Gold Reserve Inc. (TSX:GRZ) (NYSE-Amex:GRZ) has announced that it has filed its arbitration claim against the Bolivarian Republic of Venezuela with the World Bank's International Centre for Settlement of Investment Disputes ("ICSID"), in accordance with the provisions of the Canada-Venezuela Bilateral Investment Treaty ("BIT").
Gold Reserve's claim alleges violations of three provisions of the Canada-Venezuela BIT culminating in the effective expropriation of Gold Reserve's sizable investments in the world-class Brisas gold/copper project and the promising Choco 5 gold property.
Gold Reserve believes three breaches of the Canada-Venezuela BIT occurred: (1) Article II - Failure to provide fair and equitable treatment and full protection and security, (2) Article III - Failure to guarantee treatment on no less favorable terms than provided to nationals of any other State, and (3) Article VII - Protection against expropriation of investments without due process of law, on a discriminatory basis, without a legitimate public purpose, and without proper compensation.
Gold Reserve seeks compensation for all of its losses caused by Venezuela's breaches of the BIT, including the full value of its investments in the Brisas Project and in Choco 5 prior to Venezuela's breaches of the BIT, and other related damage. As of September 24, 2010, Gold Reserve values its damages at a minimum in the amount of $1.928 billion, equivalent to approximately $30 a share.
Doug Belanger, President, stated, "The filing of the Memorial that supports the claim is the result of several months of extensive effort by counsel, technical, legal and financial experts and Company personnel. The Brisas Project and the promising Choco 5 exploration property were significant assets to the shareholders of the Company. We worked extremely hard to maximize the value of these projects for the shareholders, stakeholders, and local beneficiaries in Venezuela. Venezuela has obviously decided to take another path regarding the Brisas Project. As a result of the unfortunate actions taken by Venezuela in violation of the BIT, we are prepared to vigorously pursue a decision in this case for our shareholders and stakeholders. We remain ready, however, to evaluate and possibly enter into an amicable settlement that would compensate us for our losses and allow the project or projects to proceed on a fast track basis. Any settlement would be accepted only if it were beneficial to the shareholders and stakeholders of the Company."
Further written submissions are scheduled to be made during 2011 and the oral hearing in the case is scheduled to commence on December 5, 2011.