Gabriel Resources to file arbitration against Romania for delayed Rosia Montana project

1 May 2014 (Last Updated May 1st, 2014 18:30)

Canadian mining company Gabriel Resources is set to file an arbitration process against the Romanian Government, seeking damages for 15 year delay for its Rosia Montana gold project.

Canadian mining company Gabriel Resources is set to file an arbitration process against the Romanian Government, seeking damages for 15 year delay for its Rosia Montana gold project.

The company launched the project in the early 1990s by setting up the subsidiary Rosia Montana Gold Corp. (RMGC), which is yet to receive permits to commence operations at the mine.

After investing about $550m on project development and legal work, and witnessing the departure of five CEOs over 20 years, the project is yet to commence.

"After investing about $550m on project development and legal work…the project is yet to commence."

Meanwhile, the Romanian parliament's chamber of deputies has scheduled a vote on the bill on 7 May, which would give the $1.5bn project a special legal status and allow the project to start, reported The Globe and Mail.

Gabriel Resources claims that the vote may not take place, as it is the last item in the day's agenda and the parliament sessions may close before reaching the vote.

Also, the company has had a negative reaction from the public due to its extraction technology that is based on the use of cyanide.

Earlier in November 2013, the Romanian parliamentary commission rejected a draft bill that would have permitted the Rosia Montana project to commence operations.

Gabriel Resources intends to spin-off its operations in Romania's Transylvania region to generate cash.

RMGC has already laid-off around 400 employees at three-quarters pay, and the company stated that it may terminate their contracts in May if the situation does not improve.

The case is expected to be heard in Vienna, Austria, during the second half of the year.

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