Legal notice. Forward-Looking Statements

Transcription

1 AGM 2007

2 Legal notice Forward-Looking Statements Certain statements included herein, including capital costs estimates, future ability to finance the project and other statements that express management's expectations or estimates regarding the timing of completion of various aspects of the projects development or of our future performance, constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and Canadian securities legislation. The words "believe", "expect", "anticipate", "contemplate", "target", "plan", "intends", "continue", "budget", "estimate", "may", "will", "schedule", and similar expressions identify forwardlooking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. In particular, this presentation includes many such forward-looking statements and such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of Gabriel to be materially different from its estimated future results, performance or achievements expressed or implied by those forward-looking statements and its forward-looking statements are not guarantees of future performance. These risks, uncertainties and other factors include, but are not limited to: changes in the worldwide price of precious metals; fluctuations in exchange rates; legislative, political or economic developments including changes to mining and other relevant legislation in Romania; operating or technical difficulties in connection with exploration, development or mining; environmental risks; the speculative nature of gold exploration and development, including the risks of diminishing quantities or grades of reserves; and Gabriel's requirements for substantial additional funding. Gabriel expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, events or otherwise. 2

3 2007 Annual Shareholders Meeting May 8, 2007 Alan Hill, President and CEO Richard Young, VP and CFO

4 Gabriel Resources: overview Canadian-based resource exploration and development company with major assets in Romania. Currently advancing development of gold project at Rosia Montana, 80%-owned by Gabriel (20%-owned by the Romanian Government). Largest undeveloped gold deposit in Europe. Traded on the TSX: GBU, with 255M common shares outstanding (FD 268M) and a market cap of approx. Cdn$1B. 4

5 Updated project financials suggest robust IRR Production, Reserves and Resources Gold Reserves: 10.1M oz Gold Resources: 14.6M oz Annual production averages 635,000 oz first 5 years; 500,000 oz LOM Cash cost estimate US$181 per oz first 5 years ; US$237 LOM Gabriel has 80% interest in production, reserves and resources 26% IRR at $600 per ounce gold Capital cost est. US$638M 5

6 Expected Financing Plan (US$) Est. cost to develop Rosia Montana: US$750M* Includes capital, interest, financing and corporate costs Targeting Debt : Equity 80% : 20% Equity - US$150M We have raised US$210 M expect no further equity issues to develop the project Debt - US$600M Senior Debt / Mezzanine or high yield * Estimated Capital cost does not include a cost overrun facility; a financial guarantee (reclamation deposit); or hedging costs that may also be required. These additional items could add $100 million to the financing plan. The Company raised an additional US$60 M to cover these additional items during the first quarter of 2007, completed the equity portion of the financing plan. 6

7 2006 Financial Results Loss for year $12.6M ($0.07/share) Expenditures for year $60.0M Working capital $79.9M at December 31, 2006 In 2007 expect to spend US$190M of the US$638M based on fall 2007 construction permits receipt (spent US $25 M in Q4 2006) Project financing discussions well underway completion of final term sheets expected in parallel with EIA approval (est. summer 2007) 7

8 Financial Results Q Q1 07 loss $2.5M ($0.01/share) Q1 07 expenditure $18.3M Working capital $213.6M at March 31, 2007 Equity issue in Q1 raised $148.7M Warrants exercised as at March 31, 2007 added $4.4M to treasury A further $16.1M in warrants were exercised in April 2007 Project related expenditures Remainder 2007 $200M (based on fall 07 construction) 8

9 A unique opportunity that aligns with EU accession Romania joined EU January 1, 2007 EU conditions: 1. Judicial 2. Corruption 3. Government subsidies Strong mining laws in Romania harmonized with EU Government has 20% carried interest and a 2% royalty Since the beginning of 2007 there has been significant political change Despite the changing political environment, the project has been unaffected to date. 9

10 Meridian Conference on Mining at Parliament, April 17 Economic and Social Coordinates of Romania s Mining Sector European Context Participants: Ministers of Environment and Labour, State Secretary of the Ministry of Economy and Finance, President of the committee for Industry and Services of the Chamber of Deputies; Euromines Director; representatives of trade unions; and local authorities; Gabriel Resources Focused on importance of coal as raw material for global energy security, of environmental protection and sustainable development in mining Agreed that revival of the mining sector is objective of strategic national interest to Romania public-private partnership as solution President of the National Agency for Mineral Resources: Gabriel project vital for the Romanian industrial sector and for attracting mining investment 10

