Gabriel Resources Ltd.: First Quarter Report

Gabriel Resources Ltd. (TSX:GBU) ("Gabriel" or the "Company") announces the
publication of its First Quarter Financial Statements and Management's
Discussion and Analysis Report for the period ended March 31, 2013.


Summary



--  In Q1 2013, at the start of a four-year term, the new coalition
    Government ("USL") established a new Department for Infrastructure
    Projects of National Interest and Foreign Investments (the "Department
    for Infrastructure") to which overall responsibility for the
    Government's ownership interests in the Project will be transferred,
    subject to due process. The Company views this change and recent
    dialogue across Government ministries as a positive basis for enduring
    engagement on the Rosia Montana Project ("Project"). 
    
--  On May 10, 2013 the Technical Assessment Committee ("TAC"), charged with
    assessing the environmental impact and compliance of the Project, met in
    the first such meeting since November 2011. The Company awaits
    clarification on how the TAC review will be progressed including whether
    further meetings or documentation will be requested. Gabriel remains
    unable to provide guidance on the time that it might take the TAC to
    conclude its review and vote on the Environmental Impact Assessment
    ("EIA") or to release its recommendation to the Government. 
    
--  In Q1 2013, Romanian media comments on the status of permitting of the
    Project have specifically focused on compliance with European Directives
    as key to its progression. The Company is confident that it can, and
    will, comply with its environmental obligations and looks forward to
    furthering discussions with the TAC and relevant Ministries on this
    topic. 
    
--  The 19th positive court decision for the progress of the Project was
    achieved in Q1 2013 against 20 legal challenges to permitting, licensing
    and other Project matters since early 2010. However opponents to the
    Project have continued to register new legal challenges in the quarter
    against licenses, permits, authorizations and approvals for the Project.
    
--  On April 22, 2013, Alba County Council issued a new urbanism certificate
    (UC-47) for the Project, which is valid for 24 months, subject to
    extension for a further maximum of 12 months. 
    
--  Monthly net cash usage was $3.3 million in Q1 2013 and $67.1 million of
    cash and cash equivalents was held at March 31, 2013. 



Jonathan Henry, Gabriel's President and Chief Executive Officer, stated:

"We are pleased with the recommencement of the Technical Analysis Committee
review process and encouraged by the interaction between RMGC and Government so
far this year. We will maintain dialogue with the Government regarding the
economic, social, cultural and environmental benefits that the Project will
bring to Romania and we look forward to finalising the environmental permitting
process which will allow Gabriel to build Romania's first modern mine for the
benefit of the country and all stakeholders."


Further information and commentary on the operations and results in the first
quarter of 2013, together with events anticipated in the short term, is given
below. The Company has filed its Interim Unaudited Condensed Consolidated
Financial Statements and Management's Discussion & Analysis on SEDAR at
www.sedar.com and each is available for review on the Company's website at
www.gabrielresources.com.


About Gabriel 

Gabriel is a Canadian TSX-listed resource company focused on permitting and
developing its world-class Rosia Montana gold and silver project. The
exploitation license for the Project, the largest undeveloped gold deposit in
Europe, is held exclusively by Rosia Montana Gold Corporation, a Romanian
company in which Gabriel owns an 80.69 percent equity interest, with the 19.31
percent balance held by CNCAF Minvest S.A., a Romanian state-owned mining
enterprise. Gabriel and RMGC are committed to responsible mining and sustainable
development in the communities in which they operate. The Project is anticipated
to bring over US$31 billion (at a US$1,500/oz gold price) to Romania as
potential direct and indirect contribution to GDP. The Project will generate
thousands of employment opportunities. Gabriel intends to build a
state-of-the-art mine using best available techniques and implementing the
highest environmental standards whilst preserving local and national cultural
heritage in Romania. 


For more information please visit the Company's website at www.gabrielresources.com.

Further Information

Financial Performance



--  The net loss for the first quarter of 2013 was $2.3 million, or $0.01
    per share. 



Liquidity and Capital Resources



--  Cash and cash equivalents at March 31, 2013 amounted to $67.1 million. 
--  The Company has continued to implement its plans to reduce monthly costs
    until such time as the Government moves ahead with Project permitting.
    In Q1 2013 the Company paid one-off costs in relation to the December
    2012 Referendum that totaled approximately $2.0 million. Excluding
    Referendum activities the Q1 2013 monthly average net cash usage was
    $3.3 million, consistent with Q4 2012. 



