CASE STUDY, LOCAL COMMUNITIES Prepared by Alburnus Maior Rosia Montana: Gold Mine Proposal Provokes International Opposition

Location: 2,500 year old village in Transylvania/ Romania Problem: Proposed project to build largest open cast cyanide leach gold mine in Europe Affected community: 2000 residents in the Rosa Montana and Corna Valley Mining Company: Canadian mining company Gabriel Resources Strong local opposition to Gabriel Resources Rosa Montana gold mining project emerged almost immediately in 2000 when Canadian mining junior, Gabriel Resources, announced its intentions to destroy the historic village of Rosia Montana by building the largest open-cast gold mine in Europe. Resistance to the project has since spread across Romania and Europe. Gabriel Resources was founded for the sole purpose of developing this mining project. At full production, the mine will evacuate 500,000 tons of rock per week and use between 13-15 million kilograms of cyanide per year. In 2002, the International Finance Corporation, part of the World Bank Group, turned down Gabriel Resources application for financing, explaining that "there were significant environmental and social issues connected with the project."1 In 2003, the country's highest scientific body, the Romanian Academy, stated its opposition to the project, a position it reaffirmed in February 2006, after finding that the mine would not bring sustainable development or solve the areas social and economic problems, and would have negative effects on the environment. ICOMOS2, the archaeological consultant of UNESCO has passed several resolutions warning against the destruction posed by Gabriels development to Rosia Montanas unique archaeological treasures dating from Roman and pre-Roman times. The Orthodox Church, Romanias largest, owns cemeteries, forest, arable land and historic monuments at Rosia Montana and refuses to sell its properties. On March 23, 2006, the CEO of Gabriel Resources, Alan Hill, confirmed in an interview3 that his company intends to expropriate anyone refusing to leave peacefully. There is forced unemployment or forced expropriation. Which one do you want? he asked. A poll conducted by Romania's 'Ziua' daily newspaper on April 4, 2004 showed that 92% of its readers oppose Gabriel's project. The widespread public opinion is that this development embodies the worst corruption of the political class.4 In December 2004, the European Parliament adopted a resolution expressing its deep concern about the long transitional periods agreed regarding the environment chapter, particularly regarding the Rosia Montana mine development, which poses a serious environmental threat to the whole region."5 Romania joined the European Union on 1. January 2007. The mine poses wider regional environmental threats in the event of any spills. A representative of the Hungarian government declared during an official visit to Bucharest in October 2005, "It is of the highest priority for the Hungarian Government that the Rosia Montana gold mine investment is never realized.The Rosia Montana project given its sheer size could not only affect the immediate area, but, in the event of a spill, would also affect the Tisa Basin." Hungarian government concerns have been heightened due to a January 2000 cyanide spill at a different gold operation in northern Romania that released some 100,000 tons of contaminated wastewater into the Tisza River, and eventually into the Danube--destroying 1,240 tons of fish and polluting the drinking water supplies of 2.5 million people.6 After releasing its expert assessment of Gabriel Resources Environmental Impact Assessment (EIA) report in October 2006, the Hungarian ministry for the Environment has asked the Romanian authorities not to endorse the Environmental Impact Assessment (EIA) Report for the proposed Rosia Montana gold/silver mine. The experts involved in the

analysis assessed that the document contains significant deficiencies and false basic conclusions.7 In November 2006 the European Parliaments Foreign Affairs Committee voted on reports concerning EU enlargement. MEPs adopted the final report on Romania; taking its final opportunity to review the situation of this country ahead of its accession and to draw attention to areas where action is still needed. A relevant passage of the report reads as follows: Also, Romania should speed up the processing of claims relating to the restitution of properties confiscated by the communist regime and should make further efforts in protecting the environment, with special reference to the mining in Rosia Montana.8 According to an opinion poll carried out by a Deputy Commission of the Romanian parliament inviting Romanias public to comment on the Rosia Montana mine proposal as of 22 January 2007, 96% out of a total of over 6000 participants explicitly voted against Gabriels Rosia Montana gold mine proposal.9 "The destruction of the Rosia Montana community - with a history of well over 2,000 years by resettling the population, demolishing houses (including historical monuments) and churches,as well as resettling cemeteries, is unacceptable and is reminiscent of a period everybody thinks is over. Romanian Academy of Sciences, February 200610
Wall Street Journal, October 11, 2002, Romanian Gold-Mine Loan Blocked by World Bank Chief. Bloomberg News, 11. October 2002, World Bank halts on Gabriel Resources Romanian Mine. 2 International Council on Monuments and Sites at www.icomos.org 3 http://www.daily-news.ro/article_detail.php?idarticle=24246 4 http://www.rosiamontana.org/ 5 http://www2.europarl.eu.int/omk/sipade2?PUBREF=-//EP//TEXT+TA+P6-TA-20040111+0+DOC+XML+V0//EN&LEVEL=3&NAV=X 6 http://www.miningwatch.ca/index.php?/Gabriel_Resources/AMjan06 7 http://www.kvvm.hu 8 http://www.europarl.europa.eu/news/expert/infopress_page/027-733-333-11-48-903-20061129IPR00711-29-11-2006-20061

