Gabriel Resources Ltd.: Second Quarter Report

Gabriel Resources Ltd. (TSX:GBU) ("Gabriel" or the "Company") announces the
publication of its Second Quarter Financial Statements and Management's
Discussion and Analysis Report for the period ended June 30, 2013.


Recent Events



--  On July 11, 2013 the Prime Minister of Romania, Victor Ponta, announced
    a National Plan for Strategic Investment and Job Creation (the "Plan").
    In the Plan Mr. Ponta set out key targets for 2013 including investment
    commitments into Romania of EUR10 billion and the creation of over
    50,000 jobs in five strategic investment fields. The Rosia Montana
    Project ("Project") is one of seven projects within the mineral
    resources field that have been identified for focus by the Romanian
    Government ("Government") in order to achieve those targets.

--  Mr. Ponta has subsequently been quoted as stating that any Government
    decision to proceed with the Project would be subject to a Romanian
    Parliament vote, and that a new law relating to the Project will be
    drafted for debate in the Parliament in September 2013.

--  As part of its review process of the Project's Environment Impact
    Assessment ("EIA") and its pending decision on the issuance of the
    Environmental Permit ("EP"), the Ministry of Environment and Climate
    Change ("MoE") announced on July 11, 2013 that it was initiating (with
    immediate effect) a public consultation on the conditions and measures
    which need to be included in the EP to be issued for the Project. In
    this respect a consultation document has been posted on the MoE website
    soliciting comments by July 30, 2013.

--  The Company announced on July 12, 2013 that it is in negotiation with
    the Government on an increase in the Romanian State's equity interest in
    the Project to a maximum of 25 percent and an increase in royalties to a
    fixed rate of 6 percent of revenues, along with other long-term
    commitments on environment, cultural heritage and a defined route to
    successful permitting to underpin the Project's status as a world-class,
    long-term and sustainable investment. The Company will update the market
    on these negotiations when appropriate.



Q2 Summary



--  Since the USL Government secured its long-term position at the end of
    2012, the Company's dialogue with the relevant ministries and
    departments has steadily increased. This improved momentum has been
    demonstrated through three formal meetings of the Technical Assessment
    Committee ("TAC") during Q2 2013, and since the end of the quarter a
    further TAC meeting has been held. The Company awaits clarification on
    the conclusion of the TAC process and how the results of the public
    consultation will be incorporated in the EP decision process. The
    Company is unable to provide guidance on the related timeframes to a
    final decision from the TAC, MoE or the Government. Ultimately, the EP
    must be approved by a Cabinet decision of the Government prior to its
    issuance.

--  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 average net cash usage was $3.2 million for the first six months
    of 2013, with Q2 2013 closing cash and cash equivalents of $62.8
    million.



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

"We are pleased with the inclusion of the Project within Romania's National Plan
for Strategic Investment and Job Creation. The construction of a mine at Rosia
Montana, applying high global standards and built for a sustainable future for
the local community, will be a benchmark for Romania to attract long term
socially responsible foreign investors. This will allow Romania to demonstrate
real progress towards the Government's key targets.


We are encouraged by the recent momentum within the Technical Analysis Committee
review process and look forward to the positive completion of the parliamentary
debate on the Project in the near future, together with finalisation of the
environmental permitting process."


Further information and commentary on the operations and results in the second
quarter of 2013, together with events anticipated in the short term, is given
below. The Company has filed its Unaudited Condensed Interim 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 ("RMGC"), 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$24 billion (at a US$1,200/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 second quarter of 2013 was $1.7 million.



Liquidity and Capital Resources



--  Cash and cash equivalents at June 30, 2013 amounted to $62.8 million.

--  During Q2 2013, the Company issued 3.4 million common shares upon the
    exercise of stock options for aggregate gross proceeds of approximately
    $5.3 million.

--  Excluding expenditure related to 2012 referendum activities, the monthly
    average net cash usage for the first six months of 2013 was $3.2
    million.

