SPOKANE, WA, Oct. 10 /CNW/ - Gold Reserve Inc. (TSX:GRZ - AMEX:GRZ) announced it has agreed to sell one SAG mill, two ball mills (35,000 tonne per day through-put) and related motors currently being manufactured for the Company's Brisas Project. The total value of this transaction is approximately $43 million. The Company will recover approximately $18 million of progress payments and the purchaser will assume the Company's remaining payment obligations related to the equipment of approximately $25 million.

ADVERTISEMENT

The Company's decision is consistent with its intention to stay financially strong by recovering amounts already paid and reducing future obligations. The sale of this equipment is not expected to impact the start-up of the Brisas Project to the extent the current delays in Venezuela are resolved. The Company will continue its manufacturing commitment for one SAG mill and two ball mills, related motors and peripheral equipment, demonstrating our current commitment to the Brisas Project. Initially, the Brisas Project would be expected to proceed with reduced capital costs and 35,000 tonnes per day through-put as a result of this sale. This modification should not impact the Company's ability to increase production to 70,000 tonnes per day through-put or greater thereafter.

Doug Belanger, President, stated, "The sale of this equipment reduces our near-term financial burden, but still allows us to initiate the Brisas Project to the extent the current delays related to Brisas are resolved. We are continuing our support of various social, cultural, health and environmental programs in the immediate and surrounding areas near Brisas, further demonstrating our commitment to the Brisas Project. At the request of MinAmb and MIBAM, we have prepared a number of proposals over the past months to assist in responding to the Government's concerns related to mining in the Imataca Forest Reserve and the K-88 area. We continue to believe that the Brisas Project could be an active participant in facilitating the ultimate resolution to the issues identified by MinAmb and MIBAM. Subsequent to the completion of this transaction the Company will hold cash and investments of approximately $120 million or over $2 per outstanding share."

Gold Reserve Inc. is a Canadian company, which holds the rights to the Brisas gold/copper project and the Choco 5 gold exploration property in Bolivar State, Venezuela. For the Company's periodic TSX (SEDAR) or SEC (Edgar) filings please visit our website at www.goldreserveinc.com under the Investor Relations section.

	    On Behalf of the Board of Directors

	    Gold Reserve Inc.
	    A. Douglas Belanger, President