Filed by Rusoro Mining
Ltd.
Pursuant to Rule 425
under the
Securities Act of 1933,
as amended
Subject Company: Gold
Reserve Inc.
Commission File Number:
001-31819
Date: December 15, 2008
Suite 2164 1055
Dunsmuir Street, Four Bentall Centre
Vancouver, BC V7X 1B1
Tel:
604-632-4044 Fax: 604-632-4045
Toll Free 1 800-668-0091
Website: www.rusoro.com email:
info@rusoro.com
RUSORO LAUNCHES TAKE-OVER BID FOR GOLD RESERVE
December 15,
2008
|
|
Trading Symbol (TSX-V):RML
|
Vancouver, Canada Rusoro Mining Ltd. (TSX-V:RML) (Rusoro or the
Company) today announced a take-over bid (the Take-Over Bid) for Gold
Reserve Inc. (Gold Reserve, TSX:GRZ AMEX:GRZ). Rusoro is offering Gold Reserve shareholders
and equity unit holders (collectively, the Gold Reserve Equityholders) 3
Rusoro common shares for each Gold Reserve Class A common share and each
Gold Reserve equity unit (collectively, the Gold Reserve Equity). The offer
values Gold Reserve at C$1.08 per each Class A common share and each equity
unit, and represents a premium of 140% based on the December 12, 2008
closing prices for Rusoro and Gold Reserve on the TSX Venture Exchange (TSXV)
and the Toronto Stock Exchange (TSX), respectively, and a premium of 209%
based on the volume-weighted average trading prices for Rusoro and Gold Reserve
for the previous 30 trading days on the TSXV and the TSX, respectively.
Andre Agapov, Chief Executive Officer of Rusoro said, A business
combination between Rusoro and Gold Reserve creates the premier Venezuelan gold
company and allows us to use our extensive in-country experience to unlock the
inherent value of the Brisas Project for the benefit of all shareholders. Not only would Gold Reserve Equityholders benefit
from the existing production at our Choco 10 and Isidora mines operating in
Venezuela, they will also continue to participate in the development of the
Brisas Project through significant ownership in the combined company. Gold Reserves Choco 5 project is contiguous
to our Choco 10 operations and Gold Reserves Brisas Project is approximately
10 kilometres from our Yuruan property - the logical combination of our
companies is expected to create real and valuable synergies. We are delighted
to present this premium offer directly to Gold Reserve Equityholders and we see
significant opportunities to both expand production at our existing operations
and unlock the permitting deadlock that has plagued the timely development of
the Brisas Project. The KM88 region in
Venezuela is one of the worlds great gold mining regions and the time has come
for its future to be guided by a team that has proven its ability to get its
assets permitted and operating in Venezuela.
Mr. Agapov added, This is a logical combination. I encourage Gold Reserve Equityholders to
contact their Board of Directors to support this opportunity. Further, I invite the Gold Reserve Board of
Directors to contact us to open a constructive dialogue.
The proposed combination of Rusoro and Gold Reserve would offer Gold
Reserve Equityholders a number of benefits:
·
Compelling
Premium.
On December 12,
2008, which was the last trading day prior to todays announcement of the
Take-Over Bid, the closing price of the Gold Reserve Shares listed on the TSX
was C$0.45 and on the NYSE Alternext (AMEX) was US$0.39. Rusoro is offering C$1.08 per each Gold
Reserve share and each Gold Reserve equity unit, based on Rusoros closing
share price on the TSXV that same day.
This offer represents a premium of approximately 140%, using the December 12,
2008 closing prices of Rusoro and Gold Reserve on the TSXV and TSX,
respectively. Based on
1
the volume-weighted average
price of the Rusoro Shares on the TSXV for the 30 trading days ended December 12,
2008, the Offer represents a premium of approximately 209% over the
volume-weighted average price of the Gold Reserve Shares on the TSX for the
same period.
·
Immediate
Production.
Rusoro is
expected to produce in excess of 100,000 attributable gold ounces in 2008 from
its existing proven and probable reserves.
Management is currently developing expansion plans at Choco 10 and
Increible 6 that are expected, together with Rusoros San Rafael/El Placer and Isidora
operations, to significantly increase attributable gold production. See further information on Rusoros technical
information at the end of this press release.
·
World Class Reserve
and Resource Base.
