Gabriel Resources Ltd. (GBU), a gold explorer backed by hedge-fund firm Paulson & Co., expects to get parliamentary approval to build a Romanian mine as soon as November after negotiating for more than a decade.
“Hopefully it could be a two- to three-month process,” Chief Executive Officer Jonathan Henry said today in a telephone interview. “It’s a little bit undefined.”
The Romanian government approved a draft law last week that would allow development of Gabriel’s Rosia Montana mine after the company agreed to let the country increase its stake in the venture. The law, which still needs parliamentary backing, declares the project to be of “exceptional national interest.”
Gabriel, also backed by Newmont Mining Corp. (NEM) and BSG Resources Ltd., has long sought to build the mine in western Transylvania amid opposition from environmental campaigners. About 2,000 protesters took to the streets in Bucharest yesterday after the approval was granted, Mediafax reported.
The government is set to increase its stake in the project to 25 percent from about 19 percent and raise mining royalties to 6 percent from 4 percent, Gabriel said last week, citing the proposed law.
“It’s a pretty generous offer we’ve put on the table and hopefully the Romanian parliament will agree to that,” Henry said today.
Should parliament support the law, Gabriel, which estimates the site may hold 17 million ounces of gold, will need to obtain an environmental permit before starting to raise the $1.4 billion it needs to develop the mine.
“I don’t see the government issuing us an environmental permit until the parliamentary debate is out of the way,” Henry said. “We need this project to be eminently financeable and that requires the Romanian parliament to be fully behind us.”
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