SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE TO

TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)

OF THE SECURITIES EXCHANGE ACT OF 1934

GOLD RESERVE INC.

(Name of subject company (Issuer))

RUSORO MINING LTD.

(Names of Filing Persons (Offerors))

John H. Riley, Esq.

Gersten Savage LLP

600 Lexington Avenue

9th Floor

New York, NY 10022

(212) 752-9700

(Name, address, and telephone number of person authorized to receive notices and communications on behalf of Filing Persons)

Copies to:

CALCULATION OF FILING FEE

(1)  Estimated solely for the purpose of calculating the registration fee in accordance with Rule 0-11(d) and Rule 0-11(a)(4) of the Securities Exchange Act of 1934, as amended. The transaction valuation is equal to the product of (a) $0.30, which is the average of high and low sale prices of Gold Reserve Class A common shares as reported on the NYSE Alternext US LLC, the principal trading market for Gold Reserve Class A common shares, on December 11, 2008, and (b) the sum of (i) 74,072,185, which is the estimated number of outstanding Gold Reserve Class A common shares as of November 12, 2008 (assuming full conversion or exercise, prior to the Expiry Time of the Offer period, of all outstanding and exercisable options and convertible Gold Reserve Notes for or into Gold Reserve Class A common shares), and (ii) 701,736, which is the estimated number of Gold Reserve Equity Units outstanding as of November 12, 2008, multiplied by (c) the exchange ratio of 3 Rusoro common shares for each Gold Reserve share and Gold Reserve Equity Unit.

(2)  The amount of the filing fee is calculated in accordance with Rule 0-11 of the Securities Exchange Act of 1934, as amended.

x  Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.

o   Check the box if the filing relates solely to preliminary communications made before the commencement of the tender offer.

Check the appropriate boxes below to designate any transactions to which the statement relates:

x   third party tender offer subject to Rule 14d-1

o   issuer tender offer subject to Rule 13e-4

o   going private transaction subject to Rule 13e-3

o   amendment to Schedule 13D under Rule 13d-2

Check the following box if the filing is a final amendment reporting the results of the tender offer:  o

This Tender Offer Statement on Schedule TO (“Schedule TO”) is filed by Rusoro Mining Ltd., a corporation existing under the Business Corporations Act (British Columbia (“Rusoro”). This Schedule TO relates to the offer (the “Offer”) by Rusoro to purchase all of the issued and outstanding Class A common shares (the “Gold Reserve Shares”) of Gold Reserve Inc. (“Gold Reserve”) and all of the issued and outstanding equity units (the “Gold Reserve Equity Units” and together with the Gold Reserve Shares, the “Gold Reserve Equity”), together with the associated rights (the “SRP Rights”) issued under the Shareholder Rights Plan of Gold Reserve, and including any Gold Reserve Equity that may become issued and outstanding after the date of this Offer but prior to expiry time of the Offer, upon the conversion, exchange or exercise of any securities of Gold Reserve (other than SRP Rights) that are convertible into or exchangeable or exercisable for Gold Reserve Equity. Each Gold Reserve Equity Unit is comprised of one Gold Reserve Class B common share and one common share of Gold Reserve Corporation, a wholly owned subsidiary of Gold Reserve, which Equity Units are convertible into Gold Reserve Shares on a one-for-one basis.  Each eligible holder of Gold Reserve Equity will receive 3 Rusoro common shares for each Gold Reserve Share or Gold Reserve Equity Unit validly tendered to the Offer.  The Offer is subject to the terms and conditions set forth in Rusoro’s Offer to Purchase and Circular dated December 15, 2008 (the “Offer and Circular”) and related Letter of Transmittal and Notice of Guaranteed Delivery, copies of which are attached hereto as Exhibits (a)(1)(A), (a)(1)(B), and (a)(1)(C) respectively.

As permitted by General Instruction F to Schedule TO, the information set forth in the Offer and Circular, the Letter of Transmittal and the Notice of Guaranteed Delivery, including all schedules, exhibits and annexes thereto, is hereby expressly incorporated by reference in response to all items of information required to be included in, or covered by, this Schedule TO and is supplemented by the information specifically provided herein.

Item 3. Identity and Background of Filing Person

In the past five years, to the best knowledge of Rusoro, none of the persons listed in Schedule “B” to the Offer and Circular or the persons controlling Rusoro, if and as applicable, (a) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), or (b) has been a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining such officer, director or person from future violations of, or prohibiting activities subject to, U.S. federal or U.S. state securities laws, or a finding of any violation of U.S. federal or U.S. state securities laws.

Item 5. Past Contacts, Transactions, Negotiations and Agreements

Except as described in the Offer and Circular, during the past two years there have not been any negotiations, transactions or material contacts between Rusoro or any of its subsidiaries or, to the best knowledge of Rusoro, any of the persons listed in Schedule “B” to the Offer and Circular, or any person controlling Rusoro, if and as applicable, on the one hand, and Gold Reserve or any of its directors, executive officers or affiliates, on the other hand, that are required to be disclosed pursuant to this item.

Item 8. Interest in Securities of the Subject Company

Except as described in the Offer and Circular, neither Rusoro nor, to the best knowledge of Rusoro, any of the persons listed in Schedule “B” to the Offer and Circular, or any person controlling Rusoro, if and as applicable, or any associate or majority-owned subsidiary of Rusoro or any of the persons listed in Schedule “B” to the Offer and Circular, beneficially owns any equity security of Gold Reserve; and except as described in the Offer and Circular, none of Rusoro or, to the best knowledge of Rusoro, any of the persons listed in Schedule “B” to the Offer and Circular, or any person controlling Rusoro, if and as applicable, any associate or majority-owned subsidiary of Rusoro, has effected any transaction in any equity security of Gold Reserve during the past 60 days.

Item 12. Exhibits

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3

SIGNATURES

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: December 15, 2008

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Exhibit Index

5

6

Exhibit (a)(1)(A)

This document is important and requires your immediate attention. If you have any questions as to how to deal with it, you should consult your investment dealer, stockbroker, trust company, manager, bank manager, lawyer or other professional advisor. No securities regulatory authority has expressed an opinion about the securities that are the subject of this offer and it is an offence to claim otherwise. This offer has not been approved or disapproved by any securities regulatory authority nor has any securities regulatory authority passed upon the fairness or merits of the offer or upon the adequacy of the information contained in this document. Any representation to the contrary is an offence.

December 15, 2008

OFFER TO PURCHASE

all of the outstanding Gold Reserve Equity of

GOLD RESERVE INC.

on the basis of three Rusoro Shares

for each Class A common share or equity unit of Gold Reserve Inc.

Rusoro Mining Ltd. (“Rusoro” or the “Offeror”) hereby offers (the “Offer”) to purchase, upon the terms and subject to the conditions described herein, all of the issued and outstanding Class A common shares (the “Gold Reserve Shares”) of Gold Reserve Inc. (“Gold Reserve”) and all of the issued and outstanding equity units (the “Gold Reserve Equity Units” and together with the Gold Reserve Shares, the “Gold Reserve Equity”) of Gold Reserve, and including any Gold Reserve Equity that may become issued and outstanding after the date of this Offer but prior to the Expiry Time upon the conversion, exchange or exercise of any securities of Gold Reserve (other than SRP Rights, as hereinafter defined) that are convertible into or exchangeable or exercisable for Gold Reserve Equity, together with the associated rights (the “SRP Rights”) issued under the Shareholder Rights Plan of Gold Reserve described under “Shareholder Rights Plan” in the accompanying Circular.

Each holder of Gold Reserve Equity will receive three Rusoro Shares for each Gold Reserve Share or Gold Reserve Equity Unit tendered under the Offer (the “Offered Consideration”) in respect of all of the holder’s Gold Reserve Equity properly deposited under the Offer, subject to adjustments for fractional shares. See Section 1 of the Offer, “The Offer”.

THE OFFER WILL BE OPEN FOR ACCEPTANCE UNTIL 12:00 MIDNIGHT EASTERN TIME, AT THE END OF JANUARY 21, 2009, UNLESS THE OFFER IS EXTENDED OR WITHDRAWN BY RUSORO (THE “EXPIRY TIME”).

The Offer is conditional upon, among other things, there being validly deposited under the Offer and not withdrawn at the Expiry Time, such number of Gold Reserve Shares as constitutes at least 662/3% of the issued and outstanding Gold Reserve Shares and such number of Gold Reserve Equity Units as constitutes at least 662/3% of the issued and outstanding Gold Reserve Equity Units at the Expiry Time (in each case calculated on a fully-diluted basis including any Gold Reserve Shares that are issuable upon exercise of Gold Reserve Options and upon conversion of the Gold Reserve Notes). Each of the conditions of the Offer is set forth in Section 2 of the Offer, “Conditions of the Offer”.

As of the date hereof, neither Rusoro nor any of its affiliates beneficially owns, directly or indirectly, any Gold Reserve Equity. The common shares of Rusoro (the “Rusoro Shares”) are listed on the TSX Venture Exchange (“TSXV”) under the symbol “RML”. The Gold Reserve Shares are listed on the Toronto Stock Exchange (“TSX”) and the New York Stock Exchange Alternext US LLC (“NYSE Alternext”) under the symbol “GRZ”. On December 12, 2008, the last trading day prior to the Offeror’s announcement of the Offer, the closing price on the TSXV of the Rusoro Shares was Cdn.$0.36 and the closing prices of the Gold Reserve Shares were Cdn.$0.45 on the TSX and $0.39 on the NYSE Alternext. Based on the closing price of the Rusoro Shares on the TSXV on December 12, 2008, the Offer represents a premium of approximately 140% over the closing price of the Gold Reserve Shares on the TSX for the same date. Based on the volume-weighted average price of the Rusoro Shares on the TSXV for the 30 trading days ended December 12, 2008, the Offer represents a premium of approximately 209% over the volume-weighted average price of the Gold Reserve Shares on the TSX for the same period.

For a discussion of risks and uncertainties you should consider in evaluating the Offer and ownership of Rusoro Shares, see Section 6 of the Circular, “Risk Factors Related to the Offer”, as well as the section entitled “Risk Factors” on pages 13 through 23 of Rusoro’s Annual Information Form for the year ended December 31, 2007 dated December 12, 2008, incorporated by reference into the Offer and Circular. Rusoro has applied to the TSXV to list the Rusoro Shares to be issued to Gold Reserve Equityholders in connection with the Offer.

NOTICE TO GOLD RESERVE EQUITYHOLDERS IN THE UNITED STATES

The Offer is being made for the securities of a Canadian issuer and by a Canadian issuer that is permitted, under a multijurisdictional disclosure system adopted by the United States, to prepare the Offer and Circular in accordance with the disclosure requirements of Canada. Gold Reserve Equityholders should be aware that such requirements are different from those of the United States. The financial statements included or incorporated by reference herein have been prepared in accordance with Canadian generally accepted accounting principles, and may be subject to Canadian auditing and auditor independence standards, and thus may not be comparable to financial statements of United States companies.

Gold Reserve Equityholders in the United States should be aware that the disposition of their Gold Reserve Equity and the acquisition of Rusoro Shares by them as described herein may have tax consequences both in the United States and in Canada. Such consequences may not be fully described herein and such Gold Reserve Equityholders are encouraged to consult their tax advisors. See “Certain Canadian Federal Income Tax Considerations” in Section 19 of the Circular and “Certain United States Federal Income Tax Considerations” in Section 20 of the Circular.

The enforcement by Gold Reserve Equityholders of civil liabilities under the United States federal securities laws may be affected adversely by the fact that the Offeror is incorporated under the laws of Canada, that some or all of its officers and directors may be residents of jurisdictions outside the United States, that some or all of the experts named herein may be residents of jurisdictions outside the United States and that all or a substantial portion of the assets of the Offeror and said persons may be located outside the United States.

Rusoro has filed with the United States Securities and Exchange Commission (the “SEC”) a Registration Statement on Form F-10, a Tender Offer Statement on Schedule TO and other documents and information, and expects to mail this Offer and Circular to Gold Reserve Equityholders concerning the Offer and the proposed combination of Rusoro and Gold Reserve. GOLD RESERVE EQUITYHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT, THE TENDER OFFER STATEMENT AND OFFER AND CIRCULAR AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and Gold Reserve Equityholders will be able to obtain the documents free of charge at the SEC’s website, www.sec.gov. In addition, documents filed with the SEC by Rusoro will be available free of charge from Rusoro. You should direct requests for documents to the Corporate Secretary, Rusoro Mining Ltd., Suite 2164, 1055 Dunsmuir Street, Vancouver, British Columbia V7X 1B1, telephone (604) 632-4044. To obtain timely delivery, such documents should be requested not later than January 14, 2009, five business days before the Expiry Date.

THE SECURITIES OFFERED PURSUANT TO THE OFFER AND CIRCULAR HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR ANY UNITED STATES STATE SECURITIES COMMISSION NOR HAS THE SEC OR ANY UNITED STATES SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THE OFFER AND CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

Gold Reserve Equityholders should be aware that, during the period of the Offer, the Offeror or its affiliates, directly or indirectly, may bid for or make purchases of Rusoro Shares or Gold Reserve Equity, or certain related securities, as permitted by applicable laws or regulations of Canada or its provinces or territories.

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NOTICE TO ALL GOLD RESERVE EQUITYHOLDERS

This document does not constitute an offer or a solicitation to any person in any jurisdiction in which such offer or solicitation is unlawful. The Offer is not being made to, nor will deposits be accepted from or on behalf of, Gold Reserve Equityholders in any jurisdiction in which the making or acceptance of the Offer would not be in compliance with the laws of such jurisdiction. However, Rusoro may, in its sole discretion, take such action as it may deem necessary to extend the Offer to Gold Reserve Equityholders in any such jurisdiction.

Gold Reserve Equityholders who wish to accept the Offer and deposit their Gold Reserve Equity must properly complete and execute the accompanying Letter of Transmittal (printed on yellow paper) or a manually signed facsimile thereof and deposit it, together with the certificates representing their Gold Reserve Equity and all other required documents, at one of the offices of the Depositary in accordance with the instructions in the Letter of Transmittal or request their broker, dealer, commercial bank, trust company or other nominee to effect the transaction on their behalf. Alternatively, Gold Reserve Equityholders may (1) accept the Offer by following the procedures for book-entry transfer of Gold Reserve Equity described in Section 5 of the Offer, “Manner of Acceptance — Acceptance by Book-Entry Transfer”; or (2) accept the Offer where the certificates representing the Gold Reserve Equity are not immediately available, or if the certificates and all of the required documents cannot be provided to the Depositary before the Expiry Time, by following the procedures for guaranteed delivery described in Section 5 of the Offer, “Manner of Acceptance — Procedure for Guaranteed Delivery”, using the accompanying Notice of Guaranteed Delivery (printed on green paper) or a manually signed facsimile thereof. Gold Reserve Equityholders whose Gold Reserve Equity is registered in the name of a nominee should consult their broker, investment dealer, bank, trust company or other nominee for assistance in depositing their Gold Reserve Equity. Gold Reserve Equityholders will not be required to pay any fee or commission if they accept the Offer by depositing their Gold Reserve Equity directly with the Depositary.

Rusoro has engaged Computershare Investor Services Inc. to act as the depositary (the “Depositary”) under the Offer and Georgeson Shareholder Communications Canada Inc. to act as the information agent (the “Information Agent”) to provide a resource for information for Gold Reserve Equityholders. Questions and requests for assistance may be directed to the Depositary or Information Agent for the Offer. Contact details for such persons may be found on the back page of this document. Additional copies of this document and related materials may be obtained without charge on request from the Depositary or Information Agent at its office specified on the back page of this document. Copies of this document and related materials may also be found at www.sedar.com and www.sec.gov.

NOTICE TO HOLDERS OF GOLD RESERVE OPTIONS AND GOLD RESERVE NOTES

The Offer is made only for Gold Reserve Equity and is not made for any Gold Reserve Options, Gold Reserve Notes or other rights to acquire Gold Reserve Shares. Any holder of Gold Reserve Options, Gold Reserve Notes or other rights to acquire Gold Reserve Shares who wishes to accept the Offer should, to the extent permitted by their terms and applicable law, fully exercise or convert such Gold Reserve Options, Gold Reserve Notes or other rights in order to obtain certificates representing Gold Reserve Shares that may be deposited in accordance with the terms of the Offer. Any such exercise, conversion or exchange must be completed sufficiently in advance of the Expiry Time to assure the holder of such Gold Reserve Options, Gold Reserve Notes or other rights to acquire Gold Reserve Shares will have certificates representing the Gold Reserve Shares received on such exercise, conversion or exchange available for deposit before the Expiry Time, or in sufficient time to comply with the procedures referred to in Section 5 of the Offer, “Manner of Acceptance — Procedure for Guaranteed Delivery”.

The tax consequences to holders of Gold Reserve Options or Gold Reserve Notes of exercising or not exercising their Gold Reserve Options or Gold Reserve Notes are not described in the Circular. Holders of Gold Reserve Options or Gold Reserve Notes should consult their tax advisors for advice with respect to potential income tax consequences to them in connection with the decision to exercise or convert or not exercise or not convert their Gold Reserve Options and Gold Reserve Notes.

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STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

The Offer and Circular, including the schedules attached hereto, the pro forma consolidated financial statements of the Offeror, and some of the material incorporated by reference into the Offer and Circular, contain certain forward-looking information and forward-looking statements, as defined in applicable securities laws (collectively referred to as “forward-looking statements”). Forward-looking statements include possible events, statements with respect to possible events, the proposed transaction, the business, operations and financial performance and condition each of Rusoro and Gold Reserve and the proposed company created by the combination of Rusoro and Gold Reserve, the future price of gold, the estimation of mineral reserves and resources, the realization of mineral reserve and resource estimates, the timing and amount of estimated future production, costs of production, expected capital expenditures, costs and timing of the development of new deposits, success of exploration, development and mining activities, permitting time lines, currency fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims, and limitations on insurance coverage. The words “plans,” “expects,” “is expected,” “scheduled,” “estimates,” “forecasts,” “intends,” “anticipates,” or “believes,” or variations of such words and phrases or statements that certain actions, events or results “may,” “could,” “would,” “might,” or “will be taken,” “occur” and similar expressions identify forward looking statements.

Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Rusoro as at the date of such statements, are inherently subject to significant business, economic, social, political and competitive uncertainties and contingencies and other factors that could cause actual results or events to differ materially from those projected in the forward-looking statements. The estimates and assumptions of Rusoro contained or incorporated by reference in the Offer and Circular which may prove to be incorrect, include, but are not limited to, (1) that Rusoro will be successful in acquiring 100% of the outstanding Gold Reserve Equity, (2) that all required third party regulatory and governmental approvals to the Offer will be obtained and all other conditions to completion of the transactions will be satisfied or waived, (3) there being no significant disruptions affecting operations, whether due to labour disruptions, supply disruptions, power disruptions, damage to equipment or otherwise; (4) permitting, development, expansion and power supply proceeding on a basis consistent with our current expectations; (5) permitting and development proceeding on a basis consistent with Rusoro’s current expectations; (6) the exchange rate between the Canadian dollar, the Venezuelan Bolivar and the U.S. dollar being approximately consistent with current levels; (7) certain price assumptions for gold; (8) prices for and availability of natural gas, fuel oil, electricity, parts and equipment and other key supplies remaining consistent with current levels; (9) production forecasts meeting expectations; (10) the accuracy of Rusoro’s current mineral reserve and mineral resource estimates; and (11) labour and materials costs increasing on a basis consistent with Rusoro’s current expectations.

