GOLD Reserve Provides Mineral Resource and Positive Preliminary Economic Assessment ON Siembra Minera Project
NR-18-01
GOLD RESERVE PROVIDES MINERAL RESOURCE AND POSITIVE PRELIMINARY
ECONOMIC ASSESSMENT ON SIEMBRA MINERA PROJECT
SPOKANE, WASHINGTON, March 19, 2017
Gold Reserve Inc. (TSX.V: GRZ) (OTCQX: GDRZF) (“Gold Reserve” or the “Company”) is pleased to provide
the results of a Preliminary Economic Assessment (“PEA”) of the Siembra Minera Gold Copper Project (the
"Project") in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-
101").
The Project is a gold-copper-silver deposit located in the Kilometre 88 mining district of Bolivar State in
southeast Venezuela, and is owned 45% by the Company and 55% by the Bolivarian Republic of Venezuela
("Venezuela"). The Project is expected to be a conventional truck and shovel open pit mining operation,
utilizing hydraulic shovels and 236-tonne trucks as the primary mining equipment. The overall Project
contemplates two plants: a smaller 15,000 tonne per day ("tpd") cyanidation plant (the "Small Plant") and a
larger 140,000 tpd flotation plant (the "Large Plant"). The Small Plant is designed to recover gold from oxide
saprolite and sulfide saprolite that contains low concentrations of copper and the Large Plant is designed to
process hard rock material containing higher concentrations of copper as well as gold. The overall mine life is
estimated to be 45 years after achieving commercial production of the Large Plant.
The Project is expected to begin with the Small Plant, which is estimated to take two years for detail design and
construction while providing a platform for establishing the Project's operations and management group in
advance of the Large Plant operation. The Small Plant, related mining equipment, initial tailings dam and
infrastructure cost estimate is $295 million. It is expected to start producing gold at the end of a two year
construction period and generate approximately $40 million in annual cash flow. The Large Plant is expected to
take an estimated four years for the completion of a final feasibility study, detail design and construction.
Production is expected to begin approximately two years after completion of construction of the Small Plant. All
amounts are in U.S. dollars.
Initial Capital Cost estimate1 $2.6 billion
Working Capital $195 million
Total Life of Mine Capital estimate $4.7 billion
Estimated Production Cost (Net of by-product credits (NBP)) 2 $428/ Ounce
Estimated Life of Mine Sustaining Capital Cost and Reclamation Cost $56/ Ounce
All-In Sustaining Cost (NBP) $483/ Ounce
Estimated Average Annual Gold Production (Years 3-18) 1.229 million Ounces
Estimated Average Annual Copper Production (Years 3-18) 77 million Lbs.
1 Includes both process plants, mining equipment, tailings dam and infrastructure requirements
2 Utilizing $1,300 per ounce gold and $3.00 per pound copper
Project Economic Summary (utilizing $1,300/ ounce gold and $3.00/ pound copper)
Pre-Tax After-Tax
Undiscounted Cash Flows (Mine Life) $28.16 billion $20.22 billion
Cash Flow (Annually)1 $1.1 billion $0.9 billion
Rate of Return (ROR): 36.8% 31.1%
Net Present Value (NPV 5%): $11.2 billion $8.1 billion
Net Present Value (NPV 10%): $5.53 billion $3.93 billion
Capital Payback 3.8 years 4.1 years
1 First 10 years with Large Plant (Years 3-12)
Gold
(Ounces)
Copper
(Pounds)
Silver
(Ounces)
Average Life of Mine Annual Sales (45 Years) 836,000 71 million 369,000
Life of Mine Sales 37,600, 000 3,198 million 16,600,000
All-In Sustaining Average Cost (AISC)1 $483/
Ounce
1 Net of a $262/ ounce copper and silver by-product credit (NBP)
Venezuela Minister of the People's Power for Ecological Mining Development Victor Cano stated, "This study
is a confirmation of the tremendous economic value of the Mixed Company Ecosocialista Siembra Minera, S.A.
mining project to the Venezuelan nation and our people. We look forward to the continued development of the
project in an environmentally and socially responsible manner."
