Gold Reserve Inc. Submits $1.928 Billion Arbitration Claim to World Bank’s ICSID
28 September 2010 - 3:00PM
Business Wire
Gold Reserve Inc. (TSX:GRZ)(NYSE-Amex:GRZ) announced
today it has filed its arbitration claim against the Bolivarian
Republic of Venezuela with the World Bank’s International Centre
for Settlement of Investment Disputes (“ICSID”), in accordance with
the provisions of the Canada-Venezuela Bilateral Investment Treaty
(“BIT”).
Gold Reserve’s claim alleges violations of three provisions of
the Canada-Venezuela BIT culminating in the effective expropriation
of Gold Reserve’s sizable investments in the world-class Brisas
gold/copper project and the promising Choco 5 gold property.
Gold Reserve believes three breaches of the Canada-Venezuela BIT
occurred: (1) Article II - Failure to provide fair and equitable
treatment and full protection and security, (2) Article III –
Failure to guarantee treatment on no less favorable terms than
provided to nationals of any other State, and (3) Article VII –
Protection against expropriation of investments without due process
of law, on a discriminatory basis, without a legitimate public
purpose, and without proper compensation.
Gold Reserve seeks compensation for all of its losses caused by
Venezuela’s breaches of the BIT, including the full value of its
investments in the Brisas Project and in Choco 5 prior to
Venezuela’s breaches of the BIT, and other related damage. As of
September 24, 2010, Gold Reserve values its damages at a minimum in
the amount of $1.928 billion, equivalent to approximately $30 a
share.
Doug Belanger, President, stated, “The filing of the Memorial
that supports the claim is the result of several months of
extensive effort by counsel, technical, legal and financial experts
and Company personnel. The Brisas Project and the promising Choco 5
exploration property were significant assets to the shareholders of
the Company. We worked extremely hard to maximize the value of
these projects for the shareholders, stakeholders, and local
beneficiaries in Venezuela. Venezuela has obviously decided to take
another path regarding the Brisas Project. As a result of the
unfortunate actions taken by Venezuela in violation of the BIT, we
are prepared to vigorously pursue a decision in this case for our
shareholders and stakeholders. We remain ready, however, to
evaluate and possibly enter into an amicable settlement that would
compensate us for our losses and allow the project or projects to
proceed on a fast track basis. Any settlement would be accepted
only if it were beneficial to the shareholders and stakeholders of
the Company.”
Further written submissions are scheduled to be made during 2011
and the oral hearing in the case is scheduled to commence on
December 5, 2011.
Please visit our website at www.goldreserveinc.com under
Investor Relations: SEDAR Filings or SEC Filings.
FORWARD-LOOKING STATEMENTS
This release contains forward-looking statements that 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 outcomes, financial results, performance, or achievements of
Gold Reserve to be materially different from our estimated
outcomes, 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 our arbitration under the Additional
Facility Rules of the International Centre for Settlement of
Investment Disputes of the World Bank, in Washington D.C. to
determine compensation claimed by us resulting from our claims
against the Venezuelan government and its agents and agencies;
corruption and uncertain legal enforcement; political and social
instability; 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 Venezuela including changes in laws and legal
regimes; the result or outcome of the litigation regarding the
enjoined hostile takeover bid for us; impact of currency, metal
prices and metal production volatility; our dependence upon the
abilities and continued participation of certain key employees; the
value of our 5.50% senior subordinated convertible notes due on
June 15, 2022 and potential volatility of our Class A common shares
(also referred to herein as “Common Shares”), including potential
dilution as a result of the conversion of the convertible notes
into our common shares by either us or the holder; the prospects
for exploration and development of alternative projects by us; and
risks normally incident to the exploration, development and
operation 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 those factors outlined in the "Cautionary Statement
Regarding Forward-Looking Statements" and "Risks Factors" contained
in Gold Reserve's filings with the Canadian provincial securities
regulatory authorities and U.S. Securities and Exchange Commission,
including Gold Reserve’s Annual Information Form and Annual Report
on Form 10-K for the year ended December 31, 2009, filed with the
Canadian provincial securities regulatory authorities and U.S.
Securities and Exchange Commission, respectively.
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