Will Gabriel Resources' Rosia Montana Help Romania's Nuclear Plan?

The government of Romania has decided to keep a majority stake in a venture to build and operate two new nuclear reactors, reversing an earlier decision that said five energy companies and a steelmaker should own 80%. To pay for this larger stake for state-run Nuclearelectrica, Romania may pursue an IPO on the Bucharest Stock Exchange.

With gold prices at record highs, some feel the country could help pay for the nuclear project via royalties, taxes on profits and a dividend from its ownership stake in Gabriel Resources Ltd.’s (GBRRF.PK)  Rosia Montana gold mine. However, progress on what was to become Europe’s largest open-cast gold mining project is stalled due to environmental concerns.

However, if Romania can get over the risks associated with nuclear power, some are wondering why it is so worried about the environmental impact of gold mining. National elections in November may improve prospects for Gabriel, but investors will clearly need to remain patient.

Shares of the miner have risen more than 30% to around C$2.60 per share in the past three months, after climbing as high as C$4.95 last summer.

In early June 2008, global giant Newmont Mining Corp. (NEM) expressed its confidence by announcing that it had bought an additional 1.5% stake in Gabriel, bringing its total to nearly 20%.

Two company insiders have made transactions this month that investors might be interested in. Chairman Michael Parrett exercised 200,000 options for company shares at C$2.35 each on June 13. He sold the same amount for $2.52 each, but bought 11,000 more for C$2.50 each the same day, bringing his total holdings to 37,000 shares.

Director Murray Sinclair exercised 200,000 options for Gabriel shares at C$2.35 on June 18, then sold them for C$2.88 to bring his holdings back to 100,000 shares

Comments

[Alhaja]

Can't believe Newmont buying more in this one - directors holding 37000 shares (!) and trading a bit of them ... ???
Romania had a major cyanide disaster and is completely surrounded by one of the biggest and most beautiful rivers of Europe. It is awash... although that seems to be improving... with corrupt officials which is cause enough for worries about environmental neglect.
But, those are details. The region knows some well organized, determined opposition. They managed to stall this operation, won court cases declaring invalid the company's ecological feasibility and so on...
The proposition in this article shows how less is known about this project and shows Newmont's lack of strategy for increasing it's declining resources.