Canadian company Gabriel Resources, which holds an 80 percent stake in the Rosia Montana gold mine project in Romania, seeks to get a EUR 27 million financing from existing shareholders, via private placement, in order to proceed with the project which was halted by Romanian authorities. The Canadians are also preparing for a legal battle with the Romanian state, in international law courts.

The investors who subscribe in this private placement will be entitled to get a pro-rata proportion of up to 5 percent of any money the company will get following any settlement of arbitral awards made in its favor in connection with any international arbitration proceeding regarding the Rosia Montana project. The placement was already subscribed by certain existing shareholders of the company.

"Gabriel remains fully committed to constructing and operating a mine at Rosia Montana and for all stakeholders to capitalize upon the significant value it has created for Romania through the successful exploration and development of Europe's largest gold deposit,” Jonathan Henry, Gabriel's President and Chief Executive Officer said in a statement.

He added: “It is the Company's intention to proceed with the project provided that the Romanian Government is willing to observe the international investment protection treaty obligations it has undertaken, including to provide fair and equitable and non-discriminatory treatment as it assesses the merits of the project and, in particular, administers the environmental permitting process. To that end, the company has entered into the private placement to fund progress on the project beyond 2014, including the activities necessary to secure all outstanding permits."

The mining project at Rosia Montana was blocked last year, following large street protests both in Bucharest and in other cities in Romania. The Government led by social-democrat Victor Ponta, who initially ruled in favor of the project, passed it to the Parliament to decide whether the mining exploitation at Rosia Montana should start or not. Prime-minister Victor Ponta then said that as a member of the parliament he would vote against the project. In November 2013 the Senate voted against the project. A decisive vote is still expected in the Romanian Chamber of Representatives.

The Rosia Montana site in Alba county is evaluated at containing some 300 tons of gold and 1,600 tons of silver and has been under concession to Roşia Montană Gold Corporation for exploitation. Canadian gold mining company Gabriel Resources owns 80.7 percent of Rosia Montana Gold Corporation, with the Romanian state holding the rest of the shares. The gold mining project at Rosia Montana has triggered many controversies over the years, the use of cyanide and the landscape destruction wrought by the project are the main concerns of the mine’s critics.

editor@romania-insider.com