The combined
company would have 12.2 million ounces of proven and probable gold reserves. Measured and indicated resources, inclusive
of reserves, would total 18.9 million ounces of gold. The combined company would also have
additional resources of 9.3 million inferred gold ounces. In addition, the Brisas Project contributes
1.4 billion pounds of copper in proven and probable reserves. See further information on the companies
technical information at the end of this press release.
·
Ongoing
Participation in Brisas.
Based
on the 3:1 exchange ratio, Gold Reserve Equityholders would collectively own
approximately 30.4% of the combined company on an issued share basis.
·
Opportunity
to Consolidate the KM88 Region.
Rusoro has proven itself as a Venezuelan gold
consolidator through the successful acquisition of both Gold Fields Choco 10
mine and Hecla Minings Isidora mine.
Rusoro will explore the opportunity to further consolidate the
world-class KM88 Region in Bolivar State, Venezuela.
·
Established
Relationship with the Venezuelan Government.
Rusoro has established the first mixed enterprise
joint venture of its kind with the Venezuelan government in the mining industry
by agreeing to form a joint venture over the Isidora gold mining assets that
Rusoro recently acquired from Hecla.
·
Concrete
Synergies.
The logical
combination of Rusoro and Gold Reserve will not only produce corporate
synergies through the rationalization of head offices, regulatory filing
requirements and executive teams, the strictly Venezuelan location of all
material operations will enable the combined company to optimize in-country
operations as well. Gold Reserves Choco
5 property is adjacent to Rusoros Choco 10 mine and Gold Reserves Brisas
property is 10 kilometres south of Rusoros Yuruan property, all in Bolivar State,
Venezuela. Rusoro expects to reduce
duplicated in-country costs while optimizing operations including drilling, the
use of construction and mining equipment, ore processing opportunities as well
as regulatory and logistical requirements surrounding imports and permitting.
·
Full
Exposure to Gold Price.
Based
on Gold Reserves publicly available information, none of the gold production
of the combined company is hedged.
·
Tax
Efficient Structure.
The Take-Over Bid has been structured as an
all-share offer that will allow certain Gold Reserve shareholders who tender to
the offer to do so on a tax efficient basis.
Canadian resident Gold Reserve shareholders may receive Rusoro shares on
a tax-deferred basis. Subject to the
Passive Foreign Investment Company rules, U.S. resident Gold Reserve
shareholders may also receive tax-deferral treatment if the Take-Over Bid is a
qualified reorganization under U.S. federal tax law.
·
Optimization and Consolidation Opportunities.
If the offer is accepted and
Rusoro acquires all of the outstanding Gold Reserve Equity, Rusoro intends to: (a) expedite its development and
expansion plans at its Choco 10 mine and Increible 6 project; (b) identify
opportunities to optimize the development of Gold Reserves Choco 5 project
which is adjacent to Rusoros Choco 10 mine; and (c)
2
obtain
the requisite development permits in respect of the Brisas Project in order to
recommence construction in a timely manner.
·
Ability to deliver results in Venezuela.
Since commencing Venezuelan operations, Rusoro
has been able to:
·
Develop
an extensive land package with 2.0 million proven and probable gold ounces in
reserves, and a resource (inclusive of reserves) of 7.1 million measured and
indicated gold ounces. Rusoro also has
an additional 7.0 million ounces of gold in inferred resources;
·
Permit
and develop its San Rafael/El Placer project which is expected to reach
commercial production in 2010;
·
Restart
the Choco 10 mine acquired from Gold Fields after it had been effectively shut
down as a result of both permitting and labour issues; and
·
Restart
the Isidora mine acquired from Hecla after it had been effectively shut down as
a result of both permitting and labour issues.
THE
TAKE-OVER BID WILL BE OPEN FOR ACCEPTANCE UNTIL
12:00
MIDNIGHT EASTERN TIME AT THE END OF JANUARY 21, 2009,
UNLESS THE
BID IS EXTENDED OR WITHDRAWN BY RUSORO.
The Take-Over Bid will be subject to customary conditions, including:
that a minimum of 66 2/3% of the outstanding Gold Reserve shares and 66
2/3% of the outstanding equity units on a fully-diluted basis, respectively,
are tendered to the offer; the execution of a supplemental indenture in respect
of Gold Reserves 5.50% Senior Subordinated Convertible Notes due June 15,
2022; and the waiver or setting aside of Gold Reserves shareholder rights
plan.
