Gabriel Resources Ltd. (
TSX: T.GBU,
Stock Forum) said Thursday the deadline for a key report that is necessary to debate the fate of its Rosia Montana gold mine in Romania has been extended by three weeks.
But the news didn’t appear to impress at least one Canadian investment firm, which reiterated its “underperform” rating on the stock.
“On the surface, the delay suggests that the Romanian government is engaged,’’ wrote
BMO Capital Markets in a research report. However, BMO went on to remind investors that the Rosia Montana project has a long history of delays due to government indecision.
BMO was referring to the fact that Gabriel has been waiting for 14 years for the permits to develop what would be one of Europe’s biggest gold mines.
Rosia Montana has been a lightning rod for protestors who are opposed to its planned use of cyanide in the processing as well as the sheer scale of the project. Critics have pointed out that the company would have been wise to start small and then grow the mine once local residents had attained a degree of comfort with the operation.
The government of Prime Minister Victor Ponta has proposed a bill to speed up the project by setting strict deadlines for the approval process.
The bill, which triggered countrywide protests against the mine, prompted parliament to set up a commission to assess the bill. It was supposed to file its report this week.
But Gabriel now says the Romanian parliament has extended the deadline until November 10, 2013.
“We approved a deadline extension until November 10 at the request of the commission’s president,” lower house speaker Valeriu Zgonea was quoted as saying by state news agency Agerpres.
The conclusions of the parliamentary committee will go the standing bureau of the senate, which will debate the draft law – legislation that Gabriel needs to proceed with the mine.
The draft law will then go to the chamber of deputies, the decision-making body of parliament.
Meanwhile, Gabriel fell 1.1% to 90 cents Wednesday in light trading, leaving a market cap of $345.7 million, based on 384.1 million shares outstanding. The 52-week range is $2.94 and 41 cents.
Stockhouse blogger
Materialsgirl said there continues to be
a “lottery ticket chance” of getting permits which would result in a share price of several dollars in theory.
“However protests will get louder and louder and there is no assurance that the permits can ever be acted upon,’’
Materialsgirl wrote.
“Financing would also become impossible.’’
(with files from Reuters and The Canadian Press)