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

    SPOKANE, WA, May 26 /CNW/ - Gold Reserve Inc. (TSX:GRZ - NYSE-Amex:  GRZ)
commented today on an Official Gazette issued by the Government of Venezuela
dated May 22, 2009 in which the Venezuelan Ministry of Mines (MIBAM) denied
the extension of the El Pauji concession. The Company does not own the El
Pauji concession but has an easement that allows the Company to use the El
Pauji surface rights for infrastructure purposes for the Brisas Project. The
El Pauji concession is part of a number of land parcels surrounding the ore
body located on the Brisas Alluvial and Veta concessions comprising the Brisas
gold copper Project.
    As part of the arrangement with the owner of the El Pauji concession, on
January 17, 2008 the Company applied for an extension of the concession term
pursuant to Article 25 of the Venezuelan mining law which provides MIBAM a
six-month period, ending on July 20, 2008, to deny the extension request.
MIBAM did not respond to our request for an extension. Our Venezuelan
attorneys have advised us that, pursuant to Article 25 of the mining law, the
extension is automatically granted.
    Ignoring its own regulations and laws, MIBAM thru internal reports dated
April 29, 2009 and May 12, 2009, almost one year after the six month time
period elapsed, asserts without evidence or prior notice that the Company is
not in compliance with its obligations in regards to the concession. In
September 2008 the Company received a certificate of compliance from MIBAM
regarding the Brisas Project.
    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. The Company, acting on behalf of
the owner of the El Pauji concession, will actively defend its legal rights as
defined under Venezuelan law.
    The Company also applied for the extension of the Brisas del Cuyuni
alluvial gold concession in late 2007, having met all legal requirements with
no response from MIBAM during the subsequent six month time period. We have
been advised by our Venezuelan attorneys that the application is approved
pursuant to Article 25 of the mining law. It is important to note that the
Brisas del Cuyuni alluvial gold concession contains no copper and comprises
approximately 3% of the proven and probable gold reserves of the Brisas
Project.
    Recently, MIBAM requested all of the technical information comprising the
Brisas gold copper Project. At this time we do not see any benefit in
transferring that information to MIBAM.
    Doug Belanger, President of Gold Reserve, stated, "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 the Government of the Republic of Venezuela and (2)
Barbados and the Government of the Republic of 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 that is not
possible and the Company is compelled to file for international arbitration,
we would make a claim for the fair market value of our investment at the time
of the revocation of the permit which we believe was in excess of US$5
billion."
    Belanger further said, "Reuters and other publications erroneously
reported that this was the mining rights for the Brisas Project when in fact
the action by the government relates to an infrastructure only property that
contains no mineralization."

    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 Rusoro Mining Ltd.'s enjoined hostile
takeover bid; 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