false/default_ro.htm 9 http://www.cdep.ro/informatii_publice/forum.dispPost?subid=1 10 http://www.daily-news.ro/article_detail.php?idarticle=23297

NGO statement in support of Rosia Montana community: From the outset, the proposed Rosia Montana gold mine project in Romania has been beleaguered by scandals, operational problems, and vehement local, national, and international opposition. If constructed by Toronto-based Gabriel Resources, Rosia Montana would become Europe's largest open-pit gold mine operation and transform the densely inhabited Rosia Montana valley into four open-pit mines. Just a few kilometers south of Rosia Montana, Gabriel Resources owns an even larger concession in Bucium. The film Mine Your Own Business, by Phelim McAleer and his wife Ann McElhinney, purports that foreign environmentalists oppose the project and accuses them of exaggerations and misleading claims. This couldnt be further from the truth. In fact, local opposition to the mine is strong and organized. Alburnus Maior, a local association based in Rosia Montana, represents families that oppose the mine and refuse to sell their lands. Eugen David, the president

of Alburnus Maior, was not interviewed by the film makers, and has sent the attached message and fact sheet to provide more information about the project and the reasons for the opposition. While Gabriel Resources touts local employment, the mine is expected to create between 250 and 560 jobs, and it remains unclear if local people will have the necessary qualifications to fill these positions. Alburnus Maior counters that Rosia Montana could benefit more through sustainable development activities based on agriculture, tourism, and historic heritage conservation. These would provide long-term development to the region, unlike the mine which would be in production for roughly 16 years. Over the past few years, the project has come under increasing amounts of international scrutiny. In fact, the International Finance Corporation, the Worlds Bank private sector arm, announced in October 2002 that it would not financially support the project, saying in an official statement that it had "concluded that it is in everybody's best interest that we do not pursue discussions with the company regarding IFC's involvement in the project." Within Romania, Rosia Montana has become an issue of national significance. A January 2007 opinion poll conducted by a Deputy Chamber of the Romanian parliament found that over 96 percent of Romanians voted against the mine proposal. The widespread opinion is that the political decision-making about the project is riddled with corruption. Opposition to the mine is also based in part on the disastrous experience at the Baia Mare gold mine in Romania, where a cyanide spill in 2000 polluted the Tisza and Danube Rivers, contaminating the drinking water supplies of 2.5 million people and killing 1200 tons of fish. The European Parliament has cautioned against the environmental threat the Rosia Montana project poses not just to Romania but to the whole region, and Romanias neighbor Hungary, whose eastern rivers face the risk of pollution stemming from the mine, has pointed to serious flaws in the projects environmental impact assessment. Academics and scientists too have voiced their concerns. The project is opposed by the prestigious Romanian Academy, the country's highest scientific body, which has stated that the gold mine proposal is not in the public interest and the collateral negative effects as well as the

risks involved are not justified. The project has also been heavily criticized by archaeologists, including ICOMOS, the archaeological consultant to UNESCO, because of the destructive impact it would have on the area's unique cultural and historical treasures dating back to Roman and preRoman times. Romanias Orthodox Church as well as the Historic Hungarian Churches, all of which own cemeteries, forest, arable land, and historic monuments in Rosia Montana, refuse to sell their properties to Gabriel Resources and oppose the mine proposal. Keeping in mind that Mine Your Own Business is financed by Gabriel Resources, those who view the film should at least take the time to read Eugen Davids message and visit the websites maintained by Alburnus Maior: www.rosiamontana.org and www.rosiamontana.ro. January 2007

