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: 333-156117
Date: January 5, 2009
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 Responds to Gold
Reserves Directors Circular
and Ongoing Defensive
Tactics
January 5,
2009
|
|
Trading Symbol (TSX-V):RML
|
Vancouver, Canada - Rusoro Mining Ltd.
(TSX-V:RML) (Rusoro or the Company) is pleased to confirm that, in spite of
continued defensive tactics by Gold Reserve Inc. (Gold Reserve), Rusoro is
committed to providing Gold Reserve shareholders the opportunity to consider Rusoros
bid for 100% of the shares of Gold Reserve (the Bid) on its merits. The Bid was launched on December 15,
2008, it remains open, and Gold Reserve shareholders are free to tender their
shares to the bid at any time prior to the Bid expiry time of midnight at the
end of January 21, 2009.
Andre Agapov, CEO of Rusoro stated, We have
proven our ability to acquire, rationalize, turn-around, and operate previously
struggling assets in Venezuela and we are excited to have the opportunity to
apply our experience to Gold Reserves projects for the benefit of Gold Reserve
and Rusoro shareholders. We will work
very hard to make sure Gold Reserve shareholders are not prevented by their own
management team from having the opportunity to consider our premium bid. We have just completed a positive quarter of
operations at both our Choco 10 and Isidora mines and will be providing an
update on our operations shortly. Having
only acquired the Choco 10 mine in November 2007 and the Isidora mine in July 2008,
both of which had been shut down by their previous owners due to labour and
permitting issues, my congratulations go to our operational teams who have done
an outstanding job in an incredibly short timeframe.
On December 30, 2008, Gold Reserve filed a
court application for an injunction that, if granted, would prevent the Gold
Reserve shareholders from considering the Bid.
Rusoro will vigorously defend itself against all of the allegations made
in Gold Reserves injunction application to ensure that Gold Reserve
shareholders have the opportunity to accept our premium offer.
1
Also on December 30, 2008, the Gold Reserve
board of directors issued their response circular (the GRZ Circular) in
connection with the Bid. In the GRZ
Circular, Gold Reserve made unfounded allegations including attacks on the Bid
as well as Rusoros financial and operating record. By way of example:
·
Gold Reserve claims that the Bid was not
a premium bid. This is untrue. As of December 12, 2008 (the last
trading day before the Bid was announced), the Bid represented a value of
C$1.08 per Gold Reserve share, a premium of 140% on the closing prices and 209%
on the 30-day volume weighted average prices, using Rusoros and Gold Reserves
share prices for the relevant trading days on the TSX Venture Exchange and the
Toronto Stock Exchange respectively.
Based on Rusoros closing price on the TSX Venture Exchange on Friday, January 2,
2009, the Bid represented a value of C$2.04 per Gold Reserve share.
·
Gold Reserve hired a litigation
accounting firm to attack Rusoros financial statements. Rusoro is confident that it has provided all
required financial disclosure in its public filings. Gold Reserves litigation firm made no
allegation that Rusoros financial statements do not comply with Canadian or
U.S. accounting requirements. Furthermore,
this litigation firm went to great lengths to confirm that Rusoro had prepared
its statements in accordance with Canadian Generally Accepted Accounting
Principles (GAAP). Rusoro also
reconciled its relevant financials to U.S. GAAP for the benefit of Gold Reserves
U.S. shareholders.
·
Gold Reserve hired a technical consulting
firm to attack Rusoros technical disclosure.
However, this consulting firms principal conclusion was that Rusoro may
have overstated its contained ounces of gold by approximately 114,000 ounces
due to the amount of mining Rusoro has completed since the last
reserve/resource update. This amount is approximately
1.6% of Rusoros measured and indicated resources (inclusive of reserves) of
7.1 million ounces of gold and Rusoro does not believe this change is material.
·
Gold Reserve claims that calculating the
pro-rata ownership of Gold Reserve shareholders in a combined company on an
issued share basis (which would be 30.4%) is misleading. Alternatively, Gold Reserve suggests that on
a fully-diluted basis the pro-rata ownership of Gold Reserve shareholders would
decrease to 22%. For this dilution to occur,
US$80 million in debt would be eliminated from Rusoros balance sheet and an
additional US$425 million in cash would be generated for the combined company,
at an average price of C$3.58 per Rusoro share (using the noon Bank of Canada
exchange rate on January 2, 2009 of C$1.2107/US$).
