Gold Reserve reports on Venezuelan Government's failure to follow its own laws - Part 2



    SPOKANE, WA, May 27 /CNW/ - Gold Reserve Inc. (TSX:GRZ - NYSE-Amex:  GRZ)
commented today on an Official Gazette issued by the Government of Venezuela
dated May 26, 2009 in which the Venezuelan Ministry of Mines (MIBAM) denied
the extension of the Brisas del Cuyuni alluvial gold concession which contains
approximately 3% of the proven and probable gold reserves of the Brisas
Project.
    During October 2007, the Company applied for the extension of the Brisas
del Cuyuni alluvial gold concession pursuant to Article 25 of the Venezuelan
mining law, which provided MIBAM a six-month period ending in April 2008, to
deny the extension request. Similar to the El Pauji concession extension
application discussed in our related news release yesterday, MIBAM did not
respond to our request for an extension during the requisite time period.
According to Article 25 of the mining law, the extension is automatically
granted.
    Again, as was the case with the El Pauji concession extension
application, MIBAM has attempted to ignore its own regulations and laws. In
September 2008, subsequent to the lapsing of the six month time period, the
Company received from MIBAM a certificate of compliance (or good standing) of
the Company's obligations set forth in the mining law and in the title for the
Brisas del Cuyuni alluvial gold concession. MIBAM states in the Official
Gazette that the Company timely filed an application for extension and
acknowledged that MIBAM made its evaluation on the status of the concession
subsequent to the six month time period promulgated in Article 25 of the
mining law. Now, more than one year after the six month time period elapsed,
MIBAM in internal reports asserts without evidence or prior notice that the
Company is not in compliance with its obligations in regards to the
concession.
    This action has the effect of terminating the concession and could allow
MIBAM to take physical control of the concession. The Company currently holds
in good standing the hardrock or (veta) gold and copper concession that
occupies the area below the Brisas alluvial gold concession. The hardrock
concession contains proven and probable gold and copper reserves of
approximately 10 million ounces and 1.4 billion pounds, respectively. The
impact of this implied seizure on our rights to the hardrock (veta) concession
is unclear at this time since the alluvial and hardrock concessions occupy the
same 500 hectre area. In addition, we are extremely concerned about the future
status of our employees located at the Brisas Project site.
    Recently, MIBAM also requested all of the technical information
comprising the Brisas gold copper Project. At this time we do not see any
benefit to the Company in transferring that information to MIBAM.
    There are various legal avenues in Venezuela or through arbitration
proceedings available to the Company to protect our investment and
confidential information. We are prepared to take all necessary actions to
protect our property rights and investment.
    Doug Belanger, President of Gold Reserve, stated, "As a result of these
types of actions by the Venezuelan government, on April 21, 2009 we notified
the Venezuelan government that a state of disagreement existed between the
government and the Company under Bilateral Investment Treaties between, (1)
Canada and Venezuela and (2) Barbados and Venezuela. Further, despite the
prolonged obstruction of our rights to the Brisas Project, it is Gold
Reserve's intention to settle this dispute amicably but if not then the
Company will accelerate its efforts and file for international arbitration.
The Company expects to make a claim for in excess of US$ 5 billion
representing the fair market value of our investment at the time of the 2008
revocation of the Permit to Affect."

    FORWARD-LOOKING STATEMENTS

    This release contains forward-looking statements that may state Gold
Reserve's or its management's intentions, hopes, beliefs, expectations or
predictions for the future. In this release, forward-looking statements are
necessarily based upon a number of estimates and assumptions that, while
considered reasonable by management at this time, are inherently subject to
significant business, economic and competitive uncertainties and
contingencies.
    We caution that such forward-looking statements involve known and unknown
risks, uncertainties and other risks that may cause the actual financial
results, performance, or achievements of Gold Reserve to be materially
different from our estimated future results, performance, or achievements
expressed or implied by those forward-looking statements.
    Numerous factors could cause actual results to differ materially from
those in the forward-looking statements, including without limitation: the
outcome of any potential proceedings under the Venezuelan legal system or
before arbitration tribunals as provided in investment treaties entered into
between Venezuela, Canada and Barbados to determine the compensation due to
Gold Reserve in the event that Gold Reserve and the Venezuelan government do
not reach an agreement regarding construction and operation of the Brisas
Project, or the Brisas Project is transferred to the Venezuelan government and
the parties do not reach agreement on compensation; concentration of
operations and assets in Venezuela; corruption and uncertain legal
enforcement; requests for improper payments; competition with companies that
are not subject to or do not follow Canadian and U.S. laws and regulations;
regulatory, political and economic risks associated with Venezuelan operations
(including changes in previously established laws, legal regimes, rules or
processes); the ability to obtain, maintain or re-acquire the necessary
permits or additional funding for the development of the Brisas Project; the
result or outcome of the trial regarding the enjoined hostile takeover bid for
Gold Reserve; significant differences or changes in any key findings or
assumptions previously determined by us or our experts in conjunction with our
2005 bankable feasibility study (as updated or modified from time to time) due
to actual results in our expected construction and production at the Brisas
Project (including capital and operating cost estimates); the method and
manner of our determination of reserves, risk that actual mineral reserves may
vary considerably from estimates presently made; impact of currency, metal
prices and metal production volatility; fluctuations in energy prices; changes
in proposed development plans (including technology used); our dependence upon
the abilities and continued participation of certain key employees; the
prices, production levels and supply of and demand for gold and copper
produced or held by Gold Reserve; the potential volatility of Gold Reserve's
Class A common shares; the price and value of Gold Reserve's notes, including
any conversion of notes into Gold Reserve's Class A common shares; the
prospects for exploration and development of projects by Gold Reserve; and
risks normally incident to the operation and development of mining properties.
    This list is not exhaustive of the factors that may affect any of Gold
Reserve's forward-looking statements. Investors are cautioned not to put undue
reliance on forward-looking statements. All subsequent written and oral
forward-looking statements attributable to Gold Reserve or persons acting on
its behalf are expressly qualified in their entirety by this notice. Gold
Reserve disclaims any intent or obligation to update publicly or otherwise
revise any forward-looking statements or the foregoing list of assumptions or
factors, whether as a result of new information, future events or otherwise,
subject to its disclosure obligations under applicable rules promulgated by
the U.S. Securities and Exchange Commission (the "SEC").
    In addition to being subject to a number of assumptions, forward-looking
statements in this release involve known and unknown risks, uncertainties and
other factors that may cause actual results and developments to be materially
different from those expressed or implied by such forward-looking statements,
including the risks identified under "Important Note for U.S. Investors
Concerning Resource Calculations" as well as the risks identified in the
filings by Gold Reserve with the SEC and Canadian provincial securities
regulatory authorities, including Gold Reserve's annual information form for
the year ended December 31, 2008, dated March 31, 2009, and Gold Reserve's
Annual Report on Form 20-F for the fiscal year ended December 31, 2008 filed
with the SEC on March 31, 2009.





For further information:

For further information: Internet - www.goldreserveinc.com; Investor
Information: Rubenstein Investor Relations, Tim Clemensen, (212) 843-9337,
tclemensen@rubensteinir.com; Company Contact: A. Douglas Belanger, President,
926 W. Sprague Ave., Suite 200, Spokane, WA 99201, USA, Tel. (509) 623-1500,
Fax (509) 623-1634

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