TORONTO--(Marketwire - Apr 9, 2012) -
PRESS RELEASE
FOR IMMEDIATE RELEASE TSX Trading Symbol: GBU
April 9, 2012
Gabriel Reaffirms its Outlook on Advancing the Rosia Montana Project
Gabriel Resources Ltd. ("Gabriel" or the "Company") today provided an
update regarding last week's ruling of the Alba Iulia Court of Appeal
("AICA") in Romania. The Company, with the benefit of further advice of
counsel, believes that this issue has been widely misunderstood and
misinterpreted in media and other statements such that the market
reaction does not properly reflect the facts or the recent progress the
Company has made in advancing the Rosia Montana Project ("Project").
Overview
The Company has publicly disclosed, most recently in its 2011 Annual
Information Form ("AIF"), that it was continually contesting legal
challenges to the permitting of the development of the Project, which
is 80.69%-owned by its Romanian subsidiary, Rosia Montana Gold
Corporation ("RMGC"). Over the last eight years RMGC has been highly
successful in resolving these legal obstacles in its favour and, since
2010, it has won 14 out of the 15 court cases in relation to the
Project. Meanwhile, the Company has progressed the permitting process
with local, regional and national authorities to a level significantly
more advanced than at any time in the history of the Project.
The Company has been advised that continuation in the progress of
environmental and other permitting for the Project should not be
affected by the AICA ruling.
Summary Background to the AICA Ruling
Romania manages its land planning through several levels of zoning
which include (i) General Urbanism Plans and accompanying local
regulations ("PUG") and (ii) Zonal Urbanism Plans and accompanying
local regulations ("PUZ"). In 2002, the local council of Rosia Montana
passed resolutions approving a PUG and also a PUZ designating an
industrial zone under the footprint of the proposed new mine at Rosia
Montana (known as an "Industrial Area PUZ").
The AICA upheld a previous ruling that a 2009 decision by the local
council of Rosia Montana to ratify the 2002 approval of the PUG and
Industrial Area PUZ was illegally adopted and was invalid. However,
the AICA did not rule explicitly that the original 2002 local council
decision was invalid.
Detailed background to this case and the urbanism plan permitting
process is provided in the annex to this release.The AICA ruling will
be followed in the coming months by a written judgment.
It is important to note that the Industrial Area PUZ was already in the
process of being amended at the time of the AICA ruling and that the
Company has been advised that the new Industrial Area PUZ should be
unaffected by the above legal proceedings. Moreover, the new Industrial
Area PUZ is very well advanced, having been initiated in 2006, with 19
out of the total number of 22 endorsements necessary for the approval
of the new Industrial Area PUZ already obtained. Upon completion of any
amendments and receipt of the remaining endorsements, the local council
of Rosia Montana will be in a position to update the Industrial Area
PUZ.
Moving Forward
With regard to the ongoing Technical Analysis Committee ("TAC") review
of the Project's Environmental Impact Assessment ("EIA"), the Company
is advised that there is nothing in relation to the AICA ruling that
should stop the TAC process, or the subsequent approval of an
environmental permit by the Romanian Government, from proceeding. The
TAC process is at an advanced stage and the Company is awaiting a
further TAC meeting to be held to discuss the EIA and potentially
endorse the issuance of an environmental permit for the Project.
Benefits of the Project
There remains a growing national and overwhelming local support for the
Project. RMGC currently provides employment to almost 500 people
directly and a significant number of indirect employees, with
approximately 85% of the direct employees hired from the local Rosia
Montana community which would have suffered from unemployment levels of
up to 90%, were RMGC not currently a major employer. Additionally, the
Company is investing in training and professional skills development of
its workforce for the construction phase of the Project.
Given the critical importance of sustainable 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.
This campaign to highlight the benefits of the Project continues with
recent local polls in the Rosia Montana region and national polls in
Romania showing a significant majority in favour of the development of
mining in Rosia Montana.
When in production, as envisioned by the Project's Feasibility Study,
Rosia Montana is expected to be the largest gold mine in Europe and
among the most important industrial projects in Romania. In tandem with
significant local and regional employment, it is estimated at current
gold prices that upwards of USD30 billion in benefits will accrue to
the Romanian economy as a consequence of this single mining operation.
Jonathan Henry, President and CEO of Gabriel Resources, stated:"The market
over-reacted to media commentary on last week's AICA
ruling. Gabriel is advised that the environmental and ancilliary
permitting process will be unimpeded. Our determination to advance the
permitting of the Rosia Montana Project and increase value for all
stakeholders is resolute. This is important for the Company, its
shareholders and also for Romania itself as a significant owner of
equity in the Project. At a time when the global economic environment
is uncertain and yet favourable for the Project, we believe we are
making real progress in articulating the economic advantages of this
excellent project.