·
Gold Reserve challenges Rusoros ability
to operate in Venezuela by implying that Rusoro does not have a constructive
working relationship with the Venezuelan authorities. This claim is unfounded. Since commencing operations, the Rusoro team
has repeatedly demonstrated its ability to operate successfully in Venezuela by
being able to:
·
Restart the Choco 10 mine shortly after
its acquisition after it had been effectively shut down as a result of both
permitting and labour issues;
·
Restart the Isidora mine shortly after
its acquisition after it had been effectively shut down as a result of both
permitting and labour issues;
·
Permit and develop its San Rafael/El
Placer project operations which are expected to reach commercial production in
2010;
·
Establish the first mixed enterprise
joint venture of its kind with the Venezuelan government in the mining industry
regarding the Isidora gold mining assets as part of its acquisition;
2
·
Resolve and duly settle the legacy legal
proceedings instigated by Ferrominera del Orinoco in 2004 against, Promotora
Minera de Venezuela S.A. (PMV). These
proceedings were initiated before PMV was part of the Rusoro group. Rusoro acquired PMV as of November 30,
2007. This action was formally abandoned
on July 6, 2008, the legal proceedings were terminated on September 24,
2008 and, as a result, PMVs 95% ownership in the Choco 10 operations is no
longer under dispute.
·
Gold Reserve claims that Rusoro has
material information regarding Gold Reserves Choco 5 property as a result of trespass. This claim is unfounded. Rusoro completed limited condemnation
drilling on Gold Reserves Choco 5 property in the summer of 2008, in
accordance with established practices between the two companies. Condemnation drilling is drilling for the
purpose of confirming that no mineral resources are present in a certain area,
and in this case, Rusoro wanted to confirm that no gold was in the area of a
proposed pit wall. As expected, the
condemnation drilling showed the rock to be barren. Rusoro communicated this fact to Gold
Reserve.
·
Finally, Gold Reserve implies that Rusoro
does not have the operating ability to bring value to shareholders. This claim is unfounded. Rusoro recently acquired both the Choco 10
and Isidora mines, has restarted them both from problems that plagued their
previous owners, reported record amounts of ore processed through the Choco 10
mill in November 2008, reported record low combined cash costs at the Choco
10 and Isidora mines of US$385/ounce for November 2008, and will be releasing
an update in respect of the positive 4Q 2008 operations at both Choco 10 and
Isidora shortly.
Rusoro has worked diligently in preparing the
Bid with its Canadian and U.S. legal advisors (Blake, Cassels &
Graydon LLP, Anfield, Sujir, Kennedy & Durno, Gersten Savage LLP and
Dorsey & Whitney LLP), its financial advisor (Endeavour Financial
International Corporation), its technical consultants (Micon International and
Scott Wilson Roscoe Postle), its accounting advisor (Deloitte & Touche
LLP) and its external auditors (Grant Thornton LLP and Espineira, Sheldon Y
Asociados aka PricewaterhouseCoopers Venezuela). Rusoro intends to continue to vigorously
defend and overcome any distracting tactics as they may arise so that Gold
Reserve shareholders can consider the Bid for themselves.
ON BEHALF OF THE BOARD
Andre Agapov
Chief Executive Officer
* * *
* * * * *
3
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
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, related
litigation, 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 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, risks related to litigation;
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
4
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.
MORE
INFORMATION AND WHERE TO FIND IT:
This
press release does not constitute an offer to buy or an invitation to sell, any
of the securities of Rusoro or Gold Reserve. Such an offer may only be made
pursuant to a registration statement and prospectus filed with the U.S.
Securities and Exchange Commission (the SEC) and an offer to purchase and
circular filed with Canadian securities regulatory authorities. Rusoro
has filed with the SEC a Registration Statement on Form F-10, a Tender
Offer Statement on Schedule TO and other documents and information,
and has mailed an Offer and Circular (which is filed as an exhibit to the
Registration Statement and Tender Offer Statement) to Gold Reserve
shareholders and equity unitholders (collectively, the Equityholders)
concerning the Offer and the proposed combination of Rusoro and
Gold Reserve. GOLD RESERVE EQUITYHOLDERS ARE URGED TO READ THE
REGISTRATION STATEMENT, THE TENDER OFFER STATEMENT AND OFFER AND CIRCULAR AND
ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC, BECAUSE THEY CONTAIN
IMPORTANT INFORMATION. Investors and Gold Reserve Equityholders may obtain
the documents free of charge at the SECs website,
www.sec.gov
. In addition,
documents filed with the SEC by Rusoro are available free of charge from
Rusoro. You should direct requests for documents to the Corporate Secretary,
Rusoro Mining Ltd., Suite 2164, 1055 Dunsmuir Street, Vancouver,
British Columbia V7X 1B1, telephone (604) 632-4044.
The TSX Venture Exchange has not
reviewed and does not take responsibility for the adequacy or accuracy of this
release.
5
Gold Reserve (AMEX:GRZ)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Gold Reserve (AMEX:GRZ)
Historical Stock Chart
Von Jul 2023 bis Jul 2024