Capital Cost



--  Including interest, financing and corporate costs the Company estimates
    the capital required to bring the Project into production and to a
    position of positive cashflow is approximately US$1.54 billion. 



Political Environment 



--  During 2012 the local and parliamentary elections, together with the
    intense domestic political infighting, limited significantly the level
    of Government engagement on the Project. Due to political volatility,
    the Company's expectations on meaningful dialogue in respect of
    progression of permitting the Project were low for much of 2012.
    Accordingly, with the exception of 'one-off' Referendum activities, the
    Company scaled back its level of expenditure. This cost focus has
    continued during Q1 2013. 
    
--  On December 9, 2012, the parliamentary elections brought an overwhelming
    victory for the ruling USL coalition, who gained two thirds of the
    parliamentary seats - a position enabling the USL to fully control both
    houses in parliament (the Senate and the Chamber of Deputies) and to
    adopt important laws without the need for cross-party consensus. Some of
    the former Ministries (including some relevant for the Project) have
    since been split and given different functional roles, including the
    Department for Infrastructure to which overall responsibility for the
    Government's ownership interests in the Project will be transferred,
    subject to due process. 
    
--  The Company's previously stated view is that the first half of 2013 will
    be an important barometer to determine where projects, such as Rosia
    Montana, which are significant to the economic progression of Romania,
    sit in the list of priorities for the USL Government. The Company views
    the apparent stability and strength of Government at the start of a
    four-year term, along with the establishment of the Department for
    Infrastructure and recent dialogue across Government ministries, as a
    positive basis for enduring engagement on the Project. 
    
--  The permitting progress of the Project relies heavily on Government
    approval of the environmental permit ("EP") and the issuance, in
    accordance with due process and Romanian law, of various permits and
    approvals at local, county and federal levels of government. The USL
    Government has stated that it will analyze the Project in a transparent
    manner and based on an open and democratic dialogue, so that the
    decisions are in accordance with the national interest, environmental
    protection and European legislation. In particular, recent comments from
    both the Prime Minister and Minister for Environment, reported in the
    Romanian media in 2013 on the status of permitting of the Project, have
    specifically focused on compliance with European Directives as key to
    its progression. The Company is confident that it can, and will, comply
    with its environmental obligations and looks forward to furthering
    discussions with the TAC and relevant Ministries on this topic. 
    
--  On March 1, 2013, the United States Department of Commerce notified
    Gabriel of its decision to formally support the Company through the
    Commerce Department's Advocacy Center for International Trade, which
    coordinates US government resources and authority in support of
    international business opportunities that involve foreign government
    decision-makers. As part of such Advocacy assistance, Gabriel
    anticipates that the US government will assist the Company by
    communicating to the Romanian Government on behalf of Gabriel's
    commercial interest in Romania. 
    
--  The Company and its 80.69 percent owned Romanian subsidiary, Rosia
    Montana Gold Corporation S.A. ("RMGC") will continue to pursue a
    strategy of engagement with all stakeholders, to explain the critical
    importance of the Project as part of the sustained economic development
    for Romania, and its commitment to adhere to the highest standards on
    engineering, environmental, cultural and social matters. 



Project Ownership and Royalty Rates



--  The Company has held discussions with a number of ministries of previous
    Governments on the potential for a revised ownership interest in the
    Project, royalty rates for gold and silver production and the route to
    successful permitting of the Project. 
    
--  Since the USL Government came to power in 2012, the Company has had
    limited discussions with it in respect of Project ownership or royalty
    rates. However, in 2013 the Prime Minister has reportedly reiterated his
    view that progress on the permitting status of the Project needs to be
    aligned with an increase in the State's participation in the Project,
    through both ownership interest and royalty. The Company awaits the
    initiation of formal discussions in this regard. 



 Environmental/Permitting



--  The Company is encouraged by a meeting within the last week of the TAC,
    charged with assessing the environmental impact and compliance of the
    Project, the first such meeting since November 2011. The Company awaits
    clarification on how the TAC review will be progressed including whether
    further meetings or documentation will be requested. Gabriel remains
    unable to provide guidance on the time that it might take the TAC to
    vote on the EIA or to release its recommendation to the Government.
    Ultimately, the EP must be approved by a Cabinet decision of the
    Government prior to its issuance. 
    
