TORONTO, CANADA--(Marketwired - Aug 28, 2013) - Gabriel Resources Ltd. (GBU.TO) ("Gabriel" or the "Company") is pleased to announce that the Romanian Government ("Government") has approved draft legislation relating to the Rosia Montana Project ("Project"). If adopted by the Romanian Parliament ("Parliament") in its next session, commencing September 2, 2013, this legislation will set the framework to significantly accelerate the development of Europe's largest gold mine at Rosia Montana and other mining projects in Romania.
In its meeting on August 27, the Government approved a draft law "on certain measures related to the exploitation of the gold-silver deposits from Rosia Montana and stimulation and facilitation of mining development in Romania" which will be subject to debate and approval by the Parliament ("Draft Law"). The main measures proposed by the Draft Law, as announced by the Government, are:
- Approving an agreement ("Agreement") which envisages, among other things, that:
- Gabriel, as the majority shareholder of the owner of the Project, Rosia Montana Gold Corporation ("RMGC"), will transfer 5.69% of the share capital of RMGC in stages to the minority shareholder controlled by the Romanian State, such that the indirect stake of the Romanian State in RMGC will reach 25% and Gabriel will retain 75% ownership;
- the mining royalty applicable to the Project will increase to 6% of revenues (compared to the current 4%), with the option for the Romanian State to request payment in the form of gold bullion; and
- Gabriel and RMGC undertake to preserve cultural heritage, ensure environmental protection and eliminate historical pollution, while contributing to the sustainable economic and cultural development of the community from Rosia Montana.
- Declaring the Project as being one of public utility and overriding national public interest.
- Empowering certain public entities to carry out certain measures related to the permitting and exploitation of the gold-silver deposits from Rosia Montana.
- Amending certain legislative acts on, among other things, expropriation and construction permits.
- Noting that the Project will create an average of 2,300 jobs in the construction phase and 900 in the operational phase.
As previously announced, Gabriel has been in negotiations with the Government with regards to increased royalty and ownership rates along with other long-term commitments on environment, cultural heritage and a defined route to successful permitting to underpin the Project's status as a world-class, long-term and sustainable investment. The Company is highly encouraged by the recent progress of discussions with the Government since the Project's inclusion in the National Plan for Strategic Investment and Job Creation in July 2013 and the subsequent development of the Agreement and Draft Law ("Documents"). Gabriel can confirm that the Documents also seek to facilitate a significant extension to the mining licence, and other long-term legal and fiscal conditions that the Company wishes to see in place, together with an outline schedule of permitting milestones that include estimated first gold production in November 2016.
Gabriel is currently awaiting receipt of the final form of the Documents, which have been subject to negotiation with, and endorsement of, multiple ministries within the Government in the days leading up to the Government's decision. As matters progress the Company will update the market accordingly.
Jonathan Henry, Gabriel's President and Chief Executive Officer, stated:
"The Romanian Government's decision to approve a law specific to the Rosia Montana Project represents a significant milestone for all stakeholders. We are extremely encouraged by this major step towards progression of the permitting process and consider it to be a clear sign of endorsement by the Government for investment into Romania. A Parliamentary adoption of the proposed law will enable Gabriel to build Romania's first modern mine, creating direct and indirect employment, and providing significant cultural, environmental and economic benefits. We remain fully committed to constructing what will be Europe's largest gold mine."
Gabriel is a Canadian TSX-listed resource company focused on permitting and developing its world-class Rosia Montana gold and silver project. The exploitation license for the Project, the largest undeveloped gold deposit in Europe, is held exclusively by Rosia Montana Gold Corporation, a Romanian company in which Gabriel owns an 80.69 percent equity interest, with the 19.31 percent 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 is anticipated to bring over US$24 billion (at US$1,200/oz gold) to Romania as potential direct and indirect contribution to GDP. 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.
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 in respect of 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 Project's 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", "potential", "proposed" 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, legislative, political 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.