Rosia Montana Gold Corporation Ltd: Company Background

Brief Presentation Of The Company

Rosia Montana Gold Corporation Ltd. was set up in 1997 in Alba county, Romania. Its equity structure is divided between two main shareholders: Minvest Rosia Montana S.A. (19.31%) and Gabriel Resources (80.69%). With more than 150 employees, Rosia Montana Gold Corporation Ltd. operates in the mining industry, gold and silver exploration area. In Romania, most of the mines have been closed because the state found difficult to adapt to European Union environmental standards. On international scale, the main competitors are from Sweden (Boliden- Dragon Mining), Finlanda (Lappland Goldminers), Spain (Rio Narcea -Kinbauri Gold Corporation), Italy (Sargold), Bulgaria (Dundee Precious Metals Inc.), Turkey (Koza Group – Ovacik), Hungay (Carpathian Gold), Slovakia (Tournigan Gold Corporation), Romania (European Goldfields), and Russia (Highland Gold, Polymetal, Peter Hambro Mining, Trans-Siberian Gold, Polyus, Kamgold).

The company issues annual reports and non- financial reports. For the purpose of the current analysis, we are going to use the Annual Report and Accounts 2010, being the most recent report made available by the company. We perform an evaluation on this report in order to check if complies with our model of an integrated report. According to the Annual Report and Accounts 2010, the company is fully committed to building a sustainable mine at Rosia Montana. The company understands that true sustainability means less corporate contributions, and more to community support. The assessment of the Technical Review Committee regarding the environmental impact performed in late 2010 allowed the company to demonstrate that the Romanian state plans to adopt the most modern mining technics being accountable to the environment, complying with both the law and national and European regulations and best practice. In 2010 they had many initiatives for community health and welfare through educational programs and cultural programmes related to community traditions and cultural heritage.

The direct benefits for the Romanian state result from paid dividends, salary taxes, royalties and other obligations of total, $ 1.8 billion. The remaining $ 2.4 billion will be spent on human resources, electricity, transport, construction, spare parts and other expenses. Creating jobs at local and county level will be a significant benefit brought by the project, specifically: over 3,000 direct and indirect jobs available during the construction phase of the project. After authorization, the Company is prepared to invest about $ 1 million per day during the two and half years of construction.

The company is committed to building a special operation that will bring positive outcomes for the local economy; restore and preserve cultural heritage and at the same time establish world class standards for environmental and social responsibility issues. Therefore, the company continues to demonstrate commitment to the environment through projects of reforestation and cleaning campaigns; energy consumption reduction by reorganizing office space to better meet current and settled rules of “green office” which highlighted recycling and responsible use of paper in the offices of the company. Long-term sustainability of the project depends on relationship with stakeholders (especially employees and community). “By building a best practice modern mine and implementing the highest environmental standards, the Project creates an opportunity to remediate past damage, leaving the region's rivers and soil cleaner than before. The Project will be the first permitted under the EU's stringent environmental laws, creating a model mining project not only for Romania and the EU but for future mining projects worldwide” (extracted from Annual Report 2010: page 12).

Rosia Montana Gold Corporation has reached many of the proposed environmental targets involving international groups and local communities: