Tuesday, December 4, 2007

Gabriel to cut jobs, scale back Romania gold project

TORONTO (Reuters) - Gabriel Resources Ltd (GBU.TO: Quote) said on Tuesday it would slash jobs and scale back activities related to its key Rosia Montana gold project in Romania, after the Romanian government suspended the environmental review process for the gold deposit in September.

The hard-hit Canadian company said it would cut about two-thirds of 325 full-time jobs at the project and suspend its acquisition program for nearby lands.

Gabriel's stock has plunged more than 70 percent in the last five months as bad news rolled in from Rosia Montana, which is considered Europe's largest undeveloped gold deposit.

The stock slipped another 5 Canadian cents, or 3.6 percent, to C$1.35 in early trading on the Toronto Stock Exchange.

The Toronto-based miner said the Romanian government's decision to delay the environmental impact assessment was illegal and it would launch a legal challenge.

The company said it had spent more than $300 million to develop the project and was "prepared to ride this out until the permitting process recommences" for building the mine.

Romanian authorities and environmental groups have said that drilling in the Carpathian Mountains would destroy ancient Roman mines and that using cyanide would harm the environment.

No comments: