Taking on the likes of billionaire George Soros and actress Vanessa Redgrave, Denver image-building firm Genesis Inc. is working to put the luster on a controversial gold-mine plan in Romania.
The $638 million proposal in western Romania’s Transylvania region pits a handful of angry villagers backed by wealthy donors and environmental groups against other residents who welcome the economic boost of the project by Toronto-based mining company Gabriel Resources Ltd.
Helping to sway public opinion is Genesis, a firm whose portfolio includes the creation of Frontier Airlines’ popular animal characters.
Yet the dispute in Romania has none of the warmth of the Frontier menagerie.
The project would displace thousands of villagers and disturb 3,000 acres with open-pit mines, processing facilities and waste disposal.
Redgrave has described the proposed Rosia Montana gold-mining project as an environmental boondoggle that will leave the region “poisoned for decades and decades.”
Investor and social activist Soros is backing a Romanian organization that seeks to preserve Rosia Montana’s rich history and culture by stopping the huge mining project.
Under the direction of Genesis, Gabriel Resources is fighting back with an aggressive advertising and publicity campaign to counteract the well- funded opposition from so- called nongovernmental organizations, or NGOs.
Gabriel spent $5 million last year on the campaign, including running a series of full- page ads in British newspapers to counter Redgrave’s criticism. The mining company paid Genesis just less than $1 million last year to coordinate the effort.
“We’re perceived as being aggressive because the mining industry (traditionally) has not pushed back on the factual misstatements the NGOs have made,” said Richard Young, Gabriel Resources’ chief financial officer. “Genesis is helping us strategically respond to the opposition and show why this project should be built.”
Swaying the public
At stake is a gold deposit that is the largest in Europe and among the biggest in the world – an estimated 14.6 million ounces, of which at least 10 million is judged to be readily recoverable.
At current gold prices of around $670 an ounce, the region’s resource could be worth almost $10 billion, not including additional silver deposits that also will be mined.
The project’s high stakes leave Genesis with a delicate balancing act of promoting Gabriel Resources’ venture while trying to convince Romanians that they’ll benefit from a sweeping plan that provides jobs, new housing, civic amenities and cleanup of past environmental damage.
Genesis principals Jim Adler and Deb Kelly welcome the challenge.
“Gabriel said they needed us to help them understand what the driving vision should be,” Adler said. “They have promised to do it right. It’s not just about building new houses; it’s about how people live their lives.”
Gabriel’s executive team is composed of former officers of Barrick Resources. Toronto- based Barrick last year acquired fellow Canadian miner Placer Dome, overtaking Denver- based Newmont Mining as the world’s largest gold producer.
Genesis is steering the project’s publicity campaign, coordinating the responses to criticism and helping design and promote a new village for local residents displaced by the new mine venture.
Would employ 1,200
In addition to the 20-employee Genesis firm, which operates in a converted schoolhouse on West Sixth Avenue, the Romanian mine project has another local link. Newmont owns a 19 percent stake in Gabriel Resources.
“We support (Gabriel’s) goal to build a modern mining operation that provides sustainable economic development while addressing environmental issues resulting from the area’s centuries-old mining legacy,” said Newmont spokesman Omar Jabara. “This project has the potential to provide a three-way win for investors, the local community and the environment.”
The project would employ 1,200 people during construction and create about 700 permanent jobs, Gabriel said.
Mining in the region has taken place for nearly 2,000 years, since the Roman emperor Trajan occupied western Romania in the second century to exploit its precious minerals.
A succession of other rulers, including the Hapsburgs and the Communists, continued mining with devastating environmental consequences that left local water supplies tinged red by pollution from toxic heavy metals.
“When local schoolkids draw pictures of water, they draw it red because that’s all they see,” Adler said.
Neighboring Hungary also is concerned about the project because the government believes chemicals used at the mine could contaminate a river that flows into Hungary.
Gabriel Resources proposes to extract gold from ore by using cyanide – one of the chief reasons environmentalists cite for opposing the project.
But Gabriel and Genesis maintain that not only will the cyanide be closely monitored and treated, but pollution left by former mining operations also will be cleaned.
The master plan includes developing a new village of at least 100 homes and community buildings to replace the original village that will be lost to mining.
Gabriel said it has spent $10 million so far on preserving cultural and archaeological artifacts, and has budgeted an additional $25 million on historic preservation in the region.
Radu Motoc, a spokesman for the Soros Foundation Romania, said the group’s opposition is not focused on Gabriel Resources but on Romanian government agencies charged with approving permits for the project.
“We believe that economic development should not come at the expense of the rule of law nor defy public interest,” Motoc said.
Kelly of Genesis said the project’s economic and environmental contributions to the region serve the public interest.
“It’s very frustrating to have this kind of opposition to the project,” she said. “But because of the way Gabriel operates, we feel like we’re on the side of the good guys.”
Staff writer Steve Raabe can be reached at 303-954-1948 or sraabe@denverpost.com.
