Gabriel Resources

Gabriel Resources is a Canadian based mining company which is solely focused on attempting to develop a gold mine in Rosia Montana in Romania. The project, the largest undeveloped gold deposit in Europe, is owned through Rosia Montana Gold Corporation S.A. (RMGC), a Romanian Company in which Gabriel holds an 80.69 per cent stake with the balance held by CNCAF Minvest S.A., a Romanian state-owned mining enterprise.

The company has met stiff opposition from some locals and from international environmental groups including Greenpeace and the Open Society Foundation. In response the company has engaged in a variety of advertising, public relations, lobbying and corporate social responsibility activities.

History

According to the New York Times:

Gabriel Resources was born in the breakup of the state-owned economy after Communism’s collapse when Romanian businessmen with little mining experience and suspected ties to the former secret police won a vast concession to exploit mineral deposits.

In 2005 it was reported that Frank Timis boss of Gabriel Resources and Regal an oil company that:

Timis had also managed to attract a team of top City advisers: Evolution is one of a new breed of advisory firms and one of London's most active outfits. He was also advised by one of the City's largest law firms, Weil Gotshal & Manges, and by Buchanan, a financial public- relations company.

The campaign against the mine

According to the New York Times:

Mr. David’s opposition might have withered had it not been for an ill-advised plan to build a Dracula theme park near the picturesque Romanian town of Sighisoara, once home to Vlad Dracula, the notorious Romanian ruler and inspiration for “Dracula,” the Bram Stoker novel.

Prince Charles of Britain, fond of Romania’s old Saxon villages, was outraged. So was Teddy Goldsmith, the aging anti-globalist environmentalist and scion of a wealthy business family.

A Swiss-born environmental journalist named Stephanie Roth, who wrote for Mr. Goldsmith’s magazine, The Ecologist, moved to Romania to help defeat the project. With such powerful forces aligned against it, the theme park for Sighisoara died. While in Romania, Ms. Roth heard about the Gabriel Resources’ plan for Rosia Montana and went to meet Mr. David in April 2002. Within months, she had introduced him to some of the most powerful environmental organizations in the world.

In 2003 Gabriel Resources reported:

Gabriel has also continued to add depth and breadth to its management team in Romania… Additional financial, permitting, construction and public relations personnel have been added in Romania, including … Mr. Adrian Dascalu as public relations manager.

Ms. Roth started by helping Mr. David’s group obtain a grant for a few hundred dollars from an American environmental organization, Global Greengrants Fund. "When I came there was no computer, no Web site,” Ms. Roth said. “I tried to empower the local organization. ”They organized a public hearing in Rosia Montana that drew 40 non-governmental organizations with Romanian operations, including Greenpeace, and catapulted Mr. David’s dispute onto the national stage. Then Ms. Roth took to the road. By the time Gabriel Resources’ founders turned the company over to more professional management in 2005, the company had an international coalition of nongovernmental organizations arrayed against it.

According to Simon Lawrence the vice president -- corporate development for Gabriel Resources, who 'was in the front line as Gabriel encountered nearly every public relations difficulty that might be thrown at a gold mining company' between 2000 and 2005.

Mr Lawrence says that at first it was assumed these NGO intrusions would have little traction and would move on. But this did not happen. "The NGOs are well-organised and well-funded, and passionate about what they do," he points out…

The international negative publicity drummed up by the NGOs was almost certainly part of the reason why Gabriel suffered a severe setback from a seemingly unlikely source.

Adrian Nastasi, Romania's prime minister from 2000-04, had a pro-Western, pro-development record. But he voiced his personal opposition to Rosia Montana in 2003. Mr Lawrence reckons that set the project back by two to three years -- the first gold pour is now scheduled for the early part of 2009. .

The New York Times reports:

But the mining industry doesn’t easily back down. Hoping to extract an estimated 300 tons of gold and 1,200 tons of silver from the mine, Gabriel Resources introduced a public relations campaign with Madison Avenue-style television commercials and community sponsorships to win over 960 Rosia Montana families that it needed to relocate. It cast itself as an economic savior. It even countered a critical documentary with its own film, “Mine Your Own Business.”

Some efforts backfired. Gabriel Resources helped sponsor the Transylvanian International Film Festival in nearby Cluj-Napoca. But when its organizers invited Ms. Redgrave to receive a lifetime achievement award, Ms. Roth quickly put the actress and Mr. David together.

Ms. Redgrave’s acceptance speech became a rallying cry against Gabriel Resources’ project. The anti-Gabriel Resources’ movement had its mascot and the European press began covering the story.

Word of the movement had by then reached the Open Society Institute of George Soros, which has been working for years for more accountability from Romanian public officials.

“When guys in S.U.V.’s with bags full of cash show up in a poor locality in Romania, they can really make the law there,” said Radu Motoc, project director of the Open Society Foundation-Romania.

