Wednesday, December 10, 2008

Gabriel Says Romania Court Blocks Gold Mine Project

Dec. 9 (Bloomberg) -- Gabriel Resources Ltd., planning to dig Europe’s largest gold mine, said Romania’s Supreme Court canceled a permit needed for the stalled Rosia Montana project.

The company hasn’t yet received the court’s reasons for annulling the archaeological discharge certificate and may seek a new permit, Toronto-based Gabriel said today in a statement. The court’s decision can’t be appealed and brings to a close a series of legal challenges to the certificate, Gabriel said.

Chief Executive Officer Alan Hill has faced a series of objections to the planned development of the 10 million-ounce Rosia Montana deposit into Romania’s largest gold mine. A year ago, after a lower court canceled the archaeological permit, the company scaled back work in the Eastern European nation and fired two-thirds of a workforce of 325 as it prepared to appeal.

Gabriel had $70 million in cash and $7.9 million in short- term investments at the end of the third quarter. It spent $40.6 million during that three-month period. Denver-based Newmont Mining Corp., the world’s second-largest gold producer, is the company’s largest shareholder with a 20 percent stake.

Gabriel fell 20 cents, or 16 percent, to C$1.05 at 4:10 p.m. in Toronto Stock Exchange trading. The shares have dropped 47 percent this year.

To contact the reporter on this story: Stewart Bailey in New York at sbailey7@bloomberg.net.

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