Edgy,

I agree with all you say, but I'm afraid we are preaching to the choir, and it's a very small choir!

For some reason, despite the obvious extreme undervaluation of GRZ, potential investors seem to have absolutely no interest in the story despite the obvious (to you and I) potential.

As you know I have held GLD, GLDR and GRZ stock (all the same but the symbols varied through the years) for close on 12 years and apart from the discovery excitement era around 1995-96 there has never had a decent following by analysts or investors.

Several times in it's history Gold Reserve stock has been sold by the market at under the cash in the bank value, regardless of any other assets or potential. None of the chat rooms, investor boards or other internet sites has ever had more than a handful of nterested posters. As to the reason for this, it is hard to pin down, but these are the excuses put up from time to time...

1. Brisas is low grade!

This is true of course, but that should have been put to rest by the Bankable Feasibility Study. Grade is immaterial if the metal can be extracted at a profit. Pure gold in thin veins miles underground may be 100% gold but impossible to extract at a profit, but a fraction of a gram per ton lying in an easy to dig and process ore body like Brisas can be a real "gold mine".

2. Political issues.

Every mine, anywhere in the modern world faces political issues. It may be government, local protestors, internationally financed greenies, official corruption or just inefficiency and procrastination. Venezuela isn't the worse nor is it the best, but it isn't a show stopper like many examples you can find in California or Montana or Alaska, locations where if asked most Americans would never even consider presented political oppositions to mining.

3. Finance

The idea that Brisas is an "expensive" mine and GRZ will never be able to get finance to build the mine is popular with some of the "knockers" simply because the proposed numbers seem to be large. The last projected cost was around $650 million USD and it is anticipated that cost increases could take that up to $750. It seems a big number but $200 million of that has been raised already and some spent on long lead time equipment.

But is $750 million an "excessive" capital expense? Brisas will produce 456,000 ounces of gold and 60 million pounds of copper a year. At current metal prices that copper is equivalent value to around 240,000 ounces of gold. So total gold plus gold equivalent production would be 696,000 ounce of gold.

Assuming a $750 million capital cost that gives us the capital per ounce of gold produced on an annual basis at $1077 distributed over the 18 year mine life to give a figure of $59 per ounce of gold produced. That is a very low figure compared with almost any other gold mine in the world, and far lower than virtually any other mine under planning or construction. At gold over $900 an ounce the economics of the propsed Brisas mine are excellent and there will be many viable financing options available.

So why has Gold Reserve been shunned for so long... The only reason I can't answer is that when examining everything in detail it just seems to be "too good to be true".

I'm afraid that is correct; it does seem to be too good to be true, but I am reminded of the story of the two "efficient market theorists" who walked right past a $100 note lying in plain view on the pavement. As they passed by with no more than a casual glance at the note, one commented to the other that it couldn't possibly be a genuine note, for if it was somebody else surely would have picked it up before them.