Gold Reserve Sends Letter to Shareholders

    Urges Shareholders NOT to Tender Their Shares into Rusoro's Inadequate

    SPOKANE, WA, Jan. 28 /CNW/ - Gold Reserve Inc. (NYSE Alternext: GRZ)
(TSX: GRZ) today sent the following letter to shareholders urging shareholders
not to tender their shares into Rusoro Mining Ltd.'s (TSX-V: RML) ("Rusoro")
unsolicited offer of December 15, 2008 (the "Offer") to acquire all of the
outstanding shares and equity units of Gold Reserve in consideration for three
shares of Rusoro for each Gold Reserve share tendered under the Offer.
    The full text of the letter follows:

    January 28, 2009

    Dear Fellow Shareholder:

    Gold Reserve's Board of Directors has unanimously rejected Rusoro Mining
Ltd.'s ("Rusoro") unsolicited offer of December 15, 2008 (the "Offer") to
acquire Gold Reserve. Your Board is committed to ensuring that all
shareholders receive full value for their investment and believes that:

    -   The Rusoro Offer does not represent a premium as it does not provide
        shareholders adequate consideration for the fair value of Gold
        Reserve's assets and their relative contribution to the proposed
        combined company.
    -   Rusoro's weak financial position would expose Gold Reserve
        shareholders to increased risk.
    -   Rusoro lacks the operational expertise necessary to maintain, much
        less enhance, the value of the combined company.

    On January 19, 2009, after more than 30 days of making its case to Gold
Reserve shareholders, Rusoro publicly admitted that less than 3% of Gold
Reserve's outstanding shares had been tendered into its Offer. We believe this
sends a clear message to Rusoro - the Offer is opportunistic, financially
inadequate and significantly undervalues your company. Despite the extremely
low tender, Rusoro announced that it had extended its bid expiry date to
February 18, 2009. We are writing to further highlight the deficiencies of
Rusoro's Offer and to urge you again to REJECT the Offer and NOT TENDER your


    Rusoro is attempting to acquire Gold Reserve's significant assets,
including our world-class Brisas Project and our significant cash holdings,
without paying you a premium for the underlying value of your shares. Gold
Reserve's implied value per share, considering Gold Reserve's net cash,
equipment and investment in Brisas, is more than twice the current implied
Offer price of C$1.95 (based on the closing price of C$0.65 for Rusoro shares
on the TSX-V on January 26, 2009). Under the terms contemplated in the Offer,
Rusoro would effectively pay nothing for Gold Reserve's approximately 10.2
million ounces of proven and probable gold reserves and approximately 1.4
billion pounds of proven and probable copper reserves.
    The respective contributions Gold Reserve and Rusoro would make to the
proposed combined company, the most significant of which are shown below,
demonstrate the failure of Rusoro's assets, balance sheet and reserves to
provide fair value to Gold Reserve shareholders. Despite Gold Reserve's far
greater contribution to the value of the combined company, the Offer would
provide Gold Reserve shareholders with a mere 30% interest in the proposed
combined company on a non-diluted basis, with the potential for significant
dilution in the next year or two and exposure to increased financial and
operational risk.
    To view a bar graph please see

    For example, Gold Reserve         On the other hand, Rusoro would
     would contribute:                 contribute:

    - the construction-stage Brisas   - significant cash-flow concerns and
      gold and copper project with:     long-term liquidity problems,
      - proven and probable           - operational problems at Choco 10,
        reserves of approximately     - near term exhaustion of Isidora
        10.2 million ounces of          reserves,
        gold,                         - an asset base that is largely
      - proven and probable             encumbered by the Hambro/Endeavour
        reserves of approximately       Loan,
        1.4 billion pounds of         - poorly disclosed related party
        copper,                         transactions that have significantly
      - approximately US$230            reduced Rusoro's cash resources, and
        million of investment in      - delisting of the Gold Reserve shares
        Brisas,                         from the NYSE Alternext and TSX in
    - approximately US$109 million      exchange for a Canada-only listing on
      of cash and cash equivalents,     the junior Canadian TSX Venture
    - approximately US$47 million       exchange.
      of deployable or saleable
    - the grass-roots Choco 5
      exploration project, and
    - equity securities currently
      listed on the TSX and

