Urgent Action – Stop the Canadian Government from Supporting the Rosia Montana Gold Mine

Former Canadian ambassador Raphael Girard – now a Director of the Board of Gabriel Resources – stated on a company webcast August 9, 2005 that the Canadian government is actively lobbying in support of the Rosia Montana Gold Mine. We need your help to ensure that the Canadian government DOES NOT SUPPORT this mine, which will displace 1800 people and threaten a fragile eco-system in the Apuseni Mountains.

We sent this open letter to Foreign Affairs Minister Pettigrew today. Please endorse ours with a note or send your own to:

The Honourable Pierre Pettigrew, Minister of Foreign Affairs, fax (613) 995-9926

with copies to:

Francine Lalonde, Bloc Québecois Foreign Affairs Critic, fax (613) 992-8569
Alexa Mcdonough, New Democratic Party Foreign Affairs Critic, fax (613) 996-5173
Stockwell Day, Conservative Party Foreign Affairs Critic, fax (613) 995-1154

September 7, 2005

The Honourable Pierre Pettigrew
Minister of Foreign Affairs
House of Commons
Ottawa, ON

Dear Mr. Pettigrew,

Open letter re: Gabriel Resources, Romania

I am writing to you with urgent and serious concerns about the role the Canadian government is playing in support of Gabriel Resources’ (‘Gabriel’) commercial Rosia Montana mine proposal/ Romania.

An August 9, 2005 investor webcast of Gabriel carried the announcement from Gabriel Resources Director Raphael Girard that “The Canadian government fully supports the project and in addition to this, the Canadian embassies in Brussels and Budapest are lobbying and doing all they can to help make the project happen.” The webcast can be heard at: http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=1206480.

Raphael Girard was Canadian Ambassador to Romania from June 1, 2000 to August 31, 2003, and was appointed to Gabriel’s Board of Directors last spring.

An Access to Information asking for “e-mails from and to Raphael Girard from June1, 2000 to August 31, 2003 regarding a gold mine in Rosia Montana”, produced heavily censored documents which show that he was consistently relying on information provided by the company, was minimizing the extent of the opposition to the mine, and was disregarding very real environmental and socio-economic concerns about it. As an example, on 14 May 2002, he wrote to Gilles Potvin, “I know that a village has to be relocated and that compensation has been offered. There seem to be some hold outs who either do not want to move or who maybe want more money than is being offered. In any case, I suspect most of this is a smear and AFP (Agence Presse France) fell for it…”

Alan Hill, Gabriel’s CEO, states during the webcast: "Mr. Girard, with his knowledge, experience and relationships, has been invaluable during the short time he has been on the Board of the Company." No doubt.

Gabriel is a junior mining company headquartered in Toronto and traded on TSX. It holds an 80% stake in Rosia Montana Gold Corporation (RMGC); a joint venture between Gabriel and a Minvest Deva, a Romanian state-owned mine company. RMGC has been attempting to obtain approvals for its mine for almost five years. If built the mine would be Europe’s largest of its kind (13Mt/a).

The mine proposal has occasioned an international outcry from historians, archaeologists, environmental organizations, scientists and academics. Besides organizations like ourselves that advocate for responsible mining practices the opponents to the mine include:

  • ‘Alburnus Maior’, a community organization based in Rosia Montana. It counts over 300 residents from the affected villages refusing to sell their properties to make way for the mine proposal.
  • Romania’s civil society. The movement to save Rosia Montana has given rise to the country’ largest civil society movement since the overthrow of the Communist regime. In addition to the social, environmental, cultural and economic concerns about the mine, the widespread opinion is that this development embodies the worst corruption of the political class.
  • The Romanian Academy, the country’s most eminent scientific body
  • Romania’s Orthodox Church
  • Romania’s Roman-Catholic Church
  • Romania’s Unitarian Church
  • Romania’s Protestant Church
  • The Bucharest-based Academy for Economic Studies
  • Fifty of Romania’s most eminent archaeologists and history experts in the field of Roman history
  • 1038 of the world’s most eminent archaeologists, classicists, historians and institutions have written in protest to the destruction of Rosia Montana’s archaeological treasures to Romania’s minister for Culture.
  • The International Council of Monuments and Sites (ICOMOS) - Unesco’s archaeological consultant - passed two resolutions warning about the threat Gabriel’s project poses to Rosia Montana’s unique archaeological treasures
  • CEE Bankwatch
  • Greenpeace CEE
  • Friends of the Earth International
  • FIAN International
  • The Hungarian Ministry for the Environment
  • European Federation of Green Parties
  • The World Bank

Romania wishes to join the European Union in 2007. As such the European Parliament has been closely monitoring the Rosia Montana development since November 2002 and has made official visits to the site on two occasions. In December 2004, the European Parliament adopted a resolution on Romania's progress towards EU Accession. According to Art. 41 Parliament "expresses its deep concern about the long transitional periods agreed regarding the environment chapter, particularly as regards the Rosia Montana mine development, which poses a serious environmental threat to the whole region."

The mine will displace 2150 people working 750 farms; 138 flats; 8 churches and their cemeteries. In May 2002, RMGC commenced the involuntary resettlement of the population. To date it has been able to acquire only 40% of all the lands and properties required to commence mining.

The Orthodox, Roman-Catholic, Unitarian and Protestant churches count amongst Rosia Montana’s single largest property and land owners. All of them have expressis verbis stated their irrevocable refusal to relinquish their properties at Rosia Montana to make way for the mine.

The mine is on the site of Romania's oldest documented mining settlement and the area is a treasure of important archaeological remains, including Roman temples, spas, fortified buildings, mine galleries and so on. Recent excavation have also for the first time ever identified mine works dating from the Dacian period.

Clear-cutting the rich timber on the site and the creation of four open pit mines, and a 1000 acre tailings pond with a capacity of 250 million tones will seriously damage the environment for generations. Acid Mine Drainage (AMD) is the greatest potential environmental problem associated with mining. An overall mean sulphur grade of 1.9 percent sulphur has been calculated for the ore coming from all the deposits. In general, material with sulphur grades greater than 1 percent sulphur can be expected to produce metals as a result of AMD. The sulphide content of the waste will be similar to that of the ore and there will be a significant potential for acid mine drainage in the waste. The tailings alone will contain 2 percent sulphur (in sulphide minerals). This AMD source alone could last for decades, perhaps centuries. The tailings will be held in place by a 185 metre high tailings dam, built on an "upstream" model that will be unable to resist earthquakes.

The mine is expected to last for fifteen years; creating 248 jobs during optimal production (year eight).

The grade of gold in the project is very close to cut-off grade, so the feasibility of the mine will be extremely sensitive to the volatile price of gold and rising input costs; this in particular given Romania’s commitment towards the privatization of sectors such as water, electricity, fuel etc.

Even the Government of Romania does not stand to benefit from the mine under current law. Because Rosia Montana was declared a "disadvantaged zone" in 1999, a company like Gabriel gets substantial tax breaks and advantages, including an exemption for 10 years on the payment of VAT, exemptions on import /export duty, and a corporate tax holiday, as well as indemnification against environmental damages caused by previous owners. Romania expects a royalty of 2% of gross production.

Under file No. 896/P/2004, Romania’s Prosecutor's Office next to the High Court of Cassation and Justice is currently investigating Nicolae Stanca, former Director of Minvest Deva and Frank Vasile Timis, founder of Gabriel Resources for abuse in function against public interest. The criminal case refers to the stake of Minvest Deva, the state-owned mining company, in what eventually became Rosia Montana Gold Corporation. Frank Vasile Timis has two convictions for the possession of heroin with the intention to sell. He officially resigned from Gabriel in April 2003 but Romania’s press purports that Timis still counts amongst Gabriel’s single largest shareholders.

Mr. Pettigrew, we are deeply disturbed by the uncritical relationship of the Canadian government to this project, which has more than serious environmental and socio-economic flaws.

We ask for your assurance that the Canadian government will no longer provide any lobbying or financial support to the Rosia Montana gold mine.

I look forward to your reply.


cc. Francine Lalonde, Bloc Quebequois Fax 613-992-8569
Alexa Mcdonough, New Democratic Party fax 613-996-5173
Stockwell Day, Conservative Party Fax 613-995-1154