GOLD RESERVE UPDATES SITUATION IN VENEZUELA
SPOKANE, WASHINGTON, September 8, 2002
Gold Reserve Inc. (TSE: GLR.A – OTC: GLDR.OB). On Friday, September 6, 2002, the Corporation Venezolana de Guayana (“CVG”) announced that they have selected Crystallex International Corporation to negotiate an operating contract for their Las Cristinas property, which is adjacent to Gold Reserve’s Brisas property.
There has been considerable legal and political controversy surrounding the Las Cristinas project and we are pleased to see CVG take action to move the Las Cristinas project forward.
Gold Reserve has long advocated that the two projects should be combined to achieve the most favorable economics. From information related to both properties it is now clear that Brisas/Las Cristinas is one large tonnage low grade gold copper deposit measuring some 5 km long and half a kilometer wide containing well over 20 million ounces of gold and over 2 billion pounds of copper.
Last year INGEOMIN, the technical division of the Venezuelan Ministry of Energy and Mines (MEM), completed an analysis of the economic, social, and environmental impact of the combination of the two projects into one mega project that would be the second largest gold mine in Latin America and the sixth largest in the world. INGEOMIN concluded from their analysis that “the most rational way to exploit this important gold deposit was as one single large project that would optimize the economic and social benefits, while minimizing the environmental impact.”
We have discussed this mega project with the MEM, Ministry of Planning, and the CVG and received very favorable responses. General Francisco Rangel, President of CVG, was quoted last year saying “CVG’s intention is to unify the ore bodies of Las Brisas and Las Cristinas to carry out a macro-mining project that will allow the generation of sustainable employment and development in this zone; we are talking of approximately 3,500 direct jobs. With this initiative, Venezuela would have the second largest mine in Latin America and the sixth in the world.”
Gold Reserve is committed to the development of the mining industry of Venezuela having invested over $70 million in its Brisas project. We will await the finalization of the operating contract for Las Cristinas and expect to discuss with the parties the potential to develop the combined gold project in the most rational and economic way possible. On a stand alone basis each project has been projected to have operating costs of approximately $150 per ounce (net of copper credits). The Company’s extensive work on the combined project indicates that operating costs could be dramatically lowered to approximately $110 per ounce. There would be similar savings in the capital costs per ounce as well. The area between the two current pit designs would add additional reserves and since the orebody is open at depth the economies of scale would also allow for a deeper pit adding more ore reserves, extending the mine life.
Gold Reserve’s Brisas project in southeastern Venezuela (using current gold prices) contains a current resource of 9.9 million ounces of gold containing proven and probable reserves of 6.7 million ounces of gold and 871 million pounds of copper. The company has approximately US$13 million in cash and no debt. With 23.6 million shares outstanding this amounts to 0.28 ounces of gold reserves per share, which is one of the highest in the industry. The market currently capitalizes the ore reserves at approximately US$4.25 per ounce in the ground net of cash.
The forward-looking information in this press release addresses future events involving known and unknown risks and uncertainties that could cause actual results to vary materially from projected results. These risks and uncertainties include those described in the Company’s Annual Information Statement filed on SEDAR and the 20-F filed with the US Securities and Exchange Commission on EDGAR.
FOR FURTHER INFORMATION:
A. Douglas Belanger, Executive Vice President
Internet – http//www.goldreserveinc.com 926 W. Sprague, Suite 200
Spokane, WA 99201 USA
Tel. (509) 623-1500
Fax: (509) 623-1634 |
