Gold Reserve announces sale of certain equipment

    SPOKANE, WA, Oct. 10 /CNW/ - Gold Reserve Inc. (TSX:GRZ - AMEX:  GRZ)
announced it has agreed to sell one SAG mill, two ball mills (35,000 tonne per
day through-put) and related motors currently being manufactured for the
Company's Brisas Project. The total value of this transaction is approximately
$43 million. The Company will recover approximately $18 million of progress
payments and the purchaser will assume the Company's remaining payment
obligations related to the equipment of approximately $25 million.
    The Company's decision is consistent with its intention to stay
financially strong by recovering amounts already paid and reducing future
obligations. The sale of this equipment is not expected to impact the start-up
of the Brisas Project to the extent the current delays in Venezuela are
resolved. The Company will continue its manufacturing commitment for one SAG
mill and two ball mills, related motors and peripheral equipment,
demonstrating our current commitment to the Brisas Project. Initially, the
Brisas Project would be expected to proceed with reduced capital costs and
35,000 tonnes per day through-put as a result of this sale. This modification
should not impact the Company's ability to increase production to 70,000
tonnes per day through-put or greater thereafter.
    Doug Belanger, President, stated, "The sale of this equipment reduces our
near-term financial burden, but still allows us to initiate the Brisas Project
to the extent the current delays related to Brisas are resolved. We are
continuing our support of various social, cultural, health and environmental
programs in the immediate and surrounding areas near Brisas, further
demonstrating our commitment to the Brisas Project. At the request of MinAmb
and MIBAM, we have prepared a number of proposals over the past months to
assist in responding to the Government's concerns related to mining in the
Imataca Forest Reserve and the K-88 area. We continue to believe that the
Brisas Project could be an active participant in facilitating the ultimate
resolution to the issues identified by MinAmb and MIBAM. Subsequent to the
completion of this transaction the Company will hold cash and investments of
approximately $120 million or over $2 per outstanding share."
    Gold Reserve Inc. is a Canadian company, which holds the rights to the
Brisas gold/copper project and the Choco 5 gold exploration property in
Bolivar State, Venezuela. For the Company's periodic TSX (SEDAR) or SEC
(Edgar) filings please visit our website at under the
Investor Relations section.

    On Behalf of the Board of Directors

    Gold Reserve Inc.
    A. Douglas Belanger, President

    Certain statements included herein, including those that express
management's expectations or estimates of our future performance concerning
the Brisas Project constitute "forward-looking statements" within the meaning
of the United States Private Securities Litigation Reform Act of 1995.
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 Inc. 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,
concentration of operations and assets in Venezuela; corruption and uncertain
legal enforcement; requests for improper payments; regulatory, political and
economic risks associated with Venezuelan operations (including changes in
previously established legal regimes, rules or processes); the ability to
obtain or maintain the necessary permits or additional funding for the
development of the Brisas Project; in the event 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)
significantly differ or change as a result of actual results in our expected
construction and production at the Brisas Project (including capital and
operating cost estimates); 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; 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 the Company'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 the Company or persons acting on its behalf are
expressly qualified in their entirety by this notice. The Company disclaims
any intent or obligation to update publicly these forward-looking statements,
whether as a result of new information, future events or otherwise.

For further information:

For further information: Internet -; Investor
Information: Rubenstein Investor Relations, Tim Clemensen, (212) 843-9337,; 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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