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FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
For the month of April 2006
Commission File Number: 001-31819
Gold Reserve Inc.
(Exact name of registrant as specified in its charter)
926 W. Sprague Avenue, Suite 200
Spokane, Washington 99201
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F _____
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes No X
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82-____________
Filed with this Form 6-K are the following, which are incorporated herein by
reference:
99.1 Press Release
April 24, 2006
GOLD RESERVE SIGNS EP&CM CONTRACTS AND UPDATES INITIAL CAPITAL COST ESTIMATE
Certain statements included herein, including those that express management's
expectations or estimates of our future performance, constitute "forward
looking statements" within the meaning of the United States Private Securities
Litigation Reform Act of 1995. Forward looking statements are necessarily
based upon a number of estimates and assumptions that, while considered
reasonable by management are inherently subject to significant business,
economic and competitive uncertainties and contingencies. We caution that such
forward-looking statements involve known and unknown risks, uncertainties and
other risk factors that may cause the actual financial results, performance,
or achievements of Gold Reserve to be materially different from our estimated
future results, performance, or achievements expressed or implied by those
forward looking statements. Numerous factors could cause actual results to
differ materially from those in the forward-looking statements, including
without limitation, concentration of operations and assets in foreign
countries, corruption, requests for improper payments, uncertain legal
enforcement, regulatory, political and economic risks associated with
Venezuelan operations, our ability to obtain additional funding for the
development of the Brisas project, in the event any key findings or
assumptions previously determined by our experts in the final feasibility
study (including any updates thereto) significantly differ or change as a
result of actual results in our expected construction and production at the
Brisas project, risk that actual mineral reserves may vary considerably from
estimates presently made, impact of currency, metal prices and metal
production volatility, changes in proposed development plans (including
technology used), our dependence upon the abilities and continued
participation of certain key employees, and risks normally incident to the
operation and development of mining properties. These are discussed in greater
detail in Gold Reserve's filings with the U.S. Securities and Exchange
Commission at www.sec.gov and the Annual Information Form and other reports
filed with Canadian provincial securities commissions at www.sedar.com. Gold
Reserve expressly disclaims any intention or obligation to update or revise
any forward looking statement whether as a result of new information, events
or otherwise.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Gold Reserve Inc.
(Registrant)
Date: April 24, 2006
By: s/ Robert A. McGuinness
Name: Robert A. McGuinness
Title: Vice President - Finance & CFO
EXHIBIT INDEX
99.1 Press Release
GOLD RESERVE SIGNS EP&CM CONTRACTS AND UPDATES INITIAL CAPITAL COST ESTIMATE
April 24, 2006 NR 06-04
Gold Reserve Inc. (TSX: GRZ - AMEX:GRZ) reports upon the completion of the
initial engineering definition phase of the Brisas project and the signing of
the Engineering Procurement and Construction Management (EP&CM) contracts
with SNC- Lavalin Engineers & Constructors, Inc. and its affiliates
("SNC-Lavalin"). The scope of work for the contracts includes detailed
engineering, procurement and construction management for the process,
infrastructure, tailings and camp facilities as further defined in the EP&CM
contracts.
Initial capital cost for the Brisas project is now estimated to be
approximately $638 million compared to the January 2005 capital cost estimate
of $552 million. The primary components of the estimated initial capital cost
increases are: $29 million for flotation and grinding, $16.1 million for
primary crushing and conveying, $14.6 million for camp and temporary services,
$7.3 million for port facility for concentrate shipping and $10.4 million for
contingency purposes. Value added tax of 14.0% on approximately 80% of the
capital costs is not included in the current or previous capital cost
estimates as it is expected to be exonerated and/or recovered pursuant to
Venezuelan tax regulations.
The working capital, life of mine capital, closure costs and environmental
management plans for the project are now being updated. This analysis is
expected to be completed in the next five to six weeks. Thereafter, the
Company will provide an updated project economic model for the Brisas
project, including increases in recent reserve estimates and adjustments for
the increase in gold and copper prices, since the completion of the economic
model in the original feasibility study in January 2005 which utilized $400
per ounce gold and $1.00 per pound copper.
The Company's key conclusions from work to date:
- The Brisas project has a favorable leverage to gold and
copper prices and it is expected that each $0.10
increase/decrease in copper prices will decrease/increase
net of by product cash operating costs by approximately $13
per ounce of gold produced, making copper an extremely
valuable component of the project economics;
- The Brisas project cash operating and total costs per
ounce are anticipated to be positioned in the lower half of
the worldwide gold industry cost curve;
- The ore-body is very large, predictable and open for
further expansion;
- The ore-body is relatively simple to mine, although
special attention is required to pit dewatering in order to
ensure mining efficiencies, pit slope stability, and water
quality issues;
- The mining and processing methods are all based on
conventional technology and no new or unproven technology
will be employed; and
- Existing infrastructure (including transportation and
power transmission) near the Brisas project minimizes
capital and operating costs.
