From: CRJI.ORG Romanian Centre for Investigative Journalism
Wednesday, May 22th 2002: “Vasile Frank Timis, the Mastermind Behind the ‘Rosia Montana’ Operation, Was Sentenced Twice, Charged With Possession of Heroin – Romania’s Gold, in an Adventurer’s Hands”
Paul Cristian Radu, Dan Badea, Stefan Candea, Sorin Ozon
Romania’s most significant gold diggings have fallen into the hands of a Romanian adventurer, who, two decades ago, settled himself somewhere in western Australia. Romanian-Australian Vasile Frank Timis is a trained car mechanic. He was sentenced twice, charged with drug possession. But he has managed to make legal one of the most important financial engineering schemes in Romania’s history. He took over the exploitation and making valuable the natural deposits of gold in the Apuseni Mountains’ area from the Romanian State.
“Gold is a commodity just like any other.” This is what Vasile Frank Timis said. He is the mastermind of the deals carried out at Rosia Montana, where the most important gold deposits in Europe are. The Romanian government leased the exploitation of a huge quantity of gold, which is worth more than $3 billion, in exchange for some promises and an amount of money that seem ridiculous compared to the deposit’s value. In practice, the gold at Rosia Montana has been sold in exchange for $3 million, paid in 1997 with the field’s lease. Timis also promised he would invest another $400 million, which represented production costs, and that 25,000 jobs would be created in the region.
The Golden Quadrilateral
“Think of the Gabriel Resources Company as if it were some sort of Count Dracula of the gold mines.” This is what a report drafted by the well-known US financial analysis company Hoover’s said, when making an assessment of the Gabriel Resources Company. The comparison is not at all wrong if we take into consideration the fact that the latter draws its financial strength from the Transylvanian field. A Transylvanian who emigrated to Australia is behind all the actions carried out by this company. Vasile Frank Timis was born in 1964 in Borsa, Maramures County. He managed to graduate from a vocational school for car mechanics. In 1981 he left the country and settled in Australia, in Perth.
Some Romanian citizens in the land of the kangaroos got involved in drug trafficking and underwater pearl “hunting.” Even if Vasile Frank Timis worked as a seasonal worker at a company exploring for pearls, the ties he had with the underworld sent him twice before the Australian courts. According to a report drafted by Dundee Securities Corp., Vasile Frank Timis was sentenced twice in Australia (1990 and 1994). He was charged with possession of heroin. He also paid two fines, amounting to 10,000 and 17,000 Australian dollars. According to Australian law, the heroin quantities that Timis had on him allegedly pointed to intended trafficking. This is what triggered the aforementioned sanctions. Vasile Frank Timis said the following about this episode in his life. “Everybody can make mistakes when he or she is young. George Bush also had some problems in his youth. How can I tell you, when I was young, I was involved in some adventures with bad guys. We stayed in the same dwelling, and things happened. I was in their gang. Others made mistakes, but I was the one who was detained.”
The person who was to become the mastermind of the gold deals in Transylvania returned to Romania in 1994. In the beginning, he was a representative of some foreign investors, who operated businesses involving gold mines. The genuine goal of Timis’ return to Romania was to purchase the gold mines in the Apuseni Mountains and in the Carpathian Mountains. More precisely, it concerned the area named “Romania’s Golden Quadrilateral.” It is a 500 square kilometer area in the Apuseni and Metalliferous [?Metalici] Mountains. This area includes the
following localities: Rosia Montana, Bucium, Certej, Zlatna, Bolcana, Barza-Brad, and Baita Craciunesti. However, at that time, in 1994 and 1995, neither his personal financial situation nor the Romanian legislation in force allowed the high-aiming Timis to make a quick move. That is why he chose the “step by step” tactic. The “Romanian Gold” operation required patience, persistence and, above all, the creation of an extremely complicated financial structure that could be used at the right time.
