Gabriel Resources Ltd: First Quarter Report

TORONTO -- (Marketwire) -- 05/05/11 --

For Immediate
Release
05 May 2011


                          GABRIEL RESOURCES LTD

                           FIRST QUARTER REPORT

Toronto, Canada: May 5, 2011


Highlights


* Permitting process ongoing, with the following key events taking
place:

  o Ongoing engagement with the Technical Analysis Committee ('TAC') in
 its review of the Rosia Montana Environmental Impact Assessment ('EIA')

  o Archaeological Discharge Permit for the Carnic open pit submitted
  and awaiting assessment

  o Amended Zonal Urbanization Plan for the Industrial Area of Rosia
  Montana progressing with the Strategic Environmental Assessment
  approval granted in March 2011

  o Zonal Urbanization Plan for the Protected Area of the Historical
  Centre of Rosia Montana is ongoing

* Commitment to the Project and its cultural heritage continues
with further restoration of the historical town centre of Rosia Montana

* Cash and short-term investments at March 31, 2011 of $111.6
million following development spending of $13.1 million during the
quarter

Jonathan Henry, Gabriel's President and Chief Executive Officer,
stated:'The first quarter of 2011 saw a continuation of the good progress
made
in the prior quarter on the permitting processes. There has been
pro-active engagement and dialogue with all stakeholders in addressing
the key issues in the development timeline for Rosia Montana. The
Company's public information campaign continues to inform our
communities of the economic benefits for all stakeholders which are far
reaching, in particular at the local and regional level, where economic
development and employment opportunities have a very high public
priority.'

The Company has filed its Interim Financial Report and Management
Discussion & Analysis on SEDAR at www.sedar.com and these documents are
also available on the Company's website at www.gabrielresources.com.

For further information on this press release, please contact:

Jonathan Henry                    Buchanan Communications
President and Chief Executive     Bobby Morse: bobbym@buchanan.uk.com
Officer
Gabriel Resources Ltd             Charles O'Brien:
                                  charleso@buchanan.uk.com
Tel:   44 7798 801783             Tel:  44 20 7466 5000

About Gabriel Resources Ltd ('Gabriel') / Rosia Montana Gold
Corporation ('RMGC')

Gabriel is a Canadian-listed resource company engaged in the
exploration and development of mineral properties in Romania and is
presently in the permitting stage and preparing to develop its
80.46%-owned Rosia Montana gold project (the 'Project'). Gabriel is
committed to responsible mining and sustainable development in the
communities in which it operates. Rosia Montana is expected to bring
US$19 billion to Romania as direct and indirect investment according to
estimates from British-based Oxford Policy Management. The Project will
generate thousands of jobs while observing all Romanian and European
environmental laws and also helping preserve important historic
buildings as well as local cultural heritage. For more information
please visit the Company's websites at www.gabrielresources.com and
www.rmgc.ro.

Financial Performance

* The first quarter net loss was $1.1 million, or $0.003 per share,
primarily reflecting stock based compensation and corporate costs of
$4.1 million offset by foreign exchange gains of $2.9 million.

* A total of $13.1 million was spent on development projects during
the quarter.

* The Company has adopted IFRS for the year ending December 31,
2011 and has accordingly prepared the consolidated interim financial
statements for the three-month period ended March 31, 2011, the first
quarterly reporting date for which the Company is required to apply
IFRS.


Liquidity and Capital Resources

* Cash, cash equivalents and short-term investments at March 31,
2011 totaled $111.6 million.

* The capital cost to complete the development of the Project -
including interest, financing and corporate costs - is currently
estimated at approximately US$1 billion. Once the EIA approval is
granted, the Company will re-examine its financing options to optimize
the development of the Project.

Political Environment

* Throughout the first quarter of 2011, the Romanian Government
continued to implement austerity measures intended to reduce Romania's
budget deficit and comply with the requirements of the International
Monetary Fund emergency aid programme.

* The Ministry of Environment continued the TAC review of the
Project's EIA.

* Management continues to meet with stakeholders to understand
their issues and concerns and to explain the benefits and impacts of
the Project. Continued strong local and regional support is welcomed by
the Company which seeks to grow that support as a direct result of the
Company's outreach.

Environmental/Permitting

* Since the formal resumption of the TAC review process, three TAC
meetings have been held, with the most recent on March 9, 2011. It is
not known how many further TAC meetings will be required to review and
make an assessment of the Project's EIA or how long this process may
take. While the EIA is the most important Project approval, there is a
significant number of other permits and approvals required to advance
the Project to construction.

* The Company has submitted all required paperwork for issuance by
the Ministry of Culture of the Archaeological Discharge Permit for the
Carnic open pit; assessment of this submission is ongoing by the
government authorities.

* The Company continues to move forward with the amended industrial
zonal urbanization plan ('Amended PUZ'). In March 2011, the Regional
Environmental Protection Agency in Sibiu granted the Company the
Strategic Environmental Assessment approval relating to the Amended
PUZ.At the end of March 2011, the Project had obtained 10 endorsements
out of the total of 12 endorsements necessary for the final approval of
the Amended PUZ.

* Once construction of the mine begins, it is expected to take an
estimated 30 months to complete. Ultimately, the Romanian Government
determines the timing of issuance of the EIA approval and all other
permits and approvals required for the Project.



                    This information is provided by RNS
          The company news service from the London Stock Exchange

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