Known and unknown factors could cause actual results or events to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to, fluctuations in the currency markets; fluctuations in the spot and forward price of gold or certain other commodities (such as diesel fuel and electricity); changes in interest rates; disruption to the credit markets and delays in obtaining financing; inflationary pressures; risks arising from holding derivative instruments (such as credit risk, market liquidity risk and mark-to-market risk); changes in national and local government legislation, taxation, controls, regulations and political or economic developments in Canada, Venezuela or other countries in which Rusoro does or may carry on business; business opportunities that may be presented to, or pursued by Rusoro; Rusoro’s ability to successfully integrate acquisitions; operating or technical difficulties in connection with mining or development activities; actual results of exploration activities; the possibility of cost overruns or unanticipated expenses; employee relations; the speculative nature of gold exploration and development, including the risks of obtaining and renewing necessary licenses and permits; the impact of Venezuelan law on Rusoro’s operations; diminishing quantities or grades of reserves; adverse changes in our credit rating; contests over title to properties, particularly title to undeveloped properties; and the occurrence of natural disasters, hostilities, acts of war or terrorism. In addition, there are risks and hazards associated with the business of gold exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and the risk of inadequate insurance, or inability to obtain insurance, to cover these risks). The following factors, amongst others, related to the business combination of Rusoro and Gold Reserve could cause actual results to differ materially from forward- looking statements, including those

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contained in Section 4 of the Circular, “Rationale & Benefits of the Offer” and Section 5 of the Circular “Purpose of the Offer and Rusoro’s Plans for Gold Reserve”: the Rusoro Shares issued in connection with the Offer may have a market value lower than expected; the business of Rusoro and Gold Reserve may not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected; and the expected combination benefits from the combination of Rusoro and Gold Reserve may not be fully realized or not realized within the expected time frame. All of the forward-looking statements made in the Offer and Circular are qualified by these cautionary statements and those made in Section 6 of the Circular, “Risk Factors Related to the Offer”. These factors are not intended to represent a complete list of the factors that could affect Rusoro and the combination of Rusoro and Gold Reserve. Additional factors are noted elsewhere in the Offer and Circular and in the documents incorporated by reference. Although Rusoro has attempted to identify important factors that could cause actual results or events to differ materially from those described in forward-looking statements, there may be other factors that could cause results or events not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, undue reliance should not be placed on forward-looking statements. Rusoro undertakes no obligation to update publicly or otherwise revise any forward-looking statements or the foregoing list of assumptions or factors, whether as a result of new information or future events or otherwise, except as may be required in connection with a material change in the information disclosed in this Offer and Circular or as otherwise required by law.

INFORMATION CONCERNING GOLD RESERVE

Except as otherwise indicated, the information concerning Gold Reserve contained in the Offer and Circular has been taken from or is based upon publicly available documents and records on file with Canadian and United States securities regulatory authorities and other public sources. Gold Reserve has not reviewed this Offer and Circular and has not confirmed the accuracy and completeness of the information in respect of Gold Reserve contained herein. Although Rusoro has no knowledge that would indicate that any statements contained herein concerning Gold Reserve taken from or based upon such documents and records are untrue or incomplete, neither Rusoro nor any of its directors or officers assumes any responsibility for the accuracy or completeness of such information, including any of Gold Reserve’s financial statements or Gold Reserve’s mineral resource estimates, or for any failure by Gold Reserve to disclose events or facts which may have occurred or which may affect the significance or accuracy of any such information but which are unknown to Rusoro.

Rusoro has limited means of verifying the accuracy or completeness of any of the information contained herein that is derived from Gold Reserve’s publicly available documents or records or whether there has been any failure by Gold Reserve to disclose events that may have occurred or may affect the significance or accuracy of any information.

REPORTING CURRENCIES AND ACCOUNTING PRINCIPLES

Unless otherwise indicated, all references to “$” or “dollars” in the Offer and Circular refer to United States dollars and all references to “Cdn.$” in this Offer and Circular refer to Canadian dollars. Rusoro’s financial statements included herein and incorporated by reference are reported in United States dollars and are prepared in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”). Certain of the financial information in the financial statements is reconciled to United States generally accepted accounting principles (“U.S. GAAP”).

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CURRENCY EXCHANGE RATE INFORMATION

The following table sets forth the high and low exchange rates for one U.S. dollar expressed in Canadian dollars for each period indicated, the average of the exchange rate for each period indicted and the exchange rate at the end of each such period, based upon the noon buying rates provided by the Bank of Canada:

On December 12, 2008, the exchange rate for one U.S. dollar expressed in Canadian dollars based upon the noon buying rates provided by the Bank of Canada was Cdn.$1.2452.

NOTE CONCERNING MINERAL RESOURCE CALCULATIONS

Information in this Offer and Circular, including information incorporated by reference, and disclosure documents of Rusoro that are filed with Canadian securities regulatory authorities concerning mineral properties have been prepared in accordance with the requirements of securities laws in effect in Canada, which differ from the requirements of United States securities laws.

Without limiting the foregoing, these documents use the terms “measured resources”, “indicated resources” and “inferred resources”. Gold Reserve Equityholders in the United States are advised that, while such terms are recognized and required by Canadian securities laws, the SEC does not recognize them. Under United States standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. United States investors are cautioned not to assume that all or any part of measured or indicated resources will ever be converted into reserves. Further, inferred resources have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. It cannot be assumed that all or any part of the inferred resources will ever be upgraded to a higher resource category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Therefore, United States investors are also cautioned not to assume that all or any part of the inferred resources exist, or that they can be mined legally or economically. Disclosure of “contained ounces” is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report “resources” as in place tonnage and grade without reference to unit measures. Accordingly, information concerning descriptions of mineralization and resources contained in these documents may not be comparable to information made public by United States companies subject to the reporting and disclosure requirements of the SEC.

National Instrument 43-101 — Standards of Disclosure for Mineral Projects (“NI 43-101”) is a rule developed by the Canadian Securities Administrators, which has established standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Unless otherwise indicated, all resource estimates of Rusoro contained in this Offer and Circular, including information incorporated by reference, have been prepared in accordance with NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum Classification System.

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TABLE OF CONTENTS

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QUESTIONS AND ANSWERS ABOUT THE OFFER

The following are some of the questions with respect to the Offer that you, as a holder of Gold Reserve Equity, may have and the answers to those questions. These questions and answers are not meant to be a substitute for the more detailed description and information contained in the Offer and Circular, the Letter of Transmittal and the Notice of Guaranteed Delivery. The information contained in these questions and answers is qualified in its entirety by the more detailed descriptions and information contained in the Offer and Circular, the Letter of Transmittal and the Notice of Guaranteed Delivery. Therefore, we urge you to read the entire Offer and Circular, the Letter of Transmittal and the Notice of Guaranteed Delivery carefully prior to making any decision regarding whether or not to tender your Gold Reserve Equity. We have included cross-references in this question and answer section to other sections of the Offer and Circular where you will find more complete descriptions of the topics mentioned below. Unless otherwise defined herein, capitalized terms have the meanings given to them in the Glossary below.

Who is offering to buy my Gold Reserve Shares or Gold Reserve Equity Units?

We, Rusoro, are a company principally engaged in the exploration, mining and processing of gold in Venezuela. We are a British Columbia, Canada, company and our Rusoro Shares are listed on the TSXV under the symbol “RML”.

See Section 1 of the Circular, “Rusoro.”

What is Rusoro proposing?

We are offering to purchase all of the issued and outstanding Gold Reserve Shares and Gold Reserve Equity Units, which we refer to collectively, as the “Gold Reserve Equity”, subject to the terms and conditions set forth in the following Offer and Circular.

See Section 1 of the Offer, “The Offer”.

What would I receive in exchange for my Gold Reserve Equity?

For each Gold Reserve Share or Gold Reserve Equity Unit you hold and validly tender in accordance with the terms of the Offer and do not subsequently withdraw, we are offering three Rusoro Shares.

What are some of the significant conditions of the Offer?

The Offer is subject to several conditions, some of the most important of which are as follows:

·                  there being validly deposited under the Offer and not withdrawn at the Expiry Time, Gold Reserve Shares representing not less than 662/3% of the total outstanding Gold Reserve Shares and Gold Reserve Equity Units representing not less than 662/3% of the total outstanding Gold Reserve Equity Units (in each case calculated on a fully-diluted basis);

·                  the execution, in form and substance satisfactory to Rusoro, of a supplemental indenture with respect to the Gold Reserve Notes which excludes the Offer and any Subsequent Acquisition Transaction from the definition of a “Fundamental Change” (as such term is defined in Section 15.01(a) of the Indenture for the Gold Reserve Notes, between Gold Reserve and The Bank of New York); and

·                  the Shareholder Rights Plan being waived, invalidated or cease traded.

See Section 2 of the Offer, “Conditions of the Offer”, for additional conditions of the Offer.

Why is Rusoro buying Gold Reserve?

We are making the Offer because we want to acquire control of, and ultimately the entire equity interest in, Gold Reserve. If we complete the Offer but do not then own 100% of the Gold Reserve Equity, we currently intend to acquire any Gold Reserve Equity not deposited in connection with the Offer in a second-step transaction. This transaction will take the form of a Subsequent Acquisition Transaction. The Offer is not being made for any Gold Reserve Options, Gold Reserve Notes or other rights to acquire Gold Reserve Shares.

See Section 3 of the Circular, “Background to the Offer”, and Section 10 of the Circular, “Acquisition of Gold Reserve Equity Not Deposited Under the Offer”.

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Why should Gold Reserve Equityholders accept Rusoro’s offer to buy Gold Reserve?

We believe that the Offer will deliver superior value to Gold Reserve Equityholders than Gold Reserve as a stand-alone company because:

·                  We are offering a significant premium to Gold Reserve Equityholders over the market price for Gold Reserve Shares;

·                  We believe that Gold Reserve Equityholders who tender to our Offer will benefit from the transition of their investment from an exploration stage company to a company with existing gold production;

·                  We believe the combination of Rusoro and Gold Reserve will produce corporate synergies and create the opportunity to reduce duplicate in-country costs relating to the operation of the company created by the combination of Rusoro and Gold Reserve;

·                  The company created by the combination of Rusoro and Gold Reserve would have 18.9 million ounces of measured and indicated gold resources inclusive of reserves;

·                  Rusoro has proven its ability to work with the Venezuelan government by agreeing to form the first mixed enterprise gold mining joint venture of its kind with the Venezuelan government over the Isidora assets recently acquired from Hecla;

·                  Gold Reserve Equityholders will still enjoy ongoing participation in the Brisas project, combined with exposure to Rusoro’s other assets, which include the Choco 10 mine, Increible 6 project, San Rafael/El Placer project and Isidora mine operations;

·                  Gold Reserve Equityholders will benefit from our proven ability to consolidate Venezuelan gold properties as Rusoro seeks to further consolidate the KM88 region;

·                  The company created by the combination of Rusoro and Gold Reserve will have none of its production or reserves hedged, thus maintaining 100% of the upside to the gold price for its shareholders;

·                  The Offer has been structured as an all-share offer that will allow certain Gold Reserve Equityholders who tender to the Offer to do so on a tax efficient basis; and

·                  Rusoro has proven its ability to obtain necessary permits and deliver results in Venezuela. Since commencing operations in Venezuela, Rusoro has developed an extensive land package, permitted and developed its San Rafael/El Placer project and restarted the Choco 10 and Isidora mines.

What securities are being sought in the Offer?

We are offering to purchase all of the outstanding Gold Reserve Shares and Gold Reserve Equity Units. As of November 12, 2008, 56,197,055 Gold Reserve Shares and 701,736 Gold Reserve Equity Units were issued and outstanding. Our Offer includes Gold Reserve Shares that may become outstanding after the date of this Offer, but prior to the Expiry Time, upon the exercise of any Gold Reserve Options or Gold Reserve Notes that are exercisable or convertible for Gold Reserve Shares. The Offer is not being made for any Gold Reserve Options, Gold Reserve Notes or other rights to acquire Gold Reserve Shares.

See Section 1 of the Offer, “The Offer”.

How will Gold Reserve Options and Gold Reserve Notes be treated in the Offer?

The Offer is made only for outstanding Gold Reserve Equity and not for any Gold Reserve Options, Gold Reserve Notes or other rights to acquire Gold Reserve Shares. Any holder of such securities who wishes to accept the Offer must, to the extent permitted by the terms thereof and applicable law, fully exercise or convert such securities sufficiently in advance of the Expiry Time of the Offer in order to obtain Gold Reserve Shares that may be deposited in accordance with the terms of the Offer.

If we take up and pay for Gold Reserve Equity under the Offer, we currently intend to implement a Subsequent Acquisition Transaction, or take such other action as may be available, structured in a manner so that the holders of Gold Reserve Options and Gold Reserve Notes will, pursuant to the terms thereof, receive Rusoro Shares upon the proper exercise or conversion of the Gold Reserve Options or Gold Reserve Notes. The number of Rusoro Shares to be issued and the exercise price will reflect the exchange ratio used in our Offer.

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Will fractional shares be issued in the offer?

No. We will not issue fractional Rusoro Shares. Instead, where a Gold Reserve Equityholder is to receive Rusoro Shares as consideration under the Offer and the aggregate number of Rusoro Shares to be issued to such Gold Reserve Equityholder would result in a fraction of a Rusoro Share being issuable, the number of Rusoro Shares to be received by such Gold Reserve Equityholder will either be rounded up (if the fractional interest is 0.5 or more) or rounded down (if the fractional interest is less than 0.5) to the nearest whole number.

How many Rusoro Shares could be issued pursuant to the Offer?

We expect to issue approximately 170,696,373 million Rusoro Shares based on the number of Gold Reserve Shares and Gold Reserve Equity Units outstanding as at November 12, 2008 and assuming that all of the Gold Reserve Shares and Gold Reserve Equity Units outstanding as at November 12, 2008 are acquired upon completion of the Offer and any Subsequent Acquisition Transaction, and assuming that none of the holders of Gold Reserve Options elect to exercise their Gold Reserve Options and none of the holders of Gold Reserve Notes elect to convert their Gold Reserve Notes in advance of the successful completion of the Offer.

See Section 1 of the Offer, “The Offer”, and Section 5 of the Circular, “Purpose of the Offer and Rusoro’s Plans for Gold Reserve — Treatment of Gold Reserve Options”.

Will my ownership and voting rights as a shareholder of the company created by the combination of Rusoro and Gold Reserve be the same as my ownership and voting rights as a shareholder of Gold Reserve?

As noted above, Rusoro expects to issue approximately 170,696,373 million Rusoro Shares in connection with the Offer, which would result in there being a total of approximately 561,474,319 million Rusoro Shares outstanding (based on the number of Rusoro Shares outstanding as at December 12, 2008), with Gold Reserve Equityholders holding approximately 30.4% of the Rusoro Shares on an issued basis. Each Gold Reserve Share and Gold Reserve Equity Unit carries the right to one vote at meetings of Gold Reserve’s shareholders. Each Rusoro Share carries the right to one vote at meetings of Rusoro Shareholders.

See Section 8 of the Circular, “Information about Rusoro — Authorized and Outstanding Share Capital”, and Section 6 of the Circular, “Risk Factors Related to the Offer”.

If I also hold Gold Reserve Notes, what happens to them?

The Gold Reserve Notes will remain outstanding without amendment other than an adjustment to the conversion feature to reflect the terms of the Offer. The Gold Reserve Notes are currently convertible at the rate of $7.54 per Gold Reserve Share. As the Offer is based on the ratio of three Rusoro Shares for each Gold Reserve Share, the conversion feature in the Gold Reserve Notes will be amended to $7.54 divided by three, or $2.51 per Rusoro Share.

It is a condition of Rusoro’s obligation to take up and pay for Gold Reserve Equity properly tendered to the Offer that, prior to the Expiry Time, a satisfactory supplemental indenture to the Indenture governing the Gold Reserve Notes be executed and effective. This supplemental indenture would exclude the Offer and any second-step Subsequent Acquisition Transaction from the definition of a “Fundamental Change”, as such term is defined in the Indenture.

For further information, see Section 5 of the Circular, “Purpose of the Offer and Rusoro Plans for Gold Reserve — Treatment of Gold Reserve Notes”.

How long do I have to decide whether to tender to the Offer?

The Offer is open for acceptance until 12:00 midnight, Eastern Time, at the end of January 21, 2009, or until such other time and date as set out in a notice of variation of the Offer as we determine, issued at any time and from time to time at our discretion.

See Section 4 of the Offer, “Time for Acceptance”.

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Can the Expiry Time for the Offer be extended?

Yes. We may, in our sole discretion, elect to extend the Expiry Time for the Offer from the time referenced in the answer to the previous question. Under certain circumstances, we may be required to extend the Expiry Time for the Offer under Canadian and United States securities laws. If we elect to extend, or are required to extend, the Expiry Time for the Offer, we will publicly announce the variation and, if required by applicable law, we will mail you a copy of the notice of variation.

See Section 6 of the Offer, “Extensions, Variations and Changes to the Offer”.

How do I tender my Gold Reserve Equity?

If you hold Gold Reserve Equity in your own name, you may accept this Offer by depositing certificates representing your Gold Reserve Equity, together with a duly completed and signed Letter of Transmittal, at the office of the Depositary specified in the Letter of Transmittal. If your Gold Reserve Equity is registered in the name of a nominee (commonly referred to as “in street name” or “street form”), you should contact your broker, investment dealer, bank, trust company or other nominee for assistance in tendering your Gold Reserve Equity to the Offer. You should request your nominee to effect the transaction.

Gold Reserve Shareholders may also accept the Offer pursuant to the procedures for book-entry transfer detailed in the Offer and Circular and have your Gold Reserve Shares tendered by your nominee through CDS or DTC, as applicable. Gold Reserve Shareholders are invited to contact the Information Agent for further information regarding how to accept the Offer.

See Section 5 of the Offer, “Manner of Acceptance — Acceptance by Book-Entry Transfer”.

What if I have lost my Gold Reserve Equity certificate(s) but wish to tender my Gold Reserve Equity to the Offer?

You should complete your Letter of Transmittal as fully as possible and state in writing the circumstances surrounding the loss and forward the documents to the Depositary. The Depositary will forward a copy to the transfer agent and the transfer agent will advise you of replacement requirements which must be completed and returned before the expiry of the Offer.

See Section 5 of the Offer, “Manner of Acceptance — Procedure for Guaranteed Delivery”.

If I accept the Offer, when will I receive the Rusoro Shares?

If the conditions of the Offer are satisfied or waived, and if we consummate the Offer and take up your Gold Reserve Equity, you will receive the Rusoro Shares issued as consideration for the Gold Reserve Equity tendered to the Offer promptly after the Expiry Time.

See “Take up of and Payment for Deposited Gold Reserve Equity” in Section 3 of the Offer.

Who is the Depositary under the Offer?

Computershare Investor Services Inc. is acting as Depositary under the Offer. The Depositary will be responsible for receiving certificates representing Deposited Equity and accompanying Letters of Transmittal and other documents. The Depositary is also responsible for receiving Notices of Guaranteed Delivery, giving notices, if required, and making payment for all Gold Reserve Equity purchased by us under the terms of the Offer. The Depositary will also facilitate book-entry tenders Gold Reserve Shares.

See Section 21 of the Circular, “Depositary”.

Will I be able to withdraw previously tendered Gold Reserve Equity?

Yes. You may withdraw Gold Reserve Equity previously tendered by you at any time (i) before Gold Reserve Equity deposited under the Offer is taken up by us under the Offer, (ii) if your Gold Reserve Equity has not been paid for by us within three business days after having been taken up, and (iii) in certain other circumstances.

See Section 8 of the Offer, “Right to Withdraw Deposited Gold Reserve Equity”.

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How do I withdraw previously tendered Gold Reserve Equity?

You must send a notice of withdrawal to the Depositary prior to the occurrence of certain events and within the time periods set forth in Section 8 of the Offer, “Right to Withdraw Deposited Gold Reserve Equity”, and the notice must contain specific information outlined therein.

Will I have to pay any fees or commissions?

If you are the registered owner of your Gold Reserve Equity and you tender your Gold Reserve Equity directly to the Depositary you will not have to pay brokerage fees or incur similar expenses. If you own your Gold Reserve Equity through a broker or other nominee and your broker tenders the Gold Reserve Equity on your behalf, your broker or nominee may charge you a fee for doing so. You should consult your broker or nominee to determine whether any charges will apply.

What will happen if the Offer is withdrawn?

Unless all of the conditions to the Offer have been satisfied or waived at or prior to the Expiry Time, we will not be obligated to take up and purchase Gold Reserve Equity tendered to the Offer and we may withdraw the Offer. If the Offer is withdrawn in this manner all of your Gold Reserve Equity that was deposited and not withdrawn will be returned to you with no payment.

How will Canadian residents and non-residents of Canada be taxed for Canadian income tax purposes?

Gold Reserve Shareholders resident in Canada who hold their Gold Reserve Shares as capital property for purposes of the Tax Act and who dispose of such shares to Rusoro under the Offer will not realize a capital gain or a capital loss as a result of the exchange of their Gold Reserve Shares for Rusoro Shares pursuant to the Offer. The cost for tax purposes to shareholders of Rusoro Shares received on the Offer will generally be equal to the adjusted cost base of their Gold Reserve Shares that are exchanged for Rusoro Shares pursuant to the Offer. Alternatively, such shareholders will be entitled to recognize for Canadian federal tax purposes the capital gain or capital loss, otherwise determined, from such exchange.