                             SIGNIFICANT CONCERNS

    Your Board believes that a transaction with Rusoro would expose Gold
    Reserve shareholders to increased financial risk due to Rusoro's negative
    cash flow, working capital deficit and near term debt repayment
    obligations. We also have significant concerns about Rusoro's past
    delinquency with certain quarterly regulatory filings. Consider the

    -   Since launching its hostile bid on December 15, 2008, Rusoro has
        failed to directly address what we believe are financial deficiencies
        outlined in its quarterly reports to shareholders, the most recent
        being for the quarter ended September 30, 2008.
    -   Rusoro has provided no update on its current cash position or any
        meaningful guidance as to its liquidity outlook for 2009, and omitted
        any discussion of this key issue in its last financial press release.
    -   Substantially all of Rusoro's assets are encumbered by the
        US$80 million Hambro/Endeavour Loan due in full in June 2010, yet
        Rusoro lacks the cash flows necessary to meet this obligation.
    -   A number of Rusoro's quarterly filings with the Canadian securities
        regulatory authorities over the last two years have been delinquent.
    -   Rusoro has not publicly filed an audited annual financial report for
        2008. Without this report, our shareholders cannot make an informed
        assessment of Rusoro's 2008 performance and its plans for 2009.

    Based on Rusoro's track record and its current operational problems, your
    Board does not believe Rusoro has the operational expertise necessary to
    maintain, much less enhance, the value of the proposed combined company.

    Rusoro has often failed to achieve its own forecasts in a variety of
categories including production rates, ore grades and metallurgical recovery
rates. Furthermore, Rusoro is operating at a loss despite historically high
gold prices.
    On January 14, 2009, Rusoro announced "record gold production and record
low cash costs for Q4 2008," in what we believe to be an effort to deflect
concerns over Rusoro's historically poor operating results at Choco 10. We
believe the inclusion of high-grade ore from the short-lived Isidora deposit
may have skewed the results attributable to the Choco 10 mine on a standalone
basis, which has historically remained cash flow negative.
    Rusoro claims that an important factor in its Offer is its "full exposure
to gold price." For the nine months ended September 30, 2008, Rusoro's gold
was sold on average at a 26% discount to the international spot price. In its
January 14, 2009 announcement, Rusoro failed to disclose the average sales
price it realized on gold sales for the fourth quarter 2008.


    Finally, while Rusoro implies that it is the Venezuelan government's
"partner of choice" for mining opportunities in Venezuela, Rusoro itself has
confirmed that no agreement currently exists with the Venezuelan government
regarding the development and exploitation of Las Cristinas and Brisas.
    While Rusoro asserts that it is capable of obtaining the required permits
to develop and operate a mine in Venezuela, Rusoro itself has never permitted
and constructed a mine in Venezuela. The two mines that Rusoro refers to as
examples of its ability to "get things done" in Venezuela were permitted and
constructed by previous operators prior to Rusoro acquiring them.


    To protect one of your company's most valuable assets - its confidential
information - on December 31, 2008, Gold Reserve filed a motion in the Ontario
Superior Court of Justice seeking, among other things, to restrain Rusoro from
proceeding with its unsolicited offer because we believe Rusoro had access to
or benefited from the use of our confidential information as a result of its
relationship with Endeavour Financial International Corporation.
    Gold Reserve has cash, equipment, mining rights and other valuable assets
that belong to our shareholders, and we will vigorously seek to ensure that
our shareholders receive full value for those assets. We believe Rusoro's
attempt to acquire our valuable investment in the Brisas Project and our cash,
without offering adequate consideration, is inconsistent with our objective of
enhancing shareholder value. We believe that by continuing to execute on our
long-term strategy, we can realize significantly more value for our
    We urge you to REJECT Rusoro's opportunistic Offer and NOT TENDER your
Gold Reserve shares into the Rusoro Offer. If you have already tendered any of
your Gold Reserve shares, we urge you to withdraw them immediately.
Shareholders who have tendered Gold Reserve shares into the Rusoro Offer and
who wish to obtain advice or assistance in withdrawing their Gold Reserve
shares are urged to contact their broker or Laurel Hill Advisory Group, the
information agent retained by Gold Reserve, at 1-888-295-4655.