From Sterile to Gold
Moreover, at that time, namely at the middle of the 1990s, there was no official information about the quantities of gold existing in the Apuseni Mountains’ deposits. Nobody, except for Vasile Frank Timis, suspected that the Rosia Montana locality is placed above the greatest gold deposit in Europe: more than 300 metric tons of gold and more than 1,600 metric tons of silver. According to some calculations, the average value of the gold in Rosia Montana exceeds $3 billion. Similarly, important quantities of gold and silver are in the other areas that have been leased to companies Timis is also involved in. Sources from some groups that oppose Timis’ investments keep saying that the information about these deposits has been known since communist times. However, it was kept secret, as the deposits were considered to be strategic reserves. On the other hand, Vasile Frank Timis says that he did not learn about the gold in the Apuseni Mountains from the state’s classified archives, but from a famous geologist, Roy Cox. The latter was later recruited as director of his company, Gabriel Resources.
Timis also says that the geologist has lots of books about Romania’s geological potential, which were published in the interval between the two World Wars. Timis reportedly learned of the riches of Romania’s deposits from these books.
Romanian Gold, in Barbados and Jersey
Timis initiated the “Romanian Gold” operation seven years ago. At first he set up two offshore companies: Gabriel Resources Ltd., licensed in Jersey, Channel Islands, and Castle Europa Ltd., licensed in Barbados. Vasile Frank Timis was the majority shareholder in both concerns. The geologist Roy Cox, through the Lex Trust Company Ltd. was also an associate in Castle Europa.
In 1997, the two offshore companies controlled by Timis set up two new companies in Romania, together with the Public Corporation for Gold and Copper in Deva. They were Euro Gold Resources SA [stock company] (for the Rosia Montana and Bucium areas) and Deva Gold SA (for the Certej, Zlatna, Bolcana, and Baita-Craciunesti areas). This happened after 1995. That year, the investor Frank Timis had already set foot in the yard of the Public Corporation for Gold and Copper [RAC] in Deva. He concluded a cooperation agreement between the Romanian company and Gabriel Resources.
The agreement was signed without any previous check on Timis’ companies. At first it aimed only at turning to value the obtained ore, by using a classic method of exploitation. Later on, it was completely changed, by introducing two annexes. Thus, it passed from “the exploitation of ore obtained from…” to “the exploration and exploitation of the gold deposits” by means of some new joint companies. The state, represented by RAC Deva, held 20 percent of the social registered capital and Frank Timis’ company held 80 percent. This is how the joint companies Euro Gold Resources SA and Deva Gold were established. It is Frank Timis who controls these companies and not the Romanian State. This way, he also obtained the first rights to the gold diggings, over the whole exploitation period. RAC Deva, which later on
turned itself into Minvest SA, now has a 19 percent participation in the new joint venture companies’ capital. Similarly, Euro Gold Resources is currently named Rosia Montana Gold Corporation. The association with Minvest SA (formerly RAC Deva) has consequently been the critical point in Vasile Frank Timis’ deals. From that moment on, Timis – who had never been involved into such a great operation – started to run an important speculative operation abroad. Timis, armed with the deeds mentioning the Romanian associations, directed himself toward the Canadian Stock Exchange in Vancouver. To be able to get there, he entered an association with a mining company, set up in 1986 on the Yukon territories. At first the company’s name was Prospectors International Corporation. In 1994 it changed into Starx Resources. In 1997, following the merger with Gabriel Resources Ltd., Jersey, it became Gabriel Resources Ltd. Yukon-Canada. The setting up of other offshore companies accompanied their entrance on the Canadian Stock Exchange. They were used to carry out transactions with the Gabriel Resources shares. This way, other companies emerged that are fully under Timis’ control: Albion Holdings Limited in Barbados (with a branch in Deva, Hunedoara County), Maracs Holdings Ltd., and Louraine Holdings Ltd. These companies purchased shares or options from Gabriel Resources Ltd. In direct relation with the publication of reports about the gold at Rosia Montana, the value of the shares belonging to Gabriel Resources Ltd. started to increase, too. Consequently, Gabriel Resources’ listing moved from the Vancouver Stock Exchange to the more powerful Toronto Stock Exchange. That is why Vasile Frank Timis has become now, according to his own declarations, the president of a company whose value is assessed at $1 billion.
