Gold Reserve Ltd. · TSXV:GRZ
Gold Reserve — Merger or Acquisition (January 2009)
24 slides from Gold Reserve's merger presentation, Jan 6, 2009
Slide 1: Reject the Rusoro Offer
January 5, 2009 Reject the Rusoro Offer
Slide 2: More Information and Where to Find It
More Information and Where to Find It Gold Reserve Inc. ("Gold Reserve") has filed a Directors' Circular with the Canadian securities regulatory authorities and a Schedule 14D-9 with the United States Securities and Exchange Commission ("SEC") advising holders of Gold Reserve class A common shares a
Slide 3: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements This Presentation contains certain statements that constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995, as amended that are based on expectations, estimates and projectio
Slide 4: Important Note for U.S. Investors Concerning Resource Calculations
Important Note for U.S. Investors Concerning Resource Calculations Information contained in this Presentation and in Gold Reserve's disclosure documents filed with securities regulatory authorities, including the SEC, that contain descriptions of Gold Reserve's mineral deposits may not be comparable
Slide 5: Reasons to Reject the Rusoro Offer
Reasons to Reject the Rusoro Offer REJECT the Rusoro Offer and DO NOT TENDER your Gold Reserve Shares The Rusoro Offer does not represent a premium as it does not adequately compensate Gold Reserve Shareholders for the fair value of the world-class Brisas Project or Gold Reserve's cash assets The Go
Slide 6: Reasons for the Recommendation
Reasons for the Recommendation REJECT the Rusoro Offer and DO NOT TENDER your Gold Reserve Shares There is no reason to believe that Gold Reserve Shareholders would benefit from Rusoro's purported "established" relationship with the Venezuelan government Gold Reserve's financial advisors, J.P. Morga
Slide 7: Summary of Rusoro's Hostile Offer
Summary of Rusoro's Hostile Offer The Rusoro Offer 3 Rusoro Shares for every 1 Class A Common Share or Equity Unit of Gold Reserve Rusoro Offer is equivalent to ~$0.87 (C$1.08) per Gold Reserve share(1) Rusoro is paying nothing for Gold Reserve's 10.2Moz of proven and probable gold(2) Take-over bid
Slide 8: Rusoro's Offer Does Not Adequately Compensate Gold Reserve Shareholders
Rusoro's Offer Does Not Adequately Compensate Gold Reserve Shareholders REJECT the Rusoro Offer and DO NOT TENDER your Gold Reserve Shares Rusoro Offer is equivalent to ~$0.87 (C$1.08) per Gold Reserve share(1) Gold Reserve has ~$2.71 (C$3.38) per share of cash and equivalents(2) Gold Reserve has ~$
Slide 9: Why Has Rusoro Made a Hostile Offer for Gold Reserve?
Why Has Rusoro Made a Hostile Offer for Gold Reserve? Acquire Gold Reserve's Cash The Board believes: Rusoro's financial viability is uncertain Rusoro needs Gold Reserve's cash to fund its operations Rusoro's Offer is effectively an equity offering by Rusoro Offer proposes to acquire Gold Reserve at
Slide 10: Disproportionate Contribution
Disproportionate Contribution Gold Reserve's Contribution Rusoro's Contribution Asset Base Advanced-stage Brisas Project Highly prospective Choco 5 Project ~$109M of cash and equivalents ~$47M worth of deployable equipment ~$230M of investment in Brisas Project Several small-scale operations Track r
Slide 11: Gold Reserve Making Disproportionate Contribution
Gold Reserve Making Disproportionate Contribution REJECT the Rusoro Offer and DO NOT TENDER your Gold Reserve Shares Includes proven and probable reserves Includes approximately 36 million Rusoro Shares issuable upon the exercise of outstanding options, approximately 108 million Rusoro Shares issuab
Slide 12: Rusoro's Offer Does Not Represent a Premium
Rusoro's Offer Does Not Represent a Premium Comparison of Recent Transaction Multiples(1) REJECT the Rusoro Offer and DO NOT TENDER your Gold Reserve Shares Based on gold-only in-situ inventory consisting of measured, indicated and inferred resources (measured and indicated resources are inclusive o
Slide 13: Gold Reserve's World-Class Brisas Project
