Gabriel Resources ready to sue Romania for over $4bn
Canadian miner Gabriel Resources (TSX:GBU) continues to generate polemic around its proposed gold and silver mine in Romania, as the company said Wednesday it is ready to sue the country for as much as $4 billion of damages if it cancels the permit for Rosia Montana.
“We have a very, very robust case, and we believe we have claims up to $4 billion that we can send to the Romanian state,” Gabriel Resources Chief Executive Officer, Jonathan Henry, told Bloomberg in a telephone interview. “We will go ahead and do that if the vote is against.”
The debated mine has cost the junior miner more than $580 million and no fewer than seven different CEOs, since the Canadian firm first obtained the concession in 1999.
Ongoing opposition and legislators’ reviews have also have an impact in Gabriel Resources. Its market value on the Toronto bourse is now a mere $300 million, way lower than a peak of over $3 billion at the end of 2010 and the $2.5 billion reached in early 2012.
The company sank almost 54% on Monday, hitting its lowest level in more than a year, after Prime Minister Victor Ponta said that parliament should “quickly” vote on whether to abandon the Rosia Montana project because of the massive opposition it faces.
Thousands of Romanians have been rallying on the streets calling on the government to reject the project, one of the largest undeveloped gold deposits in Europe, as it will use cyanide to extract precious metals.
Rosia Montana is a community of sixteen villages located in a district known as the Golden Quadrilateral, in the South Apuseni Mountains of Romania, which has has been one of Europe's most prolific mining districts for over 2,000 years.
The Rosia Montana concession, which extends over four of these villages, was subject to open pit mining by the state mining company, Minvest, until 2006. Following the closure of the mine with the loss of thousands of jobs, unemployment is reported to be 80% in the region.
Gabriel Resources, the parent company of Rosia Montana Gold Corp. in a partnership with the Romanian government, owns an 81% share in the proposed open-pit mining project, while state-run CNCAF Minvest holds the 19% remaining stake.
Image: Screengrab from Romanian TV News