A share of BRK Financial Group, the only stock broker listed on the Bucharest Stock Exchange, was traded on Monday morning, at the opening of the Stock Exchange, for 0.13 lei, 14.7% below Friday’s price. The company announced on Friday, in a report for investors, that it owns 1.26 million shares of Gabriel Resources, the Canadian company that bought a right to exploit a gold deposit in Rosia Montana.
Romania has won the case against Gabriel Resources in the Roșia Montană case and will not pay any compensation to the Canadian company. This is the verdict communicated Friday evening to the Government of Romania by the World Bank’s International Center for the Settlement of Investment Disputes (ICSID).
The shares of BRK Financial Group (stock symbol BRK), the only stock broker listed on the Bucharest Stock Exchange, had an opening price of 0.13 lei per unit today, from the reference price of 0.1525 lei, according to BVB data.
The minimum price of the last 52 weeks was 0.10 lei, and the maximum 0.18 lei. On Friday, March 8, the day the Court of Arbitration in Washington announced that Romania won the arbitration with Gabriel Resources, BRK shares suspended from trading (at 14:48) “according to art. 111 paragraph (1) letter c, Title II, BVB Code – regulated market operator”.
An announcement addressed to BVB investors followed, in a report published on the Stock Exchange’s website, according to which BRK holds in its own portfolio 1.26 million shares of Gabriel Resources, a company listed on the Toronto Stock Exchange, TSX Ventures segment.
BRK bought GBU shares at an average price of CAD 0.39 at the end of last year. BRK also purchased 2,043,256 warrants issued by Gabriel Resources Ltd. Each warrant entitles BRK to purchase (subscribe) one share issued by Gabriel Resources at the price of CAD 0.645 at any time prior to August 23, 2024 (provided that Gabriel Resources Ltd is notified at least 90 days in advance).
BRK shares resumed trading on Friday, at 15:15, at a price of 0.15 lei per unit, up 12%.
How Gabriel Resources shares have soared since early February
The ruling in the Rosia Montana case was unexpected, as even Coalition leaders were talking of certain failure, while Gabriel Resources’ stock market prices exploded.
According to media, stock market quotes of Gabriel Resources were relatively flat until early February. Where the situation suddenly changes, and the actions rise noticeably. Exactly from the moment when the discussion related to the Roșia Montană file appeared in our country.
HotNews reported that from January 31 until two days ago, when the shares were halted from trading, the company’s market value reached almost 900 million Canadian dollars.
On January 31, the value of a share was 0.45 Canadian dollars, and by March 7 it had reached 0.87 dollars. That is, exactly from the moment when, in our country, the politicians started talking about a possible failure of Romania in this process. There was a period when the shares stagnated, then when the news came out that we would get the verdict on March 8th they started to rise again.
There are at this moment several options considered, several scenarios. We could talk about a purely political communication strategy – all those in government have advanced the worst case scenario, so that in the end, in the event of a possible win, those involved come out as heroes. A second variant is related to an economic strategy to manipulate the stock market quotations of Gabriel Resources. It is an accusation coming from the Opposition, if we look at the declarations of Cătălin Drula and also from the Coalition, if we look at the former Prime Minister Florin Cîțu, who said that an investigation should be done to see if the Prime Minister was involved in the manipulation of these actions . In the end, the politicians could simply have been ill-informed and bet on the fact that our country had a slim chance of winning anyway.
The chairman of the USR opposition party, Cătălin Drula claimed that it is about the manipulation of the capital market after the Romanian ruling power officials’ statements in the Rosia Montana case, pointing the finger at Prime Minister Marcel Ciolacu, and asking for his resignation. REPER chairman, former PM Dacian Ciolos also asked for Ciolacu’s resignation, blaming him for prejudgment in the Rosia Montana case.
The opposition leaders say that the PSD leader would have manipulated the evolution of the Gabriel Resources shares on the capital market in Ontario by declaring before the international arbitration decision that the Romanian state could lose the process regarding the gold exploitation in Roșia Montană.
Ciolacu retorted: “I did not give any information, no document from the Government, I did not give any motivation that could influence this process”.He also says he has not received any information from lawyers regarding the lawsuit.“Am I the one playing the stock market?Maybe they play on the stock market and you know very well that they play on the stock market“, replied Ciolacu.
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