Gold Reserve's World-Class Brisas Project One of the world's largest undeveloped gold projects Comparison of Large, Undeveloped Gold Resource Projects(1,2) REJECT the Rusoro Offer and DO NOT TENDER your Gold Reserve Shares Project Las Cristinas Brisas Angostura Fruta Del Norte Rosia Montana Hope Bay
Slide 14: Concerns Regarding Rusoro's Financial Resources
Concerns Regarding Rusoro's Financial Resources Liquidity Concerns(1) "The financial viability of Rusoro is uncertain at best. Rusoro has not been able to generate positive cash flows (or profits) from operations since becoming an active mining company" ^ Rosen & Associates Limited, Independent Inve
Slide 15: Concerns Regarding Rusoro's Financial Resources
Concerns Regarding Rusoro's Financial Resources Total debt reflects Hambro / Endeavour Loan, ST borrowings, and current portion of LT debt The Board asked independent mining industry consultants Behre Dolbear & Company (USA), Inc. to review the public technical disclosure concerning Rusoro's operati
Slide 16: Rusoro's Poor Operating Performance
Rusoro's Poor Operating Performance The Board asked independent mining industry consultants Behre Dolbear & Company (USA), Inc. to review the public technical disclosure concerning Rusoro's operations (the Behre Dolbear Report is attached as Schedule D to the Directors' Circular) Rusoro has disclose
Slide 17: Rusoro Has Significant Operational Disclosure Omissions
Rusoro Has Significant Operational Disclosure Omissions(1) Incorrect Published Ore Reserve Information Rusoro provided incorrect reserve information in its December 15, 2008 takeover bid announcement The reserve information failed to deduct ore mined from Choco 10 in the period October 1, 2007 throu
Slide 18: Material Concerns Cited in Independent Expert Reports
Material Concerns Cited in Independent Expert Reports Report of Independent Investigative Accountants(1) "In our opinion, Rusoro's financial reporting of its historical results and of the pro forma combined entity does not provide sufficient information for GRI's shareholders to make an informed ass
Slide 19: Rusoro Drilled Gold Reserve's Choco 5 Property Without Permission
Venezuela Choco 5 Brisas Caracas Choco10 Rusoro Drilled Gold Reserve's Choco 5 Property Without Permission Rusoro's subsidiary is Promotora Minera de Guayana, S.A. REJECT the Rusoro Offer and DO NOT TENDER your Gold Reserve Shares Gold Reserve Rusoro Mining Agents / employees of Rusoro's subsidiary(
Slide 20: Gold Reserve Questions Rusoro's Relationship with Venezuelan Government
19 Gold Reserve Questions Rusoro's "Relationship" with Venezuelan Government Rusoro Subject to Same Mining Law and Government Action as Gold Reserve No basis to Rusoro's claim of an "established" relationship with Venezuelan government Rusoro is subject to the same mining laws / government actions a
Slide 21: Rusoro Offer is Not a Permitted Bid Under The Rights Plan
20 Rusoro Offer is Not a Permitted Bid Under The Rights Plan Purpose of the Rights Plan To provide the Board and Shareholders with sufficient time to properly consider a bid To ensure that all Gold Reserve Shareholders are treated fairly Rusoro Offer is Not a Permitted Bid To be a "Permitted Bid", a
Slide 22: Timing of the Rusoro Offer is Opportunistic
21 Timing of the Rusoro Offer is Opportunistic Implied Offer Price(3) vs. Cash Value Per Share(1) vs. Net Cash + Equipment Value Per Share(2) REJECT the Rusoro Offer and DO NOT TENDER your Gold Reserve Shares Cash value per share includes approximately $109 million in cash, restricted cash and inves
Slide 23: Gold Reserve's Plan
22 Gold Reserve's Plan REJECT the Rusoro Offer and DO NOT TENDER your Gold Reserve Shares Four Clear Avenues to Maximize Value for Shareholders Gold Reserve has four courses of action available at this time: Resolve with Venezuelan government the current status of the Brisas Project Proceed with dev
Slide 24: Reasons to Reject the Rusoro Offer
23 Reasons to Reject the Rusoro Offer The Rusoro Offer does not represent a premium as it does not adequately compensate Gold Reserve Shareholders for the fair value of the world-class Brisas Project or Gold Reserve's cash assets The Gold Reserve Board believes Rusoro lacks the financial resources t