This press release does not constitute an offer to buy or sell, or the
solicitation of an offer to buy or sell, any of the securities of Rusoro or
Gold Reserve. Such an offer can only be made
pursuant to the Take-Over Bid circular and related documents (the Circular)
filed today with securities regulatory authorities in Canada and the
registration statement, prospectus, tender offer statement and related
documents filed today with the United States Securities and Exchange Commission
(the SEC) which are available on www.sedar.com and www.sec.gov,
respectively. In addition, you may
request these documents free of charge from the Corporate Secretary, Rusoro
Mining Ltd., Suite 2164, 1055 Dunsmuir Street, Vancouver, B.C., V7X 1B1,
telephone (604) 632-4044 or from the Companys information agent, Georgeson, at
the contact details listed at the end of this press release. Investors and securityholders are strongly
advised to read these documents, as well as any amendments or supplements to
these documents, because they contain important information.
You should read these
materials carefully and in their entirety before making a decision concerning
the offer.
Rusoro has requested from Gold Reserve the use of its list of
shareholders and equity unit holders and security position listings for the
purpose of disseminating the Circular and other Take-Over Bid documents to Gold
Reserve Equityholders. Upon compliance
with this request by Gold Reserve, the Circular, Take-Over Bid documents and
other relevant materials will be mailed to Gold Reserve Equityholders of record
and furnished to brokers, dealers, banks, trust companies and similar persons,
whose names or the names of whose nominees appear on the Gold Reserve
shareholder and equity unitholder lists or, if applicable, who are listed as
participants in a clearing agencys security position listing, for subsequent
transmittal to beneficial owners of Gold Reserve Equity.
3
Rusoros financial advisor is Endeavour Financial International
Corporation, its Canadian legal counsel are Blake, Cassels & Graydon
LLP and Anfield, Sujir, Kennedy & Durno and its US legal counsel are
Gersten Savage LLP and Dorsey & Whitney LLP.
Qualified Person
: Mr. Gregory Smith, P.Geo, the
Vice-President Exploration of the Company, is the Qualified Person as defined
by National Instrument 43-101, and is responsible for the scientific and
technical aspects of this news release.
ON BEHALF OF THE BOARD
|
|
|
Andre Agapov
|
|
|
Chief Executive Officer
|
|
|
For further information, please
contact:
|
George Salamis, President
|
|
Ross Gatensbury, Investor
Relations
|
Tel: +1 604
632 4044
|
|
Tel: +1 604
632 4044
|
Email: gsalamis@rusoro.com
|
|
Email: gates@rusoro.com
|
ANY QUESTIONS OR REQUESTS FOR ASSISTANCE MAY BE
DIRECTED TO THE COMPANYS INFORMATION AGENT:
North American Toll Free Number:
1-
888-605-7615
Banks and Brokers call collect: 1-212-806-6859
4
Technical Disclosure Relating to Rusoros and Gold Reserves Reserve
Assets
The
information presented in the following tables is derived from information and
data contained in technical reports, all of which are listed following the
tables, prepared pursuant to NI 43-101. Mr. Gregory
Smith, P. Geo., the Vice-President Exploration of Rusoro, is the Qualified
Person, as defined in NI 43-101, and is responsible for the scientific and
technical aspects of this press release as they relate to Rusoros assets. Information concerning Gold Reserves assets
is taken from Gold Reserves public filings.