--  The Company has instigated a number of environmental initiatives to show
    how the implementation of the Project can assist with cleaning up legacy
    local environmental degradation from historical, unregulated mining
    activities. One such initiative is an acid rock drainage pilot test work
    program to clean mine water contaminated with high levels of heavy
    metals and total dissolved solids above EU and Romanian water standards.
    These tests have shown successfully that a full scale plant will clean
    up water discharges from the Project to levels fully compliant with all
    regulations in place (and even to potable water standards). Since
    December 2012, the Company has been working with the Government to use
    the pilot plant for additional testing of eight former state-run mine
    sites and has demonstrated that a full scale water treatment plant would
    be successful in cleaning up the contaminants to the required EU and
    Romanian standards at all sites tested. 
    
--  As result of the ongoing delays to the permitting process, two of the 19
    endorsements to the Company's amended industrial zonal urbanism plan
    ("Industrial Area PUZ"), which designates an industrial zone under the
    footprint of the proposed new mine at Rosia Montana, expired during
    2012. For one, the Company has obtained a new valid endorsement and, for
    the second, the Company is in dialogue with the relevant authority on
    the renewal process. Moreover, as a result of recent modifications to
    the law governing urbanism plans an additional endorsement has to be
    obtained, increasing the total number of required endorsements to 23.
    One equivalent endorsement for the zonal urbanism plan for the Rosia
    Montana historical protected area ("Historical Area PUZ") which expired
    in 2012 has now been replaced and consequently 10 out of the total of 13
    endorsements necessary for its final approval have been obtained. 
    
--  In February 2013, Parliament approved certain amendments, originally
    proposed in 2011, to the legislation concerning the approval of zonal
    urbanism plans, such as the Industrial Area PUZ. These legislative
    amendments include the introduction of a new approval timeline for
    certain PUZs and also set out a new basis for the construction of
    industrial facilities based on a General Urbanism Plan ("PUG")
    containing appropriate urbanism provisions. However, some uncertainties
    remain regarding the application of the new law in respect of the PUZ
    approval process. The bill was sent for promulgation to the President of
    Romania, who has recently returned it to the Parliament for re-
    examination. The relevant committees are currently in the process of re-
    examining the provisions of the law. Pending law promulgation, the
    process and timing for the approval of the Industrial Area PUZ remains
    unclear and may be amended and/or delayed further. 
    
--  The validity of the existing PUGs for Rosia Montana and Abrud has been
    extended, pursuant to local council decisions, through to July 2014. 
    
--  During 2012, RMGC obtained an extension to the validity of its urbanism
    certificate (UC-87) until April 2013. An urbanism certificate is an
    informational document issued by a local or county council and sets out
    the legal, technical and economic status of a particular parcel of land.
    On April 22, 2013, Alba County Council issued a new urbanism certificate
    (UC-47) for the Project, which is valid for 24 months, subject to
    extension for a further maximum of 12 months. 



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.
    
--  The Company is advancing a project to complete restoration of more than
    110 houses located within the Protected Area, which will bring these
    back into functional use. To date, the design work and permitting has
    been completed, with the final stage for obtaining construction
    authorization yet to be initiated. 
    
--  RMGC, in partnership with the local council of Rosia Montana, initiated
    the restoration of two iconic buildings in the Protected Area which will
    be used for tourism initiatives. Subject to internal fit out, 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 focusing on opening up
    previously unexplored old underground mining galleries that lie under
    the Protected Area, such as Catalina Monulesti, 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. Though access to other Roman
    galleries remains difficult, the Company has made substantial progress
    with installing sufficient infrastructure to allow the public to share
    in Romania's rich cultural heritage. The archaeological results identify
    spectacular Roman mining galleries and related wooden artifacts, all
    outside of the Project footprint. This is all part of the long term
    initiatives in the Protected Area funded solely by the Company. Without
    such programs, there would be no comparable preservation of the area's
    mining heritage. 



Corporate and Social Responsibility (CSR)



--  Gabriel takes pride in its commitment to achieving the highest levels of
    sustainability; from workplace safety to community and environmental
    responsibility. 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. 



Litigation



--  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. 
    
--  Most of these actions over many years have been, and continue to be,
    proved to be frivolous in the Romanian courts. Since early 2010 19 court
    decisions (from 20 legal challenges to permitting, licensing and other
    Project matters) have been positive for the progress of the Project. 
    
--  Cases concluded during the first quarter of 2013 included: 
    
    --  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. RMGC awaits the rebate
        of prior tax payments from the fiscal authorities. 
        