Timis, the Clairvoyant
The associations with Minvest SA were vital, because the public corporation held the mineral leases for the areas in which Timis was interested. Quite surprisingly, he forecast the fact that in 1998, the new law on mines would allow transferring these leases and the exploitation licenses from the Romanian company’s property to Euro Gold Resources and to Deva Gold SA companies and, later on, to the companies that control the latter. This means to the companies in Frank Timis’ network.
Consequently, at first, Minvest SA obtained exploitation licenses for the Rosia Montana, Bucium, Zlatna, Certej, and Bolcana areas. However, they were transferred in due time to the companies in which Frank Timis is a shareholder. Moreover, it has been already settled that when Deva Gold SA decided to start works at any of the aforementioned exploitations, Minvest SA must close down its working locations and take its equipment from the field. This is the final stage of taking the state out of the gold deal. In addition, according to a communique issued by the Gabriel Resources group of companies, Minvest SA is the sole entity responsible for expenditures that will arise when its employees’ activity ceases. In other words, the state “wipes” the traces, because it gets absolutely nothing out of it…
In theory, just with the Timis-Rosia Montana deal, the Romanian State sold (in a manner of speaking) gold worth more than $3 billion. On the other hand, the Gabriel Resources Company paid the state $3 million for the lease. It promised it would make investments amounting to approximately $400 million for production expenditures. Frank Timis says that the company he is involved in can spend only approximately $100 million. The World Bank and other international financial institutions will assure the remaining money for the investment. The Gabriel Resources Company also promises that through this investment it will be possible to take out subsidies from the gold diggings and jobs will be created for more than 25,000 people. According to some assessments of the Gabriel Resources projects, carried out by the WWP Inc. company on 1 September 2001, Gabriel Resources Ltd. will benefit from tax exemptions until 2009 for the Rosia Montana project, and from all customs tax exemption throughout the project’s development. The state will gain only 2 percent from the obtained gross product, due to the exploitation of its gold deposits.
In an interview granted to the Evenimentul Zilei daily, Vasile Frank Timis said, “The state’s benefit is huge, because the Romanian mining industry is subsidized now. First of all, it will not receive any more subsidies (it is about gold diggings – Evenimentul Zilei editor’s note). Secondly, the Romanian State will benefit from the fact that the $400 million that will be spent for the project will be spent in Romania – Romanian iron and cement will be purchased and a Romanian labor force will be used.”
Questions for the Government
1. How was it possible for the Romanian State to enter a partnership, in an issue related to the national security, with such a dubious character as the Romanian-Australian Vasile Frank Timis?
2. Who and when did anybody check, if anybody did, the reliability of the company through which investor Frank Timis started to operate his businesses with the Romanian State?
3. Why did Romania’s natural gold deposits have to be exploited at this particular moment, in circumstances when the BNR [National Bank of Romania] does not have the slightest intention to purchase part of it?
4. Was not Romania able to exploit its gold diggings by itself, to its own interest? Who forced the authorities’ hand to dig out and export the gold in the Apuseni Mountains and why?
5. Did investor Frank Timis have any contribution to drafting of the mines’ law? If so, who was his “Trojan Horse” in the Ministry of Industry and Resources?
6. Is it possible for Frank Timis to have obtained information about the gold deposits in the Apuseni Mountains from classified documents in the Romanian archives?
7. Who are those who ensured a free path for Timis in this deal?
8. From the analysis of the web of companies set up by Vasile Frank Timis in various offshore locations, of the way in which they “moved,” and of some of these companies’ life expectancy, one can assume that this investor has something quite serious to hide. Does anybody know what in fact the person who took over the exploitation of the Romanian gold in
the Apuseni Mountains in such an easy manner is hiding? Or, at least, does anybody know what interest group he represents?