--  On the basis of the recent engagement with the TAC, inclusion of the
    Project in the Plan, anticipated parliamentary debate in respect of the
    Project and potential progress in permitting, the Company expects an
    increase in activity levels associated with its permitting and
    communications activities which will result in increased expenditure in
    H2 2013.



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$1.5 billion.



Political Environment



--  On December 9, 2012, scheduled parliamentary elections brought an
    overwhelming victory for the 'USL' alliance of the Social Democrat,
    National Liberal and Conservative parties, led by Social Democrat leader
    Victor Ponta. The USL gained two thirds of the parliamentary seats - a
    position enabling it to fully control both 'houses' (the Senate and the
    Chamber of Deputies) and for parliament to adopt important laws without
    the need for cross-party consensus. Subsequently Mr. Ponta, as Prime
    Minister, put in place a revised cabinet structure, including a new
    Department for Infrastructure Projects of National Interest and Foreign
    Investments (the "Department for Infrastructure") to which overall
    responsibility for the Romanian State's ownership interests in the
    Project is slated to be transferred.

--  The first half of 2013 has seen the USL add definition to its program
    for its 4-year governmental term, which recently manifested itself in an
    announcement by Mr. Ponta on July 11, 2013 of the Plan. In the Plan Mr.
    Ponta set out key targets for 2013 including investment commitments into
    Romania of EUR10 billion and the creation of over 50,000 jobs in five
    strategic investment fields - energy, infrastructure, agriculture,
    industry and mineral resources. Seven projects within the mineral
    resources field have been identified for focus by the Government in
    order to achieve those targets, of which one is the Project.

--  Furthermore, Mr. Ponta has also recently been quoted as stating that any
    Government decision to proceed with the Project would be subject to a
    Romanian Parliament vote, and that a new law relating to the Project
    will be drafted for debate in the Parliament in September 2013.

--  The Company's previously stated view is that the first half of 2013
    would 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 Government. The Company
    therefore views the recent Plan announcement as highly encouraging.
    Moreover, the Plan has followed closely after three recent meetings of
    the TAC, charged with the detailed assessment of the environmental
    impact and compliance of the Project, and a further subsequent meeting
    has been held.

--  In announcing the Plan, Mr. Ponta noted that the benefits of the Project
    to Romania were up to '78% of what the Project generates'. This figure
    represents estimates for (i) direct and indirect operational expenditure
    with contractors and suppliers across Romania, (ii) taxes and duties
    payable to the fiscal authorities (including corporate, payroll, and
    withholding taxes) and distribution of profits to the Romanian State.
    These estimates are based on certain long-term technical, financial,
    economic and other assumptions, including those for commodity prices
    (such as US$1,200 per ounce gold) and foreign exchange rates, together
    with an increase in the Romanian State's equity interest in the Project
    and royalties therefrom.



Project Ownership and Royalty Rates



--  Since the USL Government secured its long-term position at the end of
    2012, the Company's dialogue with the relevant ministries and
    departments has steadily increased. The Prime Minister has maintained a
    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 announced on
    July 12, 2013 that it is currently in negotiations with the Government
    on an increase in the Romanian State's equity interest in the Project to
    a maximum of 25 percent and royalties at a fixed rate of 6 percent of
    revenues, along with other long-term commitments on environment,
    cultural heritage and a defined route to successful permitting to
    underpin the Project's status as a world-class, long-term and
    sustainable investment. The Company will update the market on these
    negotiations when appropriate.



Environmental/Permitting



--  The MoE, as part of its review process of the Project's EIA and its
    pending decision on the issuance of the EP, announced on July 11, 2013
    that it was initiating (with immediate effect) a public consultation on
    the conditions and measures which need to be included in the EP to be
    issued for the Project. In this respect a consultation document has been
    posted on the MoE website soliciting comments by July 30, 2013.

