Canada-based Gabriel Resources has announced that it will reduce about 80% of its workforce at its Romanian subsidiary, as the assessment and permitting approvals for the Rosia Montana gold-silver project have been delayed.
The Rosia Montana gold-silver project, which is claimed to be Europe's biggest undeveloped gold mine project, is located in west-central Romania, within the historic Golden Quadrilateral area of the South Apuseni and Metaliferi Mountains of Transylvania.
Gabriel noted that the job cuts will affect around 400 employees and that the company has already given the workers redundancy notices and may terminate contracts from 1 May.
Rosia Montana mine has been on hold for many years while waiting for a key environmental permit and during its 15-year involvement with the project, Gabriel has incurred costs of about $550m.
The project faced strong opposition from civil rights and environmental groups who attempted to block the development, claiming that it would destroy ancient Roman mine galleries and villages.
The state-run gold mine is owned by Gabriel's local unit Rosia Montana Gold (RMGC), in which the government currently owns a 20% stake.
This stake is expected to rise to 25% by the time construction commences.
Gabriel president and CEO Jonathan Henry said that Romania could become a leading gold producer in Europe through the development of Rosia Montana.
"This would be Romania's first modern mine, built to the exacting environmental standards that international companies are used to operating under in today's world," Henry said.
"We still remain fully committed to constructing and operating a mine at Rosia Montana, but we need to see a similar commitment from Romania."
The project is expected to generate around 2,300 jobs during the construction phase and additional 900 in the operational phase.