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The long-suffering shareholders of Gabriel Resources Ltd. two weeks ago received a brief glimmer of hope — a hope that now appears to be extinguished.
Shares of the Canadian miner plunged an astounding 53.7% to close at 68¢ on Monday after Romanian Prime Minister Victor Ponta reversed course and said the company’s giant Rosia Montana project should not go ahead. At one point, the stock was down as much as 72%.
While Mr. Ponta’s comments do not mark the end of Gabriel’s quest to build Rosia Montana, which could become Europe’s biggest gold mine if it is ever approved, the response from investors on Monday shows many of them have had enough of this saga.
Gabriel has been trying to win approval for the project since the late 1990s, but has faced vicious opposition from anti-mining activists along the way. The company battled back — it even helped fund a documentary called Mine Your Own Business, which portrayed the activists in a very negative light and suggested the mine is needed to create economic activity in an impoverished part of Romania.
The permitting process for Rosia Montana has started and stopped numerous times as this battle has dragged on.
But on Aug. 27, Mr. Ponta’s government approved a draft law that set out a potential course for developing the mine. For the first time in several years, it appeared the government was serious about moving the project forward.
But the draft law ignited an enormous backlash in Romania, as thousands of people took to the streets in Bucharest and other cities to protest Rosia Montana. The protestors are particularly concerned about the large amount of cyanide required for the mine, and are also angry about what they see as preferential treatment for Gabriel.
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