Canadian resident holders who hold their Gold Reserve Equity Units as capital property for purposes of the Tax Act and who dispose of such to Rusoro under the Offer will be subject to the following Canadian tax results: (1) with regard to the Gold Reserve Class B common shares, the shareholder will not realize a capital gain or a capital loss as a result of the exchange of the Gold Reserve Class B common shares for Rusoro Shares, except as discussed above; (2) with regard to the Gold Reserve Corporation Class B common shares, the shareholder will realize a capital gain or a capital loss as a result of the exchange. The capital gain or capital loss will be equal to the difference between (i) the value of the Rusoro Shares received that is allocable to the Gold Reserve Corporation Class B common shares exchanged; and (ii) the adjusted cost base in the Gold Reserve Equity Units that is allocable to the Gold Reserve Corporation Class B common shares.

Generally, Gold Reserve Shareholders who are non-residents of Canada for purposes of the Tax Act who receive Rusoro Shares in exchange for Gold Reserve Shares pursuant to the Offer, will realize a tax-deferred rollover on the exchange, except where they choose to recognize a capital gain or capital loss on the exchange. With respect to any capital gain realized on the sale of Gold Reserve Shares to Rusoro under the Offer, the gain will not be subject to tax pursuant to the Tax Act unless those shares constitute “taxable Canadian property” (within the meaning of the Tax Act) to such Gold Reserve Shareholders and the gain is not otherwise exempt from tax under the Tax Act or is exempt pursuant to an applicable income tax treaty.

Holders of Gold Reserve Equity Units who are non-residents of Canada who exchange their Gold Reserve Equity Units for Rusoro Shares pursuant to the Offer, will be subject to the following Canadian tax results: (1) with regard to the Gold Reserve Class B common shares, the shareholder will realize a tax-deferred rollover on the exchange; (2) with regard to the Gold Reserve Corporation Class B common shares, the shareholder will realize a capital gain or capital loss on the exchange. The capital gain or capital loss will be equal to the difference between (i) the value of the Rusoro Shares received that is allocable to the Gold Reserve Corporation Class B common shares exchanged; and (ii) the adjusted cost base in the Gold Reserve Equity Units that is allocable to the Gold Reserve Corporation Class B common shares. The taxation of any gain or loss under the

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Tax Act will be dependent upon whether the Gold Reserve Corporation Class B common shares are “taxable Canadian property” to the non-resident holder.

The foregoing is a brief summary of Canadian federal income tax consequences only and is qualified by the more detailed general description of Canadian federal income tax considerations under “Certain Canadian Federal Income Tax Considerations” in Section 19 of the Circular. Shareholders are urged to consult their own tax advisors to determine the particular tax consequences to them of a sale of Gold Reserve Shares or Gold Reserve Equity Units pursuant to the Offer or a disposition of Gold Reserve Shares or Gold Reserve Equity Units pursuant to any Subsequent Acquisition Transaction.

How will US Owners of Gold Reserve Equity be taxed for U.S. tax purposes?

Subject to the Passive Foreign Investment Company rules discussed below, a beneficial owner of Gold Reserve Shares who is a citizen or resident of the United States and who holds Gold Reserve Shares as a capital asset will not recognize gain or loss on the exchange of his Gold Reserve Shares for Rusoro Shares if the exchange constitutes a qualified reorganization under U.S. federal income tax law. Instead, he will carry over his tax basis (and his holding period) in the Gold Reserve Shares surrendered to the Rusoro Shares received.

If the exchange does not qualify as a tax-deferred reorganization, then, subject to the Passive Foreign Investment Company rules discussed below, a U.S. person will have a capital gain or loss on the exchange, equal to the difference between the cost of the Gold Reserve Shares surrendered and the fair market value of the Rusoro Shares received. The gain or loss will be long-term gain (and subject to a reduced tax rate) or long-term loss if the Gold Reserve Shares have been held for more than one year at the time of the closing of the Offer; otherwise it will be short-term gain (taxable as ordinary income) or short-term loss.

Gold Reserve has reported that it is a Passive Foreign Investment Company, and so special rules apply to U.S. persons who have not made certain elections (so-called “QEF” or “Mark-to-Market” elections). These U.S. persons will realize a gain (but not a loss) on the exchange even if the exchange is a qualified reorganization, and that gain will be taxed at ordinary income tax rates and may be subject to interest, as well.

Special rules apply to U.S. persons who are exchanging Equity Units for Rusoro Shares and these are discussed under “Certain United States Federal Income Tax Considerations” in Section 20 of the Circular.

The foregoing is a brief summary of United States federal income tax consequences only. Shareholders should read carefully the information under “Certain United States Federal Income Tax Considerations” in Section 20 of the Circular, which qualifies the summary set forth above. Shareholders are urged to consult their own tax advisers to determine the particular tax consequences to them of the Offer.

Will I be able to trade the Rusoro Shares I receive?

You will be able to trade the Rusoro Shares that you receive under the Offer. Statutory exemptions allow such trading in Canada and upon our registration statement on Form F-10 filed with the SEC becoming effective in the United States, and our satisfaction of any required Blue-Sky state filings within the United States, non-affiliates will be able to trade their Rusoro Shares received under the Offer in the United States. In connection with the Offer, we have applied to list on the TSXV the Rusoro Shares offered to Gold Reserve Equityholders pursuant to the Offer. The Rusoro Shares will not be listed on a U.S. stock exchange.

Is Rusoro’s financial condition relevant to my decision to tender my Gold Reserve Equity in the Offer?

Yes. Rusoro Shares will be issued to Gold Reserve Equityholders who validly tender their Gold Reserve Equity, so you should consider our financial condition before you decide to tender your Gold Reserve Equity to the Offer. In considering our financial condition, you should review the documents included and incorporated by reference in the Offer and Circular because they contain detailed business, financial and other information about us.

If I decide not to tender, how will my Gold Reserve Equity be affected?

If we take up and pay for the Gold Reserve Equity validly tendered, we currently intend to take such action as is necessary, including effecting a Subsequent Acquisition Transaction, to acquire any Gold Reserve Equity

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not tendered. It is our current intention that the consideration to be offered for Gold Reserve Equity under such Subsequent Acquisition Transaction will be the same consideration offered under the Offer. In connection with such a transaction, you may have dissent rights. We reserve the right not to complete a Subsequent Acquisition Transaction.

See Section 10 of the Circular, “Acquisition of Gold Reserve Equity Not Deposited Under the Offer”.

Will Gold Reserve continue as a public company?

If, as a result of the Offer and any subsequent transaction, the number of holders of Gold Reserve Shares is sufficiently reduced, Gold Reserve may become eligible for termination of registration, and cease to be a reporting issuer in Canada and/or the United States. The rules and the regulations of the TSX and the NYSE Alternext could also, upon the consummation of the Offer and/or a subsequent transaction, lead to the delisting of the Gold Reserve Shares from such exchanges. To the extent permitted by applicable law, we intend to delist the Gold Reserve Shares from the TSX and the NYSE Alternext and, where applicable, to cause Gold Reserve to cease to be a public company.

See Section 5 of the Circular, “Purpose of the Offer and Rusoro’s Plans for Gold Reserve”.

What is the market value of my Gold Reserve Shares as at a recent date?

On December 12, 2008, which is the last trading day prior to the date on which we announced the Offer, the closing price of the Gold Reserve Shares listed on the TSX was Cdn.$0.45 and on the NYSE Alternext was $0.39. The volume-weighted average price of the Gold Reserve Shares on the TSX for the 30 trading days ended December 12, 2008 was Cdn.$0.436 and on the NYSE Alternext, the principal trading market for Gold Reserve’s Shares, was $0.330. Based on the closing price of the Rusoro Shares on the TSXV on December 12, 2008, the Offer represented a premium of approximately 140% over the closing price of the Gold Reserve Shares on the TSX on the same date. Based on the volume-weighted average price of the Rusoro Shares on the TSXV for the 30 trading days ended December 12, 2008, the Offer represented a premium of approximately 209% over the volume-weighted average price of the Gold Reserve Shares on the TSX for the same period.

We urge you to obtain recent quotations for the Gold Reserve Shares and Rusoro Shares before deciding whether or not to tender your Gold Reserve Shares.

See Section 9 of the Circular, “Information About Gold Reserve — Price Range and Trading Volume of Gold Reserve Shares”.

If the Offer is successful will the Board of Directors and management of Gold Reserve change?

Yes. If the Offer is successful it is anticipated that the current management of Rusoro will manage Gold Reserve in place of Gold Reserve’s current management and that the Gold Reserve Board of Directors will be replaced by nominees of Rusoro.

See Section 5 of the Offer, “Purpose of the Offer and Rusoro’s Plans for Gold Reserve”.

Whom can I call with questions about the Offer or for more information?

You can call our Information Agent, Georgeson Shareholder Communications Canada Inc. and their affiliates, if you have questions or requests for additional copies of the Offer and Circular. Questions and requests should be directed to the following telephone numbers:

North American Toll Free Number: 1-888-605-7615

Outside North America, Banks and Brokers call collect: 1-212-806-6859

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SUMMARY OF THE OFFER

This summary highlights information more fully discussed elsewhere in the Offer and Circular. This summary is not intended to be complete and is qualified by reference to the more detailed information contained in those documents. Gold Reserve Equityholders are urged to read the more detailed information about Rusoro, the Offer and the Rusoro Shares provided elsewhere in the Offer and Circular and in the documents incorporated by reference. Capitalized terms used in this summary, where not otherwise defined herein, are defined in the Section entitled “Glossary” below.

The Offer

The Offeror is offering, on the terms and subject to the conditions of the Offer, to purchase all of the issued and outstanding Gold Reserve Shares and Gold Reserve Equity Units, and including any Gold Reserve Shares or Gold Reserve Equity Units that may become issued and outstanding after the date of this Offer but prior to the Expiry Time upon the conversion, exchange or exercise of any securities of Gold Reserve that are convertible into or exchangeable or exercisable for Gold Reserve Shares or Gold Reserve Equity Units, on the basis of three Rusoro Shares for each Gold Reserve Share or Gold Reserve Equity Unit.

Assuming that no Gold Reserve Options or Gold Reserve Notes are exercised or converted and that all of the Gold Reserve Shares and Gold Reserve Equity Units that are issued and outstanding as of November 12, 2008 are tendered to the Offer and that Rusoro takes up and pays for such Gold Reserve Shares and Gold Reserve Equity Units under this Offer, Rusoro will issue an aggregate 170,696,373 of its common shares.

See Section 1 of the Offer, “The Offer”.

Rusoro

Rusoro is a growth-oriented gold producer engaged in the acquisition, exploration, development and operation of gold mining properties in Venezuela. Rusoro currently has annual gold production in excess of 100,000 attributable ounces from its Choco 10 and Isidora mines located near the town of El Callao, Venezuela, and a significant growth pipeline of development and exploration properties located across its large land position in the prolific Bolivar State mining region in southern Venezuela.

Rusoro’s motivated management team is aggressively leading the consolidation of Venezuela’s gold mining sector through its recent successful acquisitions of the Choco 10 mine from Gold Fields and the Isidora mine from Hecla. Rusoro is an experienced operator with extensive in-country knowledge and relationships which support its continued rapid growth through organic opportunities and strategic acquisitions.

Rusoro’s common shares are listed on the TSXV under the symbol “RML”.

Rusoro is a Canadian company, organized under the laws of the Province of British Columbia. Its principal offices are located at Suite 2164, 1055 Dunsmuir Street, Vancouver, British Columbia V7X 1B1 and the phone number is (604) 632-4044. The registered and records office is located at Suite 1600, 609 Granville Street, P.O. Box 10068, Pacific Centre, Vancouver, British Columbia V7Y 1C3.

Rusoro is a reporting issuer or the equivalent in the provinces of British Columbia, Alberta, Ontario and Quebec and files its continuous disclosure documents with the relevant Canadian securities regulatory authorities. Such documents are available at www.sedar.com. Rusoro has filed a Registration Statement on Form F-10, a Tender Offer Statement on Schedule TO and certain other documents and information with the SEC. The Registration Statement, the Tender Offer Statement and such other documents are available at www.sec.gov. See Section 1 of the Circular, “Rusoro”.

Gold Reserve

Gold Reserve is a Canadian company engaged in the business of exploration and development of mining projects in Venezuela. Gold Reserve is incorporated under the laws of the Yukon Territory, Canada and its corporate administrative office is located at 926 West Sprague Avenue, Suite 200, Spokane, WA 99201, U.S.A.

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The telephone number for its corporate and administrative office is: (509) 623-1500. The Gold Reserve Shares are listed and posted for trading on the TSX and the NYSE Alternext under the symbol “GRZ”.

See Section 2 of the Circular, “Gold Reserve”.

Purpose of the Offer

The purpose of the Offer is to enable Rusoro to acquire all of the outstanding Gold Reserve Shares and Gold Reserve Equity Units. If the Offer is accepted and Rusoro acquires all of the outstanding Gold Reserve Equity, Rusoro intends to: (a) expedite its development and expansion plans at its Choco 10 mine and Increible 6 project; (b) identify opportunities to optimize the development of Gold Reserve’s Choco 5 project which is adjacent to Rusoro’s Choco 10 mine; (c) obtain the requisite development permits in respect of the Brisas project in order to recommence construction at the Brisas project in a timely manner; and (d) discuss further consolidation opportunities in the KM88 region of Venezuela with CVG and the Venezuelan government.

Rationale for the Proposed Acquisition

·                  Compelling Premium.  On December 12, 2008, which is the last trading day prior to the date on which Rusoro announced the Offer, the closing price of the Gold Reserve Shares listed on the TSX was Cdn.$0.45 and on the NYSE Alternext was $0.39. The volume-weighted average price of the Gold Reserve Shares on the TSX for the 30 trading days ended December 12, 2008 was Cdn.$0.436 and on the NYSE Alternext was $0.330. Based on the closing price of the Rusoro Shares on the TSXV on December 12, 2008, the Offer represents a premium of approximately 140% over the closing price of the Gold Reserve Shares on the TSX on the same date. Based on the volume-weighted average price of the Rusoro Shares on the TSXV for the 30 trading days ended December 12, 2008, the Offer represents a premium of approximately 209% over the volume-weighted average price of the Gold Reserve Shares on the TSX for the same period.

·                  Immediate Production.  Rusoro is expected to produce in excess of 100,000 attributable gold ounces in 2008 from its existing proven and probable reserves. Management is currently developing expansion plans at Choco 10 and Increible 6 that are expected, together with Rusoro’s San Rafael/El Placer and Isidora operations, to significantly increase attributable gold production.

·                  World Class Reserve and Resource Base.  The Combined Company would have 12.2 million ounces of proven and probable gold reserves. Measured and indicated resources, inclusive of reserves, would total 18.9 million ounces of gold. The Combined Company would also have additional resources of 9.3 million inferred gold ounces. In addition, the Brisas Project contributes 1.4 billion pounds of copper in proven and probable reserves.

·                  Ongoing Participation in Brisas.  Based on the Offered Consideration, Gold Reserve Equityholders would collectively own approximately 30.4% of the Combined Company on an issued share basis.

·                  Opportunity to Consolidate the KM88 Region.  Rusoro has proven itself as a Venezuelan gold consolidator through the successful acquisition of both Gold Fields’ Choco 10 mine and Hecla’s Isidora mine. Rusoro will explore the opportunity to further consolidate the world-class KM88 Region in Bolivar State, Venezuela.

·                  Established Relationship with the Venezuelan Government.  Rusoro has established the first mixed enterprise joint venture of its kind with the Venezuelan government in the mining industry by agreeing to form a joint venture over the Isidora gold mining assets that Rusoro recently acquired from Hecla.

·                  Concrete Synergies.  The combination of Rusoro and Gold Reserve will not only produce corporate synergies through the rationalization of head offices, regulatory filing requirements and executive teams, the strictly Venezuelan location of all material operations will enable the Combined Company to optimize in-country operations as well. Gold Reserve’s Choco 5 property is adjacent to Rusoro’s Choco 10 mine and Gold Reserve’s Brisas property is 10 kilometres south of Rusoro’s Yuruan property, all in Bolivar State, Venezuela. Rusoro expects to reduce duplicated in-country costs while optimizing

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operations including drilling, the use of construction and mining equipment, ore processing opportunities as well as regulatory and logistical requirements surrounding imports and permitting.

·                  Full Exposure to Gold Price.  Based on Gold Reserve’s publicly available information, none of the gold production of the Combined Company is hedged.

·                  Tax Efficient Structure.  The Offer has been structured as an all-share offer that will allow certain Gold Reserve Shareholders who tender to the Offer to do so on a tax efficient basis. Canadian resident Gold Reserve Shareholders may receive Rusoro Shares on a tax-deferred basis, while U.S. resident Gold Reserve Shareholders may, for purposes of the Tax Act, also benefit from a tax deferred rollover.

Canadian resident holders of Gold Reserve Equity Units will benefit from a tax-deferred rollover with respect to the exchange of the Gold Reserve Class B common shares in exchange for Rusoro Shares but will be subject to a capital gain or a capital loss in Canada on the exchange of the Gold Reserve Corporation Class B common shares for the Rusoro Shares. U.S. resident holders of Gold Reserve Equity Units will receive similar Canadian tax treatment on the disposition of their Gold Reserve Equity Units as Canadian residents, however, whether any gain or loss will be subject to tax in Canada is dependent on whether the Gold Reserve Corporation Class B common shares are “taxable Canadian property” to the U.S. resident holder. Subject to the Passive Foreign Investment Company rules under U.S. federal income tax law, U.S. resident Gold Reserve Shareholders may also receive tax-deferral treatment if the Offer is a qualified reorganization. Special U.S. federal income tax rules apply to U.S. persons who are exchanging Gold Reserve Equity Units for Rusoro Shares and these are discussed under “Certain United States Federal Income Tax Considerations” in Section 20 of the Circular.

·                  Optimization and Consolidation Opportunities.  If the Offer is accepted and Rusoro acquires all of the outstanding Gold Reserve Equity, Rusoro intends to: (a) expedite its development and expansion plans at its Choco 10 mine and Increible 6 project; (b) identify opportunities to optimize the development of Gold Reserve’s Choco 5 project which is adjacent to Rusoro’s Choco 10 mine; and (c) obtain the requisite development permits in respect of the Brisas project in order to recommence construction in a timely manner. As mentioned, Gold Reserve’s Choco 5 property is adjacent to Rusoro’s Choco 10 mine and Gold Reserve’s Brisas property is 10 km south of Rusoro’s Yuruan property.

·                  Ability to deliver results in Venezuela.  Since commencing Venezuelan operations, Rusoro has been able to:

·                  Develop an extensive land package with 2.0 million proven and probable gold ounces in reserves, and a resource, inclusive of reserves, of 7.1 million measured and indicated gold ounces. Rusoro also has an additional 7.1 million ounces of gold in inferred resources;

·                  Permit and develop its San Rafael/El Placer project operations which are expected to reach commercial production in 2010;

·                  Restart the Choco 10 mine acquired from Gold Fields after it had been effectively shut down as a result of both permitting and labour issues;

·                  Restart the Isidora mine operations acquired from Hecla after it had been effectively shut down as a result of both permitting and labour issues.

See Section 4 of the Circular, “Rationale and Benefits of the Offer” for information in respect of reserve and resource categories, tonnage and grade and Section 27 of the Circular, “Experts”.

Conditions of the Offer

The Offeror reserves the right to withdraw the Offer and not take up, purchase or pay for any Gold Reserve Equity deposited under the Offer unless all of the conditions of the Offer contained in Section 2 of the Offer, “Conditions of the Offer”, are satisfied or, where permitted, waived at or prior to the Expiry Time.

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These conditions include, among others, the conditions that:

·                  there being validly deposited under the Offer and not withdrawn at the Expiry Time, Gold Reserve Shares representing not less than 662/3% of the total outstanding Gold Reserve Shares and Gold Reserve Equity Units representing not less than 662/3% of the total outstanding Gold Reserve Equity Units (in each case calculated on a fully-diluted basis)

·                  the execution, in form and substance satisfactory to Rusoro, of a supplemental indenture with respect to the Gold Reserve Notes which excludes the Offer and any Subsequent Acquisition Transaction from the definition of a “Fundamental Change” (as such term is defined in Section 15.01(a) of the Indenture for the Gold Reserve Notes, between Gold Reserve and The Bank of New York); and

·                  the Shareholder Rights Plan being waived, invalidated or cease traded.

See Section 2 of the Offer, “Conditions of the Offer”, for all of the conditions of the Offer.

