Friday, July 3, 2009

Gabriel Resources plunges on Romania mine ruling

TORONTO, July 2 (Reuters) - Gabriel Resources' shares dropped 26 percent on Thursday to a 2009 low after the Canadian company said it had been dealt another setback in its attempt to develop its Rosia Montana gold deposit in Romania.

Gabriel said a Bucharest appeal court rejected a challenge to a requirement that Gabriel acquire an 'urbanism certificate' as part of the process for obtaining an environmental permit for the 10-million-ounce project.

Gabriel's urbanism certificate for the project, which would be Europe's largest gold mine, was suspended earlier this year after a court challenge.

Gabriel has faced stiff local opposition to the project, which sits on the ruins of an ancient Roman mine.

The company argued it is not legally required to produce a valid urbanism certificate, which is an information document detailing the legal, economic and technical regime for any project, it said.

Kathy Sipos, the miner's head of investor relations, said the judge ruled that the previous suspension constituted a ruling on the case, and so he dismissed it.

'The case was not heard therefore on its merits, and we never had an opportunity to be judged based on the question that we put forward,' she said.

The company will analyze the court's decision once it is received and then will decide further actions, she said. Gabriel's shares fell 51 Canadian cents to C$1.44 on the Toronto Stock Exchange, touching their lowest level since last year.

The company has struggled to restart the project's environmental review process, which was suspended in September 2007 following a challenge from a nongovernmental organization.

Late last year, the Romanian Supreme Court annulled an archeological discharge certificate, which is needed to clear the way for construction of the mine due to the historical significance of the Roman artifacts.

Gabriel owns 80 percent of the mine, and plans to spend $2.5 billion to develop it.

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