There is a lot of gold and silver in them there hills

Written by Mike Armitage, SRK Consulting

Role in the Rosia Montana Project

Romania still has a protective regime for its mineral resource industry.  Access to data to speak knowledgeably about resources and reserves is classified and one needs pre-approval to be able to see this data.  I have been working as a consultant to the Rosia Montana project for a number of years now and as signatory to the Toronto Stock Exchange compliant 43-101 technical report filing for Gabriel Resources, the majority owner of the company holding the mining licence over Rosia Montana.  I am one of a few international geologists that have been approved by the Romanian authorities to have access to the data.

I am now Chairman of the UK practice and the international business of the SRK Group. SRK is an expanding international mining consulting company which employs over 1,600 staff and provides expertise in a wide range of resource engineering disciplines and has 50 offices located on six continents.

I have undertaken several reviews of the Rosia Montana project resource estimate and managed reviews of the project as a whole over the last eight years including the latest 43-101 report which was completed in October 2012. The latter document in particular covered all aspects of the project and generated a Net Present Value (NPV) for the project based on the results of our review.

Rosia Montana is about just gold & silver

For an economic geologist the Rosia Montana district is a fascination; the deposits in the area are large, geologically complex and well explored.  I was in Romania in late 2013 for the Parliamentary Special Committee hearings related to Rosia Montana.  What I heard left me with the impression that there are people who think Rosia Montana has exploitable minerals other than gold and silver.  In fact every piece of rock on our planet, and others, is mineralised but the ability to recover those minerals is the challenge and the ability to do so on a commercial scale in an economically viable fashion is an even greater challenge.  From my review of the data from Rosia Montana only gold and silver fall into the latter category, I see no evidence of any additional minerals or elements that can be recovered commercially from Rosia Montana’s ore bodies.

Mining experience

I have done much in my life as a geologist, especially in the area of gold.  After completing a degree in Mining Geology at Cardiff University in June 1983, I joined AngloGold, at the time one of the largest gold mining companies in the world, to work on one of the deepest gold mines in the world in South Africa. After this I completed a PhD in Resource Estimation focussed on a gold mine in Zimbabwe and supported financially by RTZ, the company that became Rio Tinto, now one of the largest mining companies in the world.

Since then I have been with SRK.  SRK’s independence is ensured by the fact that we hold no equity in any project.  This permits the SRK Group to provide its clients with conflict-free and objective recommendations on crucial judgement issues.  The SRK Group has a track record in undertaking independent assessments of resources and reserves, project evaluations and audits, Mineral Experts’ Reports, Competent Persons’ Reports, Mineral Resource and Ore Reserve Compliance Audits, Independent Valuation Reports and independent feasibility evaluations to bankable standards on behalf of exploration and mining companies and financial institutions worldwide.

I have produced resource estimates, or reviewed resource estimates produced by others, for over 100 mineral deposits. Approximately half of these were gold deposits.  I have written several papers on resource and reserve estimation methodology and spent several years as joint course co-ordinator of an MSc in Mineral Resources at Cardiff University and then as external examiner for the MSc in Metals and Energy Finance at Imperial College, University of London. I am also a council member and Vice President of the Geological Society of London.

Rosia Montana Project today: An external expert perspective

Working on the Rosia Montana deposit has been of particular interest to see how a mining project can be designed, and hopefully some-day built, around a number of complex issues that are also encountered at other projects, but more infrequently than not.  The diverse cultural heritage that will be restored; the decades of environmental damage that will be cleaned up; and the inter-relationship between the community and mining: all make for key issues in ensuring that any mining project needs to be using the best people, the most modern techniques and the highest standards of health and safety so as to satisfy the demands for a sustainable solution for the area that is poor and suffers from high unemployment.  My work to date tells me that Gabriel Resources has done a good job in balancing these issues; the immediate future of the area now rests with the politicians and regulators to decide.  Meanwhile the rocks of Rosia Montana continue to hold a wealth of gold and silver, but not a lot else.