(Toronto, June 13, 2003) Gabriel Resources, a Canadian junior mining company that hopes to develop the largest open-pit gold mine in Europe, will have to answer to both public and shareholder scrutiny at its Annual General Meeting (AGM) in Toronto on June 17th.
“Gabriel Resources plans to move my parents and grandparents to a new home. But how can they rebuild their lives when their livelihood has been taken away?” says Sorana Ciura, a member of Alburnus Maior, a Romanian grassroots organization representing 300 families whose farms are in jeopardy. The mine will also destroy 10 churches and cemeteries, 32 national heritage buildings, and countless Dacio-Roman archaeological sites.
The controversy surrounding the mine will be a hot topic at the AGM. In a June 3rd editorial in one of Romania’s national papers, Prime Minister Adrian Nastase stated that as long as he heads the government, the project will not receive approval, pointing to “serious risks for the environment and the population.”
Gabriel Resources has accelerated the process of resettling residents despite a serious lack of financial backing for the controversial project. To make matters worse, the company has suffered radical management restructuring this year due to high-profile resignations by four senior managers, including the President and Chief Operating Officer, the Director, and two Vice-Presidents.
Last October, the International Finance Corporation of the World Bank denied Gabriel Resources its application for a US $250 million loan. Since that time, the company has projected a 69 percent increase in capital costs for the project, and Gabriel Resources is now short US $35 million in its annual operating budget. “There is tremendous financial uncertainty around this proposal,” notes Fraser Reilly-King of the Halifax Initiative. “How much longer can Gabriel Resources expect shareholders to carry this company?”
Should Gabriel Resources go through with the project, it will create a 4,282 hectare open-pit mine in Western Romania’s Apuseni mountains. A tailings dam is to be built just 2 kilometres upstream of the town of Abrud, and experts have noted that a dam failure could result in catastrophic loss to life and property. The cyanide processing that will be used to extract the gold from the low-grade ore will require nearly 16 million kilograms of cyanide each year. Over 2,000 people will have to be resettled for the project, most of whom are unwilling to move.
Françoise Heidebroek, Alburnus Maior: + (40-72) 323-0790
Fraser Reilly-King, Halifax Initiative, Ottawa: + 1 (613) 266-8100
Payal Sampat, Mineral Policy Center, Washington, DC: +1 (202) 887-1872 x 210
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