Signatories (80 organizations):

Radhika Sarin International Campaign Coordinator EARTHWORKS USA Eugen David President Alburnus Maior Rosia Montana, Romania David Waskow International Program Director Friends of the Earth USA Smeranda Enache Co-Chair Liga Pro Europa Targu Mures, Romania Joan Kuyek National Coordinator MiningWatch Canada Canada Mircea Olaru Zainescu President EcoMedia Cluj Napoca, Romania Mike Brune Executive Director Rainforest Action Network USA George Tiplea Vice President The Hargita Centre for Legal Mediation Hargita, Romania Fraser Reilly-King

Coordinator Halifax Initiative Coalition Canada Istvan Varga President Civitas Nostra Targu-Mures, Romania John Passacantando Executive Director Greenpeace US USA Cornel Apostol President Eco Alpex Braila, Romania George Holliday Manager, Europe and Central Asia Program Bank Information Center USA Eliza Teodorescu Executive Director Asociatia ALMA-RO Bucharest, Romania Dipl.Ing. Herwig Schuster Campaign Programme Director Greenpeace CEE Vienna, Austria Gabriel Petrescu Executive Director Open Society Foundation Romania Bucharest, Romania Anamaria Bogdan

Spokesperson Greenpeace in Romania Bucharest, Romania Dr. Istvan Farkas President Hungarys National Society of Conservationists Friends of the Earth Hungary Budapest, Hungary Csaba Mezei Office Director Greenpeace Hungary Budapest, Hungary Petr Hlobil & Magda Stoczkiewicz Campaign and Policy Coordinators CEE Bankwatch Network Prague, Czech Republic Farkas Szodoray-Paradi President Romanian Bat Protection Satu Mare, Romania Dan Craioveanu InfoOMG Cluj Napoca, Romania Lszl Csonta President Tinutul Secuiesc Verde Miercurea Ciuc, Romania Janos Mark-Nagy Executive Director Transylvanian Carpathian Society Satu Mare, Romania

Joszef Szabo President Otus Environmental Organisation Odorheiu Secuiesc, Romania Dipl. Ing. Dan-Calin Tocaciu President Sun Valley Environmental Organisation Targu Mures, Romania Prof. Petruta Moisi President Centre for Evironmental Consultancy Galati, Romania Ionut Apostol Executive Director Terra Mileniul III Bucharest, Romania Codrutsa Nedelcu Executive Director ARIN Environmental Organisation Braila, Romania Csongor Kovcs Zoltn President Green Transylvania Cluj-Napoca, Romania Dr. Endre Sarkany-Kiss President Apathy Istvan Cluj, Romania Luminitia Dejeu President ExtraArt Foundation Cluj-Napoca, Romania Laszlo Szakacs Vice president Rhododendron Environmental Organisation Targu Mures, Romania Mihai Gligan President Romanian Ranger Association Bucharest, Romania Sandor Koefoesfoey Executive Director Lions Foot Environmental Organisation Cluj-Napoca, Romania Hans Hedrich Project Coordinator Sustainable Sighisoara

Sighisoara, Romania Bako Mihaly Executive Director Strawberrynet Sfantu Gheorghe, Romania Ioan Ghira President National Society of Herpetology Cluj-Napoa, Romania Dan Mercea President Independent Centre for the Development of Environmental Resources Cluj-Napoca, Romania Puran Vasilica President Organisation for Sustainable Development in the Lower Danube Region Calarasi, Romania Carmen Dorobantu President Organisation of Young Ecologists Calarasi, Romania Silvius Patras President Piatra Altarului Club Cluj-Napoca, Romania Laszlo Potozky Director Environmental Partnership Foundation Miercurea Ciuc, Romania Hajdu Zoltn General Coordinator Focus Eco Center Targu Mures, Romania Sabin Cornoiu President Friends of Salvamont Gorj, Romania Emil Maniou President Cerotin Environmental Organisation Gorj, Romania Ion Negrea President Franta/Romania/CE Environmetal Network Gorj, Romania Oana Moldovan Science Society

