TORONTO, CANADA--(Marketwired - May 16, 2013) - Gabriel Resources Ltd. (News - Market indicators) ("Gabriel" or the "Company") announces the publication of its First Quarter Financial Statements and Management's Discussion and Analysis Report for the period ended March 31, 2013.

Summary

• In Q1 2013, at the start of a four-year term, the new coalition Government ("USL") established a new Department for Infrastructure Projects of National Interest and Foreign Investments (the "Department for Infrastructure") to which overall responsibility for the Government's ownership interests in the Project will be transferred, subject to due process. The Company views this change and recent dialogue across Government ministries as a positive basis for enduring engagement on the Rosia Montana Project ("Project").
  
  
• On May 10, 2013 the Technical Assessment Committee ("TAC"), charged with assessing the environmental impact and compliance of the Project, met in the first such meeting since November 2011. The Company awaits clarification on how the TAC review will be progressed including whether further meetings or documentation will be requested. Gabriel remains unable to provide guidance on the time that it might take the TAC to conclude its review and vote on the Environmental Impact Assessment ("EIA") or to release its recommendation to the Government.
  
  
• In Q1 2013, Romanian media comments on the status of permitting of the Project have specifically focused on compliance with European Directives as key to its progression. The Company is confident that it can, and will, comply with its environmental obligations and looks forward to furthering discussions with the TAC and relevant Ministries on this topic.
  
  
• The 19^th positive court decision for the progress of the Project was achieved in Q1 2013 against 20 legal challenges to permitting, licensing and other Project matters since early 2010. However opponents to the Project have continued to register new legal challenges in the quarter against licenses, permits, authorizations and approvals for the Project.
  
  
• On April 22, 2013, Alba County Council issued a new urbanism certificate (UC-47) for the Project, which is valid for 24 months, subject to extension for a further maximum of 12 months.
  
  
• Monthly net cash usage was $3.3 million in Q1 2013 and $67.1 million of cash and cash equivalents was held at March 31, 2013.
  
  

Jonathan Henry, Gabriel's President and Chief Executive Officer, stated:

"We are pleased with the recommencement of the Technical Analysis Committee review process and encouraged by the interaction between RMGC and Government so far this year. We will maintain dialogue with the Government regarding the economic, social, cultural and environmental benefits that the Project will bring to Romania and we look forward to finalising the environmental permitting process which will allow Gabriel to build Romania's first modern mine for the benefit of the country and all stakeholders."

Further information and commentary on the operations and results in the first quarter of 2013, together with events anticipated in the short term, is given below. The Company has filed its Interim Unaudited Condensed Consolidated Financial Statements and Management's Discussion & Analysis on SEDAR at www.sedar.com and each is available for review on the Company's website at www.gabrielresources.com.

About Gabriel

Gabriel is a Canadian TSX-listed resource company focused on permitting and developing its world-class Rosia Montana gold and silver project. The exploitation license for the Project, the largest undeveloped gold deposit in Europe, is held exclusively by Rosia Montana Gold Corporation, a Romanian company in which Gabriel owns an 80.69 percent equity interest, with the 19.31 percent balance held by CNCAF Minvest S.A., a Romanian state-owned mining enterprise. Gabriel and RMGC are committed to responsible mining and sustainable development in the communities in which they operate. The Project is anticipated to bring over US$31 billion (at a US$1,500/oz gold price) to Romania as potential direct and indirect contribution to GDP. The Project will generate thousands of employment opportunities. Gabriel intends to build a state-of-the-art mine using best available techniques and implementing the highest environmental standards whilst preserving local and national cultural heritage in Romania.

For more information please visit the Company's website at www.gabrielresources.com.

Further Information

Financial Performance

• The net loss for the first quarter of 2013 was $2.3 million, or $0.01 per share.

Liquidity and Capital Resources

• Cash and cash equivalents at March 31, 2013 amounted to $67.1 million.
• The Company has continued to implement its plans to reduce monthly costs until such time as the Government moves ahead with Project permitting. In Q1 2013 the Company paid one-off costs in relation to the December 2012 Referendum that totaled approximately $2.0 million. Excluding Referendum activities the Q1 2013 monthly average net cash usage was $3.3 million, consistent with Q4 2012.

Capital Cost

• Including interest, financing and corporate costs the Company estimates the capital required to bring the Project into production and to a position of positive cashflow is approximately US$1.54 billion.

Political Environment

• During 2012 the local and parliamentary elections, together with the intense domestic political infighting, limited significantly the level of Government engagement on the Project. Due to political volatility, the Company's expectations on meaningful dialogue in respect of progression of permitting the Project were low for much of 2012. Accordingly, with the exception of 'one-off' Referendum activities, the Company scaled back its level of expenditure. This cost focus has continued during Q1 2013.
  
