Gold Reserve Inc. (the “Company”) has history in mining dating back to 1956 and was formed for the purpose of acquiring, exploring and developing mining properties and placing them into production. Consistent with that strategy, the Company in 1992 acquired and began developing what is now known as the Brisas gold and copper project, located in the historic Km 88 mining district of the State of Bolivar in southeastern Venezuela (the “Brisas Project”).
From 1992 to 2009, the Company invested close to US $300 million in acquisition, land exploration, development, equipment, and engineering costs, developing the Brisas Project into what management believed was a world class mining project. In April 2008 the Bolivarian Republic of Venezuela arbitrarily revoked the Authorization to Affect, eliminating the Company’s ability to exploit the Brisas Project.
In October 2009, Gold Reserve initiated a claim (the “Brisas Arbitration”) under the Additional Facility Rules of the International Centre for Settlement of Investment Disputes (“ICSID”) of the World Bank. In September 2014, the ICSID Tribunal granted us an Award of $740.3 million. In July 2016, we signed a settlement agreement whereby Venezuela agreed to pay us $792 million to satisfy the Award and $240 million for the purchase of the Mining Data for a total of approximately $1.032 billion payable in monthly installments (the “Settlement Agreement”) (See Brisas Arbitral Award).
As of June 30, 2019, Venezuela has paid us $254 million including $165.5 in cash and $88.5 million in Venezuelan government bonds. The remaining unpaid amount due from Venezuela pursuant to the Settlement Agreement, which is now delinquent, totals approximately $859 million (including interest of approximately $80 million).
The imposition of Sanctions by the U.S. and Canadian governments pose a significant impediment to the Company’s ability to collect the remaining balance of the Award plus interest from Venezuela and, until such Sanctions are lifted, impedes our ability to work with Venezuelan government officials related to the future development of the Siembra Minera Project.