Registration No. 33-60779
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
----------------------------------
POST-EFFECTIVE AMENDMENT NO. 1 TO FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
GOLD RESERVE CORPORATION
------------------------
State of Incorporation: Montana
Primary Standard Industrial
Classification Code Number: 1041
IRS Employer Identification No.: 81-0266636
Address and telephone number: 1940 Seafirst Financial Center
Spokane, Washington 99201
(509) 623-1500
Agent for service: Rockne J. Timm
President and Chief Executive
Officer
Gold Reserve Corporation
1940 Seafirst Financial Center
Spokane, Washington 99201
(509) 623-1500
Copy to: Douglas J. Siddoway, Esq.
Randall & Danskin, P.S.
1500 Seafirst Financial Center
Spokane, Washington 99201
(509) 747-2052
Approximate date of commencement of the proposed sale of the
securities to the public: As soon as practicable following the
effective date of this Registration Statement.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans,
please check the following box. [ ] If any of the securities
being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of
1993, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box.
[X]
<PAGE>
CALCULATION OF REGISTRATION FEE
- - -------------------------------
Proposed Proposed
Title of Each Maximum Maximum
Class of Offering Aggregate Amount of
Securities to Amount to be Price Offering Registration
be Registered Registered Per Unit Price Fee
- - -------------- ------------ --------- --------- -----------
Common Stock,
no par value
per share - - - -
THE PROSPECTUS INCLUDED HEREIN RELATES TO: AN AGGREGATE OF
10,933,545 PREVIOUSLY ISSUED BUT YET UNDISTRIBUTED SHARES OF
COMMON STOCK, 1,000,000 PREVIOUSLY ISSUED BUT UNEXERCISED COMMON
STOCK PURCHASE WARRANTS AND 1,000,000 SHARES OF COMMON STOCK
ISSUABLE UPON EXERCISE OF THE WARRANTS PREVIOUSLY REGISTERED ON
FORM S-1 (REGISTRATION NO. 33-62804, EFFECTIVE AUGUST 9, 1993),
FORM S-2 (REGISTRATION NO. 33-77672, EFFECTIVE JUNE 22, 1994) AND
FORM S-3 (REGISTRATION NO. 33-60779, EFFECTIVE DATE JULY 10,
1995. SUCH PROSPECTUS IS INCLUDED HEREIN IN RELIANCE ON RULE
429.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH
DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE
UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
CALCULATION OF REGISTRATION FEE
- - -------------------------------
The amount of the registration fee with respect to the shares of
Common Stock and the Common Stock purchase warrants offered
pursuant to this Registration Statement registered hereby has
been calculated in accordance with Section 6(c) of the Securities
Act and Rule 457(c) adopted thereunder, using the average bid and
asked prices of the Common Stock as reported by the Nasdaq Stock
Market on June 26, 1996, which was $6.625 per share. (The
additional shares of Common Stock and the Common Stock purchase
warrants offered pursuant to the Prospectus included herein were
previously registered on Form S-1 (Registration No. 33-62804,
effective August 9, 1993), Form S-2 (Registration No. 33-77672,
effective June 22, 1994 and Form S-3 (Registration No. 33-60779,
effective date July 10, 1995; the registration fee with respect
to such securities was paid concurrently with such registration
statements. Such Prospectus is included herein in reliance on
Rule 429.)
<PAGE>
CROSS REFERENCE SHEET PURSUANT TO ITEM 501(B)
- - ---------------------------------------------
Item Caption or
No. Form S-8 Caption Location in Prospectus
- - ---- ---------------------------- ----------------------------
1. Forepart of the Registration Forepart of Registration
Statement and Outside Front Statement; Outside Front
Cover Page of Prospectus Cover Page of Prospectus
2. Inside Front and Outside Inside Front and Outside
Back Cover Pages of Back Cover Pages of
Prospectus Prospectus
3. Summary Information, Risk Prospectus Summary; Risk
Factors and Ratio of Factors; Background of the
Earnings to Fixed Charges Offering
4. Use of Proceeds *
5. Determination of Offering
Price *
6. Dilution *
7. Selling Security Holders Background of the Offering;
Selling Shareholders
8. Plan of Distribution Plan of Distribution
9. Description of Securities Description of Capital Stock
to be Registered
10. Interests of Named Experts Legal Matters; Experts
and Counsel
11. Material Changes *
12. Incorporation of Certain Incorporation of Certain
Information by Reference Documents by Reference
13. Disclosure of Commission Plan of Distribution
Position on Indemnifica-
tion for Securities Act
Liabilities
____________________
* Items identified by asterisk have been omitted because the
item is inapplicable.
