Gold Reserve Inc. provides Brisas progress report

    SPOKANE, WA, Feb. 19 /CNW/ - Gold Reserve Inc., (TSX: GRZ; AMEX:   GRZ)
2007 was a landmark year for the Company's Brisas gold copper project
achieving a number of positive milestones as we continue the advancement of
the Brisas project towards production. The primary milestone of 2007 was the
receipt of the Permit to Affect Natural Resources from the Venezuelan Ministry
of the Environment which enabled us to begin the construction process at the
Brisas Mine. We now are awaiting the Initiation Act to commence full-scale
construction. There were also many other milestones and positive events that
were achieved that continued the advancement of the Brisas project towards
    After receiving the Permit to Affect, we started the process of preparing
the project for construction. A major issue in the mining industry today is
the long lead times for items such as grinding mills and mining equipment. We
immediately commenced procurement efforts with the assistance of SNC-Lavalin
Inc. ("SNC"), our EPCM contractor, and we placed orders for the gyratory
crusher, two SAG mills, four ball mills, two vertical mills, and the gear
drives and motors for the mills. The suppliers are coordinating the
fabrication and delivery of these critical pieces of equipment according to
project schedule. We have also begun the process of a phased order for mining
and construction equipment from Caterpillar and are pleased to report that we
have already taken delivery of the first phase of that equipment order. A
substantial portion of the procurement function is now complete.
    The detailed engineering performed by SNC was substantially advanced
during 2007 and was approximately 70% complete by year end. We expect the bulk
of the detailed engineering to be complete by mid 2008. Detailed engineering
includes thousands of construction drawings, site layout, manpower
requirements, construction planning, and many other functions required in a
project of this magnitude. This is the final step in the engineering process
for mine development work and is a major requirement for the construction
process. The advanced state of detailed engineering is allowing us to complete
the capital cost estimate that will support the financing of the mine. We
expect to report the new capital costs and operating costs in the first
quarter and follow up with an updated 43-101 report on the Brisas project
early in the second quarter.
    An area of great concern in the industry today is rising capital costs
and like others we are also experiencing an increase in costs, but not to the
extent other projects have noted in recent press reports. This is primarily
because we are near the end of this process and have already faced many of the
issues that can substantially affect the scope of a project and its capital
costs. We have already made the necessary scope changes in the project to
bring the Brisas project to industry best practice standards, have the
detailed engineering at an advanced level, and have placed the orders for long
lead items.
    As part of this process an independent engineering company has been
reviewing our project, has monitored our progress, and has contributed to the
objective of meeting industry best practices and the Equator Principles.
Compliance with the Equator Principles has added to the original operating and
capital costs; however, in the long run, the Brisas project demonstrates best
practices in all areas of mine development needed to qualify the project for
conventional project financing.
    In 2007 we completed two concurrent financings totaling $183 million. The
lead underwriters were J. P. Morgan Securities, Inc., RBC Capital Markets and
Cormark Securities, Inc. We also continue to work on the $425 million project
debt financing with a consortium of banks to complete all the conditions
precedent for commitment. At year end we had a cash position of $140 million
and are well positioned to commence full-scale construction once we receive
the Initiation Act.
    Other permits and authorizations were received from various government
agencies. We are pleased to report that the approval of the Environmental and
Social Impact Study, which was a requirement for the issuance of the Permit to
Affect from the Ministry of Environment, was obtained without variations in
the project design. In 2007 we received, from the Ministry of Environment, the
Exploitation Permit for the quarry. This is also a key permit as the quarry
will provide the critical construction aggregates for infrastructure, roads
and concrete. We also received our annual compliance certificates from the
Ministry of Basic Industries and Mines ("MIBAM") for all of our properties in
the KM 88 project area, demonstrating our compliance to the mining law, mining
titles, and contracts.
    In mid 2007 it was determined that there was a conflict with the location
of the new 9 km access road with some small miner mineral rights and in
coordination with MIBAM we re-engineered this road receiving the final
approval from MIBAM in September of 2007. This process underscored the fact
that there is no one permit in developing a mine, not in Venezuela, nor any
other country. There are numerous permits and authorizations required to
develop a mine of this magnitude and they come from many agencies. In
constructing the Brisas mine, we will need municipal, state and federal
permits from various agencies. There are a number of laws that govern mining,
including the mining law, the environmental law, transportation laws, currency
and tax laws, import regulations, etc. The key aspect of this is that the two
Ministries that have the most oversight responsibility for mining have
approved the Brisas project plan in its entirety.
    2007 was a year of great uncertainty and social unrest in the world and
mining was not immune from these issues. We have enjoyed quite a different
experience than many others in the mining industry. As part of our corporate
social commitment, and acting along the social policies set forth by the
Venezuelan government, the Company promoted the creation of a Community
Liaison Commission for the Brisas project which initiated activities in
October 2007. This commission is composed of legal representatives from the
22 community counsels from the San Isidro Parish, both Indigenous and Creole,
and from the construction union, the heavy machinery union, the Mayor's office
and local commerce. Most recently, MIBAM has requested to be part of the
commission. The main objective of this commission is to actively participate
in finding solutions to potential events that may cause delays or affect the
normal development of the Brisas project.
    We were particularly gratified when we were informed late in 2007 that
the local communities around KM88 had come together and collected a petition
with over 1,500 signatures on it. This petition was addressed by the Liaison
Commission to President Chavez and requested his support so that the Brisas
project can proceed without delays.
    Environmental and social aspects worldwide have become a critical element
in the mine development process and we are proud of our achievements and our
adherence to the highest standards in the industry. The support of the project
by the local population is an important part of the development of Brisas. The
Brisas project will have a substantial impact on this area and Gold Reserve is
determined to bring the local communities the greatest benefit possible,
directly and indirectly, in order to significantly improve their way of life.
    We are very proud of the people who have become part of Gold Reserve in
Venezuela. In a ceremony in December Arturo Rivero, our President in
Venezuela, presented 28 people with long service recognition awards. Some of
these people have been with the company for 15 years. Arturo himself has been
with the Company for over 10 years. It is these people who share in the credit
for the success the Company has achieved to date.
    We look forward to 2008 to continue our goal of placing the Brisas Mine
into production.

    On Behalf of the Board of Directors
    Gold Reserve Inc.
    A. Douglas Belanger, President

    About Gold Reserve Inc.
    Gold Reserve Inc. is a Canadian company developing the Brisas gold copper
project in southeastern Venezuela. Brisas has NI-43-101 reserves of
485 million tonnes of ore grading 0.67 grams per tonne gold and 0.13% copper
containing 10.4 million ounces of gold and 1.3 billion pounds of copper (using
a revenue cutoff grade of US $3.04 per tonne and a gold price of US $400 and a
copper price of US $1.15 per pound). The mine plan anticipates using
conventional truck and shovel mining methods with the processing of ore at
full production of 70,000 tonnes per day, yielding an average annual
production of 456,000 ounces of gold and 60 million pounds of copper for a
mine life of 18.5 years. Using US $1.80 copper as a byproduct, operating costs
are expected to be US $126 per ounce. The Qualified Personnel for the NI
43-101 Report are Susan Poos of Marston and Marston, Inc. and Richard Addison
and Richard Lambert of Pincock, Allen and Holt, all registered professional

    Certain statements included herein, including those that express
management's expectations or estimates of our future performance concerning
the Brisas Project or the Choco 5 Exploration 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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