Friday, March 05 2004: Masters of Gold

By Paul Cristian Radu paulradu@crji.org

Transylvania's gold constitutes an intensely wanted investment. Thousands of hectares were concessioned by a handful of multinational companies which eagerness to dig for the gold. Among those, the Australian company Esmeralda, responsible for the ecologic disaster in Baia Mare has new plans for Rosia Montana. "I've been caring the gold in wooden bowls and the horse since I was seven. I was working at the wooden wheels to crush the rock. My parents were miners and had the right to mine in two locations. It was difficult. Back then, the big owners had rented smaller mining ploughs to people and should they see we found gold veins, they kicked us out. There weren't good times, not even then. We sold the gold to banks and private entrepreneurs. And then, the Communists pumped in. They wanted the gold. They beat my husband for gold". Words flow out of Adeline Szekely's mouth, a kind woman aged 84 from Rosia Montana who has lived all her life next to gold. Actually, Ms. Szekely's fate is the same as the fates of all the Moti from the Apuseni Mountains and it is strongly connected to gold. It's been a long time since 1927, the year when Ms. Szekely began working at the mine, and today still gold dictates the lives of many Romanians from Mures to Tisa. This is reportage about the situation of the Romanian gold; about the masters of the valuable metal and the impact all of this still has upon the lives of all Romanians. The Poor in the Treasure Land The existence of gold in the underground of the regions in Transylvania is not a blessing. Paradoxically, the areas where the most wanted metal is found are among the poorest regions of the country. In locations such as Certej, Sacaramb, Craciunesti or Rosia Montana poverty is evident. There is no employment, mines are shut down, pubs are crowded with people drinking cheap vodka, and perspectives are unlikely. Nevertheless, the locals literally live on gold. Under the Moti's feet there are labyrinths of mining galleries, many of which being dug since the beginning of the millennium by the Romans who exploited the gold in Dacia. The gold of the Apuseni Mountains has being exploited for almost 2,000 years and basically all reserves were exhausted. This time veins are more and more scarce, but still, there can be approximately found between 12 and 15 grams of gold spread in a tone of earth. The few of grams from each tone of Transylvanian earth make no use for inhabitants who cannot efficiently exploit infinitesimal quantities of remaining ore.

They should move out the mountains.

They should dig abysses in the Apuseni Mountains. Moreover, they should use a gold separation method based on cyanides which would lead to the storage of poisonous substances in the Apuseni Mountains. But they have neither the desire nor the material possibilities towards the fulfillment of such titanic undertaking. But see, for some years now, some people showed up in this area planning the exploitation of the Romanian Gold and which under the cover of an international corporation have concessioned a large surface of Transylvania. These people now are the masters of the Romanian gold. MASTERS OF GOLD European Goldfields Topographic maps unroll on the desks of Deva Gold company from Certej, Hunedoarea county. In one of the offices placed at the first floor of the building built in the Communist years, the company engineers meter for a future exploitation in the Certej-Sacaramb area. Equally to other situations, the deal in Certej represents few grams of gold per tone. The company hasn't moved one grain of gold just yet; this even although they were handed the golden ores exploitation license by the National Agency of Mineral Resources. At the ground floor of the same building is located a pub with a suggestive name, 'El Dorado'. This is for now the only place in the Apuseni Mountains where the gold drunkenness can be felt. Particularly after the alcohol bubbles down the throats of the locals. The pub is for many of the area's poor an ever-fantasized land of gold, a place where they forget about un-employment, family, challenges. Behind the Deva Gold Company there is as main share-holder European Goldfields (EG), a company created by Vasile Frank Timis of Romanian-Canadian descent who has formally been president of the firm and who stills owns an important stock of shares. Among European Goldfields managers and share-holders can be found former and actual business partners of the controversial Vasile Frank Timis. EG has recently extended its activities range to Greece, again through the intermediary liaison of "Global Mineral Resources", a firm controlled by Frank Timis. In Romania, EG has concessioned large surfaces of land in the Bolcana, Certej, Baita-Craciunesti and Zlatna areas. According to the company officials, Certej area is subject of highest interest. This area would be a new "Rosia Montana" kind of area - a further amongst Europe's largest gold mines. International Goldfields An exploitation license was grated for gold through rather extraordinary means back in 1998. ANMR practically granted in exchange of a couple of million ROL, an exploitation license covering an area over 2,500 square kilometers, among the towns of Deva, Lugoj and Otelul Rosu. In this context it must be indicated that for one sq km concession the payment ranges from 20,000 to 100,000 ROL. The area concessioned by the Canadian Company - International Goldfields is ten times larger than the surface of Bucharest including its suburbs. The surface was reduced to 1,200 sq km. This impressive surface is mentioned in the most recent International Goldfields reports, but Radu Claudius, ANRM Director told us that IG presently has a concession for only 400 sq km. Vasile Frank Timis is behind IG; this through his Australian business partners, just as he is behind European Goldfields. International Goldfield was actually born out of an Australian firm called Carpathian Investment PTY Limited several years ago; a firm owned by Frank Timis and his sibling, Ioana Majdik. International Goldfields representatives could not be found at their addresses in Romania. Gabriel Resources A third firm that is trying to exploit Apuseni's gold; more specifically in Rosia Montana and adjacent areas; is Rosia Montana Gold Corporation (RMGC). Again Frank Vasile Timis is behind this company. Just as in the case of Deva Gold-European Goldfields, RMGC is a firm where the majority of shares are owned by a Canadian firm, the Romanian state holding a minor position. We shall not expand on the Rosia Montana case since it is being highly subjected to public attention. On more than one occasions, Frank Timis said that the investments he had begun in he Apuseni mountains "would create numerous jobs for the people in the area and would reinvigorate mining in Romania". Frank Timis has retired for a while from all position he held within Gabriel Resources and European Goldfields companies but according to the annual reports he still holds an important number of stock within both companies. Esmeralda - Eurogold Besides the Apuseni Mountains area, gold can be found in Northern Romania as well in the Baia Mare area. The main firm which is active in the area is Esmeralda-Eurogold. The name of the Australian firm, Esmeralda, is connected to one of Europe's major ecological disasters: the release of over 100 tones of poisonous substances (n.a. - mainly cyanides) in the Lapus and Tisa rivers. The ecological disaster caused by the break-up of a dyke stemming the cyanides used for processing the ore to get the gold lead to the massive pollution of the two rivers and involved Romania in an international scandal which is not finished yet. After the disaster from Baia Mare, Esmeralda switched its name into Eurogold and it is presently very active in Romania through the companies Transgold and Explorer. As it results form the documents that we got, the switch did not assume any other change in the management of the company, the same people holding the same key-positions. ORE-LEAVE The fifth firm that has a gold exploitation license is Ore-Leave Capital. It has concessioned terrain that sums approximately 750 square kilometers, both in the Baia Mare area and in Apuseni, among the perimeters possessed by Gabriel Resources and European Goldfields. Ore-Leave is a new-comer on the Romanian gold stage. Stock Games on International Markets Up to today Romania hasn't represented an attraction for important investors in the gold exploitation field. The companies which have received exploitation rights are firms which try to capitalize gathering money from international markets. The procedure is simple. A foreign firm concessions a certain surface from ANMR, preferably in the area also known as "The Gold Quadrilateral"; namely the Apuseni Mountains; it then releases the news to the public. Afterwards figures and investment plans are spread via studies and reports. The firm is already listed on markets such as the Toronto stock exchange and then shares are auctioned off. People interested in stock automatically appear. The more the better. Then they launch a strong media campaign. The price of the stock begins to rise and transactions keep at a continuous pace. This would be the route followed by transnational firms that wish to exploit the Romanian gold. But still, nothing happens in Romania. None of the active private firms on the precious metals markets has ever extracted a gram of gold from this country. One of the most prestigious firms that has wished to extract Romania's gold is Rio Tinto. This is a giant amongst the world of gold mining who, after a short experience, ran off without taking a look back. Cons in the Gold World Esmeralda switches its name to Eurogold