Gold Reserve President Doug Belanger added, "This study confirms that the Siembra Minera Project is one of
the largest gold-copper deposits in the world with some of the lowest project operating costs for such a large
project."
Gold Reserve is also pleased to report that the Company has recently transferred an additional $30 million from
its trust account in Venezuela to its bank account in North America.
The project resource estimates are shown in the following tables:
Mineral Resource on the Siembra Mineral Project as of December 31, 2017
Tonnes
(millions)
Grade
Au oz/t
Grade
Cu %
Gold
Ounces
(millions)
Copper
Tonnes
(000’s)
Copper
Lbs
(millions)
Measured 10 1.02 0.18 318 17 38
Indicated 1,174 0.70 0.10 26.504 1,202 2,649
Total M&I 1,184 0.70 0.10 26.822 1,219 2,687
Inferred 1,291 0.61 0.08 25.389 1,044 2,300
Notes:
1. CIM (2014) definitions were followed for Mineral Resources.
2. Mineral Resources are estimated at an NSR cut-off value of US$7.20 per tonne for oxide-saprolite material and US$5.00 per
tonne for sulphide-saprolite and fresh rock material.
3. Mineral Resources are constrained by a preliminary pit shell created using the Whittle software package.
4. Mineral Resources are estimated using a long-term gold price of US$1,300 per ounce, and a copper price of US$3.00 per
pound.
5. Bulk density varies by material type.
6. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
7. Numbers may not add due to rounding.
An economic ultimate pit design was based on operating cost estimates, plant metal recoveries, net smelter
return, royalties and taxes. The pit design was centered on maximizing the Project Net Present Value and a mine
plan was developed based on the mineral resource potentially mineable by open pit methods within the design.
Mineable Resource with Economic Parameters based on $1300/oz Au and $3.00/lb Cu
Tonnes
(millions)
Grade
Au oz/t
Grade
Cu %
Gold
Ounces
(millions)
Copper
Tonnes
(000’s)
Copper
Lbs
(millions)
Measured 10 1.02 0.18 318 17 38
Indicated 1,095 0.72 0.10 25.409 1,126 2,482
Total M&I 1,105 0.72 0.10 25.727 1,143 2,520
Inferred 900 0.68 0.08 19.692 709 1,564
Notes: As on the table above.
Projected metal recoveries from the respective process plants are:
Process Plant & Material Type % Au Recovery % Cu Recovery
CIP LEACH PLANT (SMALL PLANT)
Oxide Saprolite 98.0 0
Sulphide Saprolite low Cu 86.8 0
Hard Rock low Cu 87.6 0
FLOTATION PLANT (LARGE PLANT)
Sulfide Saprolite high Cu 83.2 54.5
Hard Rock low Cu 83.2 55.5
Hard Rock high Cu 83.2 87.0
Note: The hard rock and sulphide saprolite was divi ded into high copper and low copper using a 0.02% Cu
threshold.
Years 1 Through 10 Years 11 Through 45
Production Plan Tpd Mtpa Tpd Mtpa
Leach Plant (Small Plant)1 15,000 5.8 35,000 58
Flotation Plant (Large Plant) 140,000 49.0 105,000 2 36.75
1 The leach plant will be expanded by Year 11 to accommodate the higher tonnage of material.
2 Feed to the flotation plant reduced to approximately 105,000 tpd and increased for oxide leach plant to 35,000 tpd to
account for reduced higher grade copper hard rock available to blend into flotation plant. Low grade copper hard rock
material will be ground in the existing milling circuit and processed in the leach plant.
KEY ECONOMIC PARAMETERS:
Mineral Resources are estimated at an NSR cut-off value of US$7.20 per tonne for oxide-saprolite material and
US$5.00 per tonne for sulphide-saprolite and fresh rock material.
DEVELOPMENT CAPITAL COST SUMMARY
DESCRIPTION Total $ M
Direct Costs
Mining $ 436.6
Processing 923.5
Engineering & Geology 15.9
ARD Plant 2.3
Site Infrastructure 111.8
Total Direct Costs 1,490.1
Indirect Costs
Construction Indirects 312.3
Owner's Cost 310.4
Total Indirect Costs 622.7
Contingency 457.8
Total $ 2,570.6
ALL-IN SUSTAINING COSTS COMPOSITION
Item $M $/ oz Au
Site Costs
Mining $ 5,791 $ 154
Process 9,881 263
G & A 2,654 71
Other Infrastructure 289 8
Total Site Costs 18,614 495
Offsite Costs
Transportation 728 19
Off-site Treatment 1,077 29
Total Off-site Costs 1,805 48
Direct Cash Costs 20,419 542
Ag and Cu By-Product Credit (9,875) (262)
Total Direct Cash Costs (NBP) 10,543 280
NSR Royalty 3,263 87
Special Advantages Tax 1,710 45
STI Contributions 588 16
Total Indirect Cash Costs 5,561 148
Total Production Costs 16,104 428
Sustaining Capital Cost 1,942 52
Closure/Reclamation Capital 150 4
Corporate G&A - -
Off-mine Exploration - -
Total Sustaining Costs 2,092 56
Total All-in Sustaining Costs $ 18,196 $ 483
OPERATING COST SUMMARY
Description LoM Cost $/t milled
Mining (1.36/t mined) $ 2.89
Process 4.93
G&A 1.32
Other Infrastructure 0.14
Direct Operating Costs 9.29
Concentrate Freight 0.36
Off-site Costs 0.54
Total Before Royalties/Taxes 10.19
Royalties/Production Taxes 2.77
Total $ 12.96
The next phase of the Project’s development is the detail design work for the Small Plant and related facilities in
order to implement fast track development and production. In addition, we expect to initiate the feasibility study
on the Large Plant and concurrent detailed engineering.
Proposals are currently being evaluated for a drilling program that is expected to commence in 2018 which will
support the overall project development activities, water management wells, and test areas where additional
resource potential is evident. Siembra Minera has also now established local management offices in Caracas and
Puerto Ordaz.
The PEA will be available to the public at www.sedar.com and www.sec.gov, as well as, the Company’s
website at www.goldreserveinc.com within 45 days of the date of this release.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of
the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Further
information regarding the Company can be located at www.goldreserveinc.com, www.sec.gov and
www.sedar.com.
Gold Reserve Inc. Contact
A. Douglas Belanger, President
999 W. Riverside Avenue, Suite 401
Spokane, WA 9920I USA
Tel. (509) 623-1500
Fax (509) 623-1634
Technical Disclosure
The scientific and technical information contained in this release, including resource estimates, pit design, mine
plan, flowsheet design, design criteria, project layout, infrastructure requirements, capital and operating
estimates was prepared by Roscoe Postle Associates, Inc., Samuel Engineeri ng Inc., Tierra Group International,
Ltd, and AATA International, Inc. The Qualified Persons (as defined in NI 43-101) in respect of the PEA who
have reviewed, verified and approve d such information are Richard J. Lambert, P.E., P.Eng., José Texidor
Carlsson, P.Geo., Grant A. Malensek, P.Eng., Hugo Mi randa, C.P., and Kathleen A. Altman, Ph.D., P.E., each
of whom is independent of the Company.
Mineral resource estimates reported herein have been cl assified as Measured, Indicated or Inferred based on the
confidence of the input data, geological interpretation and grade estimation parame ters. The Company is not
currently aware of any known factors that are reasona bly likely to have a negative material impact on the
Company’s mineral resources. The mineral resource estimates were prepared in acco rdance with NI 43-101 and
classifications adopted by the CIM Council.
