Fund Manager letter Re: Gabriel Resources Ltd. - June 10, 2003

June 10, 2003

Dear Fund Manager,

We are writing to express our concerns about your holdings in Gabriel Resources Ltd. and ask you to press for change at the AGM next week.

The Rosia Montana gold/silver project proposed by Gabriel comes with serious social and environmental risks.  But of immediate concern to investors is the extreme instability of Gabriel’s corporate governance structure.  There is one incident in particular that has exposed major failures of management control within Gabriel Resources Ltd.  This occurred when the announcement was made that four senior level management staff members had resigned, raising many questions about the overall stability of the company.  However, what is more disconcerting is that newly appointed CEO Mr. Oyvind Hushovd does not offer any substantial explanation behind this dramatic corporate shift.  Nor has he adequately addressed how the project will be financed, given that costs have increased by 70% from $253 to $437 million, and the 2003 budget is short $35 million.  Instead, Mr. Hushovd has expressed his desire to “speed up” the EIA and resettlement process.  This is a dubious plan of action considering that Prime Minister Nastase has indicated on two separate occasions that he will not approve the project so long as he is in office, a term that expires in 2004. 

Working in Romania, a country where political risk runs high, your clients deserve transparency and accountability from Gabriel on all accounts in order to protect their investment. 

We note that Gabriel Resources Ltd.:

·      Has not reported adequately on the potential environmental and social impacts.

·      Has not adequately engaged local communities.

·      Does not have sufficient funding to carry out this project in accordance with Work Bank guidelines.

·      Showed in one of their drill studies a shallower pit slope, which means a lot more waste, therefore greater environmental risk.

In view of the seriousness of the concerns raised, we are writing to urge you to ask Gabriel to withdraw from the Rosia Montana gold project in order to protect the affected communities, a greatly revered archaeological site, and the environment.

We would very much welcome the opportunity to meet and discuss our concerns in more detail. If interested, please contact Francoise Heidebroeck from Alburnus Maior by phone, 40 723230790 or email,


Francois Heidelbroek

Alburnus Maior

Judetul Alba, Romania                                                   

Lavinia Andrei, President,

Terra Mileniul III 

Bucuresti, Romania

Sabin Muresan, Programme Coordinator,

Peace Action, Training and Research Institute of Romania (PATRIR)

Fraser Reilly-King, Coordinator,

NGO Working Group on Export Development Canada

Jessica Zippin, Foundation Officer,

Mineral Policy Centre.

Joan Kuyek, Coordinator

MiningWatch Canada

David Brooks, Director of Research

Friends of the Earth Canada