Treatment of Gold Reserve Options and Gold Reserve Notes in the Offer

The Offer is made only for outstanding Gold Reserve Shares and not for any Gold Reserve Options, Gold Reserve Notes or other rights to acquire Gold Reserve Shares. Any holder of such securities who wishes to accept the Offer must, to the extent permitted by the terms thereof and applicable law, fully exercise or convert such securities sufficiently in advance of the Expiry Time of the Offer in order to obtain Gold Reserve Shares that may be deposited in accordance with the terms of the Offer.

If Rusoro takes up and pays for Gold Reserve Equity under the Offer, it currently intends to implement a Subsequent Acquisition Transaction, or take such other action as may be available, structured in a manner so that the holders of Gold Reserve Options and Gold Reserve Notes will, pursuant to the terms thereof, receive Rusoro Shares upon the proper conversion or exercise of the Gold Reserve Options or Gold Reserve Notes. The number of Rusoro Shares so issued and the exercise price will reflect the exchange ratio used in the Offer.

The Gold Reserve Notes will remain outstanding without amendment other than an adjustment to the conversion feature to reflect the terms of the Offer. The Gold Reserve Notes are currently convertible at the rate of $7.54 per Gold Reserve Share. As the Offer is based on the ratio of three Rusoro Shares for each Gold Reserve Share, the conversion feature in the Gold Reserve Notes will be amended to $7.54 divided by three, or $2.51 per Rusoro Share.

Treatment of Fractional Shares

Rusoro will not issue fractional Rusoro Shares. Instead, where a Gold Reserve Equityholder is to receive Rusoro Shares as consideration under the Offer and the aggregate number of Rusoro Shares to be issued to such Gold Reserve Equityholder would result in a fraction of a Rusoro Share being issuable, the number of Rusoro Shares to be received by such Gold Reserve Equityholder will either be rounded up (if the fractional interest is 0.5 or more) or rounded down (if the fractional interest is less than 0.5) to the nearest whole number.

Time for Acceptance

The Offer is open for acceptance until 12:00 midnight, Eastern Time, at the end of January 21, 2009 or until such later time and date to which the Offeror may extend the Expiry Time of the Offer at its discretion unless the Offer is withdrawn by the Offeror.

See Section 4 of the Offer, “Time for Acceptance”.

Manner of Acceptance

The Offer may be accepted by Gold Reserve Equityholders by delivering certificates representing the Gold Reserve Equity that is being deposited, together with a duly completed and signed Letter of Transmittal to the offices of the Depositary specified in the Letter of Transmittal at or before the Expiry Time. The Offer will be deemed to be accepted only if the Depositary actually has received these documents at or before the Expiry

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Time. Gold Reserve Equityholders whose certificates for Gold Reserve Equity are not immediately available may use the procedures for guaranteed delivery set forth in the Notice of Guaranteed Delivery. Gold Reserve Equityholders whose Gold Reserve Equity is registered in the name of an investment dealer, stock broker, bank, trust company or other nominee should contact that nominee for assistance if they wish to accept the Offer.

Gold Reserve Shareholders may accept the Offer by following the procedures for book-entry transfer established by CDS and DTC, provided that a Book-Entry Confirmation is received by the Depositary at its office in Toronto, Ontario, prior to the Expiry Time.

See Section 5 of the Offer, “Manner of Acceptance”.

Payment for Deposited Gold Reserve Equity

Upon the terms and subject to the conditions of the Offer, following the Expiry Date, Rusoro will take up and pay for Gold Reserve Equity validly deposited under the Offer and not withdrawn promptly, but in any event within the time periods prescribed by applicable securities laws. Any Gold Reserve Equity deposited under the Offer after the first date on which Gold Reserve Equity has been taken up by Rusoro (i.e. during the Subsequent Offering Period) will be taken up and paid for promptly. See Section 3 of the Offer, “Take-Up and Payment for Deposited Gold Reserve Equity”.

Right to Withdraw Deposited Gold Reserve Equity

All deposits of Gold Reserve Equity under the Offer are irrevocable unless withdrawn by or on behalf of the depositing Gold Reserve Equityholder at any time before the Gold Reserve Equity has been taken up by the Offeror pursuant to the Offer and in the other circumstances discussed in Section 8 of the Offer, “Right to Withdraw Deposited Gold Reserve Equity”.

Acquisition of Gold Reserve Equity Not Deposited Under the Offer

If the conditions of the Offer are satisfied or waived and Rusoro takes up and pays for Gold Reserve Equity validly deposited under the Offer, Rusoro intends to take such action as is necessary, including causing a special meeting of Gold Reserve Equityholders to be called to consider a statutory arrangement involving Gold Reserve, Rusoro, or an affiliate of Rusoro and one or more of Gold Reserve’s subsidiaries, for the purpose of enabling Rusoro or an affiliate of Rusoro to acquire all Gold Reserve Equity not acquired pursuant to the Offer. Rusoro intends that the value of the consideration offered per Gold Reserve Equity under any Subsequent Acquisition Transaction proposed by it would be equal in value to and in the same form as the consideration paid to Gold Reserve Equityholders under the Offer (provided that, in calculating the value of the consideration offered in any Subsequent Acquisition Transaction, each Rusoro Share shall be deemed to be at least equal in value to each Rusoro Share offered under the Offer).

See Section 10 of the Circular, “Acquisition of Gold Reserve Shares Not Deposited”.

Shareholder Rights Plan

On January 30, 2005, the Gold Reserve Board of Directors approved the extension of the Shareholder Rights Plan, which was ratified by Gold Reserve’s shareholders on March 22, 2006. The Shareholder Rights Plan will expire on June 30, 2009, unless reconfirmed by Gold Reserve’s shareholders prior to that date.

The Offer is not a Permitted Bid for the purposes of the Shareholder Rights Plan. Accordingly, in order for the Offer to proceed, the Shareholder Rights Plan must be terminated or action must be taken by the Gold Reserve Board of Directors or by a securities commission or court of competent jurisdiction to remove the effect of the Shareholder Rights Plan and permit the Offer to proceed.

See “Shareholder Rights Plan” in Section 18 of the Circular.

Rusoro believes that at the Expiry Time, Gold Reserve and its Board of Directors and Gold Reserve Equityholders will have had more than adequate time to fully consider the Offer and any available alternative transactions and to determine whether to deposit their Gold Reserve Shares under the Offer.

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The Offer is being made on the condition, among other things, that the Shareholder Rights Plan does not and will not adversely affect the Offer or Rusoro either before or on consummation of the Offer or the purchase of Gold Reserve Shares under a Subsequent Acquisition Transaction.

See “Conditions of the Offer” in Section 2 of the Offer.

Certain Canadian Federal Income Tax Considerations

Gold Reserve Shareholders resident in Canada who hold their Gold Reserve Shares as capital property for purposes of the Tax Act and who dispose of such shares to Rusoro under the Offer will not realize a capital gain or a capital loss as a result of the exchange of their Gold Reserve Shares for Rusoro Shares pursuant to the Offer. The cost for tax purposes to shareholders of Rusoro Shares received on the Offer will generally be equal to the adjusted cost base of their Gold Reserve Shares that are exchanged for Rusoro Shares pursuant to the Offer. Alternatively, such shareholders will be entitled to recognize for Canadian federal tax purposes the capital gain or capital loss, otherwise determined, from such exchange.

Canadian resident holders who hold their Gold Reserve Equity Units as capital property for purposes of the Tax Act and who dispose of such to Rusoro under the Offer will be subject to the following Canadian tax results: (1) with regard to the Gold Reserve Class B common shares, the shareholder will not realize a capital gain or a capital loss as a result of the exchange of the Gold Reserve Class B common shares for Rusoro Shares, except as discussed above; (2) with regard to the Gold Reserve Corporation Class B common shares, the shareholder will realize a capital gain or a capital loss as a result of the exchange. The capital gain or capital loss will be equal to the difference between (i) the value of the Rusoro Shares received that is allocable to the Gold Reserve Corporation Class B common shares exchanged; and (ii) the adjusted cost base in the Gold Reserve Equity Units that is allocable to the Gold Reserve Corporation Class B common shares.

Generally, Gold Reserve Shareholders who are non-residents of Canada for purposes of the Tax Act who receive Rusoro Shares in exchange for Gold Reserve Shares pursuant to the Offer, will realize a tax-deferred rollover on the exchange, except where they choose to recognize a capital gain or capital loss on the exchange. With respect to any capital gain realized on the sale of Gold Reserve Shares to Rusoro under the Offer, the gain will not be subject to tax pursuant to the Tax Act unless those shares constitute “taxable Canadian property” (within the meaning of the Tax Act) to such Gold Reserve Shareholders and the gain is not otherwise exempt from tax under the Tax Act or is exempt pursuant to an applicable income tax treaty.

Holders of Gold Reserve Equity Units who are non-residents of Canada who exchange their Gold Reserve Equity Units for Rusoro Shares pursuant to the Offer, will be subject to the following Canadian tax results: (1) with regard to the Gold Reserve Class B common shares, the shareholder will realize a tax-deferred rollover on the exchange; (2) with regard to the Gold Reserve Corporation Class B common shares, the shareholder will realize a capital gain or capital loss on the exchange. The capital gain or capital loss will be equal to the difference between (i) the value of the Rusoro Shares received that is allocable to the Gold Reserve Corporation Class B common shares exchange; and (ii) the adjusted cost base in the Gold Reserve Equity Units that is allocable to the Gold Reserve Corporation Class B common shares. The taxation of any gain or loss under the Tax Act will be dependent upon whether the Gold Reserve Corporation Class B common shares are “taxable Canadian property” to the non-resident holder.

The foregoing is a brief summary of Canadian federal income tax consequences only and is qualified by the more detailed general description of Canadian federal income tax considerations under “Certain Canadian Federal Income Tax Considerations” in Section 19 of the Circular. Shareholders are urged to consult their own tax advisors to determine the particular tax consequences to them of a sale of Gold Reserve Shares or Gold Reserve Equity Units pursuant to the Offer or a disposition of Gold Reserve Shares or Gold Reserve Equity Units pursuant to any Subsequent Acquisition Transaction.

Certain United Stated Federal Income Tax Considerations

Subject to the Passive Foreign Investment Company rules discussed below, a beneficial owner of Gold Reserve Shares who is a citizen or resident of the United States and who holds Gold Reserve Shares as a

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capital asset and who tenders such shares to Rusoro under the Offer will not recognize gain or loss on the exchange, provided that the exchange constitutes a qualified reorganization under U.S. federal income tax law. See Section 20 of the Circular for a discussion of whether the exchange should be a qualified reorganization.

If a qualified reorganization occurs, subject to the Passive Foreign Investment Company rules discussed below, the U.S. beneficial owner’s tax basis in the Gold Reserve Shares surrendered will become the tax basis in the Rusoro Shares received, and the owner’s holding period in the Gold Reserve stock surrendered (for purposes of determining eligibility for long-term capital gain treatment) will be tacked on to the holding period in the Rusoro stock received.

If the exchange does not qualify as a tax-deferred reorganization, then, subject to the Passive Foreign Investment Company rules discussed below, a U.S. person will have a capital gain or loss on the exchange, equal to the difference between the cost of the Gold Reserve Shares surrendered and the fair market value of the Rusoro Shares received. The gain or loss will be long-term gain (and subject to a reduced tax rate) or long-term loss if the U.S. person has held the Gold Reserve Shares for more than one year as of the date of the closing of the Offer; otherwise it will be short-term gain (taxable as ordinary income) or short-term loss

Since Gold Reserve is a Passive Foreign Investment Company, special rules apply to U.S. persons who have not made certain elections (so-called “QEF” or “Mark-to-Market” elections). These U.S. persons will realize gain on the exchange even if the exchange is a qualified reorganization and that gain will be taxed at ordinary income tax rates and some of it may be subject to interest.

Special rules apply to U.S. persons who are exchanging Gold Reserve Equity Units for Rusoro Shares and these are discussed under “Certain United States Federal Income Tax Considerations” in Section 20 of the Circular.

The foregoing is a brief summary of United States federal income tax consequences only. Shareholders should read carefully the information under “Certain United States Federal Income Tax Considerations” in Section 20 of the Circular, which qualifies the summary set forth above. Shareholders are urged to consult their own tax advisers to determine the particular tax consequences to them of the Offer.

Risk Factors Related to the Offer

An investment in Rusoro Shares is subject to certain risks. Gold Reserve Equityholders should carefully review the risk factors set out in the Offer and Circular and risks described in Rusoro’s Annual Information Form which is incorporated by reference in the Offer and the Circular before depositing Gold Reserve Equity pursuant to the Offer. See Section 6 of the Circular, “Risk Factors Related to the Offer”, and the other information contained in, or incorporated by reference into, the Offer and Circular. Additional risks and uncertainties, including those with respect to the proposed combination of Rusoro and Gold Reserve upon successful completion of the Offer (including a Subsequent Acquisition Transaction) may also adversely affect Rusoro’s business.

Depositary

Rusoro has engaged Computershare Investor Services Inc. to act as Depositary for the receipt of certificates in respect of Deposited Equity and related Letters of Transmittal and Notices of Guaranteed Delivery deposited under the Offer and for the payment for Gold Reserve Equity purchased by Rusoro pursuant to the Offer. The Depositary will receive reasonable and customary compensation from Rusoro for its services relating to the Offer and will be reimbursed for certain out-of-pocket expenses. Rusoro has also agreed to indemnify the Depositary for certain liabilities, including liabilities under securities laws, and expenses in connection with the Offer.

Information Agent

Rusoro has retained Georgeson Shareholder Communications Canada Inc. and its affiliates to act as Information Agent in connection with the Offer to provide a resource for information for Gold Reserve

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Equityholders. The Information Agent will receive reasonable and customary compensation from Rusoro for services in connection with the Offer and will be reimbursed for certain out-of-pocket expenses.

Financial Advisor

Rusoro has retained Endeavour Financial to act as its financial advisor in connection with the Offer. The Financial Advisor will receive reasonable and customary compensation from Rusoro for services in connection with the Offer and will be reimbursed for certain out-of-pocket expenses.

Regulatory Requirement

The Offer will be subject to the approval of the listing of the Rusoro Shares issued under this Offer by the TSXV, as well as filing requirements with regulatory authorities in Canada and the United States including the SEC.

We have applied to the TSXV to list the Rusoro Shares that will be issued to Gold Reserve Equityholders in connection with the Offer. Listing will be subject to our fulfillment of all of the TSXV’s applicable listing requirements.

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SUMMARY HISTORICAL AND UNAUDITED PRO FORMA

CONSOLIDATED FINANCIAL INFORMATION

The tables set out below include a summary of (i) Rusoro’s historical consolidated financial information as at and for the fiscal years ended December 31, 2007 and 2006 and as at and for the nine month periods ended September 30, 2008 and 2007 in both Canadian GAAP and reconciled to U.S. GAAP, and (ii) unaudited pro forma consolidated financial information for Rusoro as at and for the nine-month period ended September 30, 2008 and for the fiscal year ended December 31, 2007 in both Canadian GAAP and reconciled to U.S. GAAP, after giving effect to Rusoro’s acquisition of all of the Gold Reserve Equity pursuant to the Offer. The historical financial information of Rusoro as at and for the fiscal years ended December 31, 2007 and 2006 has been derived from Rusoro’s audited consolidated financial statements, and the historical financial information of Rusoro as at and for the nine month periods ended September 30, 2008 and 2007 has been derived from Rusoro’s unaudited interim consolidated financial statements, each of which can be found on SEDAR at www.sedar.com. The historical financial information for Gold Reserve as at and for the nine-month period ended September 30, 2008 and the fiscal years ended December 31, 2007 and 2006 has been derived from Gold Reserve’s audited and unaudited consolidated financial statements, which can be found on SEDAR at www.sedar.com. See note 1 of the unaudited pro forma consolidated financial statements attached as Schedule “A” hereto for information as to how the pro forma consolidated financial statements were derived.

The summary unaudited pro forma consolidated financial statement information set forth below should be read in conjunction with the unaudited pro forma consolidated financial statements of Rusoro and the accompanying notes thereto attached as Schedule “A” to the Offer and Circular. The summary unaudited pro forma consolidated financial statement information for Rusoro gives effect to the proposed acquisition of Gold Reserve as if such had occurred as at September 30, 2008 for the purposes of the pro forma consolidated balance sheet information, and as at January 1, 2007 for the purposes of the pro forma consolidated statements of operations for the fiscal year ended December 31, 2007 and the nine-month period ended September 30, 2008. In preparing the unaudited pro forma consolidated financial statement information, management of Rusoro has made certain assumptions that affect the amounts reported in the unaudited pro forma consolidated financial statement information. The summary unaudited pro forma consolidated financial information is not intended to be indicative of the results that would actually have occurred, or the results expected in future periods, had the events reflected herein occurred on the dates indicated. Actual amounts recorded upon consummation of the transactions contemplated by the Offer will differ from the pro forma information presented below. No attempt has been made to calculate or estimate the effect of harmonization of accounting policies or practices between Rusoro and Gold Reserve due to the limited publicly available information of Gold Reserve. Any potential synergies that may be realized after consummation of the transaction have been excluded from the unaudited pro forma consolidated financial statement information. The unaudited pro forma consolidated financial statement information set forth below is extracted from and should be read in conjunction with the unaudited pro forma consolidated financial statements of Rusoro and accompanying notes attached as Schedule “A” to the Offer and Circular.

[Rest of page intentionally left blank]

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Summary of Consolidated Financial Information of Rusoro

(All dollar amounts are in 000s)

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Summary of Unaudited Pro Forma Consolidated Financial Information of Rusoro

(All dollar amounts are in 000s)

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GLOSSARY

In the Offer and Circular, unless the context otherwise requires, the following terms have the meanings set forth below.

“Acquiring Person” has the meaning given to it in Section 18 of the Circular, “Shareholder Rights Plan”.

“affiliate” has the meaning given to it in the Securities Act (British Columbia).

“Agent’s Message” has the meaning given to it in Section 5 of the Offer, “Manner of Acceptance — Acceptance by Book-Entry Transfer”.

“Annual Information Form” means the annual information form of Rusoro for the fiscal year ended December 31, 2007 dated December 12, 2008, filed with certain Canadian provincial regulatory authorities.

“Appointee” has the meaning given to it in Section 5 of the Offer, “Manner of Acceptance — Power of Attorney”.

“Appropriate Regulatory Approvals” means those sanctions, rulings, consents, orders, exemptions, permits and other approvals (including the lapse, without objection, of a prescribed time under a statute or regulation that states that a transaction may be implemented if a prescribed time lapses following the giving of notice without an objection being made) of Governmental Entities required in connection with the commencement of the Offer or the consummation of the Offer.

“associate” has the meaning given to it in the Securities Act (British Columbia).

“August Proposal” has the meaning given to it in Section 3 of the Circular, “Background”.

“August Response” has the meaning given to it in Section 3 of the Circular, “Background”.

“BCBCA” means the Business Corporations Act (British Columbia).

“Book-Entry Confirmation” means confirmation of a book-entry transfer of a Shareholder’s Gold Reserve Shares into the Depositary’s account at CDS or DTC, as applicable.

“Brisas or Brisas Project” means Gold Reserve’s Brisas copper-gold project located in the KM88 mining district, Bolivar State, Venezuela.

“business day” means any day of the week other than a Saturday, Sunday or a statutory or civic holiday observed in Toronto, Ontario, Canada or federal holiday observed in the United States.

“Canadian GAAP” means Canadian generally accepted accounting principles as defined by the Accounting Standards Board of the Canadian Institute of Chartered Accountants in the Handbook of the Canadian Institute of Chartered Accountants applied on a consistent basis.

“Ceiba II CVG Contract” means the mining rights contract, as amended, between Cooperativa Mixta Chicanan and CVG issued March 18, 1991 which covers a 500 hectare concession of alluvial and vein gold and alluvial diamonds, within which Rusoro holds a 50 hectare mining lease covering the open pit mining operations of Rusoro.

“CDS” means the CDS Clearing and Depository Services Inc.

“CDSX” means the CDS on-line tendering system pursuant to which book-entry transfers may be effected.

“Choco 5” project means Gold Reserve’s Choco 5 project in the El Callao Mining District, Bolivar State, Venezuela.

“Choco 10 mine” means Rusoro’s 95% owned Choco 10 gold mine covering the Choco 4 and Choco 10 properties located in the El Callao mining district, Bolivar State, Venezuela.

“Circular” means the take-over bid circular accompanying the Offer, including the Annexes attached thereto.

“Combined Company” means the combined business of Rusoro and Gold Reserve as contemplated herein.