Reserves
|
|
|
|
Tonnage
|
|
Au Grade
|
|
Au
|
|
Cu Grade
|
|
Cu
|
|
Project
|
|
Category
|
|
Mt
|
|
g/t
|
|
ounces (000s)
|
|
percent
|
|
M pounds
|
|
Las Brisas (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proven
|
|
238
|
|
0.71
|
|
5,429
|
|
0.12
|
|
643
|
|
|
|
Probable
|
|
245
|
|
0.61
|
|
4,800
|
|
0.14
|
|
746
|
|
|
|
Sub total Las Brisas
|
|
483
|
|
0.66
|
|
10,229
|
|
0.13
|
|
1,389
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Choco 10 (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proven
|
|
2.70
|
|
2.70
|
|
234
|
|
|
|
|
|
|
|
Probable
|
|
15.0
|
|
3.32
|
|
1,596
|
|
|
|
|
|
|
|
Sub total Choco 10
|
|
17.7
|
|
3.21
|
|
1,830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Isidora (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proven
|
|
0.07
|
|
37.2
|
|
84
|
|
|
|
|
|
|
|
Probable
|
|
0.11
|
|
28.8
|
|
101
|
|
|
|
|
|
|
|
Sub total Isidora
|
|
0.18
|
|
32.1
|
|
185
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grand Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proven
|
|
240
|
|
0.74
|
|
5,747
|
|
|
|
|
|
|
|
Probable
|
|
260
|
|
0.78
|
|
6,497
|
|
|
|
|
|
|
|
Grand Total - Gold
|
|
501
|
|
0.76
|
|
12,244
|
|
|
|
|
|
|
|
Grand Total - Copper
|
|
483
|
|
|
|
|
|
0.13
|
|
1,389
|
|
Measured and Indicated Resources - inclusive
of Reserves
|
|
|
|
Tonnage
|
|
Au Grade
|
|
Au
|
|
Cu Grade
|
|
Cu
|
|
Project
|
|
Category
|
|
Mt
|
|
g/t
|
|
ounces (000s)
|
|
percent
|
|
M pounds
|
|
Las
Brisas (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Measured
|
|
256
|
|
0.71
|
|
5,853
|
|
0.12
|
|
674
|
|
|
|
Indicated
|
|
300
|
|
0.62
|
|
5,986
|
|
0.13
|
|
888
|
|
|
|
Sub
Total
|
|
557
|
|
0.66
|
|
11,839
|
|
0.13
|
|
1,562
|
|
Choco
10 (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Measured
|
|
2.60
|
|
2.86
|
|
243
|
|
|
|
|
|
|
|
Indicated
|
|
56.3
|
|
2.45
|
|
4,432
|
|
|
|
|
|
|
|
Sub
Total
|
|
58.9
|
|
2.47
|
|
4,675
|
|
|
|
|
|
Isidora
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Measured
|
|
0.11
|
|
29.1
|
|
100
|
|
|
|
|
|
|
|
Indicated
|
|
0.36
|
|
19.8
|
|
230
|
|
|
|
|
|
|
|
Sub
Total
|
|
0.47
|
|
21.8
|
|
330
|
|
|
|
|
|
Increible
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indicated
|
|
23.5
|
|
2.10
|
|
1,590
|
|
|
|
|
|
San
Rafael / El Placer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indicated
|
|
0.64
|
|
19.4
|
|
399
|
|
|
|
|
|
Valle
Hondo
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indicated
|
|
3.5
|
|
0.90
|
|
101
|
|
|
|
|
|
Ceiba
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indicated
|
|
|
|
|
|
|
|
|
|
|
|
Total
Measured and Indicated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Measured
|
|
259
|
|
0.74
|
|
6,196
|
|
|
|
|
|
|
|
Indicated
|
|
385
|
|
1.03
|
|
12,738
|
|
|
|
|
|
|
|
Total
|
|
644
|
|
0.92
|
|
18,935
|
|
|
|
|
|
5
Inferred Resources
|
|
|
|
Tonnage
|
|
Au Grade
|
|
Au
|
|
Cu Grade
|
|
Cu
|
|
Project
|
|
Category
|
|
Mt
|
|
g/t
|
|
ounces (000s)
|
|
percent
|
|
M pounds
|
|
Las
Brisas (a)
|
|
Inferred
|
|
121.1
|
|
0.59
|
|
2,278
|
|
0.12
|
|
316
|
|
Choco
10 (4)
|
|
Inferred
|
|
42.9
|
|
2.19
|
|
3,017
|
|
|
|
|
|
Increible
6
|
|
Inferred
|
|
17.5
|
|
1.95
|
|
1,100
|
|
|
|
|
|
Isidora
(4)
|
|
Inferred
|
|
0.1
|
|
14.1
|
|
45
|
|
|
|
|
|
Twin
Shear
|
|
Inferred
|
|
1.2
|
|
12.5
|
|
482
|
|
|
|
|
|
Days
|
|
Inferred
|
|
0.21
|
|
5.52
|
|
37
|
|
|
|
|
|
San
Rafael / El Placer
|
|
Inferred
|
|
0.7
|
|
23.2
|
|
524
|
|
|
|
|
|
Valle
Hondo
|
|
Inferred
|
|
47.0
|
|
0.9
|
|
1,360
|
|
|
|
|
|
Ceiba
|
|
Inferred
|
|
1.6
|
|
9.20
|
|
459
|
|
|
|
|
|
Total
Inferred Resources
|
|
|
|
232.2
|
|
1.25
|
|
9,302
|
|
|
|
|
|
COMBINED SUMMARY - ALL PROJECTS
|
|
|
|
|
|
|
|
Au
|
|
|
|
|
|
Tonnage
|
|
Au Grade
|
|
ounces
|
|
Category
|
|
|
|
Mt
|
|
g/t
|
|
(000s)
|
|
Reserves
|
|
Proven and Probable
|
|
501
|
|
0.76
|
|
12,244
|
|
Resources
|
|
Measured and Indicated (inclusive of reserves)
|
|
644
|
|
0.92
|
|
18,935
|
|
Resources
|
|
Inferred
|
|
232
|
|
1.25
|
|
9,302
|
|
NOTES:
All
Resources reported include Reserves.
