Saturday, September 29, 2007

Oct. 3 vote in Romania could be crucial for Gabriel Resources

Source: The National Post

Romania’s political parties remain locked in conflict and the country’s main opposition party has asked for a no-confidence vote by parliament on Oct. 3.
If the plan succeeds, Romania could have a new political majority and much of the instability since the minority centre-right government came to power in 2004 could end.

For miner Gabriel Resources Ltd. (GBU/TSX), which is working to develop its 80% Rosia Montana gold project in Romania, this could be exactly what is needed.

The company continues to face environmental permitting delays, that it says are partly motivated by politics. Resumption of the permitting process now hinges on a ministerial change, according to Canaccord Adams analyst Nicholas Chalmers.

“We acknowledge that the project’s immediate future is now out of Gabriel’s control, but on balance believe the permitting process will proceed given the fragile position of the current government and the legal avenues open to the company,” he said in a note to clients.

As a result, Canaccord upgraded its recommendation on Gabriel from “hold” to “speculative buy,” while its last price target, which pre-dated the suspension of the permitting process, was $5.50 per share.

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