Gabriel Resources Ltd. (
TSX: T.GBU,
Stock Forum) told the Toronto Globe and Mail Wednesday that it will sue the Romanian government for billions of dollars if parliament votes next week to kill the company’s Rosia Montana mine, Europe’s biggest gold mining project.
“If the lower house [of parliament] does reject the project, we will go ahead with formal notification to commence litigation for multiple breaches of international investment treaties for up to US$4 billion,’’ said Gabriel Resources Chief Executive Officer Jonathan Henry in an interview with the newspaper.
Gabriel shares have been in freefall this week, losing about 60% of their value in the last couple of trading sessions. But the stock was up 18.5% in early trading Wednesday, leaving a market cap of $295.7 million, based on 384.1 million shares outstanding. The 52-week range is $2.94 and 41 cents.
On Monday, the company says it's seeking clarification after reports cited the Romanian prime minister and other ministers saying the government will use an emergency procedure to halt debate of draft legislation in the two houses of parliament.
The company also urged markets not to read too much into the news,
saying in a press release it would ``advise caution in the trading of its shares.''
Gabriel Resources says the threat to block debate comes despite government approval of the draft legislation in August, as well as polls that suggest support for the project, and is looking into the matter to find out what was actually said.
If the draft legislation is rejected, the miner says it will then assess ``all possible actions'' open to it, including the possibility of a lawsuit for multiple breaches of international investment treaties.
The Associated Press reported Monday that Romania's prime minister Victor Ponta said he would look for other ways to find jobs in the deprived area, where thousands have protested this week against the proposed mine.
The leader of two main parties said Monday they opposed the project, which the Romanian parliament is still due to vote on.
Gabriel Resources has struggled for several years to overcome opposition to the project, which opponents say poses too much of an environmental risk because it uses cyanide in the extraction process.
Supporters say the mine would bring vital jobs and investment.
Published reports say as many as 8,000 mostly young people took to the streets of the Romanian capital Bucharest on September 8, 2013 to protest against the project.
According to the reports, protesters claim that the use of cyanide at the project site poses a huge risk to the environment, a danger they say nobody has assessed so far. Local authorities also staged their own show of force in a stadium near Rosia Montana.
This has split Romania’s governing coalition, reports say.