Doug Belanger, President, stated, "We are pleased that the new capital cost
estimate reflects a less than 16 percent increase while the industry as a
whole has experienced capital cost increases of approximately 20 to 25
percent over the last 18 months. Brisas' sensitivity analysis indicates that
the project economics are most sensitive to metal prices and operating costs
and have a limited sensitivity to capital costs. As a result, we do not
expect the increase in initial capital costs to negatively impact our ability
to finance the project.
"With the completion of the engineering definition phase of the Brisas project
and the signing of the EP&CM contracts we will continue our detailed project
engineering activities. Upon receipt of the Administrative Authorization to
Affect Natural Resources for Construction of Infrastructure and Exploitation
of Alluvial and Vein Deposits of Gold and Copper from the Ministry of the
Environment and Natural Resources, we expect to arrange the required financing
necessary for construction of the Brisas project. Construction is expected to
employ approximately 2,000 people directly and 9,000 people indirectly and,
during production, provide approximately 900 full-time jobs and 6,000 indirect
jobs.
"The significant increase in gold and copper prices, the low interest rate
environment and the resurgence of the Venezuelan economy have come together at
a critical time for the anticipated financing and development of the Brisas
project. This should also have a substantial, positive impact on the local
and regional economies of Venezuela and benefit the Venezuelan people."
Gold Reserve Inc. is a Canadian company that holds the rights to the Brisas
gold/copper project and the Choco 5 exploration property in Bolivar State,
Venezuela. The qualified person involved in the review of the information
contained herein was Daniel M. Thompson, Manager-- Technical Services for Gold
Reserve. Information regarding Gold Reserve Inc. is located at
www.goldreserveinc.com .
References to cash operating costs per ounce (a non-GAAP measure of
performance) we believe enables certain investors to better understand the
Brisas Project's potential profitability and ability to generate operating
cash flow. Non-GAAP measures do not have any standardized meaning prescribed
by U.S. GAAP, and therefore they may not be comparable to similar measures
prescribed by other companies. The data are intended to provide additional
information and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with GAAP, such as the nearest
comparable GAAP measure-total cost per ounce. Such measures are not
necessarily indicative of operating profit or cash flow from operations as
determined under GAAP.
Certain statements included herein, including those that express management's
expectations or estimates of our future performance, constitute "forward
looking statements" within the meaning of the United States Private Securities
Litigation Reform Act of 1995. Forward looking statements are necessarily
based upon a number of estimates and assumptions that, while considered
reasonable by management are inherently subject to significant business,
economic and competitive uncertainties and contingencies. We caution that such
forward-looking statements involve known and unknown risks, uncertainties and
other risk factors that may cause the actual financial results, performance,
or achievements of Gold Reserve to be materially different from our estimated
future results, performance, or achievements expressed or implied by those
forward looking statements. Numerous factors could cause actual results to
differ materially from those in the forward-looking statements, including
without limitation, concentration of operations and assets in foreign
countries, corruption, requests for improper payments, uncertain legal
enforcement, regulatory, political and economic risks associated with
Venezuelan operations, our ability to obtain additional funding for the
development of the Brisas project, in the event any key findings or
assumptions previously determined by our experts in the final feasibility
study significantly differ or change as a result of actual results in our
expected construction and production at the Brisas project, risk that actual
mineral reserves may vary considerably from estimates presently made, impact
of currency, metal prices and metal production volatility, changes in
proposed development plans (including technology used), our dependence upon
the abilities and continued participation of certain key employees, and risks
normally incident to the operation and development of mining properties. These
are discussed in greater detail in Gold Reserve's filings with the U.S.
Securities and Exchange Commission at www.sec.gov and the Annual Information
Form and other reports filed with Canadian provincial securities commissions
at www.sedar.com. Gold Reserve expressly disclaims any intention or obligation
to update or revise any forward looking statement whether as a result of new
information, events or otherwise.
FOR FURTHER INFORMATION:
Internet - www.goldreserveinc.com
A. Douglas Belanger, President
926 W. Sprague Ave., Suite 200
Spokane, WA 99201 USA
Tel. (509) 623-1500
Fax (509) 623-1634