Canadian Gabriel Resources (TSX:GBU) reported Thursday a fourth quarter loss of $500,000 related to expenses associated with the ongoing review of its flagship Rosia Montana gold project by the Romanian government.
The company said that despite various committees put in place to look into the project and some of its permits, “no progress or clarity of process has been forthcoming” in the quarter.
As a result, Grabriel Resources cannot provide shareholders with any guidance on time frames for the project, and it expects the cash impact to affect first quarter spending.
The loss for the year ended Dec. 31 was $2.5 million, or one cent per share.
For more than a year, Romanians have protested against Rosia Montana, which they deem as an environmentally risky project and an even larger problem of political corruption.
The pollution concerns are tied to the company’s planned use of cyanide to extract gold and silver from the ore.
Things took a turn for the worse last December, when the Romanian Parliament ruled against a bill that would’ve allowed the Rosia Montana project to proceed. The company has been waiting for 15 years for permits for the project, which has upped costs to about $1.5 billion.
Then in January a tribunal temporarily suspended a key permit for Gabriel’s Carnic open pit at Rosia Montana, as three non-governmental organizations applied for the suspension of the archaeological discharge certificate. This issue is still pending a court decision to cancel such permit.
Gabriel Resources says it is now dealing with a new coalition government, sworn in early March, which has forced the miner to lay off about 80% of its Romanian employees. About 400 workers will be terminated by May 1 if no progress is made on the polemic project, added the firm.
“All of these jobs and more will be lost unless we see a real and transparent process from the new government in the coming weeks and months to proceed with the project, which has the potential to create over 3,600 jobs,” said in a statement the firm’s chief executive Jonathan Henry.
The Canadian miner has already spent around $550 million on the project in a region of Transylvania where mining dates back to the first century, since it first acquired the concession in the late 1990s.
On the Toronto Stock Exchange, Gabriel shares were trading at $1.17 this morning, down 2.5%.