March 5, 2009 / 1:27 PM / in 9 years

UPDATE 1-Gabriel Resources posts Q4 profit on forex gains

* Q4 EPS C$0.02

* Foreign exchange gains help results

March 5 (Reuters) - Canadian mining firm Gabriel Resources Ltd (GBU.TO) reported a quarterly profit, helped by foreign exchange gains on weak Canadian dollar.

The Toronto-based company posted fourth-quarter profit of C$4 million, or 2 Canadian cents a share, compared with a loss of C$7.8 million, or 3 Canadian cents a share, a year ago.

For the fourth quarter, foreign exchange gains on foreign currency cash balances generated net income, the company said in a statement.

The company, however, said it expects to incur operating losses until commercial production commences and revenue are generated.

Gabriel Resources is currently engaged in the exploration and development of mineral properties in Romania, with its primary focus on the development of its 80 percent owned Rosia Montana gold project.

The company expects the project to produce 626,000 ounces of gold annually during its first five years of operation at an estimated cash cost of $272 per ounce.

Gabriel Resources shares, which have risen 125 percent in the past three months, closed at C$2.70 Wednesday on the Toronto Stock Exchange.

$1=1.278 Canadian Dollar Reporting by R. Manikandan in Bangalore; Editing by Anil D'Silva raman.manikandan@reuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging:raman.manikandan.reuters.com@reuters.net

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