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“Competing Permitted Bid” has the meaning given to it in Section 18 of the Circular, “Shareholder Rights Plan”.

“CRA” has the meaning given to it in Section 19 of the Circular, “Certain Canadian Federal Income Tax Considerations”.

“CVG” means Corporacioń Venezolana de Guayana, a decentralized Venezuelan autonomous entity responsible for the development and administration of the Guayana region of Venezuela.

“Depositary” means Computershare Investor Services Inc.

“Deposited Equity” has the meaning given to it in Section 5 of the Offer, “Manner of Acceptance — Dividends and Distributions”.

“Distributions” has the meaning given to it in Section 5 of the Offer, “Manner of Acceptance — Dividends and Distributions”.

“DTC” means the Depository Trust Company.

“Effective Date” means the date on which Rusoro first pays for Gold Reserve Shares deposited under the Offer.

“Eligible Institution” means a Canadian Schedule I chartered bank, a major trust company in Canada, a member of a Securities Transfer Agents Medallion Program (STAMP), a member of the Stock Exchange Medallion Program (SEMP) or a member of the New York Stock Exchange, Inc. Medallion Signature Program (MSP). Members of these programs are usually members of a recognized stock exchange in Canada or the United States, members of the Investment Dealers Association of Canada, members of the Financial Industry Regulatory Authority or banks or trust companies in the United States.

“Emilia property” means Rusoro’s 100% owned Emilia project located in the El Dorado mining district, Bolivar State, Venezuela.

“Endeavour Financial” means Endeavour Financial International Corporation.

“Expiry Date” means the end of the day on January 21, 2009 or such other date as is set out in a notice of change or a notice of variation of the Offer issued at any time and from time to time extending the period during which Gold Reserve Equity may be deposited under the Offer, provided that, if such day is not a business day, then the Expiry Date will be the next business day. See Section 6 of the Offer, “Extensions, Variations and Changes to the Offer”.

“Expiry Time” means 12:00 midnight, Eastern Time, at the end of January 21, 2009 or such other time as is set out in a notice of change or a notice of variation of the Offer issued at any time and from time to time. See Section 6 of the Offer, “Extensions, Variations and Changes to the Offer”.

“Financial Advisor” means Rusoro’s financial advisor, Endeavour Financial.

“forward-looking statements” has the meaning given to it in “Statements Regarding Forward-Looking Information”.

“fully-diluted basis” means, with respect to the number of outstanding Gold Reserve Shares at any time, the number of Gold Reserve Shares that would be outstanding if all rights to acquire Gold Reserve Shares, other than SRP Rights, were exercised, including for greater certainty, all Gold Reserve Shares issuable upon the exercise of Gold Reserve Options, whether vested or unvested and Gold Reserve Shares issuable upon conversion of the Gold Reserve Notes.

“GAAP” means generally accepted accounting principles.

“Gold Fields” means Gold Fields Limited, a corporation existing under the laws of South Africa.

“Gold Reserve” means Gold Reserve Inc., a corporation existing under the YBCA, and, where the context requires, its subsidiaries.

“Gold Reserve Board of Directors” means the board of directors of Gold Reserve.

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“Gold Reserve Corporation” means Gold Reserve Corporation, a corporation existing under the laws of Montana and a wholly-owned subsidiary of Gold Reserve.

“Gold Reserve Equity” means, collectively, the Gold Reserve Shares and the Gold Reserve Equity Units.

“Gold Reserve Equityholders” means, collectively, holders of Gold Reserve Shares and holders of Gold Reserve Equity Units.

“Gold Reserve Equity Units” means an equity unit of Gold Reserve comprised of one Gold Reserve Class B common share and one Gold Reserve Corporation Class B common share, which equity units are convertible into Gold Reserve Shares on a one for one basis.

“Gold Reserve Noteholders” means the holders of the Gold Reserve Notes.

“Gold Reserve Notes” means Gold Reserve’s 5.50% Senior Subordinated Convertible Notes due June 15, 2022.

“Gold Reserve Option” means an option to purchase Gold Reserve Shares granted under either of the Gold Reserve Option Plans.

“Gold Reserve Option Plans” means the Gold Reserve 1997 Equity Incentive Plan (last amended in March 2006) and the 2008 Venezuelan Equity Incentive Plan (approved by Gold Reserve’s shareholders in June 2008) of Gold Reserve and any other shares into which such Gold Reserve Shares may be subdivided, consolidated, reclassified or changed.

“Gold Reserve Share” means a Class A common share in the capital of Gold Reserve.

“Gold Reserve Shareholder” means a holder of Gold Reserve Shares.

“Governmental Entity” means (a) any supranational, national, provincial, territorial, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, administrative agency, commission, board, bureau or agency, domestic or foreign; (b) any subdivision, agent, commission, board, or authority of any of the foregoing; (c) any self-regulatory authority; (d) the TSX; (e) the TSXV; (f) the NYSE Alternext; or (g) any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing.

“Hecla” means Hecla Mining Company, a corporation existing under the laws of Delaware.

“HSR Act” has the meaning given to it in Section 17 of the Circular, “Regulatory Matters”.

“including” (or “includes”) means including (or includes) without limitation.

“Increible 6 project” means Rusoro’s 100% owned Increible 6 Project located in the El Callao mining district, Bolivar State, Venezuela.

“Indenture” means the indenture for the Gold Reserve Notes dated May 18, 2007 between Gold Reserve and the Bank of New York.

“Information Agent” or “Georgeson” means Georgeson Shareholder Communications Canada Inc. and its affiliates.

“Isidora mine” means Rusoro’s interest in the Isidora gold deposit located in the El Callao mining district, Bolivar State, Venezuela that has been committed to a 50/50 joint venture with the Venezuelan government.

“laws” means all laws, by-laws, statutes, rules, regulations, principles of law, policies, orders, ordinances, decisions, declarations, rulings, directives, judgments, decrees or other requirements of any Governmental Entity and the terms and conditions of any grant of approval, permission, authority or license of any Governmental Entity, which, for greater certainty, shall include the laws of Canada, the United States of America and Venezuela, and the term “applicable” with respect to such laws and in a context that refers to one or more persons, means such laws as are applicable to such person or its business, undertaking, property or securities and emanate from a person having jurisdiction over the person or persons or its or their business, undertaking, property or securities.

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“Letter of Transmittal” means the letter of acceptance and transmittal in the form accompanying the Offer and Circular (printed on yellow paper or a facsimile thereof).

“Market Price” has the meaning given to it in Section 18 of the Circular, “Shareholder Rights Plan”.

“Material Adverse Effect” means, in respect of any person, any effect, change, event, occurrence or state of facts, that is, or could reasonably be expected to be, material and adverse to the business, properties, assets, liabilities (including any contingent liabilities that may arise through outstanding, pending, or threatened litigation or otherwise), capitalization, condition (financial or otherwise), operations, licenses, permits, results of operations, prospects, articles, by-laws, rights or privileges of the relevant person, other than any effect, change, event, occurrence or state of facts: (i) relating solely to general political, economic or financial conditions; (ii) relating solely to the state of securities or commodities markets in general; (iii) solely attributable to the announcement of the transactions contemplated herein; (iv) relating solely to the industries in which Gold Reserve and its subsidiaries operate in general; or (v) in applicable Laws or regulations or GAAP.

“MI 61-101” means Multilateral Instrument 61-101 entitled “Protection of Minority Security Holders in Special Transactions”.

“Minimum Tender Condition” means that there will have been validly deposited under the Offer and not withdrawn at the Expiry Time that number of Gold Reserve Shares which constitutes at least 662/3% of the issued and outstanding Gold Reserve Shares and that number of Gold Reserve Equity Units which constitutes at least 662/3% of the issued and outstanding Gold Reserve Equity Units (in each case calculated on a fully diluted basis).

“NI 43-101” means National Instrument 43-101 — Standards of Disclosure for Mineral Projects.

“Non-Resident Holder” has the meaning given to it in Section 19 of the Circular, “Certain Canadian Federal Income Tax Considerations”.

“Notice of Guaranteed Delivery” means the notice of guaranteed delivery (printed on green paper) in the form accompanying the Offer and Circular or a facsimile thereof.

“NYSE Alternext” means the NYSE Alternext US LLC (formerly, the American Stock Exchange).

“Offer” means Rusoro’s Offer to purchase the Gold Reserve Equity made hereby.

“Offer and Circular” means the Offer and the Circular, collectively.

“Offered Consideration” means the consideration to be paid by Rusoro for the Gold Reserve Equity taken up under the Offer or three Rusoro Shares for each Gold Reserve Share or Gold Reserve Equity Unit tendered.

“Offer Letter” has the meaning given to it in Section 3 of the Circular, “Background”.

“Offeror” means Rusoro.

“Offer Period” means the period commencing on the date of the Offer and ending at the Expiry Time.

“person” includes an individual, partnership, association, body corporate, joint venture, business organization, trustee, executor, administrator, legal representative, government (including any Governmental Entity) or any other entity, whether or not having legal status.

“Purchased Securities” has the meaning given to it in Section 5 of the Offer, “Manner of Acceptance — Power of Attorney”.

“Resident Holder” or “Resident Holders” has the meaning given to it in Section 19 of the Circular, “Certain Canadian Federal Income Tax Considerations — Shareholders Resident in Canada”.

“Rights Certificates” means the certificates representing the SRP Rights.

“Rusoro” means Rusoro Mining Ltd., a corporation existing under the BCBCA and, where the context requires, its subsidiaries.

“Rusoro Share” means a common share in the capital of Rusoro.

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“San Rafael/El Placer project” means Rusoro’s 100% owned San Rafael/El Placer gold development property located in the El Dorado mining district, Bolivar State, Venezuela.

“SEC” means the United States Securities and Exchange Commission.

“Separation Time” has the meaning ascribed thereto under “Shareholder Rights Plan” in Section 18 of the Circular.

“Shareholder Rights Plan” means the shareholder rights plan agreement of Gold Reserve dated as of October 5, 1998, amended as of March 20, 2000 and June 2, 2000, and amended and restated as of March 14, 2003, and amended and restated as of January 29, 2006.

“SRP Exercise Price” has the meaning given to it in Section 18 of the Circular, “Shareholder Rights Plan”.

“SRP Rights” means the rights issued pursuant to the Shareholder Rights Plan.

“Subsequent Acquisition Transaction” has the meaning given to it in Section 10 of the Circular, “Acquisition of Gold Reserve Equity Not Deposited Under the Offer — Subsequent Acquisition Transaction”.

“Subsequent Offering Period” has the meaning given to it in Section 6 of the Offer, “Extensions, Variations and Changes to the Offer — Subsequent Offering Period”.

“subsidiary” means, with respect to a person, any body corporate of which more than 50% of the outstanding shares ordinarily entitled to elect a majority of the board of directors thereof (whether or not shares of any other class or classes will or might be entitled to vote upon the happening of any event or contingency) are at the time owned or over which voting control or direction is exercised, directly or indirectly, by such person and will include any body corporate, partnership, trust, joint venture or other entity over which such person exercises direction or control or which is in a like relation to a subsidiary.

“Take-Up Date” means a date upon which Rusoro takes up or acquires Gold Reserve Equity under the Offer. Rusoro reserves the right, to the extent permitted by applicable law, to have multiple Take-Up Dates.

“Tax Act” means the Income Tax Act (Canada) R.S.C. 1985, c.1 (5th supplement), as amended and the regulations thereunder, as amended.

“taxable capital gain” has the meaning given to it in Section 19 of the Circular, “Certain Canadian Federal Income Tax Considerations — Shareholders Resident in Canada — Taxation of Capital Gains and Losses on the Exchange and on the Disposition of Rusoro Shares”.

“trading day” means any day on which trading occurs on the TSX, TSXV or NYSE Alternext as applicable.

“TSX” means the Toronto Stock Exchange.

“TSXV” means the TSX Venture Exchange.

“United States” or “U.S.” means the United States of America, its territories and possessions, any State of the United States, and the District of Columbia.

“U.S. Exchange Act” means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“U.S. GAAP” means generally accepted accounting principles in the United States.

“U.S. Securities Act” means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Valle Hondo project” means Rusoro’s 100% owned Valle Hondo Project located in the El Dorado mining district, Bolivar State, Venezuela.

“YBCA” means the Business Corporations Act (Yukon).

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OFFER

December 15, 2008

TO: THE HOLDERS OF GOLD RESERVE SHARES AND GOLD RESERVE EQUITY UNITS

The accompanying Circular, which is incorporated into and forms part of the Offer, contains important information and should be read carefully before making a decision with respect to the Offer. This Offer and the Circular constitute the take-over bid circular required under applicable Canadian securities laws. Capitalized terms used in the Offer but not otherwise defined herein are defined in the section entitled “Glossary” above.

1.              The Offer

The Offeror hereby offers to purchase, upon the terms and subject to the conditions of the Offer, all of the issued and outstanding Gold Reserve Equity and including any Gold Reserve Equity that may become issued and outstanding after the date of this Offer but prior to the Expiry Time upon the conversion, exchange or exercise of any securities of Gold Reserve that are convertible into or exchangeable or exercisable for Gold Reserve Equity, on the basis of three Rusoro Shares in respect of each Gold Reserve Share or Gold Reserve Equity Unit.

Each Gold Reserve Equityholder will receive the Offered Consideration in respect of all of the Gold Reserve Equityholder’s Gold Reserve Equity properly deposited under the Offer, subject to adjustment for fractional shares.

On December 12, 2008, which is the last trading day prior to the date on which the Offeror announced the Offer, the closing price of the Gold Reserve Shares listed on the TSX was Cdn.$0.45 and on the NYSE Alternext was $0.39. The volume-weighted average price of the Gold Reserve Shares on the TSX for the 30 trading days ended December 12, 2008 was Cdn.$0.436 and on the NYSE Alternext was $0.330. Based on the closing price of the Rusoro Shares on the TSXV on December 12, 2008, the Offer represented a premium of approximately 140% over the closing price of the Gold Reserve Shares on the TSX on the same date. Based on the volume-weighted average price of the Rusoro Shares on the TSXV for the 30 trading days ended December 12, 2008, the Offer represented a premium of approximately 209% over the volume-weighted average price of the Gold Reserve Shares on the TSX for the same period.

The Offeror urges you to obtain recent quotations for the Gold Reserve Shares and Rusoro Shares before deciding whether or not to tender your Gold Reserve Shares.

The Offer is made only for Gold Reserve Equity and is not made for any Gold Reserve Options, Gold Reserve Notes or other rights to acquire Gold Reserve Shares (other than the SRP Rights). Gold Reserve Equityholders who deposit their Gold Reserve Equity will be deemed to have deposited the SRP Rights associated with such Gold Reserve Equity. No additional payment will be made for the SRP Rights and no amount of consideration to be paid by the Offeror for the Gold Reserve Equity will be allocated to the SRP Rights.

Any holder of Gold Reserve Options, Gold Reserve Notes or other rights to acquire Gold Reserve Shares who wishes to accept the Offer should, to the extent permitted by their terms and applicable law, fully exercise or exchange the options, equity units or other rights in order to obtain certificates representing Gold Reserve Shares that may be deposited in accordance with the terms of the Offer. Any such exercise or exchange must be made sufficiently in advance of the Expiry Date to ensure such holders that they will have certificates representing Gold Reserve Shares available for deposit prior to the Expiry Date or in sufficient time to fully comply with the procedures referred to in Section 5 of this Offer, “Manner of Acceptance — Procedure for Guaranteed Delivery”.

If any holder of Gold Reserve Options, Gold Reserve Notes or other securities of Gold Reserve that are convertible into or exchangeable or exercisable for Gold Reserve Shares does not exercise or convert such Gold Reserve Options, Gold Reserve Notes or other convertible, exchangeable or exercisable securities before the Expiry Time, such Gold Reserve Options, Gold Reserve Notes or other convertible, exchangeable or exercisable securities will remain outstanding in accordance with their terms and conditions, including with respect to term to expiry, vesting and exercise prices, except that, to the extent permitted, after completion of a Subsequent Acquisition Transaction a Gold Reserve Option will become an option or right to acquire a number

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of Rusoro Shares, as determined in accordance with the terms of the Gold Reserve Option or other convertible, exchangeable or exercisable securities.

Other than such amendments as are required to meet Rusoro’s conditions to this Offer (see paragraph (d) of “Conditions of the Offer” below), the Gold Reserve Notes will remain outstanding without amendment other than an adjustment to the conversion feature to reflect the terms of the Offer. The Gold Reserve Notes are currently convertible at the rate of $7.54 per Gold Reserve Share. As the Offer is based on the ratio of three Rusoro Shares for each Gold Reserve Share, the conversion feature in the Gold Reserve Notes will be amended to $7.54 divided by three, or $2.51 per Rusoro Share.

Fractional Rusoro Shares will not be issued in connection with the Offer. Where on any Take-Up Date a Gold Reserve Equityholder is to receive Rusoro Shares as consideration for the Offer and the aggregate number of Rusoro Shares to be issued to the Gold Reserve Equityholder would result in a fraction of a Rusoro Share being issued, the number of Rusoro Shares to be received by the Gold Reserve Equityholder will be rounded up (if the fractional interest is 0.5 or more) or down (if the fractional interest is 0.5 or less) to the nearest whole number.

Pursuant to United States state securities laws, Rusoro will not be permitted to take up and pay for Gold Reserve Equity owned by a U.S. resident until the offer and sale in the state in which such person is resident in has been registered with the applicable state regulatory agency or an exemption from such registration is available. In this regard, Rusoro intends to file the appropriate forms to qualify the Offer in all states in which Gold Reserve Equityholders reside. There can be no assurance that all states will approve the Offer and sale.

The accompanying Circular, which is incorporated into and forms part of the Offer, and the Letter of Transmittal and the Notice of Guaranteed Delivery contain important information that should be read carefully before making a decision with respect to the Offer.