10,933,545 Previously Issued Shares of Common Stock, 1,000,000
Previously Issued Common Stock Purchase Warrants and 1,000,000
Shares of Common Stock Issuable upon Exercise of the Warrants
<PAGE>
GOLD RESERVE CORPORATION
- - ------------------------
This Prospectus relates to 10,933,545 previously issued shares
(the "Shares") of common stock, no par value (the "Common
Stock"), 1,000,000 previously issued Common Stock purchase
warrants (the "Warrants") and 1,000,000 Shares issuable upon
exercise of the Warrants of Gold Reserve Corporation (the
"Company" or "Gold Reserve"), a Montana corporation, to be
offered and sold from time to time by certain shareholders of the
Company (the "Selling Shareholders"). See "Background of the
Offering," "Selling Shareholders" and "Plan of Distribution."
The Company will not receive any of the proceeds from the sale of
the Shares or the Warrants.
The Selling Shareholders propose to sell the Shares and Warrants
from time to time or at any time during a period of two years
after the registration statements of which this Prospectus is a
part have become effective, in the over-the-counter market, in
other permitted public sales, in privately negotiated
transactions or otherwise, at market prices prevailing at the
time of sale or at negotiated prices. Some or all of the Shares
or Warrants may be sold in transactions involving broker-dealers,
who may act solely as agent or may acquire Shares or Warrants as
principal. Broker-dealers participating in such transactions as
agent may receive commissions from the Selling Shareholders and,
if they act as agent for the purchaser, also from the purchaser.
Selling Shareholders and any such broker-dealer may be deemed to
be "underwriters," as that term is defined in the Securities Act.
Any commissions received by any such broker-dealer in connection
with any such sales, and any profits received from the resale of
Shares or Warrants acquired by such broker-dealer as principal,
may be deemed to be underwriting discounts and commissions
pursuant to the Securities Act. See "Plan of Distribution."
The Company has paid all fees and expenses incident to the
registration of the Shares and Warrants. Normal commission
expenses and brokerage fees, and any applicable transfer taxes
relating to the Shares and Warrants, are payable by the Selling
Shareholders.
The Common Stock is traded on the Nasdaq Stock Market under the
symbol "GLDR" and on The Toronto Stock Exchange under the symbol
"GLR". On July 25, 1996, the closing sales price per share of
the Common Stock, as reported by the Nasdaq Stock Market, was
$9.985.
These are speculative securities and involve a high degree of
risk. See "Risk Factors."
<PAGE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Underwriting Proceeds to
Discounts or Selling
Price to Public Commissions Shareholder
- - --------- --------------- -------------- --------------
Per Share See Text Above See Text Above See Text Above
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER
THAN THE REGISTERED SECURITIES TO WHICH IT RELATES OR AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN
ANY CIRCUMSTANCES IN WHICH SUCH AN OFFER OR SOLICITATION WOULD BE
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO THE DATE HEREOF.
The date of this Prospectus is July 25, 1996.
PERSONS WHO PUBLICLY REOFFER THE SECURITIES OFFERED HEREBY IN THE
UNITED STATES MAY BE DEEMED UNDER CERTAIN CIRCUMSTANCES TO BE
"UNDERWRITERS" AS THAT TERM IS DEFINED IN SECTION 2(11) OF THE
SECURITIES ACT. PERSONS PLANNING TO REOFFER SUCH SECURITIES
PUBLICLY IN THE UNITED STATES SHOULD CONSULT WITH THEIR COUNSEL
PRIOR TO ANY SUCH REOFFER IN ORDER TO DETERMINE WHETHER SUCH
REOFFERS SHOULD BE ACCOMPANIED BY DELIVERY OF A PROSPECTUS.
