Gabriel Resources Spent EUR11.6 Million On Rosia Montana Project In 2010

Gabriel Resources, the majority stakeholder in Rosia Montana Gold Corporation, reported CAD28.2 million (EUR21 million) in first semester losses, having spent CAD15.6 million (EUR11.6 million) on the development of its mining project in the Apuseni Mountains in western Romania.

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The Canadian company posted CAD8.7 million losses in the first half of last year, while expenses on the Rosia Montana project totaled CAD18.1 million during the same interval.

According to a report presented Thursday by Gabriel Resources, this first semester's result was mainly influenced by a CAD20.3 million (EUR15.1 million) loss, caused by fluctuations on currency markets.

On June 30, the company's balance of cash, cash equivalents and short-term investments amounted to CAD120 million (EUR89.6 million).

The base budget for 2010 on the Rosia Montana project totals CAD46 million (EUR34.3 million), of which CAD26.6 million (EUR19.8 million) remains to be spent over the balance of the year. If the project is re-started, the company could spend an additional CAD33 million (EUR24.6 million) during 2010.

RMGC is developing the mining project at Rosia Montana, in the western Romanian Apuseni Mountains, with projected costs reaching more than $1 billion, through which the company expects to extract 626,000 ounces of gold per year for five years since the launch of the mine. An ounce of gold weighs 31.1 grams and is worth almost $1,200 on international markets.

Romanian environmental NGOs have been protesting the cyanide mining plan since it was put on the table in the 1990s and have proposed to promote tourism and agriculture in the otherwise poor area.

RMGC's final hurdle is to get approval for an environmental impact study from the Romanian Environment Ministry. Minister Laszlo Borbely said late June authorities will resume authorization procedures for investments in the Rosia Montana gold mining project, a statement saluted by Gabriel Resources in the report.

Gabriel Resources owns 80.46% of RMGC, while the Romanian state (19.31%) and other shareholders (0.23%) control the rest.

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