2.              Conditions of the Offer

Notwithstanding any other provision of the Offer, subject to applicable law, and provided that the Offeror may not assert an Offer condition when the condition is triggered by the Offeror’s own action or inaction, the Offeror shall have the right to withdraw the Offer and shall not be required to take up, purchase or pay for, and shall have the right to extend the period of time during which the Offer is open and postpone taking up and paying for, any Gold Reserve Equity deposited under the Offer unless all of the following conditions are satisfied or waived by the Offeror at or prior to the Expiry Time:

(a)          the Minimum Tender Condition;

(b)         any and all government or regulatory approvals (including the Appropriate Regulatory Approvals), waiting or suspensory periods (and any extensions thereof), waivers, permits, consents, reviews, sanctions, orders, rulings, decisions, declarations, certificates and exemptions required by law, policy or practice (including, those of any provincial securities authorities, stock exchanges or other securities regulatory authorities) that are, in the Offeror’s reasonable discretion, necessary or advisable to complete the Offer, shall have been obtained, received or concluded or, in the case of waiting or suspensory periods, expired or been terminated, each on terms satisfactory to Rusoro, in its sole discretion, acting reasonably;

(c)          no act, action, suit or proceeding shall have been taken or threatened or be pending before or by any Governmental Entity or by any elected or appointed public official or private person (including, by any individual, company, firm, group or other entity), whether or not having the force of law, and no law shall have been proposed, amended, enacted, promulgated or applied, in either case:

(i)             challenging the Offer or the ability of Rusoro to make or maintain the Offer;

(ii)   seeking to prohibit, restrict or impose material limitations or conditions on: (A) the acquisition by, or sale to, Rusoro of any Gold Reserve Equity, (B) the take-up or acquisition of Gold Reserve Equity by Rusoro, (C) the issuance and delivery of Rusoro Shares in consideration for Gold Reserve Equity taken up or acquired by Rusoro, (D) the ability of Rusoro to acquire or hold, or exercise full rights of ownership of, any Gold Reserve Equity, (E) the ownership or operation or

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effective control by Rusoro of any material portion of the business, property, assets, licenses or permits of Gold Reserve or its affiliates or subsidiaries or to compel Rusoro or its affiliates or subsidiaries to dispose of or hold separate any material portion of the business, property, assets, licenses or permits of Gold Reserve or any of its affiliates or subsidiaries as a result of the Offer, or (F) the ability of Rusoro and its affiliates and subsidiaries to complete any Subsequent Acquisition Transaction;

(iii)  seeking to obtain from Rusoro, any of its affiliates or subsidiaries, or any director or officer of any of the foregoing, or from Gold Reserve, any of its affiliates or subsidiaries, or any director or officer of any of the foregoing, any material damages directly or indirectly in connection with the Offer;

(iv)  which, if successful, in the reasonable discretion of Rusoro, would be reasonably likely to result in a Material Adverse Effect on Gold Reserve or its affiliates or subsidiaries, taken as a whole, if the Offer was consummated; or

(v)   which, if successful, in the reasonable discretion of Rusoro, would make uncertain the ability of Rusoro and its affiliates and subsidiaries to complete any Subsequent Acquisition Transaction;

(d)         the valid execution, in form and substance satisfactory to Rusoro, and the continued effectiveness at the Expiry Time of a supplemental indenture with respect to the Gold Reserve Notes which excludes the Offer and any Subsequent Acquisition Transaction from the definition of a “Fundamental Change” (as such term is defined in Section 15.01(a) of the Indenture) such that Gold Reserve shall have no obligation, as a result of Rusoro’s acquisition of Gold Reserve Equity pursuant to the Offer, to make a “Fundamental Change Purchase Offer” (as such term is defined in Section 15.01(a) of the Indenture);

(e)          Rusoro shall have determined in its reasonable discretion that, on terms satisfactory to Rusoro: (i) the Gold Reserve Board of Directors shall have waived the application of the Shareholder Rights Plan to the purchase of Gold Reserve Shares by Rusoro under the Offer, any and any Subsequent Acquisition Transaction; (ii) a cease trade order or an injunction shall have been issued that has the effect of prohibiting or preventing the exercise of SRP Rights or the issue of Gold Reserve Shares upon the exercise of the SRP Rights in relation to the purchase of Gold Reserve Shares by Rusoro under the Offer, any Subsequent Acquisition Transaction; (iii) a court of competent jurisdiction shall have ordered that the SRP Rights are illegal or of no force or effect or may not be exercised in relation to the Offer, any Subsequent Acquisition Transaction; or (iv) the SRP Rights and the Shareholder Rights Plan shall otherwise have become or been held unexercisable or unenforceable in relation to the Gold Reserve Shares with respect to the Offer, any Subsequent Acquisition Transaction;

(f)            there shall not be in effect or threatened any temporary restraining order, preliminary or permanent injunction, cease trade order or other order, decree or judgment issued by any Governmental Entity or other legal restraint or prohibition challenging the Offer or preventing the completion of the Offer or the acquisition of Gold Reserve Equity under the Offer, or any Subsequent Acquisition Transaction and there shall not exist any law, nor shall any law have been proposed, enacted, entered, modified, amended, promulgated or applied, nor shall there be in effect, pending or threatened any temporary restraining order, preliminary or permanent injunction or other order or decree issued by any Governmental Entity or other legal restraint or prohibition which would have the effect of prohibiting, restricting, making illegal or imposing material limitations or conditions on (i) the acquisition by, or sale to, Rusoro of any Gold Reserve Equity, (ii) the take up or acquisition of Gold Reserve Equity by Rusoro, (iii) the issuance and delivery of Rusoro Shares in consideration for Gold Reserve Equity taken up or acquired by Rusoro, (iv) the ability of Rusoro to acquire or hold, or exercise full rights of ownership of, any Gold Reserve Equity, (v) the ownership or operation or effective control by Rusoro of any material portion of the business, property, assets, licenses or permits of Gold Reserve or its affiliates or subsidiaries or to compel Rusoro or its affiliates or subsidiaries to dispose of or hold separate any material portion of the business, property, assets, licenses or permits of Gold Reserve or any of its affiliates or subsidiaries as a result of the Offer, or (vi) the ability of Rusoro and its affiliates and subsidiaries to complete any Subsequent Acquisition Transaction;

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(g)         Rusoro shall not have become aware of any adverse claims, impairments, rights, interests, limitations or other restrictions or rights of expropriation of any kind whatsoever not specifically and publicly disclosed by Gold Reserve prior to December 12, 2008 in respect of any of Gold Reserve’s properties, assets, licenses or permits including any mineral rights or concessions;

(h)         Rusoro shall have determined, in its reasonable discretion, that none of the following shall exist or shall have occurred (which has not been cured or waived), or is threatened, (i) any property, right, franchise, concession, permit or licence of Gold Reserve or of any of its affiliates or subsidiaries has been or may be impaired or otherwise adversely affected, whether as a result of the making of the Offer, taking up and paying for Gold Reserve Equity deposited under the Offer, the completion of a Subsequent Acquisition Transaction or otherwise, on a basis which might reduce the expected economic value to Rusoro of the acquisition of Gold Reserve or make it inadvisable for Rusoro to proceed with the Offer and/or with taking up and paying for Gold Reserve Equity deposited under the Offer, or (ii) any covenant, term or condition in any of the notes, bonds, mortgages, indentures, licences, leases, contracts, agreements or other instruments or obligations to which Gold Reserve or any of its affiliates or subsidiaries is a party or to which they or any of their properties or assets are subject that might reduce the expected economic value to Rusoro of the acquisition of Gold Reserve or make it inadvisable for Rusoro to proceed with the Offer and/or taking up and paying for Gold Reserve Equity deposited under the Offer, and/or completing a Subsequent Acquisition Transaction (including, but not limited to, any default, right of termination, acceleration, right of first refusal, pre-emptive right, purchase right, loss of control or operatorship, pricing change or other event that might ensue as a result of Rusoro taking up and paying for Gold Reserve Equity deposited under the Offer or completing a Subsequent Acquisition Transaction);

(i)             Rusoro shall have determined in its reasonable discretion that none of Gold Reserve, any of its affiliates or subsidiaries, or any Governmental Entity or other third party has taken or proposed to take any action or has failed to take any action, or disclosed a previously undisclosed action or event (in each case other than an action or failure to take an action specifically and publicly disclosed by Gold Reserve prior to December 12, 2008), which might reduce the expected economic value to Rusoro of the acquisition of Gold Reserve or make it inadvisable for Rusoro to proceed with the Offer and/or with the taking up and paying for Gold Reserve Equity under the Offer and/or the completion of a Subsequent Acquisition Transaction, including without limiting the generality of the foregoing: (i) any action or event with respect to any agreement, proposal, offer or understanding relating to any sale, disposition or other dealing with any of the assets of Gold Reserve or any of its affiliates (other than any such sale, disposition or other dealing between Gold Reserve and any affiliate of Gold Reserve or in the ordinary course of business consistent with past practice), any issuance of securities (other than in connection with the exercise of Gold Reserve Options, Gold Reserve Equity Units or other securities (other than SRP Rights) of Gold Reserve that are convertible into or exchangeable or exercisable for Gold Reserve Shares existing on December 12, 2008, in accordance with their terms specifically and as publicly disclosed prior to December 12, 2008) or options or rights to purchase securities, the payment of any dividends or other distributions or payments (except in the ordinary course of business consistent with past practice), any acquisition or transaction causing a reduction in the number of, or authorizing or proposing the acquisition or other reduction in the number of outstanding Gold Reserve Equity or other securities of Gold Reserve or any of its subsidiaries, any incurrence of material debt or project financing or material steps in furtherance of the foregoing, any acquisition from a third party of assets (except in the ordinary course of business consistent with past practice) or securities by Gold Reserve or any of its affiliates, any reorganization of Gold Reserve and its affiliates, or any take-over bid (other than the Offer), merger, amalgamation, statutory arrangement, recapitalization, business combination, share exchange, joint venture or similar transaction involving Gold Reserve or any of its subsidiaries or affiliates or any capital expenditure by Gold Reserve or any of its subsidiaries or affiliates not in the ordinary course of business and consistent with past practice, the making of or committing to make any capital expenditure by Gold Reserve or any of its affiliates or subsidiaries (other than in the ordinary course of business consistent with past practice or in accordance with plans specifically and publicly disclosed by Gold Reserve prior to December 12, 2008), the waiving, releasing, granting, transferring, extinguishing, expropriation or

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amending of any rights of material value under (A) any existing material contract in respect of any material joint ventures or material properties or projects, or (B) any other material license, lease, permit, authorization, concession, contract, agreement, instrument or other document (other than in the ordinary course of business consistent with past practice and only if so doing would not have a Material Adverse Effect on Gold Reserve or any of its affiliates or subsidiaries); (ii) any change to Gold Reserve’s notice of articles, articles or other constating documents; (iii) adopting, establishing or entering into any new employment, change in control, severance compensation or similar agreement, arrangement or plan with or for one or more of Gold Reserve’s or its affiliates’ or subsidiaries’ employees, consultants, officers or directors not specifically and publicly disclosed by Gold Reserve prior to December 12, 2008; (iv) adopting, establishing or entering into, or amending or making on or after December 12, 2008 grants or awards pursuant to any agreements, arrangements or plans to provide for increased benefits to one or more employees, consultants, officers or directors of Gold Reserve or any of its affiliates or subsidiaries, whether or not as a result of or in connection with the transactions contemplated by the Offer and Circular; (v) except as may be required by law, taking any action to adopt, establish, terminate or amend any employee benefit plan of Gold Reserve or any of its affiliates or subsidiaries; or (vi) any proposal, plan or intention to do any of the foregoing, either publicly announced or communicated by or to Gold Reserve, or any agreement to engage in any of the foregoing;

(j)             Rusoro shall have determined, in its reasonable discretion, that there does not exist and that there shall not have occurred any change, effect, event, circumstance, occurrence or state of facts, pending or threatened, on or after December 12, 2008, that has or may have a Material Adverse Effect on Gold Reserve and its affiliates or subsidiaries, taken as a whole and that the Offer, if consummated, shall not trigger a Material Adverse Effect on Gold Reserve and its affiliates and subsidiaries, taken as a whole and Rusoro shall not have become aware of any change, effect, event, circumstance, occurrence or state of facts, pending or threatened, on or after December 12, 2008, that, in the reasonable discretion of Rusoro, has had or may have a Material Adverse Effect on Gold Reserve and its affiliates and subsidiaries, taken as a whole;

(k)          Rusoro shall not have become aware of any untrue statements of a material fact, or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in the light of the circumstances in which it was made and at the date it was made, in any document filed by or on behalf of Gold Reserve with any securities commission nor similar securities regulatory authority in any of the provinces of Canada or in the United States or elsewhere, including any prospectus, registration statement, annual information form, financial statement, material change report, management proxy circular, feasibility study or technical report (or executive summary thereof), press release or any other document so filed by Gold Reserve, and Gold Reserve shall have disclosed all material changes in relation to Gold Reserve which occurred prior to December 12, 2008 in a non-confidential material change report filed with the British Columbia Securities Commission prior to December 12, 2008; and

(l)             there shall not have occurred or been threatened on or after the date of the Offer: (i) any general suspension of trading in, or limitation on prices for, securities on the TSXV, the TSX or the NYSE Alternext; (ii) any change in the general political, market, economic, social or financial market conditions in Canada, the United States or Venezuela that could, in the reasonable discretion of Rusoro, have a Material Adverse Effect on Gold Reserve and its affiliates and subsidiaries, taken as a whole; or (iii) in the case of any of the foregoing existing at the time of the commencement of the Offer, a material acceleration or worsening thereof.

The foregoing conditions are for the exclusive benefit of the Offeror and may be asserted by the Offeror regardless of the circumstances giving rise to any such condition. The Offeror may, in the Offeror’s sole discretion, waive any of the foregoing conditions, in whole or in part, at any time and from time to time without prejudice to any other rights which the Offeror may have. The failure by the Offeror at any time to exercise any of the foregoing rights will not be deemed to be a waiver of any such right and each such right shall be deemed to be an ongoing right which may be asserted at any time and from time to time. The Offeror reserves the right to withdraw the Offer if, at the Expiry Time, any condition to the Offer remains unsatisfied or has not been

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waived. Any determination by the Offeror concerning any event or other matter described in the foregoing conditions shall be final and binding on all parties.

Any waiver of a condition or the withdrawal of the Offer will be effective upon written notice or other communication confirmed in writing by the Offeror to that effect to the Depositary at its office in Toronto, Ontario. The Offeror, forthwith after giving any such notice, will make a public announcement of such waiver or withdrawal in compliance with applicable securities laws, will cause the Depositary, if required by law, as soon as practicable thereafter to notify Gold Reserve Equityholders in the manner set forth below in Section 11 of this Offer, “Notice and Delivery” and provide a copy of the notice thereof to the TSXV, the TSX and the NYSE Alternext. In the event that the Offeror waives a material condition to the Offer, the Offeror will disseminate notice of such waiver to Gold Reserve Equityholders in a manner reasonably calculated to inform such holders of such waiver and will allow sufficient time for Gold Reserve Equityholders to consider the effect of such waiver on the Offer. Any notice of waiver will be deemed to have been given and to be effective on the day on which it is delivered or otherwise communicated to the Depositary at its office in Toronto, Ontario. In the event of any waiver, all Gold Reserve Equity deposited previously and not taken up or withdrawn will remain subject to the Offer and may be accepted for purchase by the Offeror in accordance with the terms of the Offer. If the Offer is withdrawn, the Offeror will not be obligated to take up or pay for any Gold Reserve Equity deposited under the Offer and the Depositary will promptly return all Gold Reserve Equity to the parties by whom it was deposited in acceptance of the Offer. See Section 9 of this Offer, “Return of Deposited Securities”.

3.              Take-Up and Payment for Deposited Gold Reserve Equity

Upon the terms and subject to the conditions of the Offer the Offeror will take up and pay for Gold Reserve Equity validly deposited under the Offer and not withdrawn pursuant to Section 8 of this Offer, “Right to Withdraw Deposited Gold Reserve Equity”, promptly, after the Offeror becomes obligated by the terms of the Offer to take-up the Gold Reserve Equity. Any Gold Reserve Equity deposited under the Offer after the first date on which Gold Reserve Equity have been taken up by the Offeror (i.e., during the Subsequent Offering Period) will be taken up and paid for promptly.

Subject to applicable law, the Offeror expressly reserves the right in its sole discretion to delay or otherwise refrain from taking up and paying for any Gold Reserve Equity or to terminate the Offer and not take up or pay for any Gold Reserve Equity or terminate the Offer if any condition of the Offer is not satisfied or, where permitted, waived by the Offeror by giving written notice thereof, or other communication confirmed in writing, to the Depositary at its office in Toronto, Ontario. The Offeror also expressly reserves the right, in its sole discretion and notwithstanding any other condition of the Offer, to delay taking up and paying for Gold Reserve Equity in order to comply, in whole or in part, with any applicable law.

For the purposes of the Offer, the Offeror will be deemed to have taken up and accepted for payment Gold Reserve Equity validly deposited and not validly withdrawn pursuant to the Offer if, as and when the Offeror gives written notice or other communication confirmed in writing to the Depositary of its acceptance for payment of such Deposited Equity pursuant to the Offer at its principal office in Toronto, Ontario.

The Offeror will pay for Gold Reserve Equity validly deposited under the Offer and not withdrawn by providing the Depositary with the Offered Consideration in the form of sufficient certificates for Rusoro Shares for transmittal to persons who have deposited Gold Reserve Equity under the Offer. The Depositary will act as the agent of the persons who have deposited Gold Reserve Equity in acceptance of the Offer for the purposes of receiving the Offered Consideration from the Offeror and transmitting such Offered Consideration to such persons. Receipt of the share certificates representing the Offered Consideration by the Depositary will be deemed to constitute receipt of payment by persons depositing Gold Reserve Equity pursuant to the Offer. Under no circumstances will interest accrue or be paid by the Offeror or the Depositary to persons depositing Gold Reserve Equity on the purchase price of Gold Reserve Equity purchased by the Offeror, regardless of any delay in making such payment.

Settlement with each Gold Reserve Equityholder who has validly deposited and not validly withdrawn Gold Reserve Equity under the Offer will be made by the Depositary forwarding a certificate for the Rusoro Shares to which such Gold Reserve Equityholder is entitled. Subject to the foregoing and unless otherwise directed by the Letter of Transmittal, the certificates will be issued in the name of the registered Gold Reserve Equityholder of the Gold Reserve Equity so deposited. Unless the person depositing the Gold Reserve Equity

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instructs the Depositary to hold the certificates representing the Rusoro Shares for pick-up by checking the appropriate box in the Letter of Transmittal, the certificate will be forwarded by first class insured mail to such person at the address specified in the Letter of Transmittal. If no such address is specified, the certificates will be sent to the address of the Gold Reserve Equityholder as shown on the securities register maintained by or on behalf of Gold Reserve. Certificates mailed in accordance with this paragraph will be deemed to be delivered at the time of mailing.

If any Deposited Equity is not accepted for payment pursuant to the terms and conditions of the Offer for any reason, of if certificates are submitted for more Gold Reserve Equity than is deposited, certificates for unpurchased Gold Reserve Equity will be returned, at the Offeror’s expense, to the depositing Gold Reserve Equityholder as soon as it is practicable following the termination of the Offer or the conclusion of the Offer, as applicable. Unless otherwise directed in the Letter of Transmittal, certificates representing unpurchased Gold Reserve Equity will be forwarded to the address of the registered Gold Reserve Equityholder as shown on the securities register maintained by Gold Reserve.

Gold Reserve Equityholders depositing Gold Reserve Equity will not be required to pay any fee or commission if they accept the Offer by depositing their Gold Reserve Equity directly with the Depositary. If you own your Gold Reserve Equity through a broker or other nominee and your broker or nominee tenders your Gold Reserve Equity on your behalf, your broker or nominee may charge you a fee for doing so.

4.              Time for Acceptance

The Offer is open for acceptance, unless extended or withdrawn by the Offeror upon the failure of one or more conditions to the Offer in accordance with applicable law, until 12:00 midnight, Eastern time, at the end of January 21, 2009.

See Section 6 of this Offer, “Extensions, Variations and Changes to the Offer”.

5.              Manner of Acceptance

Letter of Transmittal

The Offer may be accepted by Gold Reserve Equityholders by depositing the following documents with the Depositary at any of the offices specified in the Letter of Transmittal no later than the Expiry Time:

(a)          a Letter of Transmittal (or a manually signed facsimile thereof), properly completed and duly executed as required by the instructions set out in the Letter of Transmittal;

(b)         the certificate(s) representing the Gold Reserve Equity in respect of which the Offer is being accepted; and

(c)          any other documents required by the instructions set out in the Letter of Transmittal.

The Offer will be deemed to be accepted only if the Depositary actually has received these documents at or before the Expiry Time at one of the addresses for the Depositary indicated on the Letter of Transmittal.

Gold Reserve Equityholders who cannot comply on a timely basis with these procedures for deposit of the requisite certificates for Gold Reserve Equity may deposit certificates representing Gold Reserve Equity pursuant to the procedure for guaranteed delivery described below.

Unless waived by Rusoro, holders of Gold Reserve Equity are required to deposit one SRP Right for each Gold Reserve Share and Gold Reserve Equity Unit (representing the SRP Right issued in respect of the underlying Class B common shares of Gold Reserve) in order to effect a valid deposit of such Gold Reserve Equity prior to the Expiry Time. If the Separation Time does not occur before the Expiry Time, a deposit of Gold Reserve Equity will also constitute a deposit of the associated SRP rights. If the Separation Time occurs before the Expiry Time and Rights Certificates are distributed by Gold Reserve to Gold Reserve Shareholders prior to the time that the holder’s Gold Reserve Equity is deposited under the Offer, in order for the Gold Reserve Equity to be validly deposited, Rights Certificate(s) representing SRP Rights equal in number to the number of Gold Reserve Shares and Gold Reserve Equity Units deposited by such Gold Reserve Equityholder must be delivered to the Depositary. If the Separation Time occurs before the Expiry Time and Rights Certificates are not distributed by the time that a Gold Reserve Equityholder deposits its Gold Reserve

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Equity under the Offer, the Gold Reserve Equityholder may deposit its SRP Rights before receiving Rights Certificate(s) by using the guaranteed delivery procedure described below. In any case, a deposit of Gold Reserve Equity constitutes an agreement by the signatory to deliver Rights Certificate(s) representing SRP Rights equal in number to the number of Gold Reserve Shares and Gold Reserve Equity Units deposited under the Offer to the Depositary on or before the third trading day on the TSX after the date, if any, that Rights Certificate(s) are distributed. Rusoro reserves the right to require, if the Separation Time occurs before the Expiry Time, that the Depositary receive, prior to taking up the Gold Reserve Equity for payment pursuant to the Offer, Rights Certificate(s) from a Gold Reserve Equityholder representing SRP Rights equal in number to the Gold Reserve Shares and Gold Reserve Equity Units deposited by such holder.

In addition, Gold Reserve Equity and, if applicable, Rights Certificates, may be deposited under the Offer in compliance with the procedures for guaranteed delivery set out below under the heading “Procedure for Guaranteed Delivery” or in compliance with the procedures for book-entry transfers set out below under the heading “Acceptance by Book-Entry Transfer”.