<PAGE>
AVAILABLE INFORMATION
- - ---------------------
Gold Reserve has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form
S-3 (the "Registration Statement"), pursuant to the provisions of
the Securities Act, and the rules and regulations promulgated
thereunder. Such Registration Statement updates and amends
registration statements on Form S-1 (Registration No. 33-62804,
effective August 9, 1993), Form S-2 (Registration No. 33-77672,
effective June 22, 1994) and Form S-3 (Registration No. 33-60779,
effective date July 10, 1995 previously filed by Gold Reserve for
the registration of 12,325,798 Shares and the Warrants offered
hereby, pursuant to Rule 429 of the Securities Act. This
Prospectus, which constitutes a part of the Registration
Statement, does not contain all of the information set forth in
the Registration Statement, certain portions of which have been
omitted as permitted by the rules and regulations of the
Commission. For further information with respect to Gold Reserve
and the Shares and Warrants offered hereby, reference is made to
the Registration Statement, including the exhibits thereto and
financial statements and notes incorporated by reference as a
part thereof. Statements made in this Prospectus concerning the
contents of any contract or other document are not necessarily
complete. With respect to each such contract or other document
filed with the Commission as an exhibit to the Registration
Statement, or incorporated by reference to exhibits previously
filed, reference is made to the exhibit for a more complete
description of the matter involved, and each such statement shall
be deemed qualified in its entirety by such reference.
Gold Reserve is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and, in accordance therewith, files reports and other information
with the Commission. The Registration Statements and the
exhibits thereto, and other reports and information filed by Gold
Reserve with the Commission, may be inspected and copied at the
public reference facilities maintained by the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549 and will also be available for inspection and copying at
the following regional offices of the Commission upon payment of
prescribed fees: Northeast Regional Office, 7 World Trade
Center, Suite 1300, New York, New York 10048 and Midwest Regional
Office, Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. The Commission maintains a web site at
http://www.sec.gov that contains reports, proxy or information
statements, and other information regarding registrants that file
electronically with the Commission. The Company's common stock is
traded on the NASDAQ Stock Market. Material filed by the Company
can be inspected at the offices of the National Association of
Securities Dealers, Inc., Reports Section, 1735 K Street, N.W.,
Washington, D.C. 20006.
<PAGE>
PROSPECTUS SUMMARY
- - ------------------
The following is a summary of certain information contained in
this Prospectus and is qualified in its entirety by reference to
the more detailed information and financial statements appearing
elsewhere in this Prospectus.
THE COMPANY
Gold Reserve is a Montana corporation organized in 1956 to
explore and develop mining properties. The Company is presently
engaged, through subsidiary foreign corporations, in exploring a
gold property in Venezuela for possible development, and, to a
lesser extent, in evaluating other mineral properties in
Venezuela and elsewhere in the world for possible acquisition or
joint venture. The Company's principal mining asset is the
Brisas concession, which is in the exploration stage and is
located in the Kilometer 88 mining area of southeastern
Venezuela. See "Risk Factors."
Unless the context requires otherwise, the term the "Company"
used throughout this Prospectus refers to Gold Reserve
Corporation and the following subsidiaries: Compania Aurifera
Brisas del Cuyuni, C.A. ("Brisas"); Gold Reserve de Venezuela,
C.A. ("GLDRV"); Compania Minera Unicornio, C.A. ("Unicorn");
Great Basin Energies, Inc. ("Great Basin"); MegaGold Corporation
("MegaGold"); Gold Reserve Holdings A.V.V. ("Gold Reserve
Holdings"); Gold Reserve de Aruba A.V.V. ("Gold Reserve Aruba");
G.L.D.R.V. Aruba A.V.V. ("GLDRV Aruba"); Glandon Company A.V.V.
("Glandon"); GoldenLake A.V.V. ("GoldenLake"); Stanco Investments
A.V.V. ("Stanco"); and Mont Ventoux A.V.V. ("Mont Ventoux").
The principal executive offices of the Company are located at
1940 Seafirst Financial Center, Spokane, Washington 99201. The
Company's telephone number is (509) 623-1500. The Company also
maintains offices in Caracas and Puerto Ordaz, Venezuela.
