Europe's Largest Gold Mining Project "Back on Track"

Romanian government takes 25% share of Rosia Montana, can be paid in gold...

 

PLANS to develop Europe's largest gold mining deposit are "back on track" according to the BBC, following a new proposal to Romania's parliament agreed with the project's Canadian owners, Gabriel Resources.

 

Rosia Montana in central Romania holds perhaps 10 million ounces of gold. Gold mining began there in the 1st century AD, if not earlier, and continued through the medieval and Austro-Hungarian periods. Open-cast gold mining was done under the 20th century Communist regime, but modern development has been stalled since 2003 in arguments over permits and the environment. 

 

This week's draft legislation – which will now go to the Romanian parliament – proposes that the Rosia Montana gold mining project is "of public utility and overriding national public interest."

 

British actress and campaigner Vanessa Redgrave condemned the project in 2006, leading Gabriel Resources to respond with a full-page newspaper advertisement, signed by 77 local residents. In 2009 Hungarian billionaire hedge-fund manager George Soros was led to explain his personal position on the mine, after his Romanian Foundation spoke against it repeatedly.

 

Controversy centred on the project's likely use of cyanide, and argument over the existing pollution levels due to 2,000 years of gold mine working.

 

The new proposals see 25% of the project owned by the Romanian government, with its share of revenues from the gold mining site rising to 6% from 4%. This would allow Gabriel Resources, whose environmental impact assessment was first rejected in 2007, to target 7.9 million ounces of gold production over 16 years at Rosia Montana – meaning "red mountain" from its streams, colored by chemicals and mining by-products.

 

"The surprise," says specialist mining site MineWeb, "is that Romania asked to be paid in gold if it wants."

 

"It could (emphasis on could) mean Romania hauls in some 15 tonnes of gold...about 15% of Romania's [current] official gold reserves."

 

Rallying since end-June from 4-year lows, shares in Gabriel Resources (Toronto: GBU) hit a 3-month high on the news.