    --  On April 1, 2013, the Bucharest Tribunal rejected a claim brought by
        an NGO which sought the disclosure of certain documents pertaining
        to the Rosia Montana exploitation license. 
        
--  Upcoming hearings in the second quarter of 2013 include: 
    
    --  Two NGOs have initiated proceedings before the Bucharest Tribunal
        seeking the cancellation and suspension of the Archealogical
        Discharge Certificate ("ADC") for the Carnic open-pit, issued in
        July 2011, the first hearing of which is scheduled for May 27, 2013.
        
    --  A request filed by three NGOs in the Cluj Tribunal seeking the
        cancellation of the ADC for the Carnic open-pit is scheduled to be
        heard on June 3, 2013. 
        
    --  The next hearing of a claim by same three NGOs in the Cluj Tribunal
        seeking the suspension of the ADC for the Carnic open-pit is
        scheduled to be heard on June 21, 2013.  
        
    --  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 June
        7, 2013. 
        
    --  A claim initiated by the same two NGOs seeking the suspension of the
        SEA is also scheduled to be heard in the same court on June 21,
        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. 



Outlook



--  The Company's key objectives in the short term include to: 
    
    --  Operate on a reduced cost basis until such time as the Government
        moves ahead with Project permitting; 
        
    --  Finalise the TAC process; 
        
    --  Continue efforts to increase the Romanian public and Government
        awareness of the Project benefits, both economic and otherwise, and
        of the widespread support for the permitting of the Project (as
        demonstrated by the recent Referendum); 
        
    --  Obtain approval of the EP and all other required permits that will
        allow construction activities to commence; 
        
    --  Maximize shareholder value, while optimizing benefits of the Project
        to those in the community and the surrounding area. 



Forward-looking Statements 

This press release contains forward-looking information as defined in applicable
securities laws relating to the Company and/or the Project (referred to herein
as "forward-looking statements") that are based on management's current
expectations, estimates and projections. Specifically, this press release
contains forward-looking statements regarding the returns to Romania from the
Project and in respect of future permitting processes. All statements other than
statements of historical facts included herein, including without limitation,
those incorporated by reference, those which may refer to the Company's
financial position, business strategy, plans, objectives of management for
future operations (including development plans and objectives relating to the
Company's business) the economic impact, job creation, costs estimates,
patrimony plans, future ability of the Company to finance the Project, Project
delivery and estimates regarding the timing of completion of various aspects of
the Project's development or of future performance are forward-looking
statements. 


The words "believe", "expect", "anticipate", "contemplate", "target", "plan",
"intends", "continue", "budget", "estimate", "projects", "may", "will",
"schedule", "potential", "proposed" and similar expressions identify
forward-looking statements. Forward-looking statements are necessarily based
upon a number of estimates and assumptions that are inherently subject to
significant business, economic, legislative, political and competitive
uncertainties and contingencies. 


Forward-looking statements are not guarantees of future performance and are
subject to known and unknown risks, uncertainties and other factors which are
difficult, or may be beyond Gabriel's ability, to predict or control and that
may cause the actual outcomes, level of activity, financial results, performance
or achievements to differ materially from those expressed or implied by the
forward-looking statements. These risks, uncertainties and other factors
include, without limitation, changes in the worldwide price of precious metals;
fluctuations in exchange rates; legislative, political or economic developments
including changes to mining and other relevant legislation in Romania;
geopolitical uncertainty, uncertain legal enforcement; changes in, and the
effects of, the government policies affecting the Company's operations;
uncertainties related to timelines for awaited approvals; changes in general
economic conditions, and the financial markets; operating or technical
difficulties in connection with exploration, development or mining;
environmental risks; the risks of diminishing quantities or grades of reserves;
and the Company's requirements for substantial additional funding.


Accordingly, readers should not place undue reliance on forward-looking
statements. Gabriel undertakes no obligation to update publicly or otherwise
revise any forward-looking statements contained herein whether as a result of
new information or future events or otherwise, except as may be required by law.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Gabriel Resources Ltd.
Jonathan Henry
President and Chief Executive Officer
Mobile: [phone]
[e-mail]


Gabriel Resources Ltd.
Max Vaughan
Chief Financial Officer
Mobile: [phone]
[e-mail]


Gabriel Resources Ltd.
Katie Fedorowicz
Investor Relations
Mobile: [phone]
[e-mail]
www.gabrielresources.com


Buchanan
Bobby Morse
Mobile: [phone]
[e-mail]