President Cluj, Romania Dr. Grigore Davideanu President AquaTerra Environmental Organisation Iasi, Romania Alexandru Gota President Eco-Breite Sighisoara, Romania Mihai Togor President Regional Centre for the Ecological Monitoring of the Apuseni Mountains Oradea, Romania Paul Iacobas President Centre for Protected Areas and Sustainable Development Oradea, Romania Ioana Lucaciu Director Be Prepared!Environmental Organisation Oradea, Romania Eduard Faier President ECO South-East Drobeta Turnu Severin, Romania Dr. Monica Margineanu President Association for Architecture, Restoration and Archaeology Bucharest, Romania Zoltn Demeter Chairman Green Action Miskolc, Hungary Ioana Bobina President Womens Association for Environmental Protection and Sustainable Development Chisinau, Republic of Moldova Jzsef Kelemen Director

Central European Club for Environmental Protection Kiskufelegyhaza, Hungary Benedek Javor Program Leader Protect the Future! Budapest, Hungary Rodica Negura President SalvaEco Chisinau, Republic of Moldova Bence Kovacs Executive Director Independent Ecological Center Budapest, Hungary Zsolt Fzr President Hatvan Environmental Protection Hatvan, Hungary Edina Vadovics President Greendependent Gdll_, Hungary ELTE Nature Conservation (ETK) Veronika Mora President Budapest, Hungary Pter Gyngyssy President Deep Forest Fund Szombathely, Hungary Huub Scheele Project Coordiator Both ENDS Amsterdam, The Netherlands Theodora Borghoff President Ecotopia Romania Stanciova, Romania Laura Boicenco President Mare Nostrum Constanta, Romania Florina Ianculescu President Asociatia Galanthus Drobeta Turnu Severin, Romania Ionut Brigle President Eco Training Center Cluj Napoca, Romania

Cristian Grecu Actiunea Civica Directa President Bucharest, Romania George Razvan Marcu Executive Director Ecosens Bucharest, Romania Alin Rosca Executive Director Potaissa Foundation for Ecology and Tourism Turda, Romania Gbor Cseh Chairman Csermely Environmental Association Szeged, Hungary Raul Papalicev President Salvamont and the Association for the Protection of the Ceahlau Mountain's Biodiversity Piatra Neamt, Romania Eleonora Mircescu Vice president ECOTOP Oradea, Romania Dr. Laszlo Rakosy President The Romanian Society for the Protection of Butterflies Cluj Napoca, Romania Dr Dumitru Murariu President Romanian Federation of Chiropterology Bucharest, Romania Attila Pilbath President ACCENT GeoEcologica Sfantu Gheorghe, Romania Emil Burdusel President UNESCO Pro Natura Bucharest, Romania

MESSAGE FROM EUGEN DAVID PRESIDENT OF ALBURNUS MAIOR ROSIA MONTANA, ROMANIA Greetings from Rosia Montana! My name is Eugen David and I am from Rosia Montana. This is where I live with my family; this is where I farm my land; this is where my daughter goes to school; this is our home. Rosia Montana is also the place where Gabriel Resources wants to develop Europes largest open cast cyanide leach gold mine. At full production they will evacuate 500,000 tons of rock per week and use between 13-15 million kilograms of toxic cyanide per year -- for 16 long years. Because the gold lies squarely under and around the village of Rosia Montana, Gabriel needs to move out the local population -- roughly 2000 people all in all. But its not only the people that will need to go. Gone also would be our mountains, pastures, rivers and our churches, cemeteries and school our community with its social fabric and traditions. Mine Your Own Business doesnt talk about any of this but instead is a propaganda film paid for by Gabriel Resources who wants to make a lot of money from all this destruction. If anything, this film is reminiscent of times that are long over and does not portray the situation as it is at Rosia Montana. Anyone can see this by simply reading what the international press has been reporting. Any company who makes its money from the production of gold would, when faced with opposition, want to promote issues such as jobs instead of expropriation, a new model village instead of the destruction of Rosia Montana, and cyanide management plans instead of the risks associated with the use of such large quantities of this poisonous substance over such a long period of time. Any company faced with opposition would also want to diminish and de-legitimize such forces and in this sinister instance advance foreign environmentalists to avoid the local opposition issue. Not that Gabriel Resources is from Rosia Montana and not that Phelim McAleer is unaware of Alburnus Maior, the local opposition group that I represent. For the sake of professional subjectivity he simply forgot to pay us a visit. When Mr. McAleer couldnt get an interview with Stephanie Roth, he simply stole images from the Goldman Environmental Prize Foundation in order to have images of so-called evil foreign environmentalists. Miss Roth, who is a recipient of the prestigious Goldman Environmental Prize, has been working with us at Rosia Montana since 2002 and because of her contributions I can communicate with you today. When approached by McAleer under a completely different name and asked to give an interview, she refused because McAleer was uninterested in interviewing any of the locals Miss Roth suggested should be interviewed instead of her. Luckily in Romania where people are highly aware of the Rosia Montana issue, the propaganda side of Mine your own Business was quickly recognized. After a first unannounced test screening in Bucharest, Gabriel Resources had to stop the film after 15 minutes because people were so revolted by what they saw. Money can buy a lot of things, including a third rate Mine Your Own Business. Disappointingly for Gabriel, there are things that money cannot buy. My land, my roots, my home, my family are not for sale and neither is my soul. Long live Rosia Montana! 18 January 2007