    On behalf of the Board, we thank you for your continued support.


    James H. Coleman Q.C.                Rockne J. Timm
    Chairman of the Board of Directors   Chief Executive Officer and Director


    Information contained in this shareholder letter and in Gold Reserve's
disclosure documents filed with securities regulatory authorities, including
the SEC, that contain descriptions of Gold Reserve's mineral deposits may not
be comparable to similar information made public by U.S. companies subject to
the reporting and disclosure requirements under the U.S. federal securities
laws and the rules and regulations thereunder. The terms "Mineral Reserve",
"Proven Mineral Reserve" and "Probable Mineral Reserve" are Canadian mining
terms as defined in accordance with NI 43-101 under the guidelines set out in
the Canadian Institute of Mining, Metallurgy and Petroleum (the "CIM")
Standards on Mineral Resources and Mineral Reserves, adopted by the CIM
Council. These definitions differ from the definitions in the SEC Industry
Guide 7 under the Securities Act. The definitions of "proven" and "probable"
reserves used in NI 43-101 differ from the definitions in SEC Industry Guide
7. We believe Gold Reserve has proven and probable reserves pursuant to
Industry Guide 7. In addition, the terms "mineral resource", "measured mineral
resource", "indicated mineral resource" and "inferred mineral resource" are
defined in and required to be disclosed by NI 43-101. However, these terms are
not defined terms under SEC Industry Guide 7 and normally are not permitted to
be used in reports and registration statements filed with the SEC. Investors
are cautioned not to assume that any part or all of the mineral deposits in
these categories will ever be converted into reserves. "Inferred mineral
resources" have a great amount of uncertainty as to their existence, and as to
both their economic and legal feasibility. It cannot be assumed that all or
any part of an inferred mineral resource will ever be upgraded to a higher
category. Under Canadian rules, estimates of inferred mineral resources may
not form the basis of feasibility or pre-feasibility studies, except in rare
cases, and such estimates are not part of SEC Industry Guide 7. NI 43-101 is a
rule developed by the Canadian Securities Administrators, which established
standards for all public disclosure an issuer makes of scientific and
technical information concerning mineral projects. Unless otherwise indicated,
all resource estimates of Gold Reserve contained in Gold Reserve's securities
regulatory filings have been prepared in accordance with NI 43-101 and the
CIM, Metallurgy and Petroleum Classification System.

    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.


    Certain statements included in this release may constitute
"forward-looking statements" within the meaning of the United States Private
Securities Litigation Reform Act of 1995, as amended, ("PSLRA"), provided that
statements made solely in connection with Rusoro's offer are not subject to
the safe harbor protections provided to forward-looking statements under the
PSLRA. 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, concentration of operations and assets in Venezuela;
corruption and uncertain legal enforcement; 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
other countries 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; requests for improper payments; 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; 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); 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 or Rusoro; the potential volatility of
both Gold Reserve shares and Rusoro shares; the price and value of the Gold
Reserve notes; uncertainty as to the future value of Rusoro, Gold Reserve or
the combined company proposed by the Rusoro offer; the prospects for
exploration and development of projects by Gold Reserve or Rusoro; whether or
not an alternative transaction superior to the Rusoro offer will emerge; 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 forward-looking
statements herein, 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 ("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, 2007, dated March 31, 2008, and Gold Reserve's
Annual Report on Form 40-F for the fiscal year ended December 31, 2007 filed
with the SEC on March 31, 2008.


For further information:

For further information: Gold Reserve Inc., President, A. Douglas
Belanger, (509) 623-1500, Fax: (509) 623-1634,; Dan
Katcher, Steve Frankel, Andi Salas, Joele Frank, Wilkinson Brimmer Katcher,
(212) 355-4449

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