September 9, 2013 / 1:44 PM / in 7 years

UPDATE 3-Canada's Gabriel may sue as Romania set to reject project

* Parliament due to hold session in coming days

* PM says there is clear political will to reject project

* Gabriel shares slump 72 pct to more than 14-year low

By Radu Marinas and Ioana Patran

BUCHAREST, Sept 9 (Reuters) - A long-running bid by Canadian miner Gabriel Resources Ltd to open Europe’s biggest open-cast gold mine in Romania is set to be rejected due to mounting opposition, the country’s Prime Minister said on Monday.

Gabriel shares slumped 72 percent to a more than 14-year low of 41 Canadian cents, before recouping some losses to trade at 75 Canadian cents. The stock traded at nearly C$8 about three years ago.

Gabriel, whose largest shareholder is hedge fund Paulson & Co with a 16 percent stake, said it could consider legal action.

“Gabriel is urgently seeking confirmation of the actual statements made and clarification of the impact on the proposed permitting of the project,” the company said in a statement.

The project in the Carpathian mountains was stalled for 14 years and last month the leftist cabinet of Prime Minister Victor Ponta, which opposed it before coming to power in 2012, renegotiated the contract.

The state increased the royalty tax on gold to 6 percent from 4 percent and also raised its stake in Gabriel’s local business, Rosia Montana Gold Corp, to 25 percent from roughly 20 percent.

Rosia Montana said earlier this month it expected Romania’s parliament to vote in favor of the project despite protests. The mine is expected to bring billions of euros in taxes and jobs to an economically depressed region.

Thousands of people in cities across Romania are protesting against the project, which wants to use cyanide to extract 314 tonnes of gold and 1,500 tonnes of silver.

“Basically, today we must rapidly begin the rejection proceedings in the senate, then in the lower house, and that’s it,” Ponta told reporters.

“It’s very clear a decision was taken.”

Earlier in the day Ponta’s main coalition ally, presidential candidate and senate head Crin Antonescu said legislators could not support a project against such overwhelming opposition.

A vote in parliament has yet to be scheduled but political sources said it could be called as early as this week.

“Protests will continue until the parliament’s houses reject through vote the law proposal,” anti-mine organisation Alburnus Maior said in a statement.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below