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13 We launched an aggressive communication campaign Beginning in Fall 05, the Company initiated an aggressive campaign to counter years of unchecked attacks by anti-project opposition A sustained national TV and print ad campaign in Romania A new website to provide the other side of the story Seed-funding for documentary filmmakers of Mine Your Own Business Counter-punch campaigns, i.e., full page ads in UK news media to refute remarks of actress Vanessa Redgrave Ongoing research shows steady increase in message awareness across the country 13

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23 Rosia Montana working in partnership for the: 1. Economy 2. Environment 3. Culture 4. Community 23

24 In partnership for the economy Sustainable economic development 1, ,000 $2.5 estimated direct jobs during the construction of the mine direct jobs created during the life of the mine indirect jobs created during the life of the mine US$B infused over the life of the mine Much needed revenue to Romania: 20% government interest in the project Rosia Montana will be one of the largest tax payers in Romania Total infusion of at least $2.5B LOM Direct/indirect employment and diversification of local economy 1,300 local miners laid off (300,000 in Romania) MicroCredit - a micro-bank chartered, funded by GBU launched Jan Model for Romania and Europe 24

25 In partnership for the environment We will leave the region s rivers and soil cleaner than we found them Environment is plagued from 2,000 years of uncontrolled mining We will meet or exceed all Romanian and EU standards including new EU Waste Management Directive EIA completed by independent team Spans construction through reclamation Results have been confirmed by independent reviews: Banks Technical Consultants Equator Principal compliant; IGIE (European Committee) found EIA well-developed subject to a few recommendations; and Reading University completed water model confirming that the project has no negative transboundry environmental consequences 25

26 The EIA process 1. May 06 Independent team of specialists submitted EIA 2. June 06 Government announced public consultation schedule, 16 meetings 14 in Romania followed by 2 meetings in Hungary 3. Jan. 07 Ministry of Environment and Waters referred all questions and comments (approx. 5,700) from public hearings judged to require response by the Company 4. May 07 Company submitted Annex to the EIA (12,900 pages in Romanian and 12,600 pages in English) 5. Romanian Government makes final determination on EIA approval 26

27 In partnership for the culture We are making a significant investment in archaeological rescue and preservation Have all necessary discharge certificates required to begin construction July 11 Annulment of archaeological discharge certificate overturned, retrial does not delay commencement of construction Commitment is real and measurable with more than US$10M invested in archaeological rescue additional US$25M in budget Preservation of 41 historically-designated structures and all 6 churches in Rosia Montana valley 27

28 In partnership for the community Opportunity to improve existing conditions: Over half without reliable running water Two thirds with outside latrines Started acquiring homes Oct. 9, 2006 Reflects World Bank/IFC guidelines Have rights to 140 of 379 remaining homes needed to build and operate over 20-year life Currently have over 50% of the homes necessary for construction and first 10 years of operation 28

29 Community Development Initiatives (CDI) Addressing: CDI Health, housing, education, skills training, assistance to elderly, economic stability, job and business creation and respect for the area s archaeological patrimony to enhance sustainable development and improve living standards in the community. 29

30 Community Development Initiatives (CDI) Resettlement Property Purchase Program Construction of the new neighborhood of Piatra Alba and Alba Iulia Rosia Montana MicroCredit Micro-bank chartered and funded by the Company Good Neighbour Program Partnership with Ovidiu Rom Leading non-profit agency focused on child education Skill training initiative Rescue Archaeology Patrimony Program 30

31 Achievements 2006 to date Updated feasibility study Q1 06 Submitted EIA Q2 06 Participated in Public Consultation Process 16 meetings in total Q3 06 Raised US$80M in equity Q3 06 US$130M in equity Q1 07 Began purchasing homes Q4 06 Appointed EPCM contractors Q4 06 Ordered long lead time equipment Q4 06/Q % of mechanical and mining equipment should be ordered by June 07 Received annex questions from Ministry of Environment Q1 07 Submitted annex questions to Ministry of Environment May

32 Updated Timeline 1. Expected EIA approval delay in receiving the questions extends permitting process into summer Targeting receipt of construction permits fall 2007 Following receipt of EIA approval and other necessary permits 3. Expected first gold pour delay in receiving long lead time equipment and delay in receiving questions has extended production to fall

33 2007 Objectives Continue dialog and communication with stakeholders Receive EIA approval and other required permits expected summer 07 Acquire surface rights ongoing Complete financing in conjunction with EIA approval Begin construction fall 07 33

34 Summary World-class asset in a world-class setting 26% IRR at $600/oz gold Experienced management team committed to doing it right Creating value from responsible mining and partnership with all constituencies Project financing discussions well underway First gold pour expected fall

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