THE OFFERING
The securities being offered consist of 10,933,545 previously
issued and outstanding Shares, 1,000,000 previously issued
Warrants and 1,000,000 Shares issuable upon exercise of the
Warrants. The Shares and Warrants are owned by the Selling
Shareholders and will be sold by the Selling Shareholders.
The Selling Shareholders, which include certain affiliates of the
Company, acquired the Shares in private placements both within
and outside the United States for cash, in exchange for minority
interests in subsidiaries of the Company, as compensation for
services or pursuant to the exercise of options and warrants
granted by the Company, at prices or values per Share equal to
then prevailing market prices for the Common Stock. The Warrants
were issued to certain Selling Shareholders in March 1994 in
conjunction with the Company's sale of special warrants that were
subsequently exercised for Shares and Warrants. Each Warrant
entitles the holder thereof to purchase one share of Common Stock
at the price of $13.00 per share at any time before September 15,
1996. The Warrants are not subject to redemption by the Company.
See "Background of the Offering."
<PAGE>
The Company will receive no proceeds from the sale or
distribution of the Shares and Warrants offered hereby. The
Company will receive proceeds of up to $13,000,000, if, as and
when the Warrants are exercised, which will be used for general
corporate purposes.
At July 25, 1996, 24,572,193 shares of Common Stock were
outstanding or deemed outstanding, including 3,246,006 shares
issuable pursuant to options and warrants and presently
exercisable within 60 days.
The Common Stock of the Company is approved for quotation on the
Nasdaq Stock Market under the symbol GLDR and on The Toronto
Stock Exchange under the symbol GLR.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
- - -----------------------------------------------
The following documents filed by the Company with the Commission
are incorporated herein by reference and made a part hereof,
except as superseded or modified herein: (i) the Company's
Annual Report on Form 10-K for the fiscal year ended December 31,
1995; (ii) the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996; and (iii) the Company's Proxy
Statement and related materials filed in connection with its 1996
annual meeting of shareholders held on June 7, 1996.
All documents filed by the Company with the Commission pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the date of this Prospectus and prior to the termination of the
offering of the Common Stock and Warrants covered by this
Prospectus shall be deemed to be incorporated by reference into
this Prospectus and to be a part hereof from the date of filing
of such documents. Any statement contained in any document
incorporated or deemed to be incorporated by reference in this
Prospectus shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that such a statement
contained herein or in any other subsequently filed document
which also is or is deemed to be incorporated by reference in
this Prospectus modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed to
constitute a part of this Prospectus, except as modified or
superseded.
The Company will provide without charge to each person to whom
this Prospectus is delivered, including any beneficial owner,
upon written or oral request of such person, a copy of any and
all of the documents that have been or may be incorporated by
reference in this Prospectus (other than exhibits to such
documents that are not specifically incorporated by reference
into such documents. Such requests should be directed to Robert
A. McGuinness, Vice President of Finance and Chief Financial
Officer, Gold Reserve Corporation, 1940 Seafirst Financial
Center, Spokane, Washington 99201 (telephone: (509) 623-1500).
<PAGE>
RISK FACTORS
- - ------------
The following matters, in addition to those discussed elsewhere
in this Prospectus, should be carefully considered before
purchasing the Shares and Warrants offered hereby.
THE BRISAS VETA CONCESSION
The Company's present concession on the Brisas property covers
the rights to the alluvial gold mineralization which is
approximately 15% of the total mineralization on the Brisas
property. In February 1993, the Company applied for a concession
covering a significant polymetallic mineralized deposit believed
to underlie the near-surface alluvial deposit. This application
was approved by the Venezuelan Ministry of Energy and Mines
("MEM"), which exercises jurisdiction over the Brisas property,
in March 1995, but such application has not yet been submitted to
the Official Gazette for public comment. Since March 1995, the
Company has responded to a number of administrative and technical
questions and requests from the MEM regarding the veta
application. Most recently the Venezuelan mining authorities and
our attorney have informed us that the present delay in obtaining
the veta rights is due to the MEM submitting a request for
consultation to the Solicitor General regarding whether the MEM
should grant a single mining title covering the three metals
applied for or separate mining titles for each metal applied for
in the application. The MEM has further informed the Company that
this process of clarification will be completed soon, after which
our application will be processed promptly. Under the Venezuelan
mining concession system, which for gold and diamonds is solely
administered by the MEM since July 15, 1996, holders of alluvial
concessions have preference in respect to the granting of the
underlying veta concession. The Company is not aware of any fact
or circumstance that would prevent the MEM from submitting the
application for public comment and ultimately granting the
hardrock (veta) concession to the Company. However, the process
of obtaining a concession in Venezuela is lengthy and
bureaucratically complex, and no assurance can be given that the
Company will be successful in obtaining a concession to this
mineralized deposit in the near term, if at all.