Signature Guarantees

No signature guarantee is required on the Letter of Transmittal if:

(a)          the Letter of Transmittal is signed by the registered owner of the Gold Reserve Equity exactly as the name of the registered Gold Reserve Equityholder appears on the Gold Reserve Equity certificate deposited therewith, and the certificates for Rusoro Shares under the Offer are to be delivered directly to such registered Equityholder; or

(b)   Gold Reserve Equity is deposited for the account of an Eligible Institution.

In all other cases, all signatures on the Letter of Transmittal must be guaranteed by an Eligible Institution. If a certificate representing Gold Reserve Equity is registered in the name of a person other than the signatory of a Letter of Transmittal or if the certificates for the Rusoro Shares are to be delivered to a person other than the registered owner, the certificate must be endorsed or accompanied by an appropriate power of attorney, in either case, signed exactly as the name of the registered owner appears on the certificate with the signature on the certificate or power of attorney guaranteed by an Eligible Institution.

Procedure for Guaranteed Delivery

If a Gold Reserve Equityholder wishes to accept the Offer and either (i) the certificates representing such Gold Reserve Equityholder’s Gold Reserve Equity are not immediately available or (ii) such Gold Reserve Equityholder cannot deliver the certificates and Letter of Transmittal to the Depositary by the Expiry Time, such Gold Reserve Equity may nevertheless be deposited under the Offer provided that all of the following conditions are met:

(a)          such deposit is made only at the principal office of the Depositary in Toronto, Ontario, by or through an Eligible Institution;

(b)         a Notice of Guaranteed Delivery (or a manually signed facsimile thereof), properly completed and duly executed, including a guarantee to deliver by an Eligible Institution in the form set out in the Notice of Guaranteed Delivery, is received by the Depositary at its principal office in Toronto, Ontario, at or before the Expiry Time;

(c)          the certificate(s) representing the Deposited Equity, and, if the Separation Time has occurred before the Expiry Time and Rights Certificates have been distributed to Gold Reserve Equityholders before the Expiry Time, the Rights Certificates representing the deposited SRP Rights, in proper form for transfer, together with a properly completed and duly signed Letter of Transmittal (or a manually signed facsimile thereof), relating to such Gold Reserve Equity, with signatures guaranteed if so required in accordance with the Letter of Transmittal, and all other documents required by such Letter of Transmittal, are received at the Toronto, Ontario, office of the Depositary by 5:00 p.m. (Toronto time) on the third trading day on the TSX after the Expiry Date; and

(d)         in the case of SRP Rights where the Separation Time has occurred before the Expiry Time but Rights Certificates have not been distributed to Gold Reserve Equityholders before the Expiry Time, the

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Rights Certificate(s) representing the deposited SRP Rights, in proper form for transfer, together with a properly completed Letter of Transmittal (or a manually signed facsimile thereof), with signature guarantees if so required, and all other documents required by such Letter of Transmittal, are received by the Depositary at its office in Toronto, Ontario by 5:00 p.m. (Toronto time) on the third trading day on the TSX after Rights Certificates are distributed to Gold Reserve Equityholders.

The Notice of Guaranteed Delivery may be delivered by hand or couriered or transmitted by electronic facsimile or mailed to the Depositary only at its principal office in Toronto, Ontario, and must include a signature guarantee by an Eligible Institution in the form set forth in the Notice of Guaranteed Delivery.

Delivery of the Notice of Guaranteed Delivery to any other office other than the Toronto, Ontario office of the Depositary does not constitute delivery for the purpose of satisfying the guaranteed delivery.

Acceptance by Book-Entry Transfer

Gold Reserve Shareholders may accept the Offer by following the procedures for a book-entry transfer established by CDS, provided that a Book-Entry Confirmation through CDSX is received by the Depositary at its office in Toronto, Ontario prior to the Expiry Time. The Depositary has established an account at CDS for the purpose of the Offer. Any financial institution that is a participant in CDS may cause CDS to make a book-entry transfer of a Shareholder’s Gold Reserve Shares into the Depositary’s account in accordance with CDS procedures for such transfer. Delivery of Gold Reserve Shares to the Depositary by means of a book-entry transfer will constitute a valid tender under the Offer.

Gold Reserve Shareholders, through their respective CDS participants, who use CDSX to accept the Offer through a book-entry transfer of their holdings into the Depositary’s account with CDS shall be deemed to have completed and submitted a Letter of Transmittal and to be bound by the terms thereof and therefore such instructions received by the Depositary are considered a valid tender in accordance with the terms of the Offer.

Gold Reserve Shareholders may also accept the Offer by following the procedures for book-entry transfer established by DTC, provided that a Book-Entry Confirmation, together with an Agent’s Message (as defined below) in respect thereof, or a properly completed and executed Letter of Transmittal (including signature guarantee if required) and all other required documents, are received by the Depositary at its office in Toronto, Ontario at or prior to the Expiry Time. The Depositary has established an account at DTC for the purpose of the Offer. Any financial institution that is a participant in DTC may cause DTC to make a book-entry transfer of a Gold Reserve Shareholder’s Gold Reserve Shares into the Depositary’s account in accordance with DTC’s procedures for such transfer. However, as noted above, although delivery of Gold Reserve Shares may be effected through book-entry transfer at DTC, either an Agent’s Message in respect thereof, or a Letter of Transmittal (or a manually signed facsimile thereof), properly completed and executed (including signature guarantee if required), and all other required documents, must, in any case, be received by the Depositary, at its office in Toronto, Ontario at or prior to the Expiry Time. Delivery of documents to DTC in accordance with it procedures does not constitute delivery to the Depositary. Such documents or Agent’s Message should be sent to the Depositary.

The term “Agent’s Message” means a message, transmitted by DTC to, and received by, the Depositary and forming part of a Book-Entry Confirmation, which states that DTC has received an express acknowledgement from the participant in DTC depositing the Gold Reserve Shares which are the subject of such Book-Entry Confirmation that such participant has received and agrees to be bound by the terms of the Letter of Transmittal as if executed by such participant and that Rusoro may enforce such agreement against such participant.

Gold Reserve Shareholders who wish to accept the Offer by Book-Entry Confirmation should contact their broker or the Information Agent for assistance. Contact details for the Information Agent may be found on the last page of this document.

Method of Delivery

The method of delivery of the certificates representing Gold Reserve Equity (or a Book-Entry Confirmation for the Gold Reserve Shares, as applicable), the Letter of Transmittal, the Notice of Guaranteed Delivery and all other required documents is at the option and risk of the depositing Gold Reserve Equityholder. The Offeror recommends that those documents be delivered by hand to the Depositary and that a

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receipt be obtained or, if certificates for Gold Reserve Equity and the other documents are to be sent by mail, registered mail with return receipt requested, properly insured, is recommended, and it is suggested that the mailing be made sufficiently in advance of the Expiry Time to permit delivery to the Depositary on or prior to such time. Delivery will only be effective upon actual receipt of certificates for such Gold Reserve Equity by the Depositary.

A Gold Reserve Equityholder who wishes to deposit Gold Reserve Equity under the Offer and whose Gold Reserve Equity is registered in the name of a broker, dealer, commercial bank, trust company or other nominee should immediately contact such nominee in order to take the necessary steps to be able to deposit such Gold Reserve Equity under the Offer.

Determination of Validity

All questions as to the form of documents and the validity, eligibility (including time of receipt) and acceptance for exchange of any deposit of Gold Reserve Equity will be determined by the Offeror in its sole discretion, which determination will be final and binding on all parties. The Offeror reserves the absolute right to reject any and all deposits of Gold Reserve Equity determined by it not to be in proper form, or the issue of Rusoro Shares in respect of which may, in the opinion of the Offeror’s counsel, be unlawful. The Offeror also reserves the absolute right to waive any defect or irregularity in any deposit of Gold Reserve Equity. No deposit of Gold Reserve Equity will be deemed to be properly made until all defects and irregularities have been cured or waived. None of the Offeror, the Depositary or any other person will be under any duty to give notification of any defect or irregularity in deposits or incur any liability for failure to give any such notice. The Offeror’s interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and the Notice of Guaranteed Delivery) will be final and binding on all parties. The Offeror reserves the right to permit the Offer to be accepted in a manner other than as set forth herein.

Under no circumstances will any amount be paid by the Offeror or the Depositary due to any delay in exchanging any Gold Reserve Equity accepted for exchange pursuant to the Offer.

Dividends and Distributions

Subject to the terms and conditions of the Offer and subject, in particular, to Gold Reserve Equity being validly withdrawn by or on behalf of a depositing Gold Reserve Equityholder, and except as provided below, by accepting the Offer pursuant to the procedures set forth above, a Gold Reserve Equityholder deposits, sells, assigns and transfers to the Offeror all right, title and interest in and to the Gold Reserve Equity covered by the Letter of Transmittal delivered to the Depositary (the “Deposited Equity”) and in and to all rights and benefits arising from such Deposited Equity including any and all dividends, distributions, payments, securities, property or other interests which may be declared, paid, accrued, issued, distributed, made or transferred on or in respect of the Deposited Equity or any of them on and after the date of the Offer, including any dividends, distributions or payments on such dividends, distributions, payments, securities, property or other interests (collectively, “Distributions”).

Power of Attorney

An executed Letter of Transmittal (or, in the case of shares deposited by book-entry transfer by the making of a book-entry transfer into the Depositary’s accounts with CDS or DTC, as applicable) irrevocably approves, constitutes and appoints, effective on and after the date that the Offeror takes up and pays for the Deposited Equity covered by the Letter of Transmittal or book-entry transfer (which securities upon being taken up and paid for are, together with any Distributions thereon, hereinafter referred to as the “Purchased Securities”), certain officers of the Offeror and any other person designated by the Offeror in writing (each an “Appointee”) as the true and lawful agents, attorneys and attorneys-in-fact and proxies, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), of the depositing Gold Reserve Equityholder with respect to the Purchased Securities. The Letter of Transmittal or the making of a book-entry transfer authorizes an Appointee, in the name and on behalf of such Gold Reserve Equityholder (a) to register or record the transfer and/or cancellation of such Purchased Securities (to the extent consisting of securities) on the appropriate register maintained by or on behalf of Gold Reserve; (b) for so long as any Purchased Securities are registered or recorded in the name of such Gold Reserve Equityholder (whether or not

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they are now so registered or recorded), to exercise any and all rights of such Gold Reserve Equityholder including the right to vote, to execute and deliver any and all instruments of proxy, authorizations or consents in form and on terms satisfactory to the Offeror in respect of any or all Purchased Securities, to revoke any such instrument, authorization or consent, and to designate in such instrument, authorization or consent any person or persons as the proxy of such Gold Reserve Equityholder in respect of the Purchased Securities for all purposes including in connection with any meeting or meetings (whether annual, special or otherwise or any adjournment thereof, including any meeting to consider a Subsequent Acquisition Transaction) of holders of relevant securities of Gold Reserve; (c) to execute, endorse and negotiate, for and in the name of and on behalf of such Gold Reserve Equityholder, any and all cheques or other instruments representing any Distribution payable to or to the order of, or endorsed in favour of, such Gold Reserve Equityholder; and (d) to exercise any other rights of a holder of Purchased Securities.

A Gold Reserve Equityholder accepting the Offer under the terms of the Letter of Transmittal revokes any and all other authority, whether as agent, attorney-in-fact, attorney, proxy or otherwise, previously conferred or agreed to be conferred by the Gold Reserve Equityholder at any time with respect to the Deposited Equity or any Distributions. The Gold Reserve Equityholder accepting the Offer agrees that no subsequent authority, whether as agent, attorney-in-fact, attorney, proxy or otherwise will be granted with respect to the Deposited Equity or any Distributions by or on behalf of the depositing Gold Reserve Equityholder unless the Deposited Equity is not taken up and paid for under the Offer.

A Gold Reserve Equityholder accepting the Offer also agrees not to vote any of the Purchased Securities at any meeting (whether annual, special or otherwise or any adjournment thereof, including any meeting to consider a Subsequent Acquisition Transaction) of holders of relevant securities of Gold Reserve and not to exercise any of the other rights or privileges attached to the Purchased Securities, and agrees to execute and deliver to the Offeror any and all instruments of proxy, authorizations or consents in respect of any or all of the Purchased Securities, and agrees to appoint in any such instruments of proxy, authorizations or consents, the person or persons specified by the Offeror as the proxy of the holder of the Purchased Securities. Upon such appointment, all prior proxies and other authorizations (including all appointments of any agent, attorney-in-fact or attorney) or consents given by the holder of such Purchased Securities with respect thereto will be revoked and no subsequent proxies or other authorizations or consents may be given by such person with respect thereto.

Further Assurances

A Gold Reserve Equityholder accepting the Offer covenants under the terms of the Letter of Transmittal to execute, upon request of the Offeror, any additional documents, transfers and other assurances as may be necessary or desirable to complete the sale, assignment and transfer of the Purchased Securities to the Offeror. Each authority therein conferred or agreed to be conferred may be exercised during any subsequent legal incapacity of such holder and shall, to the extent permitted by law, survive the death or incapacity, bankruptcy or insolvency of the holder and all obligations of the holder therein shall be binding upon the heirs, executors, administrators, attorneys, personal representatives, successors and assigns of such Gold Reserve Equityholder.

Binding Agreement

The acceptance of the Offer pursuant to the procedures set forth above constitutes a binding agreement between a depositing Gold Reserve Equityholder and the Offeror, effective immediately following the Offeror’s take-up of the Gold Reserve Equity deposited by such Gold Reserve Equityholder, in accordance with the terms and conditions of the Offer. This agreement includes a representation and warranty by the depositing Gold Reserve Equityholder that (i) the person signing the Letter of Transmittal or on whose behalf a book-entry transfer is made owns the Deposited Equity and has full power and authority to deposit, sell, assign and transfer the Deposited Equity and any Distributions being deposited under the Offer, (ii) the Deposited Equity and Distributions have not been sold, assigned or transferred, nor has any agreement been entered into to sell, assign or transfer any of the Deposited Equity and Distributions, to any other person, (iii) the deposit of the Deposited Equity and Distributions complies with applicable laws, and (iv) when the Deposited Equity and Distributions are taken up and paid for by the Offeror, the Offeror will acquire good title thereto, free and clear of all liens, restrictions, charges, encumbrances, claims and rights of others.

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6.              Extensions, Variations and Changes to the Offer

The Offer will be open for acceptance at the places of deposit specified in the Letter of Transmittal until the Expiry Time, unless the Offer is extended or withdrawn by the Offeror.

Subject to the limitations described below, the Offeror expressly reserves the right, in its sole discretion, at any time and from time to time while the Offer is open for acceptance, to vary the terms of the Offer or extend the Expiry Time, in accordance with applicable laws, by giving notice in writing to the Depositary at its office in Calgary, Alberta. Also, if at any time before the Expiry Time, or at any time after the Expiry Time, but before the expiry of all rights of withdrawal with respect to the Offer, a change occurs in the information contained in this Offer and Circular, as amended from time to time, that would reasonably be expected to affect the decision of a Gold Reserve Equityholder to accept or reject the Offer (other than a change that is not within the control of the Offeror or an affiliate of the Offeror, unless it is a change in a material fact relating to the Rusoro Shares), the Offeror will give written notice of such change to the Depositary at its office in Calgary, Alberta. Upon the giving of such notice to the Depositary, the Expiry Time or withdrawal rights, as applicable, will be deemed to be extended to the date specified in such notice or as required by applicable law, or in the case of a variation, the Offer will be deemed to be varied in the manner described in such notice, as the case may be. The Offeror will, as soon as practicable after giving any such notice to the Depositary (but in no event later than 9:00 a.m. Eastern Time, on the next business day after the previously scheduled Expiry Time), publicly announce the extension, variation or change, provide a copy of the notice thereof to the TSXV, the TSX and the NYSE Alternext and, if required by applicable law, cause the Depositary to mail a copy of any such notice to Gold Reserve Equityholders as required by applicable securities legislation at their respective addresses appearing in the share register of Gold Reserve. Any notice of extension, variation or change will be deemed to have been given and be effective on the day on which it is delivered or otherwise communicated to the Depositary at its office in Calgary, Alberta.

Where the terms of the Offer are varied, the Offer Period will not expire before ten days after the notice of change or variation has been given to Gold Reserve Equityholders, unless otherwise permitted by applicable law and subject to abridgement or elimination of the Offer Period pursuant to such orders or other forms of relief as may be granted by any Governmental Entity. Notwithstanding the foregoing, if the Offeror makes a material change in the terms of the Offer or the information concerning the Offer, or if the Offeror waives a material condition of the Offer, the Offeror will disseminate additional offer materials and extend the Offer to the extent required by Rules 14d-4(d), 14d-6(c) and 14e-1 under the U.S. Exchange Act. Under the U.S. Exchange Act, the minimum period during which an offer must remain open following a change in consideration offered, percentage of securities sought or inclusion for changes to a dealer’s soliciting fee is ten business days. The period during which an offer must remain open following a material change in the terms of such offer, other than a change in consideration offered, percentage of securities sought or inclusion of, or changes to a dealer’s soliciting fee, will depend upon the facts and circumstances, including the materiality of, the changes. Accordingly, if prior to the Expiry Time, the Offeror changes the consideration offered pursuant to the Offer, reduces the percentage of the Gold Reserve Equity sought or increases or decreases a dealer’s soliciting fee, and if the Offer is scheduled to expire at any time earlier than the tenth business day from the date that notice of such change or variation is first published, mailed or given to Gold Reserve Equityholders, the Offer will be extended at least until the expiration of such tenth business day.

During any extension of the Offer, all Gold Reserve Equity previously deposited and not withdrawn will remain subject to the Offer and may be accepted for purchase by the Offeror in accordance with the terms of the Offer, subject to Section 8 of this Offer, “Right to Withdraw Deposited Gold Reserve Equity”. An extension of the Expiry Time will not, in and of itself, constitute a waiver by the Offeror of any of its rights under Section 2 of this Offer, “Conditions of the Offer”.

Under applicable Canadian provincial securities laws, if there is a variation in the terms of the Offer, the period during which Gold Reserve Equity may be deposited under the Offer will not expire before 10 days after the date that the notice of variation has been delivered.

If, before the Expiry Time, the Offeror in its sole discretion elects to increase the Offered Consideration, such increase will be applicable to all holders whose Gold Reserve Equity is taken up under the Offer.

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Subsequent Offering Period

Pursuant to Rule 14d-11 under the U.S. Exchange Act, the Offeror, subject to the conditions listed below, may elect to make available a subsequent offering period by extending the Offer on one occasion for a period of at least three business days (the “Subsequent Offering Period”) following the Expiry Time. Pursuant to such rule, the Offeror may include a Subsequent Offering Period with respect to the Offer so long as:

(a)          the Offer was open for at least twenty business days and has expired;

(b)         the Offer was for all outstanding Gold Reserve Shares and Gold Reserve Equity Units that are the subject of the Offer;

(c)          the Offeror immediately takes up and promptly pays for all Gold Reserve Equity deposited prior to the Expiry Time which were not validly withdrawn;

(d)         the Offeror announces the results of the Offer, including the approximate number and percentage of Gold Reserve Shares and Gold Reserve Equity Units deposited, not later than 9:00 am (Eastern time) on the next business day after the Expiry Time and immediately begins the Subsequent Offering Period with respect to the Offer;

(e)          the Offeror immediately takes up and promptly pays for Gold Reserve Shares and Gold Reserve Equity Units as they are deposited during the Subsequent Offering Period with respect to the Offer; and

(f)            the Offeror pays the same form and amount of consideration for all Gold Reserve Equity deposited in both the Subsequent Offering Period and the period prior to the Expiry Time.

A Subsequent Offering Period, if one is included, does not constitute an extension of the Offer for purposes of the U.S. Exchange Act, although it does constitute an extension of the Offer under Canadian securities laws. Under Canadian securities laws, in order for an Offeror to take up and pay for additional shares deposited after the initial Expiry Time, the Offeror must either: (a) extend the Offer in accordance with Canadian securities laws (which extension would be treated as a Subsequent Offering Period in the United States); or (b) initiate a new offer in respect of Gold Reserve Equity, which new offer could not be consummated for at least 35 days. For purposes of the U.S. Exchange Act, a Subsequent Offering Period is an additional period of time beginning on the next business day after the Expiry Time during which Gold Reserve Equityholders may deposit Gold Reserve Equity not deposited prior to the Expiry Time of the initial Offer. For purposes of applicable Canadian securities laws, a Subsequent Offering Period is an additional period of time by which the Offer is extended, following the satisfaction or waiver of all conditions of the Offer and the take up of all Gold Reserve Equity then deposited under the Offer, and during which period Gold Reserve Equityholders may deposit Gold Reserve Equity not deposited prior to the commencement of the Subsequent Offering Period with respect to the Offer.

The Offeror does not currently intend to include a Subsequent Offering Period with respect to the Offer, although the Offeror reserves the right to do so in its sole discretion. If the Offeror elects to include a Subsequent Offering Period with respect to the Offer, for purposes of applicable United States securities laws, the Offeror will include a statement of its intention to do so in the press release announcing the results of the Offer disseminated no later than 9:00 am (Eastern time) on the next business day after the previously scheduled Expiry Time. For purposes of applicable Canadian securities laws, the Offeror will provide a written notice of extension of the Offer with respect to the implementation of the Subsequent Offering Period, including the period during which the Offer will be open for acceptance, to the Depositary, and will cause the Depositary to provide as soon as practicable thereafter a copy of such notice in the manner set forth under “Notice and Delivery” in Section 11 of the Offer to all holders of Gold Reserve Equity that have not been taken up pursuant to the Offer at the date of the extension. The same form and amount of consideration as the Offered Consideration will be paid to Gold Reserve Equityholders depositing Gold Reserve Equity during the Subsequent Offering Period, if one is included, as would have been paid prior to the commencement of such period. If the Offered Consideration for the Gold Reserve Equity under the Offer is increased, the increased consideration will be paid to all depositing Gold Reserve Equityholders whose Gold Reserve Equity is taken up under the Offer without regard to when such Gold Reserve Equity is taken up under the Offer by the Offeror.

Notwithstanding the provisions of the U.S. Exchange Act regarding subsequent offering periods, the Offeror will permit withdrawal of Gold Reserve Equity deposited during any Subsequent Offering Period, if

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there is one, at any time prior to the expiry of such Subsequent Offering Period; provided, however, that this right of withdrawal will not apply in respect of deposited Gold Reserve Equity taken up by the Offeror prior to the Subsequent Offering Period. Withdrawing holders of Gold Reserve Equity who have deposited such Gold Reserve Equity during the Subsequent Offering Period and have received payment for such Gold Reserve Equity must return such payment to the Offeror prior to any withdrawal by including the payment received for such Gold Reserve Equity with the notice of withdrawal submitted to the Depositary in compliance with the procedures described in Section 8 of the Offer, “Right to Withdraw Deposited Gold Reserve Equity”. Subject to the following sentence, the Expiry Time with respect to a subsequent Offer shall be 5:00 p.m. (Eastern time) on the last day of the Subsequent Offering Period, unless determined otherwise pursuant to provisions of this Section 6. The foregoing sentence will not limit the requirement that the conditions to the Offer set forth under “Conditions of the Offer” in Section 2 of the Offer, be satisfied or waived prior to the initial Expiry Time, which will be before the commencement of the Subsequent Offering Period.

Under applicable Canadian securities laws, a Subsequent Offering Period must be open for at least ten calendar days from the date of notice of extension referred to above. As a result, to comply with the applicable laws of Canada and the U.S. Exchange Act, if the Offeror elects to make a Subsequent Offering Period available with respect to the Offer, the Subsequent Offering Period will be open for at least ten calendar days from the date of notice of extension. The Offeror will promptly take up and pay for all Gold Reserve Equity validly deposited during the Subsequent Offering Period with respect to the Offer.

7.              Changes in Capitalization of Gold Reserve; Liens

If, on or after the date of the Offer, Gold Reserve should divide, combine, reclassify, consolidate, convert or otherwise change any of the Gold Reserve Shares or Gold Reserve Equity Units or its capitalization, or should disclose that it has taken or intends to take any such action, then the Offeror may, in its sole discretion and without prejudice to its rights under Section 2 of this Offer, “Conditions of the Offer”, subject to compliance with Rules 14d-4(d), 14d-6(c) and 14e-1 under the U.S. Exchange Act, make such adjustments as it deems appropriate to reflect such division, combination, reclassification, consolidation, conversion or other change in the Offered Consideration or other terms of the Offer (including the type of securities offered to be purchased and the consideration payable therefor).

Gold Reserve Equity acquired pursuant to the Offer shall be transferred by the Gold Reserve Equityholder and acquired by the Offeror free and clear of all liens, charges, encumbrances, claims and equities and together with all rights and benefits arising therefrom, including the right to any and all dividends, distributions, payments, securities, rights, assets or other interests which may be declared, paid, issued, distributed, made or transferred on or after the date of the Offer on or in respect of the Gold Reserve Equity, whether or not separated from the Gold Reserve Equity, but subject to any Gold Reserve Equity being validly withdrawn by or on behalf of a depositing Gold Reserve Equityholder. If, on or after the date of the Offer, Gold Reserve should declare or pay any dividend or declare, make or pay any other distribution or payment on or declare, allot, reserve or issue any securities, rights or other interests with respect to any Gold Reserve Equity, which is or are payable or distributable to Gold Reserve Equityholders of record on a date prior to the transfer into the name of the Offeror or its nominees or transferees on the securities register maintained by or on behalf of Gold Reserve in respect of Gold Reserve Equity, then the whole of any such dividend, distribution, payment, right or other interest will be promptly remitted and transferred by the depositing Gold Reserve Equityholder to the Depositary for the account of the Offeror accompanied by appropriate documentation of transfer. Pending such remittance, the Offeror will be entitled to any such dividend, distribution, payment, right or other interest and may deduct from the purchase price payable by the Offeror pursuant to the Offer the amount or value thereof, as determined by the Offeror in its sole discretion. The declaration or payment of any such dividend or distribution may have tax consequences not discussed in Section 19 of the Circular, “Certain Canadian Federal Income Tax Considerations” or Section 20 of the Circular, “Certain United States Federal Income Tax Considerations.”

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8.              Right to Withdraw Deposited Gold Reserve Equity

Except as otherwise provided in this Section 8, all deposits of Gold Reserve Equity to the Offer will be irrevocable. Unless otherwise required or permitted by applicable laws, any Gold Reserve Equity deposited in acceptance of the Offer may be withdrawn by or on behalf of the depositing Gold Reserve Equityholder:

(a)          at any time before the Gold Reserve Equity have been taken up by the Offeror pursuant to the Offer;

(b)         if the Gold Reserve Equity has not been paid for by the Offeror within three business days after having been taken up; or

(c)          at any time before the expiration of 10 days from the date upon which either:

(i)    a notice of change relating to a change in the information contained in the Offer, as amended from time to time, that would reasonably be expected to affect the decision of a Gold Reserve Equityholder to accept or reject the Offer (other than a change that is not within the control of the Offeror or an affiliate of the Offeror, unless it is a change in a material fact relating to the Rusoro Shares), in the event that such change occurs at or before the Expiry Time or after the Expiry Time but before the expiry of all rights of withdrawal in respect of the Offer; or

(ii)   a notice of variation concerning a variation in the terms of the Offer (other than a variation consisting solely of an increase in the Offered Consideration offered for the Gold Reserve Equity where the Expiry Time is not extended for more than 10 days);

is mailed, delivered, or otherwise properly communicated, but subject to abridgement of that period pursuant to such order or orders as may be granted by applicable courts or securities regulatory authorities and only if such Deposited Equity have not been taken up by the Offeror at the date of the notice;

(d)         during a Subsequent Offering Period with respect to the Offer, provided, however, that this right of withdrawal will not apply in respect of Gold Reserve Equity taken up by the Offeror prior to the Subsequent Offering Period; or

(e)          as required by the U.S. Exchange Act at any time after 60 days from the commencement of the Offer, provided that the Gold Reserve Equity has not been accepted for payment by the Offeror prior to the receipt by the Depositary of the notice of withdrawal in respect of such Gold Reserve Equity.

For a withdrawal to be effective, a written or facsimile transmission notice of withdrawal must be received in a timely manner by the Depositary at the place of deposit of the relevant Gold Reserve Equity. Any such notice of withdrawal must (i) be made by a method, including a manually signed facsimile transmission, that provides the Depositary with a written or printed copy; (ii) be signed by or on behalf of the person who signed the Letter of Transmittal (or Notice of Guaranteed Delivery) that accompanied the Gold Reserve Equity to be withdrawn; (iii) specify the number of Gold Reserve Shares or Gold Reserve Equity Units to be withdrawn, the name of the registered Gold Reserve Equityholder and the certificate number shown on the share certificate(s) representing such Gold Reserve Equity to be withdrawn; and (iv) must be actually received by the Depositary at the place of deposit for the applicable Gold Reserve Equity (or Notice of Guaranteed Delivery in respect thereof). No signature guarantee is required on a notice of withdrawal if the notice of withdrawal is signed by the registered Gold Reserve Equityholder exactly as the name of the registered Gold Reserve Equityholder appears on the certificate representing Gold Reserve Equity deposited with the Letter of Transmittal or if the Gold Reserve Equity was deposited for the account of an Eligible Institution. In all other cases, the signature on a notice of withdrawal must be guaranteed by an Eligible Institution. The withdrawal will take effect upon actual receipt by the Depositary of the properly completed notice of withdrawal. A withdrawal of Gold Reserve Equity deposited pursuant to the Offer can only be accomplished in accordance with the foregoing procedure. The withdrawal will take effect only upon actual receipt by the Depositary of the properly completed and executed written or facsimile notice of withdrawal.

Alternatively, if Gold Reserve Shares have been deposited pursuant to the procedures for book-entry transfer, as set forth in Section 5 of this Offer, “Manner of Acceptance — Acceptance by Book-Entry Transfer”, any notice of withdrawal must specify the name and number of the account at CDS or DTC, as applicable, to be credited with the withdrawn Gold Reserve Shares and otherwise comply with the procedures of CDS or DTC, as applicable.

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All questions as to form and validity (including time of receipt) of notices of withdrawal will be determined by the Offeror in its sole discretion and such determination will be final and binding. There will be no duty or obligation on the Offeror, the Depositary or any other person to give notice of any defect or irregularity in any notice of withdrawal, and no liability will be incurred by any of them for failure to give such notice.

Withdrawals may not be rescinded and any Gold Reserve Equity properly withdrawn will thereafter be deemed not validly deposited for the purposes of the Offer. However, withdrawn Gold Reserve Equity may be re-deposited at any subsequent time prior to the Expiry Time by again following any of the procedures described in Section 5 of this Offer, “Manner of Acceptance”.

If the Offeror extends the period of time during which the Offer is open, is delayed in taking up or paying for or exchanging the Gold Reserve Equity or is unable to take up or pay for or exchange Gold Reserve Equity for any reason, then, without prejudice to the Offeror’s other rights under the Offer, the Depositary may, subject to applicable laws, retain on behalf of the Offeror all Deposited Equity and Distributions, and such Gold Reserve Equity may not be withdrawn except to the extent that depositing Gold Reserve Equityholders are entitled to withdrawal rights as set forth in this Section 8 or pursuant to applicable laws.

9.              Return of Deposited Securities

If any Deposited Equity is not taken up and paid for pursuant to the terms and conditions of the Offer for any reason, or if certificates are submitted for more Gold Reserve Equity than is deposited, certificates for unpurchased Gold Reserve Equity will be returned to the depositing Equityholder as soon as is practicable following the termination or withdrawal of the Offer by either (i) sending new certificates representing Gold Reserve Equity not purchased or by returning the deposited certificates (and other relevant documents) or (ii) in the case of Gold Reserve Shares deposited by book-entry transfer of such Gold Reserve Shares pursuant to the procedures set forth in Section 5 of this Offer, “Manner of Acceptance — Acceptance by Book-Entry Transfer”, such Gold Reserve Shares will be credited to the depositing Gold Reserve Shareholder’s account maintained with CDS or DTC, as applicable. Certificates (and other relevant documents) will be forwarded by first class mail in the name of and to the address specified by the Gold Reserve Equityholder in the Letter of Transmittal or, if such name or address is not so specified, in such name and to such address as shown on the share register maintained by Gold Reserve or its transfer agent, as soon as practicable after the termination of the Offer.

10.       Mail Service Interruption

Notwithstanding the provisions of the Offer, the Circular, the Letter of Transmittal and the Notice of Guaranteed Delivery, share certificates and any other relevant documents will not be mailed if the Offeror determines that delivery thereof by mail may be delayed. A person entitled to share certificates and any other relevant documents which are not mailed for the foregoing reason may take delivery thereof at the office of the Depositary at which the Gold Reserve Equity was delivered, upon application to the Depositary, until such time as the Offeror has determined that delivery by mail will no longer be delayed. Notwithstanding Section 11 of this Offer, “Notice and Delivery”, the deposit of share certificates and any other relevant documents with the Depositary in such circumstance will constitute delivery to the persons entitled thereto and the Gold Reserve Equity will be deemed to have been paid for immediately upon such deposit.

Notice of any determination regarding mail service delay or interruption made by the Offeror will be given in accordance with Section 11 of this Offer, “Notice and Delivery”.

11.       Notice and Delivery

Without limiting any other lawful means of giving notice, any notice which the Offeror or the Depositary may give or cause to be given under the Offer will be deemed to have been properly given to registered Gold Reserve Equityholders if it is mailed by prepaid, first class mail to the registered Gold Reserve Equityholders at their respective addresses appearing in the appropriate registers maintained by Gold Reserve in respect of the Gold Reserve Equity and will be deemed, unless otherwise specified by applicable laws, to have been received on the first business day following the date of mailing. For this purpose, “business day” means any day other than a Saturday, Sunday or statutory holiday in the jurisdiction to which the notice is mailed. These provisions apply notwithstanding any accidental omission to give notice to any one or more Gold Reserve

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Equityholders and notwithstanding any interruption of mail service in Canada or the United States following mailing. Except as otherwise required or permitted by law, in the event of any interruption of mail service in Canada or the United States, the Offeror intends to make reasonable efforts to disseminate the notice by other means such as publication. Except as otherwise required or permitted by law, if post offices in Canada or the United States are not open for the deposit of mail, or there is reason to believe that there is or could be a disruption in all or any part of the postal service, any notice which the Offeror or the Depositary may give or cause to be given under the Offer will be deemed to have been properly given and to have been received by Gold Reserve Equityholders if (i) it is given to the TSX and NYSE Alternext for dissemination through their facilities, (ii) if it is published once in the National Edition of The Globe and Mail or the National Post and in a daily newspaper of general circulation in the French language in the City of Montreal, Quebec, or (iii) it is given to the Marketwire News Wire Service and the Dow Jones News Wire Service for dissemination through their facilities.

Unless post offices are not open for the deposit of mail, the Offer, the Circular, the Letter of Transmittal and the Notice of Guaranteed Delivery will be mailed to registered Gold Reserve Equityholders by first class mail, postage prepaid or made available in such other manner as is permitted by applicable regulatory authorities and the Offeror will use its reasonable efforts to furnish such documents to brokers, banks and similar persons whose names, or the names of whose nominees, appear on the security holder list, or, if applicable, who are listed as participants in a clearing agency’s security position listing, for subsequent transmission to beneficial owners of Gold Reserve Equity when such list or listing is received.

Wherever the Offer calls for documents to be delivered to the Depositary, those documents will not be considered delivered unless and until they have been physically received at one of the addresses listed for the Depositary in the Letter of Transmittal or the Notice of Guaranteed Delivery, as applicable. Wherever the Offer calls for documents to be delivered to a particular office of the Depositary, those documents will not be considered delivered unless and until they have been physically received at the particular office at the address listed in the Letter of Transmittal or Notice of Guaranteed Delivery, as applicable.

12.       Market Purchases

Rule 14e-5 under the Exchange Act does not permit Rusoro to purchase Gold Reserve Shares outside of the Offer. However, Rusoro reserves the right to seek such relief from the SEC as may be required to permit Rusoro to purchase Gold Reserve Shares outside the Offer and to acquire, or cause an affiliate to acquire, beneficial ownership of Gold Reserve Shares by making purchases through the facilities of the TSX, subject to applicable laws, at any time prior to the Expiry Time. In the event that Rusoro seeks relief, its application would propose that, among other matters:

·                  In no event will Rusoro make any such purchases of Gold Reserve Shares until the third business day following the date of the Offer.

·                  Rusoro will not purchase Gold Reserve Shares in the United States other than pursuant to the Offer.

·                  If Rusoro purchases Gold Reserve Shares during the Offer other than pursuant to the Offer, the Gold Reserve Shares so purchased will be counted in the determination as to whether the Minimum Tender Condition has been fulfilled.

·                  The aggregate number of Gold Reserve Shares acquired by Rusoro though the facilities of the TSX after the date of the Offer to and including the Expiry Date shall not exceed 5% of the outstanding Gold Reserve Shares as of the date of the Offer, and Rusoro will issue and file a news release forthwith after the close of business of the TSX on each day on which such Gold Reserve Shares have been purchased.

·                  The news release will disclose among other things, the purchaser, the number of Gold Reserve Shares purchased by the purchaser through the facilities of the TSX during the currency of the Offer, and the total number of securities owned by the purchasers as of the close of business of the TSX on that day.

If SEC relief is sought and is granted, Rusoro would intend to make purchases outside the Offer if and to the extent that market conditions, the trading price of the Gold Reserve Shares and other factors make it

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desirable for Rusoro to complete such purchases. For the purposes of this Section 12, “Market Purchases”, “Rusoro” includes Rusoro and any person acting jointly or in concert with Rusoro.

13.       Other Terms of the Offer

No broker, dealer or other person has been authorized to give any information or to make any representation or warranty on behalf of the Offeror other than as contained in the Offer and Circular and as set forth on the Registration Statement on Form F-10 and Tender Offer Statement on Schedule TO filed by the Offeror in connection with the Offer, and, if any such information, representation or warranty is given or made, it must not be relied upon as having been authorized. No broker, dealer or other person shall be deemed to be the agent of the Offeror or the Depositary for purposes of the Offer.

The provisions of the Glossary, the Summary, the Circular, the Letter of Transmittal and the Notice of Guaranteed Delivery accompanying the Offer, including the instructions and rules contained therein, as applicable, form part of the terms and conditions of the Offer.

The Offeror reserves the right to transfer to one or more affiliates of the Offeror the right to purchase all or any portion of the Gold Reserve Equity deposited under the Offer. Any such transfer will not relieve the Offeror of its obligations under the Offer and will not prejudice the rights of Gold Reserve Equityholders depositing Gold Reserve Equity to receive payment for Gold Reserve Equity validly deposited and taken up pursuant to the Offer.

The Offer and all contracts resulting from the acceptance thereof will be governed by and construed in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable therein. In any jurisdiction in which the Offer is required to be made by a licensed broker or dealer, the Offer shall be made on behalf of the Offeror by brokers or dealers licensed under the laws of such jurisdiction. Each party to any agreement resulting from the acceptance of the Offer unconditionally and irrevocably attorns to the exclusive jurisdiction to the courts of the Province of British Columbia.

This document does not constitute an offer or a solicitation to any person in any jurisdiction in which such offer or solicitation is unlawful. The Offer (including, without limitation, the satisfaction of the conditions of the Offer), the Circular, the Letter of Transmittal and the Notice of Guaranteed Delivery, is not being made or directed to, nor will deposits of Gold Reserve Equity be accepted from or on behalf of, Gold Reserve Equityholders in any jurisdiction in which the making or acceptance of the Offer would not be in compliance with the laws of such jurisdiction. However, the Offeror may, in its sole discretion, take such action as it may deem necessary to extend the Offer to Gold Reserve Equityholders in any such jurisdiction.

The Offeror, in its sole discretion, shall be entitled to make a final and binding determination of all questions relating to the interpretation of the Offer (including, without limitation, the satisfaction of the conditions of the Offer), the Circular, the Letter of Transmittal and the Notice of Guaranteed Delivery, the validity of any acceptance of the Offer, the validity of any deposit of Gold Reserve Equity, and the validity of any withdrawals of Gold Reserve Equity.

The Offeror reserves the right to waive any defect in acceptance with respect to any particular Gold Reserve Equity or any particular Gold Reserve Equityholder. There shall be no duty or obligation of Rusoro, the Depositary or any other person to give notice of any defect or irregularity in the deposit of any Gold Reserve Equity or in any notice of withdrawal and in each case no liability shall be incurred or suffered by any of them for failure to give such notice.

The Offer and the accompanying Circular constitute the take-over bid circular required under applicable Canadian provincial securities legislation with respect to the Offer. Gold Reserve Equityholders are urged to refer to the accompanying Circular for additional information relating to the Offer.

Dated: December 15, 2008