Rosia Montana Gold Corporation Will Receive the Approvals For the Cetate and Corna Dams From the Ministry of Environment Wed Jun 2, 12:25 PM TORONTO, ONTARIO--(Marketwire - June 2, 2010) - Gabriel Resources Ltd. (TSX: GBU.TO) ("Gabriel" or the "Company") is pleased to announce that Rosia Montana Gold Corporation S.A ("RMGC") is now entitled to receive the approvals for the Cetate and Corna dams related to the Rosia Montana Project. Through an irrevocable decision awarded today, the High Court of Cassation and Justice has compelled the Ministry of Environment to issue the approvals and endorsements for the Cetate and Corna dams immediately, affirming an earlier decision of the Bucharest Court of Appeal. "This result confirms the impartial opinion of experts and recognises that our project is a viable one. We have a solid project which deserves a fair evaluation in all its components," Company officials said. The National Commission on Dams Safety (CONSIB), consisting of national experts and functioning under the Ministry of Environment, approved the documentation which represented the basis for the issuance of the endorsements in April 2007. The Cetate and Corna dams for the Rosia Montana Project were designed by Montgomery Watson Harza in the USA, a leading international dam construction engineering firm, in accordance with specific international standards and legislation, and approved on two separate occasions by the Romanian Central Committee for Endorsement of Documentations on Dams Safety Assessment. Each dam is designed to withstand an earthquake measuring 8 degrees on the Richter scale. "RMGC proposed extremely strict environmental protection and crisis management measures in the Rosia Montana Project, stricter than both European and Romanian standards," Company representatives underline. The Rosia Montana Project is strongly needed in an area where 80% of the people are unemployed and is expected to bring thousands of jobs and over $US 4 billion into the Romanian economy, while observing all Romanian and European environmental laws and helping preserve important historical buildings and local patrimony. About Gabriel Resources Ltd. / Rosia Montana Gold Corporation Gabriel Resources Ltd. is a resource company committed to responsible mining and sustainable development in the communities in which it operates. Gabriel is engaged in the exploration and development of mineral properties in Romania and is presently engaged in the development of its 80.46%-owned Rosia Montana gold project.

The following from:

http://www.gabrielresources.com/s/RosiaMontana.asp?ReportID=128024

Location:
The Rosia Montana Project is located within the Golden Quadrilateral which is situated within the Apuseni and Metaliferi Mountains of Transylvania, Romania and covers an area of approximately 900 square kilometres immediately to the north of the city of Deva.

Concession Size: 23.8 square kilometres Geology and History:

Dacite Intrusives Epithermal gold-silver mineralization Mining for high grade veins dates back 2000 years 150 Km of grid pattern exploration development Extensively explored over a vertical distance of 400m

Major Targets:

Cetate Cirnic Cirnicel Igre-Jig-Vaidoaia Orlea-Tarina

Gabriel's Work Program to Date:

Basic Engineering Study completed Optimized Plant Capacity Study completed Definitive Feasibility Study completed Pre-feasibility study completed Scoping Study completed Environmental Impact Assessment (EIA) & Annex to EIA completed Resettlement and Relocation Action Plan (RRAP) completed Annex to Resettlement and Relocation Action Plan completed Update to Zonal Urbanism Plan - Rosia Montana Industrial Area completed

The Rosia Montana Project (the "Project" ) is situated in west-central Romania near the village of RosiaMontana in Alba County within the Rosia Montana mining district. It is located immediately northeast of the town of Abrud, approximately 45 km northwest of the regional capital of Alba Iulia, and 60 km north-northeast of the city of Deva. The village of Rosia Montana and the nearby town of Abrud are the two main centres housing staff and associated infrastructure for the project. The proposed mine and mill site are located at the head of a small drainage basin within steep hilly/mountainous terrain at an elevation of approximately 850 metres above sea level (masl). The proposed tailings management area is located in the immediately adjacent valley to the mine/mill complex. The valley elevation in the area below the site is at approximately 600 masl. As a result of historical mining activities, abandoned waste dumps and tailings ponds exist on the Rosia Montana property. In addition, approximately 140 km of historical underground workings, some dating from Roman times, have been identified within the mineralized zones. Acid mine drainage continues to be produced from the historical openings and dumps. This drainage currently discharges, untreated, into local streams. Gabriel proposes to treat these effluents, as part of its normal operating procedures. Numerous epithermal gold-silver, porphyry copper and polymetallic ore deposits are located in the Golden Quadrilateral area and have been mined since ancient times. They are of Neogene Age and are situated on the three volcanic NW-SE oriented alignments as follows:

Brad - Sacaramb, Zlatna - Almasul Mare, Rosia Montana - Bucium.

The Rosia Montana deposit has been mined since Roman occupation. There have been four principal mining periods: Roman conquest period (106 - end of the Third century) Austrian -Hungarian Empire conquest (from the end of the 17th century until 1918) The period between the Two World Wars (1918 - 1939) Modern Age (1959 up to present).

The Romans mined out the gold rich veins using trapezoidal galleries which followed the vein direction. During Austro--Hungarian Empire times mining operations were developed both in Carnic and Cetate along the more highly mineralized veins (and the zones where veins intersected) using underground methods and developing underground mine workings or stopes, locally called "coranda". During this period accessible ore became deplenished and to ensure that the mining continued and the community stayed in the area the then Emporer funded the construction of the Cross Gallery (714mRL drive) to enable access for the miners to ore in the lower parts of the deposit. Between the two World Wars there were many concession contracts, called "cuxe", awarded to local people which permitted the mining of gold for a defined period of time resulting in many of the rich gold veins being mined out. The employment of children at the mine was a common practice to access the very narrow veins. The ore was transported by foot to water powered stamp batteries from which the gold and other sulphides (including pyrite, sphalerite and galena) contained in the veins were collected. The rivers and streams from the area resulting from the mining and acid mine drainage were so polluted and ran so red that the town was known as "Verespatak" in Hungarian, or "Red River". Gold was then extracted using amalgom (mercury) which was burnt off to recover the bullion (gold and silver). The resulting historical mining methods have left Rosia Montana with a lasting environmental legacy with high levels of mercury in the lakes and water ways and high levels of metals including zinc, lead and related cadmium in the soils and water ways. More recently due to more efficient modern mining methods the lower grade disseminated style mineralization within the bulk of the rock, mining operations were initially developed underground using underground stope and pillar bulk mining methods and later on, as the average gold content of the remaining rock decreased further, ore was recovered using open pit methods and then gold was recovered along with other sulphides in a flotation plant situated at Gura Rosiei. The resulting flotation concentrate was then trucked to Baia de Aries only 15 km away and gold and silver were recovered using conventional cyanide leaching techniques. Open pit mining commenced in 1975 and the state mining company, Minvest, ceased underground operations in 1985, but continued to operate a state subsidized open pit mining operation. This open pit mine is expected to cease operations in the second half of 2006. The Rosia Montana deposit is hosted in a maar- diatreme complex intruding Cretaceous age fine grained sediments predominantly comprised of black shales, with subordinate sandstones and conglomerates. The main lithology types found within this complex consist of phreato -- magmatic breccias, reworked breccias, and re-worked lake sediments, intruded by sub-volcanic dacite bodies. These main dacite bodies are the Neogene gold-silver bearing intrusions known as the "Cetate Dacite" and "Carnic Dacite". Many phreato-magmatic and smaller phreatic breccias which display varying degrees of mineralization, have been identified and mapped within the maar-diatreme complex and within the dacite bodies. The phreatomagmatic breccias contain clasts of Cretaceous black shale, sandstone and conglomerate, and crystalline basement clasts such as gneisses and schists in addition to dacite clasts. One of the largest, the "black breccia" or "glamm" forms a sub-vertical breccia pipe at the very heart of this complex, being situated between the two dacite intrusions does not contain significant mineralization. Another the "Corna" breccia situated to the south of Cetate and Cirnicel has been emplaced