The Toronto stock-market which lists the majority of gold companies de risc is considered to be one of the most permissive stock institutions in the world. Practically, it also accepts and lists small companies that are not thoroughly verified. The vulnerability of the Toronto stock-market has been fully underlined on two occasions in the last years. The first one occurred in 1997 and was called Bre-X. Bre-X is the name of a gold mining company which reportedly discovered an impressive gold deposit in Indonesia. Consequently, the price of Bre-X shares increased at an extraordinary pace. But the price equally decreased when investors discovered that Bre-X had "baptized" the ore samples taken by adding gold from its own pocket. The damage caused by the BreX con was in the amount of CAN$3 billion. One year later, on the same market, the hit came from YBM Magnex, a company supported by one of the most wanted Mafiosi in the world - Semion Mogilevich. YBM Magnex shares increased in value when it was announced that a miracle fuel had been discovered. The miracle only lasted 3 days, when the con was revealed and again, the investors got worthless shares and several billion dollars damage. Between Poverty and Cyanide The situation of the locals from the gold zones is dramatic. The state mines were shut down or function at minimum capacity and unemployment has certainly augmented. People there do not get many chances for a decent living. The land rich in gold is poor for agriculture. Rural tourism has begun to develop especially in the North of Alba Iulia and Hunedoara counties, but few people take advantage. Transnational companies that wish to exploit gold offer a limited number of jobs and this certainly is a chance embraced mainly by youngsters. I met on the paths from Apuseni people who wanted to get a job with these companies. "I go and try to get a job. These Canadians offer big salaries, but I don't know if they continue to employ people. I hope they'll accept me", told us a young man who was hitchhiking on the road to Rosia Montana. He says he wants to have food. He doesn't care much that after some 15 years, RMGC's estimated mine life, the mountains will have disappeared and sizeable basins with tailings and cyanide will instead appear. The man is hungry and he wants food now, not later. Years from now his story would probably become Adelina Szekely's story with whom we began this story. A story of the gold lacking brilliancy and which breaks the lives of so many Romanians.

Holoangarii - the Gold Outlaws

The elderly from Apuseni remember, sometimes with fury, sometimes with admiration, a category of people who had always wondered around the gold mines: the holoangarii. They are portrayed either as thieves or outlaws. The Holoangarii are people who entered the mines and were not seen, shadows who know the underground in detail and which sneak in the galleries and steal from the gold veins. The elderly say stories about miners who dug into rich veins, celebrated the discovery and who upon return to the galleries found the mine without gold. The Holoangarii have eyes and ears everywhere. Holoangarii, in a modern version, exist even to this day. Armed with metal detectors and dynamite they still haunt the mine galleries and try to reap gold from the veins, gold they later process and sell way under the market price. Modern Holoangari's traces can be seen in the galleries underneath Rosia Montana where tens of meters in the underground they left inscriptions which expose the corporations and foreigners who have come to exploit the gold in Apuseni.