Furthermore, we continue to fight vigourously the misleading
accusations and legal cases brought by a small minority that are
impeding the willingness of the majority of Romanians to develop a
modern mining industry that will bring jobs and economic growth where
it is much needed.
We fully expect that the strong and consistent community and regional
support for the Project will allow the Company to continue the
Project's advancement for the benefit of all our stakeholders and the
people of Romania."
For further information on this press release, please contact:
Jonathan Henry
President and Chief Executive Officer
Mobile: +44 7798 801783
jh@gabrielresources.com
About Gabriel
Gabriel is a Canadian TSX-listed resource company focused on permitting
and developing its world-class Rosia Montana gold and silver project.
The Project, the largest undeveloped gold deposit in Europe, is owned
through RMGC, a Romanian company in which Gabriel holds an 80.69% stake
with the 19.31% balance held by CNCAF Minvest S.A., a Romanian
state-owned mining enterprise. Gabriel and RMGC are committed to
responsible mining and sustainable development in the communities in
which they operate. The Project will generate thousands of employment
opportunities. Gabriel intends to build a state-of-the-art mine using
best available techniques and implementing the highest environmental
standards whilst preserving local and national cultural heritage in
Romania. For more information please visit the Company's website at
www.gabrielresources.com .
Forward-looking statements
This press release contains forward-looking information as defined in
applicable securities laws relating to the Company and/or the Project
(referred to herein as "forward-looking statements") that are based on
management's current expectations, estimates and projections.
Specifically, this press release contains forward-looking statements
regarding the returns to Romania from the Project and future permitting
processes. All statements other than statements of historical facts
included herein, including without limitation, those incorporated by
reference, those which may refer to the Company's financial position,
business strategy, plans, objectives of management for future
operations (including development plans and objectives relating to the
Company's business) the economic impact, job creation, costs estimates,
patrimony plans, future ability of the Company to finance the Project,
Project delivery and estimates regarding the timing of completion of
various aspects of the Projects' development or of future performance
are forward-looking statements.
The words "believe", "expect", "anticipate", "contemplate",
"target","plan", "intends", "continue", "budget", "estimate", "projects",
"may","will", "schedule", and similar expressions identify forward-looking
statements.
Forward-looking statements are necessarily based upon a number of
estimates and assumptions that are inherently subject to significant
business, economic and competitive uncertainties and contingencies.
Forward-looking statements are not guarantees of future performance and
are subject to known and unknown risks, uncertainties and other factors
which are difficult, or may be beyond Gabriel's ability, to predict or
control and that may cause the actual outcomes, level of activity,
financial results, performance or achievements to differ materially
from those expressed or implied by the forward-looking statements,
These risks, uncertainties and other factors include, without
limitation, changes in the worldwide price of precious metals;
fluctuations in exchange rates; legislative, political or economic
developments including changes to mining and other relevant legislation
in Romania; geopolitical uncertainty, uncertain legal enforcement;
changes in, and the effects of, the government policies affecting the
Company's operations; uncertainties related to timelines for awaited
approvals; changes in general economic conditions, and the financial
markets; operating or technical difficulties in connection with
exploration, development or mining; environmental risks; the risks of
diminishing quantities or grades of reserves; and the Company's
requirements for substantial additional funding.
Accordingly, readers should not place undue reliance on forward-looking
statements. Gabriel undertakes no obligation to update publicly or
otherwise revise any forward-looking statements contained herein
whether as a result of new information or future events or otherwise,
except as may be required by law.
Annex - Background to the AICA ruling and PUZ
Background
By way of background, all land situated under the footprint of the
proposed new mine at Rosia Montana must be zoned and/or classified for
industrial uses, including mining. Similar to other countries, Romania
manages its land planning through several levels of zoning which
include (i) General Urbanism Plans and accompanying local regulations
("PUG") and (ii) Zonal Urbanism Plans and accompanying local
regulations ("PUZ").
A PUG for the Rosia Montana commune was approved in 2002 ("2002 PUG")
and, according to Romanian legislation, is required to be updated every
ten years by the local council of Rosia Montana. RMGC is sponsoring the
local council with respect to initiating the updating processes for
obtaining a new PUG for the Project which shall replace the 2002 PUG.
In 2002, the local council of Rosia Montana passed resolutions ("LCDs
45 and 46/2002") approving the 2002 PUG and also a PUZ designating an
industrial zone under the footprint of the proposed new mine at Rosia
Montana ("2002 Industrial Area PUZ"). Following such approvals, and
based on LCDs 45 and 46/2002, a number of urbanism certificates
("UCs"), which comprise informational documents issued by a local or
county council and setting out the legal, technical and economic status
of a particular parcel of land, were issued for the Project. All of
these UCs have been the subject of legal challenges, including UC68/
2004 ("UC68") which is no longer in existence and UC87/2010 ("UC87"),
the existing UC held by the Company, which remains in full force and
effect. UC87 has recently been successfully extended for another 12
months until April 2013. A legal challenge for the cancellation of UC87
is scheduled to be held today, the outcome of which is likely to be
known to the Company before the end of April.
