HispanicBusiness

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.--  RMGC, in partnership with the local council of Rosia Montana, initiated    the restoration of two iconic houses (the old school house and former    town hall) in the Protected Area, along with the rehabilitation of a    number of houses, which will be used for tourism initiatives. Subject to    internal fit out, which has been placed on hold, 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 in the old underground    mining galleries that lie under the Protected Area. This work has    focused on opening up previously unexplored Roman galleries for public    interest and will serve as a permanent museum, a visible testimony to    the 2,000 year mining history at Rosia Montana. One such example is the    Catalina Monulesti underground mining gallery 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.

--  Gabriel takes pride in its commitment to achieving the highest levels of    sustainability from workplace safety to community and environmental    responsibility. It has a clear goal of attaining business performance    through a dynamic process of continuous improvement in all aspects of    its business and respecting all stakeholders. 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.

--  In November 2007 RMGC commenced an action to compel the Ministry of    Environment ("MoE") to resume the EIA review, previously suspended. On    June 19, 2012 the High Court of Cassation and Justice ordered that the    file in respect of RMGC's original legal claim against the MoE should be    returned to the Bucharest Court of Appeal to be reheard on its merits.    At a hearing on January 14, 2013, the Bucharest Court of Appeal itself    raised the question of whether the claim should be discontinued as a    whole due to a lack of interest, based on the fact that the EIA review    process had reconvened in September 2010. RMGC and the MoE informed the    Court that they considered the action should be discontinued on such    grounds and the Court admitted a motion of lack of interest.    Accordingly, the actions against the MoE and its former officials have    been discontinued.--  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.--  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. While a small number of these actions over many years have been    successful, most have been, and continue to be proved to be, frivolous    in the Romanian courts. Since early 2010 18 court decisions (from 19    legal challenges to permitting, licensing and other Project matters)    have been positive for the progress of the Project.--  Cases concluded during the fourth quarter of 2012 included:    --  A claim initiated by the Archaeological Restoration Association        ("ARA") in the Alba Iulia Tribunal which sought to commence the        procedure of classifying certain buildings from Rosia Montana as        historical monuments was rejected at a hearing on February 3, 2012.        This decision was appealed by the ARA, but such appeal was        irrevocably rejected by the Alba Iulia Court of Appeal on October 3,        2012.    --  An action commenced by two NGOs which sought the cancellation and        suspension of UC-87 was dismissed by the Bucharest Tribunal on        December 21, 2011. The NGOs appealed this decision, an appeal which        was irrevocably rejected by the Bucharest Court of Appeal on October        15, 2012.    --  An action initiated by two NGOs, which sought to compel the Alba        County Authority for Culture and Patrimony and Minister of Culture        and Patrimony to disclose the entire documentation submitted by RMGC        in respect of the application for the Archaeological Discharge        Certificate ("ADC") issued in July 2011 for the Carnic open-pit, was        dismissed by the Bucharest Tribunal at a hearing on December 20,        2012.--  Upcoming hearings in the first quarter of 2013 include:    --  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        March 15, 2013.    --  A request filed by three NGOs in the Cluj Tribunal seeking the        cancellation of the ADC, issued in July 2011 for the Carnic open-        pit, is scheduled to be heard on March 18, 2013.    --  The next hearing of a claim by the same three NGOs in the Cluj        Tribunal seeking the suspension of the ADC for the Carnic open-pit,        is scheduled to be heard on April 5, 2013.    --  An action before the Bucharest Tribunal, pursuant to which an NGO is        seeking disclosure of certain documents pertaining to the Rosia        Montana exploitation license, is scheduled to be heard on March 22,        2013.    --  Two NGOs have also initiated proceedings before the Bucharest        Tribunal seeking the cancellation and suspension of the ADC for the        Carnic open-pit, the first hearing of which is scheduled for April        1, 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.