  
• On December 9, 2012, the parliamentary elections brought an overwhelming victory for the ruling USL coalition, who gained two thirds of the parliamentary seats - a position enabling the USL to fully control both houses in parliament (the Senate and the Chamber of Deputies) and to adopt important laws without the need for cross-party consensus. Some of the former Ministries (including some relevant for the Project) have since been split and given different functional roles, including the Department for Infrastructure to which overall responsibility for the Government's ownership interests in the Project will be transferred, subject to due process.
  
  
• The Company's previously stated view is that the first half of 2013 will be an important barometer to determine where projects, such as Rosia Montana, which are significant to the economic progression of Romania, sit in the list of priorities for the USL Government. The Company views the apparent stability and strength of Government at the start of a four-year term, along with the establishment of the Department for Infrastructure and recent dialogue across Government ministries, as a positive basis for enduring engagement on the Project.
  
  
• The permitting progress of the Project relies heavily on Government approval of the environmental permit ("EP") and the issuance, in accordance with due process and Romanian law, of various permits and approvals at local, county and federal levels of government. The USL Government has stated that it will analyze the Project in a transparent manner and based on an open and democratic dialogue, so that the decisions are in accordance with the national interest, environmental protection and European legislation. In particular, recent comments from both the Prime Minister and Minister for Environment, reported in the Romanian media in 2013 on the status of permitting of the Project, have specifically focused on compliance with European Directives as key to its progression. The Company is confident that it can, and will, comply with its environmental obligations and looks forward to furthering discussions with the TAC and relevant Ministries on this topic.
  
  
• On March 1, 2013, the United States Department of Commerce notified Gabriel of its decision to formally support the Company through the Commerce Department's Advocacy Center for International Trade, which coordinates US government resources and authority in support of international business opportunities that involve foreign government decision-makers. As part of such Advocacy assistance, Gabriel anticipates that the US government will assist the Company by communicating to the Romanian Government on behalf of Gabriel's commercial interest in Romania.
  
  
• The Company and its 80.69 percent owned Romanian subsidiary, Rosia Montana Gold Corporation S.A. ("RMGC") will continue to pursue a strategy of engagement with all stakeholders, to explain the critical importance of the Project as part of the sustained economic development for Romania, and its commitment to adhere to the highest standards on engineering, environmental, cultural and social matters.
  
  

Project Ownership and Royalty Rates

• The Company has held discussions with a number of ministries of previous Governments on the potential for a revised ownership interest in the Project, royalty rates for gold and silver production and the route to successful permitting of the Project.
  
  
• Since the USL Government came to power in 2012, the Company has had limited discussions with it in respect of Project ownership or royalty rates. However, in 2013 the Prime Minister has reportedly reiterated his view that progress on the permitting status of the Project needs to be aligned with an increase in the State's participation in the Project, through both ownership interest and royalty. The Company awaits the initiation of formal discussions in this regard.
  
  

 Environmental/Permitting

• The Company is encouraged by a meeting within the last week of the TAC, charged with assessing the environmental impact and compliance of the Project, the first such meeting since November 2011. The Company awaits clarification on how the TAC review will be progressed including whether further meetings or documentation will be requested. Gabriel remains unable to provide guidance on the time that it might take the TAC to vote on the EIA or to release its recommendation to the Government. Ultimately, the EP must be approved by a Cabinet decision of the Government prior to its issuance.
  
  
• The Company has instigated a number of environmental initiatives to show how the implementation of the Project can assist with cleaning up legacy local environmental degradation from historical, unregulated mining activities. One such initiative is an acid rock drainage pilot test work program to clean mine water contaminated with high levels of heavy metals and total dissolved solids above EU and Romanian water standards. These tests have shown successfully that a full scale plant will clean up water discharges from the Project to levels fully compliant with all regulations in place (and even to potable water standards). Since December 2012, the Company has been working with the Government to use the pilot plant for additional testing of eight former state-run mine sites and has demonstrated that a full scale water treatment plant would be successful in cleaning up the contaminants to the required EU and Romanian standards at all sites tested.
  
  
• As result of the ongoing delays to the permitting process, two of the 19 endorsements to the Company's amended industrial zonal urbanism plan ("Industrial Area PUZ"), which designates an industrial zone under the footprint of the proposed new mine at Rosia Montana, expired during 2012. For one, the Company has obtained a new valid endorsement and, for the second, the Company is in dialogue with the relevant authority on the renewal process. Moreover, as a result of recent modifications to the law governing urbanism plans an additional endorsement has to be obtained, increasing the total number of required endorsements to 23. One equivalent endorsement for the zonal urbanism plan for the Rosia Montana historical protected area ("Historical Area PUZ") which expired in 2012 has now been replaced and consequently 10 out of the total of 13 endorsements necessary for its final approval have been obtained.
  
  
• In February 2013, Parliament approved certain amendments, originally proposed in 2011, to the legislation concerning the approval of zonal urbanism plans, such as the Industrial Area PUZ. These legislative amendments include the introduction of a new approval timeline for certain PUZs and also set out a new basis for the construction of industrial facilities based on a General Urbanism Plan ("PUG") containing appropriate urbanism provisions. However, some uncertainties remain regarding the application of the new law in respect of the PUZ approval process. The bill was sent for promulgation to the President of Romania, who has recently returned it to the Parliament for re-examination. The relevant committees are currently in the process of re-examining the provisions of the law. Pending law promulgation, the process and timing for the approval of the Industrial Area PUZ remains unclear and may be amended and/or delayed further.
  
  
• The validity of the existing PUGs for Rosia Montana and Abrud has been extended, pursuant to local council decisions, through to July 2014.
  
  
• During 2012, RMGC obtained an extension to the validity of its urbanism certificate (UC-87) until April 2013. An urbanism certificate is an informational document issued by a local or county council and sets out the legal, technical and economic status of a particular parcel of land. On April 22, 2013, Alba County Council issued a new urbanism certificate (UC-47) for the Project, which is valid for 24 months, subject to extension for a further maximum of 12 months.
  
  

Archaeology and Preservation of Cultural Heritage

• The Company has continued maintenance work on 160 houses located in the historical center of the village of Rosia Montana ("Protected Area"), with the aim of preventing their deterioration. During 2012, the restoration of sixteen of these houses was completed and these are now in use. While these village houses are not designated as historic, the restoration will contribute to maintaining the character of the village.
  
  
• The Company is advancing a project to complete restoration of more than 110 houses located within the Protected Area, which will bring these back into functional use. To date, the design work and permitting has been completed, with the final stage for obtaining construction authorization yet to be initiated.
  
  
• RMGC, in partnership with the local council of Rosia Montana, initiated the restoration of two iconic buildings in the Protected Area which will be used for tourism initiatives. Subject to internal fit out, the primary restoration of the former town hall was completed during 2012. Work on the old school house advanced to the stage of the building being secure and weather tight. Further restoration work has been put on hold until such time as the Government moves ahead with Project permitting.
  
  
• RMGC is continuing further archaeological work focusing on opening up previously unexplored old underground mining galleries that lie under the Protected Area, such as Catalina Monulesti, which is in the process of being successfully restored and has been opened to the public. The Company has already hosted over one thousand visitors to the gallery, representing various stakeholder groups. Though access to other Roman galleries remains difficult, the Company has made substantial progress with installing sufficient infrastructure to allow the public to share in Romania's rich cultural heritage. The archaeological results identify spectacular Roman mining galleries and related wooden artifacts, all outside of the Project footprint. This is all part of the long term initiatives in the Protected Area funded solely by the Company. Without such programs, there would be no comparable preservation of the area's mining heritage.
  
  

Corporate and Social Responsibility (CSR)

• Gabriel takes pride in its commitment to achieving the highest levels of sustainability; from workplace safety to community and environmental responsibility. The Company invests significant resources into its CSR programs, which in Romania is a multi-dimensional commitment managed by RMGC covering employee training and safety, local communities, living traditions, direct and indirect social impacts, educational programs, environmental protection, community sponsorship and heritage aspects.
  
  
• One of RMGC's core commitments is to develop local employment, local supply and a strategy for local economy diversification during the life of the Project and beyond, evidenced through:
  
  
  • Local employment - RMGC currently employs approximately 500 people directly and numerous others indirectly, with some 85 percent hired from the local community. The Company is investing in training and skills assessments for the construction phase of the Project; and
    
    
  • Local supply - more than 600 local firms are suppliers / contractors to RMGC.
    
    

Litigation

• Over the years, certain foreign and domestically-funded non-governmental organizations ("NGOs") have initiated a multitude of legal challenges against licenses, permits, authorizations and approvals obtained for the exploration and development of the Project.
  
  
• The publicly stated objective of the NGOs in initiating and maintaining these legal challenges is to use the Romanian court system not only to delay as much as possible, but to ultimately stop the development of the Project. Often an action will be taken by the NGOs on a particular issue in several different regional court jurisdictions, and such legal objection may be raised in separate cases seeking a suspension or cancellation of a particular license, permit or approval, as is the situation with upcoming hearings for the first quarter 2013 summarized below.
  
  
• Most of these actions over many years have been, and continue to be, proved to be frivolous in the Romanian courts. Since early 2010 19 court decisions (from 20 legal challenges to permitting, licensing and other Project matters) have been positive for the progress of the Project.
  