--  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. Statements,
    reported in the Romanian media in 2013, from both the Prime Minister and
    Minister for Environment 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
    concluding its discussions with the TAC and relevant Ministries on this
    topic and to a successful process through Parliament of the Project
    specific legislation noted by Mr. Ponta.

--  Re-engagement with the MoE and Government occurred in Q1 2013, followed
    by three TAC meetings in Q2 2013 on May 10, May 31 and June 14, and a
    further TAC meeting was held on July 26. Although following these
    meetings, there has been no formal TAC announcement or recommendation,
    the Company views this as a positive procedural development and awaits
    clarification on the conclusion of the TAC process and how the results
    of the public consultation will be incorporated in the EP issuance
    process. The Company is unable to provide guidance on the related
    timeframes to a final decision from the TAC, MoE or 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 in
    recent years 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 been conducted on water
    courses in Rosia Montana that are currently adversely affected by
    existing acid mine drainage from historic mining activities. The results
    have successfully shown that a full scale plant will clean up water
    discharges from the Project, along with much of the existing baseline
    contamination in the area, to levels fully compliant with all
    regulations in place (and even to potable water standards).

--  Furthermore, since late 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. This is one
    example of how the Project, and the commitments made in the EIA, will
    produce long-term environmental benefits at local, regional and national
    levels.

--  The Company's amended industrial zonal urbanism plan ("Industrial Area
    PUZ") is at an advanced stage, although a recent modification to the law
    governing urbanism plans increased the total number of endorsements
    required for its approval to 23. Currently there are 18 valid
    endorsements; the Company has submitted the necessary documentation for
    three further endorsements and is progressing with the submission of
    documents for the remaining two. After obtaining all the necessary
    endorsements, the final approval for the Industrial Area PUZ will be
    given by the local councils of Rosia Montana, Abrud and Bucium.

--  In addition, 10 out of the total of 13 endorsements necessary for the
    final approval of the zonal urbanism plan for the Rosia Montana
    historical protected area ("Historical Area PUZ") had been obtained at
    the end of Q2 2013, with the remainder being a work in progress.

--  In February 2013, Parliament approved certain amendments, originally
    proposed in 2011, to the legislation concerning the approval of zonal
    urbanism plans. 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. The
    original bill that was approved by Parliament has been through a
    subsequent examination and redrafting process. In July 2013, the amended
    bill came into force. The provisions of the law include clarification of
    the approval process for urbanism plans, applicable to the Industrial
    Area PUZ.

--  While the Company understands there is no formal link between the
    receipt of remaining endorsements for the Industrial Area PUZ, the
    Historical Area PUZ and the EIA review process, it believes that these
    respective remaining endorsements are likely to be obtained on, or
    after, the issuance of the EP.

--  During 2012, RMGC obtained an extension to the validity of its urbanism
    certificate (UC-87) through 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. 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 third quarter of 2013 summarized
    below: 
    --  Two NGOs have initiated proceedings before the Bucharest Tribunal
        seeking the cancellation and suspension of the ADC for Carnic, the
        first hearing of which is scheduled for September 9, 2013. 
    --  An action filed by three NGOs requesting the suspension of the ADC
        for the Carnic open-pit is scheduled to be heard by the Cluj
        Tribunal on September 13, 2013. 
    --  The next hearing of a claim brought by the same three NGOs in the
        Cluj Tribunal seeking the cancellation of the ADC for the Carnic
        open-pit is scheduled to be heard on September 30, 2013. 
    --  A claim initiated by two NGOs 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 September 6, 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 September 20,
        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: 
    --  Finalise the TAC process; 
    --  Obtain approval of the EP and all other required permits that will
        allow construction activities to commence; 
    --  Continue appropriate stewardship of cash resources, whilst
        maintaining efforts to promote the awareness of the Project
        benefits, both economic and otherwise, and of the widespread support
        for the permitting of the Project; and 
    --  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.
Katie Fedorowicz
Investor Relations
Mobile: [phone]
[e-mail]
www.gabrielresources.com


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