RECENT LOSSES
The Company reported a net loss of $642,271 for the three months
ended March 31, 1996, compared to a net income of $100,329 for
the same three month period in 1995. The decrease was due to a
decrease in interest income as a result of both lower levels of,
and returns on, invested cash and increases in foreign exchange
loss and operating expenses. The Company has no revenue from
mining operations and has experienced losses from operations for
each of the last five years. For the years ended December 31,
1995 and 1994, the Company reported losses of $337,303 and
$23,740,478, respectively. The decreased loss during 1995
resulted primarily from the one-time costs of approximately
$22,500,000 incurred in settling the Brisas litigation in 1994.
<PAGE>
The Company expects to incur losses from operations for the next
several years as the result of increased expenditures associated
with the management of exploration and development activities on
the Brisas concession. This trend is expected to reverse if and
when this property is developed and gold and copper is produced
from the concession.
PROJECT DEVELOPMENT
The Company's principal mining asset is the Brisas alluvial gold
concession, which is in the exploration stage (see "Brisas Veta
Concession"). The Company currently estimates that capital
expenditures ( additional drilling, feasibility and environmental
work) for the project will total approximately $7,000,000 in 1996
and up to $10,000,000 in 1997, and will be significantly more in
ensuing years if, as and when the concession is developed and
placed into production. In 1995 the Company engaged an
independent consultant to provide advice on preliminary mill
design and production plans. This information is being utilized
by the Company to develop a feasibility study for the concession
and is preparatory in nature and therefore not definitive.
Currently, the mill is expected to be a conventional,
gravity/flotation/cyanidation process yielding estimated
recoveries of gold and copper of approximately of 90%. Initial
cost estimates of a 15,000 tonnes per day mill (with an error
factor of -5% to +25%) are approximately $90 million. The Company
will fund 1996 and 1997 expenditures from proceeds received from
prior sales of Common Stock of the Company and from proceeds, if
any, to be received upon the exercise of outstanding options and
the Warrants. Future expenditures are expected to be funded from
additional sales of Common Stock of the Company, or other means,
however no assurance can be given such funding can be obtained.
The Company's estimate of capital expenditures for the project is
based upon currently available information and could increase or
decrease depending upon a number of factors beyond the Company's
control. It is not unusual in new mining operations to
experience unexpected problems during the development of a mine.
As is described under " - Risks Inherent in the Mining Industry
Generally," the mining business is subject to a number of risks
and hazards. There can be no assurance these risks and hazards
will be avoided if, as and when the Brisas concession is
developed.
FOREIGN OPERATIONS
At December 31, 1995, approximately 43% of the Company's
identifiable assets (96% of its noncash assets), including its
mining property, were located in Venezuela. The Venezuelan
government, amid economic uncertainties and a bank crisis,
suspended certain constitutional rights and implemented certain
currency exchange and price controls on June 27, 1994.
Subsequently, substantially all constitutional rights were
re-established. On April 15, 1996, Venezuelan President Rafael
Caldera announced a series of free-market measures that included,
among other actions, removal of all exchange and price controls,
<PAGE>
floating interest rates, gasoline price increases and increases
in certain taxes. As part of these fiscal measures, the
Venezuelan government is negotiating with the International
Monetary Fund and certain multilateral lending agencies to help
in restructuring the Venezuelan economy. Inflation is expected
to increase over the next six to twelve months as a result of the
elimination of restrictions on the Venezuelan currency.
Subsequent to the announcement the Venezuelan bolivar exchange
rate increased from 290 bolivars per U.S. dollar to a high of 500
bolivars per U.S. dollar. On July 25, 1996, the exchange rate was
approximately 470 bolivars per U.S. dollar.
