--- In [EMAIL PROTECTED], "Paul Wood" <[EMAIL PROTECTED]> wrote:

Gabriel suffers Romania setback

Grant Surridge And Peter Koven
Financial Post

Friday, September 14, 2007

Despite a "terrible" setback, analysts and company executives at
Gabriel Resources Ltd. agree the Toronto-based miner will eventually
get environmental approval for its Rosia Montana gold project in

Yesterday, Romania's Ministry of Environment halted a review of
Gabriel's environmental assessment following opposition by
non-governmental organizations, who are claiming one of Gabriel's
documents is invalid.

The NGO challenge is a familiar situation that other mining companies
are facing in areas as diverse as Latin America and Southeast Asia.

"It's terrible news, and it's very unfortunate," Gabriel's chief
financial officer Richard Young said in a telephone interview from
Romania. "This is a setback. We don't know whether it's a week, two
weeks, a month or longer."

He added that the company remains confident yesterday's decision will
be overturned, and that Gabriel will receive a construction permit for
the mine.

But Haytham Hodaly, an analyst at Salman Partners, said this may not
be the end of the company's problems.

"This specific one is just a delay. But if they're getting delayed on
a simple submission like this, chances are they'll have more problems
[from NGOs] going forward," he said.

Gabriel shares plunged as much as 44% at the start of trading
yesterday. But they rose through the morning as the shock wore off and
investors became more confident that the mine will eventually go
forward. The stock ended the day at $2.80, down 21%.

The government suspended the review process following a court
challenge led by two groups: a local NGO called Alburnus Maior, and
Open Society Institute, a non-profit organization funded by
controversial American activist George Soros. Mr. Young said that most
of the opposition to Rosia Montana is from groups outside of Romania.

The groups allege that a document called the urbanism certificate,
required to obtain the construction permit, is not valid.

Gabriel says that's incorrect, and that the document has nothing to do
with the environmental review. The company says the certificate is
simply an information document that lists other documents needed in
order to get a construction permit.

Rosia Montana has been controversial since it was proposed in the late 1990s.

Locals and European environmental groups vehemently criticized the
proposed open-pit gold mine, saying it would damage one of the world's
most promising archeological sites and ruin the local environment.
Gabriel argued it would create jobs and pump more than $2-billion into
a country that receives little foreign investment.

Analysts said yesterday that they expect the project to eventually go
forward, but the timing is highly uncertain. Gabriel is now expecting
to pour gold in the first quarter of 2010.

"I think it will eventually clear, but it will take a lot longer than
they expect," Mr. Hodaly said. "Every time they file for a permit,
whether it's for construction or explosives or development, there
could be an appeal on every single one."

Brian Christie, an analyst at National Bank Financial, rates the stock
a "sector perform" with a target of $5.25 a share. "However, with the
further delay in the project, we see our [net asset value] and target
coming down," he wrote in a note to clients.


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