  
• Cases concluded during the first quarter of 2013 included:
  
  
  • A case brought by RMGC to recover approximately 12.7 million RON (approximately $3.9m) in taxes, penalties and interest over the period January 2005 to June 2007 was resolved in RMGC's favor by the Bucharest Court of Appeal on May 10, 2011. The Romanian fiscal authorities submitted an appeal against this decision to the High Court of Cassation and Justice, an appeal which was irrevocably rejected by the High Court on March 13, 2013. RMGC awaits the rebate of prior tax payments from the fiscal authorities.
    
    
  • On April 1, 2013, the Bucharest Tribunal rejected a claim brought by an NGO which sought the disclosure of certain documents pertaining to the Rosia Montana exploitation license.
    
    
• Upcoming hearings in the second quarter of 2013 include:
  
  
  • Two NGOs have initiated proceedings before the Bucharest Tribunal seeking the cancellation and suspension of the Archealogical Discharge Certificate ("ADC") for the Carnic open-pit, issued in July 2011, the first hearing of which is scheduled for May 27, 2013. 
    
    
  • A request filed by three NGOs in the Cluj Tribunal seeking the cancellation of the ADC for the Carnic open-pit is scheduled to be heard on June 3, 2013.
    
    
  • The next hearing of a claim by same three NGOs in the Cluj Tribunal seeking the suspension of the ADC for the Carnic open-pit is scheduled to be heard on June 21, 2013. 
    
    
  • A claim seeking the cancellation of the Strategic Environmental Assessment endorsement ("SEA") to the Industrial Area PUZ, which was issued by the Regional Agency for Environmental Protection of Sibiu in March 2011, is scheduled to be heard by the Cluj Tribunal on June 7, 2013.
    
    
  • A claim initiated by the same two NGOs seeking the suspension of the SEA is also scheduled to be heard in the same court on June 21, 2013.
    
    
• Due to the inherent uncertainties of the judicial process, the Company is unable to predict the ultimate outcome or impact, if any, with respect to matters challenged in the Romanian courts. In all circumstances, the Company and/or RMGC will vigorously maintain its legal rights and will continue to work with local, county and federal authorities to ensure the Project receives a fair and timely evaluation in accordance with Romanian and EU laws. However, there can be no assurance that the Company and/or RMGC will prevail in these matters. If any claims are not resolved in the Company's or RMGC's favor, then such a negative ruling may have a material adverse effect on the timing and/or outcome of the permitting process for the Project and the Company's financial condition. The implications of a negative court ruling will only be known once such a decision is issued and the position of the Government is assessed.
  
  

Outlook

• The Company's key objectives in the short term include to:
  
  
  • Operate on a reduced cost basis until such time as the Government moves ahead with Project permitting;
    
    
  • Finalise the TAC process;
    
    
  • Continue efforts to increase the Romanian public and Government awareness of the Project benefits, both economic and otherwise, and of the widespread support for the permitting of the Project (as demonstrated by the recent Referendum);
    
    
  • Obtain approval of the EP and all other required permits that will allow construction activities to commence;
    
    
  • Maximize shareholder value, while optimizing benefits of the Project to those in the community and the surrounding area.
    
    

Forward-looking Statements

This press release contains forward-looking information as defined in applicable securities laws relating to the Company and/or the Project (referred to herein as "forward-looking statements") that are based on management's current expectations, estimates and projections. Specifically, this press release contains forward-looking statements regarding the returns to Romania from the Project and in respect of future permitting processes. All statements other than statements of historical facts included herein, including without limitation, those incorporated by reference, those which may refer to the Company's financial position, business strategy, plans, objectives of management for future operations (including development plans and objectives relating to the Company's business) the economic impact, job creation, costs estimates, patrimony plans, future ability of the Company to finance the Project, Project delivery and estimates regarding the timing of completion of various aspects of the Project's development or of future performance are forward-looking statements.

The words "believe", "expect", "anticipate", "contemplate", "target", "plan", "intends", "continue", "budget", "estimate", "projects", "may", "will", "schedule", "potential", "proposed" and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that are inherently subject to significant business, economic, legislative, political and competitive uncertainties and contingencies. 

Forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors which are difficult, or may be beyond Gabriel's ability, to predict or control and that may cause the actual outcomes, level of activity, financial results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and other factors include, without limitation, 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; geopolitical uncertainty, uncertain legal enforcement; changes in, and the effects of, the government policies affecting the Company's operations; uncertainties related to timelines for awaited approvals; changes in general economic conditions, and the financial markets; operating or technical difficulties in connection with exploration, development or mining; environmental risks; the risks of diminishing quantities or grades of reserves; and the Company's requirements for substantial additional funding.

Accordingly, readers should not place undue reliance on forward-looking statements. Gabriel undertakes no obligation to update publicly or otherwise revise any forward-looking statements contained herein whether as a result of new information or future events or otherwise, except as may be required by law.