Gold Reserve Awarded $740.3 Million by ICSID for the Expropriation of the Brisas Project by Venezuela
September 22 2014 - 7:48PM
Business Wire
Gold Reserve Inc. (TSX.V:GRZ) (OTCQB:GDRZF) is pleased to
announce that the three-member Tribunal at the World Bank’s
International Center for the Settlement of Investment Disputes
(“ICSID”) has awarded the Company $740.3 million in accordance with
the provisions of the Canada–Venezuela Bilateral Investment Treaty
(“BIT”).
The Award represents $713 million for the fair market value of
the Brisas Project, $22.3 million for interest on the Award since
April 2008 based on the US Treasury Bill rate compounded annually
and $5 million for reimbursement of legal and technical costs
expended by the Company. Payment of the Award is due and payable
immediately with any unpaid amounts accruing interest at Libor plus
2% per annum.
Gold Reserve and its legal counsel are evaluating the
substantial text of the Award and expect to have further comments
on the Tribunal’s decision in the near future. A copy of the full
text of the Award will be posted on the Company’s website in the
next few days.
Gold Reserve has commenced steps to ensure the recognition and
collection of the Award which is immediately enforceable in any of
the 150-plus member states party to the New York Convention. The
Company is well financed and has the strong support of its
stakeholders to pursue the collection of the Award in full.
Gold Reserve expects that Venezuela will honor its international
obligations and will effect prompt payment of the tribunal’s
unanimous Award. While the Company is pleased with the Award it is
less than the value of the Brisas project at today’s gold and
copper prices and Venezuela will substantially benefit from the
development of the mine. As previously reported, the Company
expended approximately US$300 million developing the Brisas project
to the construction stage prior to its termination by Venezuela.
The acquisition of the Company’s valuable engineering work product
by the Venezuelan government would both expedite and reduce the
cost of the project’s development. If requested, Gold Reserve would
also be prepared to assist in the fast-track development of the
Brisas Project.
The Company plans to distribute a substantial majority of any
proceeds received to its shareholders in the most efficient manner
possible, subject to the need to retain funds for operating and
arbitration related expenses, corporate income taxes and other
obligations, such as repayment of convertible notes (if not
otherwise converted).
As of the date of this notice the Company has 76.1 million Class
A common shares issued and outstanding and holds approximately $8.8
million in cash. On a fully diluted basis, assuming all warrants,
options and convertible notes are converted to common shares, the
Company would have approximately 93.5 million Class A common shares
issued and outstanding and would hold approximately $18.8 million
in cash. This amount excludes any potential sale of the Brisas
project technical and engineering work product and approximately
$19 million of related equipment held for sale.
Gold Reserve President Doug Belanger stated, “The board of
directors, management and employees of the Company are pleased that
the Tribunal was unanimous in deciding all phases of the Award in
favor of the Company. We feel vindicated by the Tribunal’s clear
conclusion that the Venezuelan government acted unlawfully in
terminating the Brisas Project in direct violation of the BIT. We
are gratified to know that all of our hard work prior to the
unlawful termination of the project and subsequently in the
execution of our claim against the Venezuelan government has been
rewarded.
“On behalf of the Board, we thank our legal team at White &
Case, led by Abby Cohen Smutny and Darryl Lew and supported by a
host of talented and dedicated professionals. We also acknowledge
our employees, consultants and legal and technical experts for
their tremendous contribution and dedication. Lastly, we commend
our shareholders for their continued support throughout this
difficult, very costly and time consuming process.
“As our counsel studies the Award, the Company plans to reach
out to the government of Venezuela to explore ways to facilitate
Venezuela’s ability to honor its obligations promptly. We are
hopeful that Venezuela will satisfy its obligations to the Company
without delay and without any further legal proceeding. Should they
fail to do so, we are prepared to pursue all available means to
ensure that the amount awarded to the Company is recovered in full.
There are well documented procedures in place for identifying and
attaching sovereign commercial assets located in States that are
party to the New York Convention. The Company is already well
advanced in this effort.”
Please see our website at www.goldreserveinc.com for further
information including: International Arbitration, Brisas Project,
Corporate Obligations, Investor Information – pro forma diluted
Common Shares outstanding.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This release contains “forward-looking statements” or
“forward-looking information” as such terms are defined under
applicable U.S. and Canadian securities laws (collectively referred
to herein as “forward-looking statements”) with respect to the
ICSID Award related to the expropriation of the Company’s Brisas
Project by the Venezuela government. 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 such as, among other
things, the Company’s ability to collect such Award.
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.
Factors that could cause actual results to differ materially
from those in the forward-looking statements include the timing of
and amount of collection of the Award, if at all.
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 U.S. or Canadian securities laws.
“Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.”
Gold Reserve Inc.A. Douglas Belanger, President,
509-623-1500Fax: 509-623-1634
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