Gabriel relocation plan given go-ahead

Gabriel Resources (GBU-T) has taken another step forward in the development of its 80%-owned Rosia Montana gold project in central Romania.

The Local Council of the Rosia Montana Borough has approved the company’s revised land-use plan, which includes a general urban plan and territorial planning plan.The plans effectively rezone, for industrial purposes, all land, within the Rosia Montana Borough, that will be required for the development of a new mine at Rosia Montana.

The revised plan has been approved by the local, county and federal levels of government. Gabriel can now legally implement its proposed resettlement action plan, which is being prepared by Planning Alliance of Toronto. Resettlement and relocation packages will be negotiated on an individual basis. Relocations will be carried out according to World Bank standards.

The resettlement plan will be part of Rosia Montana’s environmental impact assessment (EIS). The EIS, in turn, will be part of the definitive feasibility study.

The company intends to launch a work program aimed at identifying and protecting (from development) any archaeologically and historically significant areas.

Gabriel hopes to complete its independent feasibility study by mid-year. It will employ results from last year’s exploration, with the aims of increasing overall resources by testing new areas and upgrading existing resources through infill and definition drilling.

Using a cutoff grade of 0.6 gram gold per tonne, Rosia Montana’s overall resource stands at 344 million tonnes grading 1.3 grams gold per tonne. The bulk of the resource lies in two main deposits — Cetate and Cirnic.

Gabriel, through two local subsidiaries, acquired rights to several properties in the district in the late 1990s. One subsidiary held the Rosia Montana and the Bucium projects. The other held rights to explore the Certej and Zlatna projects, as well as several less advanced properties.

A reorganization last year resulted in the creation of a new entity, European Goldfields (EGU-V), which now holds the rights to the Certej, Zlatna, Bolcana and Baita-Craciunesti projects. Gabriel continues to hold Rosia Montana and Bucium (an advanced exploration project).

A 1999 prefeasibility study pegged capital costs at about US$205 million for an owner-mined project, or US$188 million if contract miners are used. The ongoing feasibility study will include updated cost estimates for an open-pit mine.

The 1999 study estimated annual production of 411,000 oz. over 10 years, at a cash operating cost of US$113 per oz. for owner mining and US$127 per oz. for contract mining. The resource figures have been significantly expanded since then.