Nearly all members of Rosia Montana’s former and current council are either employed by Rosia Montana Gold, Gabriel’s local subsidiary, or have family members who are, according to the foundation. The foundation, which has already given $35,000 to the cause, says it plans to spend as much as $240,000 next year fighting the project and helping Mr. David. Because of the polarizing debate surrounding open-pit gold mining, it is hard to find an unbiased commentator to assess the risks and benefits of Gabriel Resources’ proposed mine. A major focus of contention is the use of large quantities of highly toxic cyanide to separate gold and silver from the ore.

In 1999, Aurul, a joint venture of the Australian mining company, Esmeralda Exploration, and a Romanian national company, Remin, began a leaching operation to recover gold from old tailings in Baia Mare, or Great Mine, roughly 80 miles north of Rosia Montana. Like Gabriel Resources, the company promised a state-of-the-art, self-contained project that would not pose risks to the environment. But less than a year later, the dam holding back a lake of cyanide-laced water burst, sending 100,000 cubic meters of contaminated water downstream to the Danube, killing more than 1,200 tons of fish in Hungary.

Gabriel Resources says it would build in safeguards that were missing at Baia Mare. It has promised to convert most of the cyanide into a nontoxic compound before discharging it into the mine’s tailing pond. It also promises to clean up pollution left by past mining operations and spend $70 million to do as much as possible to repair the altered landscape after its project is done.

In 2006 the Globe and Mail reported:

"You've got to fight fire with fire," Gabriel CEO Alan Hill says of the campaign. "Nobody has ever pushed back on the NGOs like this."

Gabriel Resources PR and lobbying battle

Lobbying expenditure in the US

In 2006 the Globe and Mail reported:

The mining firm also retained communications specialists, including a former White House staffer under George Bush Sr., and took out full-page ads in a British newspaper to discredit Ms. Redgrave. Finally, Gabriel hired a pair of freelance journalists and put up 80 per cent of the €240,000 (CA$353,000) budget to make Mine Your Own Business - even agreeing to cede creative control, at the filmmakers' request.

(In addition to the documentary, Gabriel is now producing another mining film starring Romanian television personality Don Chisu.) The public relations campaign will consume about 12 per cent of Gabriel's $30-million capital expenditure budget this year - a reasonable price tag, Mr. Hill contends, to counter the "exaggerations, extrapolations and flat-out lies" spread by Alburnus Maior.

"It's a lot of shareholder money," he concedes. "But it's got to do a job."

Twelve per cent of CA$30 million is CA£3,600,000.

The Globe and Mail also indirectly revealed that the PR firm working for Gabriel was the White House Writers Group a conservative PR firm based in Washington DC.

Quarterbacking Gabriel's communications strategy is consultant Dan McGroarty, a former deputy director of White House speech writing and special assistant to President George Bush Sr. Based in Washington, D.C., Mr. McGroarty says he hopes to counter what he calls "a mountain of misinformation" spread about Rosia Montana amid frequent upheaval at Gabriel's head office in Toronto.

"They've been fed so many falsehoods over time. The management of Gabriel came and went and the story line was largely shaped by the opposition groups to the mining project and we needed to change that in a way that touched mass perception," he says.

One of his first moves was to engage a local communications company to produce a trilogy of television commercials for Gabriel - at a cost of more than $1-million - aimed at winning over the citizens of Romania.

"[The politicians] need cover," explains Gabriel's chief financial officer Richard Young. "That's why you need this broad-based communications program, so when they approve this project the people on average will say, 'That's OK,' and not want to run them out of town."

The first spot, turned the words of Alburnus Maior's Stephanie Roth, a former journalist turned activist, against her. Ms. Roth's descriptions of a tranquil and sylvan agricultural community in Rosia Montana were juxtaposed with stark images of impoverished conditions and environmental damage caused by the state-run mine that Gabriel says it wants to transform into a modern facility with vastly improved standards.

For her part, the Swiss-born Ms. Roth thinks the commercials, along with the rest of the communications efforts by Gabriel, have backfired. "It works in our interest. It has had the opposite effect of what they are trying to achieve," she says in an interview.

The commercials have fallen on deaf ears, she adds, and are being interpreted by the citizens of Romania as propaganda, a tactic they are all too familiar with, having lived under the regime of communist dictator Nicolae Ceausescu.

Affiliations/related

• Mine Your Own Business
• White House Writers Group

People

• Frank Timis

Contact

Website:

Resources

• Eric Reguly, Gabriel Resources’ Romanian mining project suffers setback, The Globe and Mail, Nov. 11 2013
• Craig Wong, Gabriel Resources wants Romania to move quickly on new generic mining law, The Globe and Mail, Nov. 19 2013, 1:54 PM EST