Venezuela has generally encouraged foreign investment in the
past, and the Company believes there presently exists no
significant policies, legal requirements or other regulations
which might present barriers to its continued investment in the
country. Inflation and other economic conditions have resulted
in political and social turmoil on occasion and this can be
expected to continue. Such conditions have not materially
adversely affected the Company's operations in Venezuela to-date
as substantially all of the Company's sources of funding for its
Venezuelan operations are denominated in U.S. dollars and the
Company does not currently repatriate funds from Venezuela.
Nonetheless, its activities and investment in Venezuela could be
adversely affected by future exchange controls, currency
fluctuations, political and social events, and laws or policies
of Venezuela and the United States affecting trade, investment
and taxation. Whether and to what extent current or future
economic, regulatory or political conditions may affect the
Company in the future cannot be predicted.
RISKS INHERENT IN THE MINING INDUSTRY GENERALLY
The Company is subject to all of the risks inherent in the mining
industry, including environmental hazards, industrial accidents,
labor disputes, unusual or unexpected geologic formations,
cave-ins, flooding and periodic interruptions due to inclement
weather. Such risks could result in damage to, or destruction
of, mineral properties and production facilities, personal
injury, environmental damage, delays, monetary losses and legal
liability. The Company does not presently maintain insurance
covering environmental or other catastrophic liabilities, and is
not expected to do so unless and until it is economically
feasible to do so. Insurance against environmental risks
(including pollution or other hazards resulting from the disposal
of waste products generated from exploration and production
activities) is not generally available to the Company or other
companies in the mining industry at present. Were the Company
subjected to environmental liabilities, the payment of such
liabilities would reduce the funds available to the Company.
Were the Company unable to fund fully the cost of remedying an
environmental problem, it might be required to suspend operations
or enter into interim compliance measures pending completion of
remedial activities. In addition to the foregoing risks, the
Company will also encounter or be subject to competition from
<PAGE>
other mining companies having significantly greater resources
than the Company, governmental regulation of its mining
activities and practices, the speculative nature of mineral
exploration and development, operating hazards, fluctuating
metals prices, and inflation and other economic conditions over
which it has no control.
ENVIRONMENTAL MATTERS
Venezuela has adopted environmental laws and regulations for the
mining industry which, though less restrictive than the
environmental laws of the United States, nonetheless impose
significant obligations on companies doing business in the
country. The Company will be required to submit detailed reports
outlining the environmental impact of the development of its
Brisas concession, and will be required to rehabilitate and
restore the Brisas property once mining activities are completed.
The Company will also be subject to routine inspection by the
Venezuelan Ministry of Environment and Renewable Resources to
ensure that its activities are in compliance with environmental
laws.
FLUCTUATING PRICES OF GOLD AND COPPER
The Company's operations will be significantly influenced by the
prices of gold and copper. Gold prices fluctuate widely and are
affected by numerous factors beyond the Company's control, such
as inflation, the strength of the United States dollar relative
to foreign currencies, global and regional demand, and the
political and economic conditions of major gold producing
countries throughout the world. Copper prices also fluctuate and
are generally affected by global and regional demand and existing
inventories.
NO ESTABLISHED RESERVES
The Company has to-date announced a gold and copper mineralized
deposit of 5.5 million ounces of gold and approximately 726
million pounds of copper. The mineralized deposit now
approximates 186 million tonnes grading 0.91 grams (0.029 ounces)
per tonne gold and 0.17% copper. The mineralization identified
on the Brisas concession as a consequence of the Company's
exploration activities will qualify as a commercially mineable
ore body under standards promulgated by the Securities and
Exchange Commission only after a comprehensive economic,
technical and legal feasibility study has been completed. As a
result, the Company has not yet established either proven or
probable reserves on the Brisas concession and no assurance can
be given that any such reserves will be established on the
concession.