(a)
Resources for Las Brisas are taken from Gold Reserves public filings
and are reported at a cut-off of 0.4 g/t AuEq where AuEq = Au (gpt) + Cu
(%)*1.16.
Notes
for all Rusoro Resources and Reserves:
(1)
|
Reserves
and resources are NI 43-101 compliant and follow the definitions for proven
and probable reserves and measured, indicated and inferred resource
established by the CIM.
|
|
|
(2)
|
Mineral
resource estimates which are not mineral reserves do not have demonstrated
economic viability. The estimate of mineral resources may be materially
affected by environmental, permitting, legal, title, taxation,
socio-political, marketing, or other relevant issues.
|
|
|
(3)
|
The
quantity and grade of reported inferred resources in these estimates is
uncertain in nature and there has been insufficient exploration to define
these inferred resources as an indicated or measured mineral resource and it
is uncertain if further exploration will result in upgrading them to an
indicated or measured category.
|
|
|
(4)
|
Choco
10 reserves are reported as 100%; 95% are attributable to Rusoro. Isidora
reserves are 100% attributable to Rusoro until the Mixed Enterprise with
MIBAM is established. All resources reported include reserves.
|
6
The key
assumptions, parameters and methods used for each of the resource and reserve
estimates are summarized in the following table:
Project
|
|
Independent
Consultant
|
|
Date
|
|
Method
|
|
Cut Off
|
|
Grade Cap
|
|
Density
(g/cm3)
|
|
Gold Price for
Reserves
|
|
|
|
|
|
|
|
|
|
|
|
Brisas
|
|
Information sourced from
public filings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Choco 10
|
|
Micon
|
|
November 2007
|
|
3D
computer models, uniform conditioning and kriged estimated grades
|
|
0.5
g/t
|
|
50.0
g/t
|
|
1.7
- 2.8
|
|
$500
- $550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Isidora
|
|
Micon
|
|
August 2008
|
|
Seam
Model with inverse distance cubed method using Vulcan Software
|
|
8.0
g/t
|
|
200.0
g/t
|
|
2.67
- 2.80
|
|
$570
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twin Shear
|
|
SW-RPA
|
|
August 2008
|
|
3D
geological model using inverse distance squared
|
|
8.0
g/t
|
|
50.0
g/t
|
|
2.7
|
|
n/a
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increible 6
|
|
Micon
|
|
February 2008
|
|
Partial
Block model using Gemcom software and inverse distance squared
|
|
0.5
g/t
|
|
20-40
g/t
|
|
2.0
- 2.7
|
|
n/a
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SREP
|
|
Micon
|
|
October 2008
|
|
3D
geological model using Gemcom software and inverse distance squared
|
|
8.0
g/t
|
|
80.0
g/t
|
|
2.8
|
|
n/a
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Days
|
|
Micon
|
|
October 2008
|
|
3D
geological model using Gemcom software and inverse distance squared
|
|
2.0 &
8.0 g/t
|
|
30.0
g/t
|
|
2.0
- 2.8
|
|
n/a
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ceiba
|
|
SW-RPA
|
|
April 2007
|
|
Polygonal
using Gemcom Software
|
|
0.5
g/t
|
|
36.0
g/t
|
|
2.8
|
|
n/a
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Valle Hondo
|
|
SW-RPA
|
|
April 2007
|
|
Block
Model using ordinary kriging
|
|
0.5
g/t
|
|
20.0
g/t
|
|
2.00
- 2.65
|
|
n/a
|
For
further information on Rusoros gold projects see Rusoros NI 43-101 reports
available on www.sedar.com:
·
Technical Report on the San
Rafael-El Placer and Days Vein Deposits, Bolivar State, Venezuela, dated October 2,
2008.