post-mineralization and contains primary magnetite and altered dacite clasts but no significant mineralization. Between Tarina and Jig a series of polymict diatreme breccia bodies have been identified which have intercepted and re-worked the vent breccia. These breccias are the product of deep phreato -- magmatic eruptions along structures, which also explains their cylinder or elongated shapes. In general, these breccia are mineralized. In the Igre zone, dacite and polymict breccias are found within host Creatceous sedimentary units and are interpreted as branches of the diatreme breccia emplaced along smaller faults. Extrusive andesites are found at the northern and eastern side of the project area and they formed a thin to medium thickness blanket overlying the maar complex. Within this succession, the lower levels are represented by pyroclastic flows and volcanic ashes while to the north and east, the lava flows are seen covering the pyroclastics. These volcanics occurred after mineralization at Rosia Montana. The Rosia Montana deposits are epithermal, low to intermediate sulphidation systems with relatively simple metallurgy. The mineralization does not contain deleterious antimony, mercury, arsenic or tellurium. Gold occurs as electrum (goldsilver), associated with sulphides (predominantly pyrite) and in the native form. Mineralization is associated with quartz-adularia alteration and later carbonate-claysulphides and occurs as disseminations throughout the host rocks. The bulk of the known reserves are localized within the two adjacent dacitic bodies, Cetate (in the west) and Cirnic (in the east). The surrounding breccia units host the Orlea, Cirnicel and Igre deposits and much of the breccia hosted mineralization remains untested. Cetate The Cetate deposit is hosted in the western most of two main dacite dome complexes located at RosiaMontana. Peripheral and internal phreato-magmatic breccias comprised of dominantly dacite clasts grading out into mixed volcanoclastic breccias and vent breccia surround the main dacite body. Mineralization occurs as disseminations within the dacite and breccias as well as in later carbonate-quartzclay-sulphide veins. Veins and fractures are orientated NNE-SSW to NNW-SSW and veining is volumetrically small. Mineralization is situated within a dominantly north to northeasterly trending zone and appears to plunge and is open to the south and at depth, notably in the Gauri zone. An open pit mining operation is currently being conducted over the Cetate zone by Minvest but is expected to cease operation in the second half of 2006. The main zone of mineralization extends along a strike length of approximately 800 metres and is up to 500 metres wide. Cirnic The Cirnic Dacitic dome complex is "mushroom shaped" in cross section and at depth forms a sub vertical intrusive plug with an approximate circular cross - section. The dacitic dome occurs as the eastern most dome. Extensive gold-silver mineralization has been defined and occurs in two main zones. The largest is within a NE-SW corridor along the western margin of the Cirnic dacitic and the second within a roughly E-W trending zone on the southern margins of Cirnic. Away from the main zones of pervasive mineralization and silicification, alteration grades into argillic alteration.