<PAGE>
DEPENDENCY ON FINANCING ACTIVITIES
The Company does not have any revenues from operations and has
financed its mining activities in Venezuela since 1991 primarily
from the sale of its equity securities. Although management
anticipates that the Company's cash position (approximately
$28,000,000 at July 25, 1996, excluding $4,500,000 in escrowed
funds payable by the Company upon the satisfaction of certain
conditions in connection with the settlement of the Brisas
litigation), together with proceeds, if any, to be received from
the future exercise of outstanding options and the Warrants, will
be sufficient to cover estimated operating and capital
expenditures associated with the exploration and development of
its Brisas concession through 1997, there can be no assurance
that the options or Warrants will be exercised, or even if
exercised, that proceeds received by the Company will be
sufficient to finance these activities and other Company
expenditures. In addition, significant additional financing will
be required to be obtained by the Company if, as and when the
Brisas concession is placed into production.
SHARES ELIGIBLE FOR FUTURE SALE; EFFECT ON MARKET PRICE OF
COMMON STOCK
The Company's directors and executive officers currently
beneficially own 972,408 Shares, or 4.7% of the outstanding
Common Stock as of the date of this Prospectus, all of which are
offered for sale pursuant to this Prospectus. Such directors and
executive officers also own options for the purchase of an
additional 1,206,964 Shares, which, if exercised, would increase
their ownership to 10.0% of the then outstanding Common Stock.
In addition, Bluegrotto Trading Limited ("Bluegrotto") owns
1,250,000 shares of Common Stock, representing approximately 6.1%
of the outstanding Common Stock. Such shares were issued to
Bluegrotto on December 31, 1994, in connection with the
settlement of legal proceedings in Venezuela associated with the
ownership, custody and control of the Company's Brisas
concession. Pursuant to the terms of related settlement and
standstill agreements between the Company and Bluegrotto,
Bluegrotto is permitted to sell no more than 75,000 of such
shares during any 30-day period, in addition to other permitted
block trade sales, for a period of three years from the date of
settlement or until such time as Bluegrotto and any of its
related persons own less than 5% of the Common Stock then
outstanding, provided such sales are in accordance with
applicable federal, state or Canadian provincial securities laws.
None of such shares or warrants are offered for sale pursuant to
this Prospectus.
Although the Common Stock is approved for quotation on the Nasdaq
Stock Market and The Toronto Stock Exchange, trading activity in
these markets is sometimes characterized by infrequent
transactions. As a consequence, the sale from time-to-time of
the Shares offered hereby, or the shares of Common Stock
available for sale by Bluegrotto, may have the effect of
depressing the market price of the Common Stock.
<PAGE>
BACKGROUND OF THE OFFERING
OVERVIEW. The securities offered pursuant to this Prospectus
consist of 10,933,545 previously issued and outstanding Shares,
1,000,000 Warrants acquired in March 1994 by certain United
States and Canadian Selling Shareholders in connection with the
purchase of special warrants subsequently exercised for Shares
and Warrants, and 1,000,000 Shares issuable upon exercise of the
Warrants.
Selling Shareholders, other than those who also hold Warrants,
acquired the Shares from the Company in private placements both
within and outside the United States for cash, in exchange for
minority interests in subsidiaries of the Company, as
compensation for services rendered or pursuant to the exercise of
options granted by the Company, at then prevailing market prices
and exercisable at prices equivalent to the mean of the high and
low sales prices of the Common Stock as reported by the Nasdaq
Stock Market and The Toronto Stock Exchange as of the dates of
grant.
Selling Shareholders who hold the Warrants acquired special
warrants subsequently exercised for Shares and Warrants in a
private placement primarily in the United States and Canada, at a
price per special warrant of $10.50. Each special warrant
consisted of one Share and one-half of a September Warrant
exercisable per whole September Warrant into one Share, at
$13.00, on or before September 15, 1996.
DESCRIPTION OF INCENTIVE STOCK OPTION AND EMPLOYEE STOCK
OWNERSHIP PLANS. The Company currently maintains three stock
option plans, the 1985 Stock Option Plan, the 1992 Stock Option
Plan and the 1994 Stock Option Plan. All plans provide for the
issuance of incentive stock options intended to qualify under
Section 422A of the Internal Revenue Code of 1986, as amended
(the "Code"), and options that are not qualified under the Code.