Mineral resources that are not mineral reserves do not have demonstrated economic viability. The PEA is
preliminary in nature and includes inferred mineral res ources that are considered too speculative geologically to
have the economic considerations applied to them that w ould enable them to be categorized as mineral reserves,
and there is no certainty that the PEA will be realized.
Cautionary Statement Regarding Forward-Looking Information
This release contains “forward-looking statements” w ithin the meaning of applicable U.S. federal securities
laws and “forward-looking information” within the meani ng of applicable Canadian provincial and territorial
securities laws and state Gold Reserve’s and its management ’s intentions, hopes, beliefs, expectations or
predictions for the future including w ithout limitation statements with respect to the price of copper and gold;
the estimation of mineral resources; the timing and amount of estimated future production; capital expenditures
and related funding, operating costs, and projected cash flows; the continued evaluation of the Project and the
economic analysis provided in the PEA, including the timeline and estimated capital required and the
assessment of financial and strategic options; the exp ectation of meeting production targets; costs of
production; estimated mine life; and net present values associated with the Project. Forward-looking statements
are necessarily based upon a number of estimates an d assumptions that, while considered reasonable by
management at this time, are inherently subject to significant business, economic and competitive uncertainties
and contingencies. Generally, these forward-looking statemen ts can be identified by the use of forward-looking
terminology such as “plans”, “expects”, “is expected ”, “guidance”, “scheduled”, “estimates”, “forecasts”,
“intends”, “anticipates”, “believes”, or variations or comparable language of such words and phrases or
statements that certain actions, events or results “m ay”, “could”, “would”, “should”, “might” or “will be
taken”, “occur” or “be achieved” or the negative connotation thereof.
We caution that such forward-looking statements in volve known and unknown risks, uncertainties and other
risks that may cause the actual outcomes, financial results , performance, or achievements of Gold Reserve to be
materially different from our estimated outcomes, fu ture results, performance, or achievements expressed or
implied by those forward-looking statements, including, without limitation, the risk that the development of the
Siembra Minera Project may not proceed as anticipated ; risks associated with the uncertainty of mineral
resource estimates; volatility of metal prices; the Company ’s ability to obtain financing as and when required
and on reasonable terms; ability to obtain any necessary pe rmits, consents or authorizations required for its
activities in a timely manner; adequate infrastructure, en ergy and other inputs; shortages or cost increases in
necessary equipment, supplies and labour; production meeting expectations and be ing consistent with
estimates; plant, equipment and processes operating as anticipated; social unrest and political or economic
instability in the jurisdiction in which the Project is located; changes in national and local government
legislation, regulation, and taxation; un-appealable j udicial decisions; environmental and other regulatory
compliance; reliance upon third parties; the risk of unexpected litigation; as well as other factors identified in
Gold Reserve’s filings with applicable securities regulatory authorities. This list is not exhaustive of the factors
that may affect any of Gold Reserve’s forward-looki ng statements. Investors are cautioned not to put undue
reliance on forward-looking statements. All subse quent written and oral forw ard-looking statements
attributable to Gold Reserve or persons acting on its behalf are expressly qualified in their entirety by this
notice. Gold Reserve disclaims any intent or obliga tion 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, future
events or otherwise, subject to its disclosure obligati ons under applicable rules pr omulgated by the Securities
and Exchange Commission and applicable Canadian provincial and territorial securities laws.
The terms "mineral resource," "mea sured mineral resource," "indicate d mineral resource" and "inferred
mineral resource" are defined in and required to be disclosed by NI 43-101. However, these terms are not
defined terms under SEC Industry Guide 7 and normally are not permitted to be used in reports and registration
statements filed with the SEC. Investors are cautioned not to assume that any part or all of the mineral deposits
in these categories will ever be con verted into reserves. “Inf erred mineral resources” have a great amount of
uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be
assumed that all or any part of an inferred mineral res ource will ever be upgraded to a higher category. Under
Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility
studies, except in rare cases, and such estimates are not part of the SEC industry Guide 7.