Gold mine backers hail Romania president

ROSIA MONTANA, Romania, Aug. 31 (UPI) -- Supporters of an effort to build a one of the world's biggest gold mines in Romania say they're encouraged by the public backing of President Traian Basescu.

A pro-mining industry and trade group said Monday it is thrilled with comments made last week by Basescu, who seemed to indicate the chronic waffling of the Romanian government on the controversial Rosia Montana Project is turning into qualified support more than a decade after the $1 billion project was announced.

"We hail the statements for support of the mining project in Rosia Montana made by the president of Romania," a statement from the Group for the Support of the Rosia Montana Project said.

The Romanian group, composed of local public authorities, universities, non-governmental organizations, mining industry associations and trade unions, the project is needed in country's Apuseni Mountains region, the English-language Romanian news Web site ACTMedia reported.

"The reality of Rosia Montana is that it is an underdeveloped area, with mining its only industry," the group said. "(There is a large) unemployed population and 80 percent of its people live at subsistence levels, with youth lacking any perspective."

The project, spearheaded by the Canadian mining company Gabriel Resources Ltd., has encountered stiff resistance from environmentalists and others, mainly because of its massive scale and the use of cyanide.

Rosia Montana, considered a world-class reserve, is estimated to hold gold resources of 10 million ounces and Gabriel has said it plans to produce an average 500,000 ounces a year at a cash cost of $400 an ounce, The Globe and Mail newspaper in Toronto reported.

With price of gold at an all-time high of $1,800 per ounce, the Romanian government is seeing its potential in a different light but is also responding to calls that it get a better deal from the investors.

A mine's controlling company, Rosia Montana Gold Corp., is 19.3 percent-owned by Bucharest through its Minvest Deva while Gabriel Resources holds 80.5 percent and other minority with shareholders control 0.23 percent of the company.

Basescu told an audience at the Danube Delta town of Sulina last week he backed the Rosia Montana gold and silver mining project, given that the world gold prices had risen so high, but that the state's profit-sharing arrangements with Gabriel need to be changed, ACTMedia said.

"I think the Rosia Montana project must be made," he said. "Romania needs it, on condition that the terms relating the sharing of the benefits from the operation of the gold and silver reserves of Rosia Montana be renegotiated."

Romanian Prime Minister Emil Boc also has stated his preference to have the terms of the deal revisited, saying last week he's awaiting the results of an environmental impact assessment as well as legal opinions on its EU aspects.

"I am no fan of this project for various reasons," he told Radio Romania Actualitati Friday. "In my opinion, the benefits to the Romanian government are not yet sufficient within the project framework the government has negotiated with the entrepreneurs, and surely it should be revisited."

Meanwhile, Gabriel Chief Executive Jonathan Henry said he's encouraged Bucharest seems to be moving ahead with the project.

"I'm cautiously optimistic," he told The Globe and Mail. "If the Romanian government did not want this project, we'd know by now."

Source: United Press International (UPI).
Link: http://www.upi.com/Business_News/Energy-Resources/2011/08/31/Gold-mine-backers-hail-Romania-president/UPI-26701314787140/.