In order to eliminate all debates surrounding the validity of the 2002
PUG, the 2002 Industrial Area PUZ and LCDs 45 and 46/2002, the local
council of Rosia Montana passed a further resolution in 2009 ("LCD 1/
2009") ratifing LCDs 45 and 46/2002 and the approval of the 2002 PUG
and the 2002 Industrial Area PUZ.
The Legal Landscape
Approximately 150 separate legal challenges regarding the Project have
been initiated since 2004 by certain foreign and domestically-funded
non-governmental organizations ("NGOs"). These legal actions have been
against local, regional and national Romanian authorities that hold the
administrative or regulatory authority to grant licenses, permits,
authorizations and approvals for many aspects of the exploration and
development of the Project. In general, the legal challenges claim
that such authorities are acting in violation of the laws of Romania
and seek suspension and/or cancellation of a particular license, permit
or approval.
While a small number of these actions over many years have been
successful, most have been, and continue to be, proven to be frivolous
in the Romanian courts. The Company, through RMGC, has intervened in
all material cases brought to date.
The publicly stated objective of the NGOs in initiating and maintaining
these legal challenges is to use the Romanian court system not only to
delay as much as possible, but to ultimately stop the development of
the Project. Most of the legal challenges have been initiated in the
Alba County court system. Often actions will be initiated by the NGOs
on a particular issue in several different regional court
jurisdictions, and the same legal objection may be raised in separate
cases seeking a suspension or cancellation of a particular license,
permit or approval. These actions add significant delay, distraction
and material costs to the process of permitting the Project.
Legal actions in the Romanian court system often take many months of
hearings before an initial decision of the court is rendered, and then
there is usually an additional period of time before the reasons for
the decision are made public. In all cases, there is at least one
appeal from an initial decision of the court.
The Company continues to expect such legal challenges as it passes
through all stages of permitting the Project and will intervene to
defend them aggressively where it is deemed appropriate.
Further information on the legal and permitting landscape and risks
facing the Company is set out in detail in the AIF to which readers of
this announcement are encouraged to refer. A copy is filed on the
Gabriel Reources profile at www.sedar.com .
The Recent Court Ruling concerning LCD 1/2009
The legality of LCD 1/2009 was challenged by three NGOs in the Alba
Iulia court system where they sought its suspension and annulment. In
the secord quarter of 2011, a court admitted the claim that LCD 1/2009
had been illegally adopted. RMGC and the local council of Rosia
Montana submitted an appeal against this decision to the Alba Iulia
Court of Appeal.
Last week, the AICA upheld the court decision that LCD 1/2009 had been
illegally adopted by the local council of Rosia Montana and was
invalid. However, the court did not rule that the original local
council decision, LCDs 45 and 46/2002, was invalid. As noted above,
the Company will need to consider the implications of the AICA decision
in due course once the written reasons for the judgement are published
by the court, expected to be within the next two months.
New and Amended Land Use Approvals to replace the 2002 Industrial Area
PUZ and 2002 PUG
Since 2002, the Company has updated the design of the proposed mine,
reduced the size of the footprint, expanded the protected zones and
incorporated a number of additional changes to the proposed mine, all
arising as a result of public consultation. The local council of Rosia
Montana is obligated to update the 2002 PUGto reflect these changes
and modifications. Accordingly, in 2006, an amended PUZ for the
industrial development area of the Project was initiated, and such PUZ
was further updated in 2010 ("New Industrial Area PUZ").
RMGC has obtained most of the necessary endorsements for the New
Industrial Area PUZ, holding 19 out of the total number of 22
endorsements necessary for the approval of this PUZ. After obtaining
all the necessary endorsements, the final approval will be given by the
local councils of Rosia Montana, Abrud and Bucium.The New Industrial
Area PUZ is unaffected by the above legal proceedings.
In addition, in 2009, the local council of Rosia Montana initiated the
process for a PUZ for the Rosia Montana historical protected area
("Historical Area PUZ") and currently holds ten (10) endorsements out
of the total of thirteen (13) endorsements necessary for its final
approval.
In parallel, the local councils in the Project area have also initiated
the procedures for drafting new PUGs for the respective localities
including, as noted above, a new PUG for Rosia Montana to replace the
2002 PUG, which is due to expire after its 10 year life in 2012.
ENDS This information is provided by RNS
The company news service from the London Stock Exchange
END
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