Gabriel Resources Ltd., the Paulson & Co.-backed Canadian miner, rose the most in almost seven weeks after Romania approved a draft law that would allow development of its Rosia Montana mine while increasing the government’s stake in the project.
Gabriel gained 3.5 percent to C$1.76 at 10:24 a.m. in Toronto. The Whitehorse, Yukon-based company earlier jumped 10 percent, the most intraday since July 11.
The draft law, which still needs parliamentary approval, declares the project to be of “exceptional national interest,” according to a statement published on the government website. It proposes increasing the government’s stake in the project to 25 percent, from about 19 percent, and raising mining royalties to 6 percent from a current 4 percent.
Gabriel has spent more than a decade trying to build the mine amid opposition from non-profit organizations that say it will harm the environment. The new law will set a framework to “significantly accelerate” development, the company said in a statement today.
Rosia Montana has estimated reserves of 10.1 million ounces of gold and 47.6 million ounces of silver, according to Gabriel’s website. The mine may produce an average of 375,000 ounces of gold a year and cost $1.5 billion, Stephen Walker, a Toronto-based analyst at Royal Bank of Canada, said in a note today.
“We view the announcement as positive for the shares and await further updates on the expected September Romanian parliamentary debate,” Walker said.
Hedge fund Paulson owned 16 percent of Gabriel as of May 17 and is its biggest shareholder, according to data compiled by Bloomberg.