
attention to the significant employment and economic opportunities the
Project brings, while at the same time aiming to conform to the highest
standards on engineering, environmental, cultural and social matters.
* The Company's communication efforts are fact-based, focusing on
the critically-needed employment and economic advantages the Project
will bring to Romania as well as the benefits to an area that has
significant damage to its cultural heritage and environment from many
years of unregulated mining activities.
This information is provided by RNS
The company news service from the London Stock Exchange
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