One of the more hotly contested mining developments in the world is the Rosia Montana gold project of GABRIEL RESOURCES (80% owner and operator). Opponents fear cultural devastation when the historic village is moved to make way for the open pit. They complain of all kinds of potential environmental damage and cultural disruption.
Having seen picture of the postcard-perfect central Romanian countryside, for a while I too thought it might not be such as good idea to disturb it. However, I am being won over by the size of the resource and the responsible way Gabriel is moving toward production.
Rosia Montana lies in an area that has been mined in various ways for 2,000 years. It is the largest undeveloped gold deposit in Europe. Proven and probable reserves total 214.9 million t grading 1.36 g/t Au and 6.9 g/t Ag. There are measured and indicated resources of 350.3 million t grading 1.3 g/t Au and 6.0 g/t Ag. The inferred resource is 30.3 million t grading 1.2 g/t Au and 3.0 g/t Ag. The amount of contained metal is huge: 10.1 million oz of gold in reserves and another 14.6 million oz in other resource categories.
Gabriel has done everything in its power to consult, co-operate and innovate as it moves forward. Originally, 28 groups opposed the project. Now there are only a handful, and those are not Romanian. Romanian NGOs overwhelmingly support Gabriel. But opponents are vocal despite their small numbers, and the project remains in the public eye.
There are many good reasons to support mine development at Rosia Montana. The mire will create 1,200 direct jobs during construction and 600 jobs during operation. Another 6,000 indirect jobs will be created. Gabriel estimates that the project will be US$2.5 billion to the region during the life of the mine.
The project carries a capital cost of approximately US$638 million. Gabriel management expects to receive the necessary permit shortly and construction will begin this year. The first gold pour is scheduled for spring 2009. Over the life of the mine, annual production will be 500,000 oz of gold and 1.8 million oz of silver.
Gabriel sees Rosia Montana as much more than a gold mine. The project offers the opportunity to remediate local soil and water after two millennia of uncontrolled extraction. The company promises to support the local culture by preserving 41 historical structures and five churches in the Rosia Montana valley. Living conditions will improve as the company follows the most recent World Bank/IFC guidelines for the relocation of residents.
And if I needed more convincing that Rosia Montana is worth mining, I would do well to remember that Gabriels Cdn$108.7-million recent public offering was taken up by NEWMONT CANADA. Provision has been made for an over allotment of another Cdn$16.3 million.
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