Anticipating Surprise/Assessing Risk: Making Sense of Gabriel's Intentions
Rosia Montana/Romania, October 8, 2004 -- Alburnus Maior in association with eleven Romanian and international NGOs is pleased to present Anticipating Surprise: Assessing Risk, an investors' guide to Gabriel Resources' Rosia Montana mine proposal (TSX:GBU). The report released today highlights the speculative and unsustainable nature of this development and as such aims to send a strong and serious warning signal to investors. The document is also available in Romana as Anticiparea Surprizei.
Gabriel Resources (TSX: GBU), a junior Canadian mining company, intends to realize Europe’s largest open-cast mining development in Rosia Montana entailing, amongst other, the involuntary resettlement of over 2000 people as well as the destruction of unique archaeological and natural sites. From its onset the development has been beleaguered by scandals, operational problems, and vehement local, national and international opposition. After encountering critical uncertainties as well as debts Gabriel Resources entered just over one month ago a 10 percent subscription agreement with Newmont Mining Corp. of Canada Limited, a subsidiary of Newmont Mining Corp. (NTSE: NEM), the world’s largest gold producer.
According to Anticipating Surprise: Assessing Risk Gabriel’s published capital and production costs estimates are seemingly low because they amongst others, exclude liability for special risks, financial costs, predictable price escalations following Romania’s entry into the EU in 2007 (i.e. labour and energy costs). On the other hand, gold price assumptions used to estimate revenue inflows are overly optimistic. “The EU mining waste directive alone will increase direct environmental costs at mines by 20 to 30 percent. Economic policy indicators show that, further to Romania’s entry in the EU, the labor price could be three times higher than today and energy prices will have nearly doubled,” comments Francoise Heidebroek of Alburnus Maior.
“From a European perspective it seems impossible that only four years after the Baia Mare spill in Romania a mining project of such dimensions and risks could be given the go-ahead. This is an endemically flawed operation and investors should realize this once they critically analyze the true cost of all necessary mitigation attempts alone,” comments of Laszlo Maraz of Pro-Regenwald.
“We have been tracking Gabriel’s hazardous projections whilst at the same time observing events amongst the affected population in Rosia Montana. Delays in relocation and in securing permits are but a superficial manifestation of a deeper reality. Investors need to know that the environmental and social impacts of this project make it a bad investment, not just a risky one,” says Dan Craioveanu of StawberryNet.
“At a time when Canadian mining companies often talk about needing a ‘social license’ to mine, Gabriel clearly has no social license at Rosia Montana and is unlikely to ever obtain it. In addition, Rosia Montana contains unique Dacian and Roman mine galleries and I can’t think of any responsible miner that would develop a project entailing the destruction of its very tradition. All in all this project flies in the face of responsible mining practices and makes no sense what so ever,” adds Jamie Kneen of MiningWatch Canada.
According to Eugen David, president of Alburnus Maior: “The cost towards the village relocation simply makes the project unfeasible because large property owners such as the churches and members of Alburnus Maior have officially declared that they will not surrender their properties. Whilst international financial institutions increasingly incorporate social and environmental standards into investment policies - this because in cases where such standards are not enforced corruption, mismanagement and the abuse of resources have been substantially higher - we herewith transfer the entire responsibility for realities such as blackmail, involuntary resettlement, corruption, environmental destruction and the destruction of unique archaeological treasures to GBU investors.”
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For more information contact:
- Francoise Heidebroek on +40 (0) 723 230 790
- Laszlo Maraz on +49 (0) 228 359 704
- Dan Craioveanu on +40 (0) 788 416 409
- Jamie Kneen on +1 613 761-2273
- Eugen David on +40 (0) 740 280 309