It was December 31, 2013, and the phone lines at the Toronto headquarters of Gabriel Resources
(Gabriel) would not stop ringing. The calls were related to Gabriel’s foreign mining project in Romania
and the recent draft bill to approve its further development. On December 10, the Romanian Parliament
voted on the final permit of Gabriel’s Rosia Montana gold and silver project. The vote resulted in an
outright majority to ban further development of the project until a more thorough environmental and legal
framework was established. This outcome followed a December 2 vote that also failed to receive the
requisite majority for project approval.
Approval of the draft bill was set to increase Romania’s state-controlled stake in the project to 25 per cent
and up royalties from 4 per cent to 6 per cent. The controversial mine had been protested for years by
interest groups inside and outside of Romania, mainly due to potential environmental impacts. This last
setback made it appear that Gabriel would not be able to move forward with desired development efforts.
After three months of increasing opposition from environmental and community groups, investors were
starting to get worried. Shares of Gabriel closed the year at $0.78,
2 down roughly 30 per cent from the
December 16 price of $1.10 (see Exhibit 1). Management had to act quickly with a plan to move forward
as smoothly as possible. How should the company handle investor relations in order to calm shareholder
panic and negative stock price movement? More importantly, what steps should be taken to help bring the
mine forward to development?