UPDATE 1-Rusoro seeks termination of Gold Reserve's poison pill

Feb 2 (Reuters) - Gold producer Rusoro Mining Ltd (RML.V), which is seeking to buy Gold Reserve Inc (GRZ.TO), applied for an order from the Ontario Securities Commission (OSC) to terminate Gold Reserve's shareholder rights plan, a provision that makes hostile takeovers difficult.

Rusoro, which is based in Canada but controlled by Russian Vladimir Agapov, said it expects the hearing by OSC to be held prior to the expiry of its bid on Feb. 18, 2009.

"Rusoro fully expects that the poison pill will be cease traded and urges Gold Reserve shareholders to tender their shares immediately," Rusoro said in a statement.

Rusoro has offered to acquire all the outstanding Class A common shares and equity units of Gold Reserve on the basis of three Rusoro sheserve had said that less than 3 percent of the company's outstanding shares had been tendered into Rusoro's hostile bid and urged shareholders not to tender their shares into the offer.

Rusoro shares, which have lost more than 30 percent of their value in the last six months, were down 2 Canadian cents at at 67 Canadian cents in morning trade on the TSX Venture Exchange. (Reporting by Krishna Chaithanya in Bangalore; Editing by Himani Sarkar)