·
Technical Report on the Mining
and Processing Operations of Hecla Mining Company, Estado Bolivar, Venezuela
dated August 1, 2008.
·
Technical Report on the Increible
6 Property, Bolivar State, Venezuela, dated November 14, 2007, as revised February 14,
2008.
·
Technical Report on the PMG (Gold
Fields) Choco 10 Concession and Mine, Estado Bolivar, Venezuela dated November 21,
2007.
·
Technical Report and Mineral
Resource Estimate, Ceiba II Project, Bolivar State, Venezuela dated April 9,
2007.
·
Technical Report and Mineral
Resource Estimate, Valle Hondo Project, Bolivar State, Venezuela dated April 9,
2007.
Cautionary Note Regarding Forward-Looking
Statements
This
press release, the Take-Over Bid and Circular, including the schedules attached
therein, the pro forma consolidated financial statements of the Company, and
some of the material incorporated by reference into the Circular, contain
certain forward-looking information and forward-looking statements, as defined
in applicable securities laws (collectively referred to as
forward-looking statements
). Forward-looking statements include possible
events, statements with respect to possible events, the proposed transaction,
the business, operations and financial performance and condition of each of
Rusoro and Gold Reserve and the proposed combined company, the future price of
gold, the estimation of mineral reserves and resources, the realization of
mineral reserve and resource estimates, the timing and amount of estimated
future production, costs of production, expected capital expenditures, costs
and timing of the development of new deposits, success of exploration,
development and mining activities, permitting time lines, currency
fluctuations, requirements for additional capital, government regulation of
mining operations, environmental risks, unanticipated reclamation expenses,
title disputes or claims, and limitations on insurance coverage. The words plans, expects, is expected, scheduled,
estimates, forecasts, intends, anticipates, or believes, or
variations of such words and phrases or statements that certain actions, events
or results may, could, would, might, or will be taken, occur and
similar expressions identify forward looking statements.
Forward-looking
statements are necessarily based upon a number of estimates and assumptions
that, while considered reasonable by Rusoro as at the date of such statements,
are inherently subject to significant business, economic, social, political and
competitive uncertainties and contingencies and other factors that could cause
actual results or events to differ materially from those projected in the
forward-looking statements. The
estimates and assumptions of Rusoro contained or incorporated by reference in
the Circular which may prove to be incorrect, include, but are not limited to, (1) that
Rusoro will be successful in acquiring 100% of the outstanding Gold Reserve
Equity
, (2) that all
required third party regulatory and governmental approvals to the Take-Over Bid
will be obtained and all other conditions to completion of the transactions
will be satisfied or waived, (3) there being no significant disruptions
affecting operations, whether due to labour disruptions, supply disruptions,
power disruptions, damage to equipment or otherwise; (4) permitting,
development, expansion and power supply proceeding on a basis consistent with
Rusoros current expectations; (5) permitting and development proceeding
on a basis consistent with Rusoros current expectations; (6) the exchange
rate between the Canadian dollar, the Venezuelan Bolivar and the U.S. dollar
being approximately consistent with current levels; (7) certain price
assumptions for gold; (8) prices for and availability of natural gas, fuel
oil, electricity, parts and equipment and other key supplies remaining
consistent with current levels; (9) production forecasts meeting
expectations; (10) the accuracy of Rusoros current
7
mineral
reserve and mineral resource estimates; and (11) labour and materials costs
increasing on a basis consistent with Rusoros current expectations.