Precious metal mineralization occurs as disseminations associated with pervasive quartz-adularia-trace pyrite alteration overprinted by carbonate-quartz-clay-trace sulphide veining. Early weakly mineralized black siliceous veins (chinga) also occur and the Cirnic has been cut by internal mineralized phreato-magmatic and phreatic breccias. The Cirnic deposit was subject to the greatest degree of underground development of the five mineralized areas at Rosia Montana. Thirteen levels of previous adits from the 1960's to 1980's as well as underground workings from the 18th and 19th centuries provide access into the interior of the hill. Cirnicel The Cirnicel deposit is located about 400 metres to the south of Cirnic and is hosted in volcaniclastic maar-diatreme re-worked sediments composing multi-clast breccias and tuffaceous grits, and to a lesser extent mixed breccia hosting dominantly dacite clasts. The area is intensely altered with strong silification at the core with surrounding QIP and argillic alteration. Disseminated gold-silver mineralization is associated with disseminated sulfides, with lesser sulfide vein stockworks and individual carbonate-quartz-sulphide veins. The Cirnicel zone occurs as a subhorizontal zone of mineralization. Jig-Vaidoaia-Igre At Jig-Vaidoaia, located about 550 meters north of the Cirnic dacite intrusive, dacite outcrops above maar-diatreme sediments and volcanoclastics as well as Cretaceous age shales and slates and is expressed as a small hill. The Vaidoaia dacite may represent a remnant of the larger dacite dacte body, the roots of which have not been located to date. Mineralization is considered to be sourced along local structures. The dacite, volcanoclastics, and sediments are brecciated and intensely altered; this alteration includes silification, argillic, and disseminated sulfides. The small dacite body at Vaidoaia is situated on the intersection of major WNW and NE trending structures. The NE trending structure may have displaced the Cetate and Cirnic bodies. Gold- silver mineralization is found within the dacite, dacite breccia, vent breccia and within Cretaceous black shales. The mineralization occurs dominantly as disseminations, small veinlets and stockworks and secondarily as quartz sulfide veins that trend both north-south and east-west. The Igre prospect, located immediately west of Jig-Vaidoaia, is contained within strongly altered (sulfides and silicified) volcaniclastic sediments, phreato-magmatic breccias and local small dacite dykes and dacite breccias. Mineralization has been emplaced and focused along and adjacent to steeply south dipping structures with silicification and veining also forming sub-horizontal zones of mineralization within the breccias and volcaniclastic units with more vertical zones emplaced within the Cretaceous sediments. The Jig-Vaidoaia-Igre zone appears to have formed within a structurally linked WNW trending zone, which remains open to the ESE. To the east the zone is linked with the relatively untested Cos zone. The Jig-Vaidoaia zone remains open to the NE also.

Orlea-Tarina Gold-silver mineralization in this area is hosted in a series of sub-parallel quartz sulfide veins hosted in volcaniclastic sediments located to the north of the Cetate dacite intrusive. Mineralization has been located north of Cetate at Carpeni and it appears that mineralization will be continuous to Orlea. Mineralization at Orlea has been emplaced along steeply dipping E-W trending structures and sub-horizontal veins. Pervasive silicification, sulphides, carbonate and clays form sub-horizontal zones which host pervasive precious metal mineralization. The mineralization at Tarina appears to form the intersection of N-S trending structures from Orlea with the main ENE trending regional structures which have emplaced the Igre deposits. The zones remain relatively untested but are known to host precious metal mineralization within volcaniclastic sediments, phreato-magmatic breccias and local small dacitic dykes and dacite breccias. Mineralization is hosted in carbonate-quartz veins, silicificed zones and zones of sulphides and clay alteration. The Rosia Montana deposits are surrounded by a spatially extensive zone of intense hydrothermal alteration (dominantly QIP, argillic and quartz-adularia alteration or commonly silicification). The mineralized intrusives and breccia pipes are topographic highs making them ideal for large scale open pit mining with low strip ratio. These deposits collectively represent a major world-class, under-developed resource, arguably the largest in Europe. Between 1997 and 2005, the Company carried out and completed a large geological exploration program consisting of surface mapping and sampling, underground sampling and mapping of the existing galleries, as well as surface and underground drilling, geo-physical surveying and measurements, and topographic surveys. In addition the Company conducted geochemical, mineralogical, and petrographic analysis and studies in addition to other specific exploration activities. This program defined four main mineralized zones: Cetate, Carnic, Orlea and Tarina-Igre-JigVaidoaia. The gold content is generally relatively low (average 1.3 g/t Au), and disseminated throughout the whole rock mass. Based on the exploration program a total measured and indicated resource of 350,000,000 tonnes at a grade of 1.3 g/t of gold and 6 g/t of silver for a contained total of 14,600,000 ounces of gold and 64,900,000 ounces of silver in addition to an inferred resource of 30,000,000 tonnes at a grade of 1.2 g/t of gold and 3 g/t of silver for 1,200,000 ounces of gold and 3,000,000 ounces of silver. The deposit remains open in several directions and an exploration program has been ongoing. While the proving of the recoverable reserves is sufficiently complete to allow the development of the new mine, the geological exploration program will continue at a lower level of intensity in order to identify new mineralized zones and increase the knowledge and understanding of the already calculated resources.