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Gold Reserve wins another round in battle against Rusoro hostile takeover

An Ontario Superior Court has refused to allow Rusoro Mining and Endeavour Financial to appeal an injunction halting Rusoro's hostile bid for Gold Reserve.

Author: Dorothy Kosich
Posted: Wednesday , 08 Apr 2009

RENO, NV -

Ontario Superior Court Justice denied permission to Rusoro Mining and the Endeavor Financial to appeal a February 10th order granting an injunction barring Rusoro and Endeavor from a hostile takeover of Gold Reserve and its Las Brisas gold project in Venezuela.

On April 2, 2009, the Ontario Superior Court of Justice heard motions from Rusoro and Endeavor that the motions judge erred when he concluded Gold Reserve would suffer irreparable harm if Rusoro and Endeavour were allowed to proceed with the Rusoro's hostile takeover bid.

The judge had also found that a fiduciary relationship existed between Gold Reserve and Endeavor that precluded Endeavor from providing advice to Rusoro during the bid.

Rusoro also argued that the judge's order is overly broad and punitive because it failed to limit the length of the injunction prohibiting the bid. The Vancouver-based junior gold miner argued the judge should have set a 30-day time limit on the injunction.

The court concluded, "The motions judge was very much alive to all of the issues raised by the moving parties and, in conducting his analysis, he carefully analyzed the facts, then applied well-established principles of law. In granting this discretionary remedy, he made no error that would result in my doubting the correctness of his order."

In a news release, Doug Belanger, president of Spokane-based Gold Reserve, said, "The strength of the court's response will guide the execution of our claim against Rusoro and Endeavour in the future. " Gold Reserve is seeking monetary damages of Cdn$550 million and other items against Rusoro and Endeavor.

Last December Rusoro launched a $49.8 million all stock hostile bid for Gold Reserve, whose Brisas and Choco 5 gold projects are located in the Km88 Mining District in Bolivar State, Venezuela. Choco 5 is contiguous to Rusoro's Choco 10 gold operations. Brisas is contiguous to Crystallex's Las Cristinas gold project.