Known and unknown factors
could cause actual results or events to differ materially from those projected
in the forward-looking statements. Such
factors include, but are not limited to, fluctuations in the currency markets;
fluctuations in the spot and forward price of gold or certain other commodities
(such as diesel fuel and electricity); changes in interest rates; disruption to
the credit markets and delays in obtaining financing; inflationary pressures;
risks arising from holding derivative instruments (such as credit risk, market
liquidity risk and mark-to-market risk); changes in national and local
government legislation, taxation, controls, regulations and political or
economic developments in Canada, Venezuela or other countries in which Rusoro
does or may carry on business; business opportunities that may be presented to,
or pursued by Rusoro, Rusoros ability to successfully integrate acquisitions;
operating or technical difficulties in connection with mining or development
activities; actual results of exploration activities; the possibility of cost
overruns or unanticipated expenses; employee relations; the speculative nature
of gold exploration and development, including the risks of obtaining and
renewing necessary licenses and permits; the impact of Venezuelan law on Rusoros
operations; diminishing quantities or grades of reserves; adverse changes in
our credit rating; contests over title to properties, particularly title to
undeveloped properties; and the occurrence of natural disasters, hostilities,
acts of war or terrorism. In addition,
there are risks and hazards associated with the business of gold exploration,
development and mining, including environmental hazards, industrial accidents,
unusual or unexpected formations, pressures, cave-ins, flooding and gold
bullion losses (and the risk of inadequate insurance, or inability to obtain
insurance, to cover these risks). The
following factors, amongst others, related to the business combination of
Rusoro and Gold Reserve could cause actual results to differ materially from forward-looking
statements, including those contained in the Circular: the Rusoro shares issued
in connection with the Take-Over Bid may have a market value lower than
expected; the business of Rusoro and Gold Reserve may not be integrated
successfully or such integration may be more difficult, time-consuming or
costly than expected; and the expected combination benefits from the
combination of Rusoro and Gold Reserve may not be fully realized or not
realized within the expected time frame.
All of the forward-looking statements made in the Circular are qualified
by these cautionary statements and those made in the Circular itself. These factors are not intended to represent a
complete list of the factors that could affect Rusoro and the combination of
Rusoro and Gold Reserve. Additional
factors are noted elsewhere in the Circular and in the documents incorporated
by reference therein. Although Rusoro
has attempted to identify important factors that could cause actual results or
events to differ materially from those described in forward-looking statements,
there may be other factors that could cause results or events not to be as
anticipated, estimated or intended.
There can be no assurance that forward-looking statements will prove to
be accurate, as actual results and future events could differ materially from
those anticipated in such statements.
Accordingly, undue reliance should not be placed on forward-looking
statements. Rusoro undertakes no
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 or future events or otherwise, except as may be required in
connection with a material change in the information disclosed in the Circular
or as otherwise required by law.
Cautionary Note Concerning Resource
Estimates
Information
in this press release and the Circular, including information incorporated by
reference, and disclosure documents of Rusoro that are filed with Canadian
securities regulatory authorities concerning mineral properties have been
prepared in accordance with the requirements of securities laws in effect in
Canada, which differ from the requirements of United States securities laws.
Without
limiting the foregoing, these documents use the terms measured resources, indicated
resources and inferred resources.
Gold Reserve
Equity
holders in the United States are advised that, while such terms are
recognized and required by Canadian securities laws, the SEC does not recognize
them. Under United States standards,
mineralization may not be classified as a reserve unless the determination
has been made that the mineralization could be economically and legally
produced or extracted at the time the reserve determination is made. United
States investors are cautioned not to assume that all or any part of measured
or indicated resources will ever be converted into reserves. Further, inferred resources have a great
amount of uncertainty as to their existence and as to whether they can be mined
legally or economically. It cannot be assumed that all or any part of the
inferred resources will ever be upgraded to a higher resource category. Under
Canadian rules, estimates of inferred mineral resources may not form the basis
of feasibility or pre-feasibility studies, except in rare cases. Therefore,
United States investors are also cautioned not to assume that all or any part
of the inferred resources exist, or that they can be mined legally or
economically. Disclosure of contained
ounces is permitted disclosure under Canadian regulations; however, the SEC
normally only permits issuers to report resources as in place tonnage and
grade without reference to unit measures. Accordingly, information concerning
descriptions of mineralization and resources contained in these documents may
not be comparable to information made public by United States companies subject
to the reporting and disclosure requirements of the SEC.
National
Instrument 43-101 -
Standards
of Disclosure for Mineral Projects
(NI
43-101) is a rule developed by the Canadian Securities Administrators,
which has established standards for all public disclosure an issuer makes of
scientific and technical information concerning mineral projects. Unless otherwise indicated, all resource
estimates of Rusoro contained in this press release and the Circular, including
information incorporated by reference, have been prepared in accordance with NI
43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum
Classification System.
The TSX Venture Exchange has not
reviewed and does not take responsibility for the adequacy or accuracy of this
release.
8
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