Key individuals of the Company and its subsidiaries, including
officers and directors who are also employees, and consultants,
are eligible to receive grants of options under the plans. All
options are exercisable at prices equivalent to the closing bid
and ask prices of the Common Stock, as reported by the Nasdaq
Stock Market and The Toronto Stock Exchange as of the date of
grant.
As of July 25, 1996, options for the purchase of 21,670 and
577,035 shares remained available for grant under the 1992 and
1994 plans, respectively. Options for the purchase of 1,982,319
shares granted under the 1985, 1992 and 1994 plans remained
unexercised at such date. The incentive stock option plans are
jointly administered by the executive remuneration committee,
management and the compensation committee of the board of
directors. The primary function of the executive remuneration
committee is to review and evaluate the fairness of the
recommendations of management and the compensation committee of
the board concerning proposed grants to directors and executive
officers of the Company.
<PAGE>
The Company also maintains the Gold Reserve KSOP Plan which is
comprised of two parts, (1) a 401(k) salary reduction plan, and
(2) an ESOP employee stock ownership plan for the benefit of
eligible employees of the Company and its subsidiaries. The
salary reduction component of the plan has not been utilized to
date. The employee stock ownership component of the KSOP Plan,
which has been utilized, is intended to qualify under Sections
421 and 423 of the Code, and was established to provide eligible
employees an opportunity to purchase Common Stock of the Company.
The terms of the plan permit investment in approved securities
other than the Company's Common Stock, and allow plan
participants to self-direct the investment of their account. To
date, the plan's sole investment has been Common Stock of the
Company.
The plan invests in Common Stock of the Company through
Company-guaranteed loans. During 1995, 1994 and 1992, the plan
purchased 50,000, 20,000 and 53,571 shares of Common Stock from
the Company, respectively, at then-prevailing market prices, for
consideration of $280,195, $123,760 and $50,000, respectively.
No shares of Common Stock of the Company were purchased during
1993. Such shares were allocated to participants' accounts based
on the contributions by the Company during the plan year and the
prices at which such shares were purchased by the plan.
Combined contributions to the KSOP Plan for both Company matching
of employee 401(k) salary reductions and allocation of Company
Stock pursuant to the ESOP are based on the combination of
contributions by the Company and the participant, up to a maximum
of 25 percent of the participants' annual compensation. The KSOP
Plan is available to all eligible employees of the Company or
subsidiaries who have been employed for a period in excess of one
year and who have worked at least 480 hours during the year in
which any allocation is to be made. Distributions from the plan
are not permitted before the participating employee reaches the
age of 59 1/2, except in the case of death, disability,
termination of employment by the Company or financial hardship.
SHARES ISSUED IN EXCHANGE FOR MINORITY INTERESTS IN SUBSIDIARIES.
At the annual meeting held on May 19, 1995, the Company's
shareholders approved a plan of exchange whereby each issued and
outstanding share of Gold Reserve Aruba and Glandon held by
persons other than the Company would be exchanged for Common
Stock of the Company. The plan of exchange was completed on
June 23, 1995, and consolidated the ownership of Gold Reserve
Aruba (and its wholly-owned GLDRV subsidiary) and Glandon (and
its wholly-owned Unicorn subsidiary) into the Company as
wholly-owned subsidiaries. In consequence of the exchange, the
Company's ownership interest in the Brisas concession has been
increased by 9%, from 91% to 100%.
Pursuant to the plan of exchange, each issued and outstanding
share of Gold Reserve Aruba and Glandon, other than shares held
by the Company, was exchanged for 0.3687 Share and 0.1697 Share,
respectively. The number of Shares received by the minority
shareholders was determined by multiplying the number of shares
<PAGE>
of Gold Reserve Aruba and Glandon held by the exchanging
shareholders by ratios determined by reference to an implied
market valuation of the Brisas concession, which is the Company's
most significant asset. In addition, options to purchase 220,000
shares of Glandon were exchanged for options to purchase Shares,
based on the same methodology. Each of the Glandon options was
exchanged for options to purchase 0.1697 Share at an exercise
price equal to the average of the closing bid and ask prices of
the Common Stock, as reported on the Nasdaq Stock Market and The
Toronto Stock Exchange, as of May 22, 1995. The exchange was
predicated on the opinion of an independent financial advisor
retained for the benefit of the Company and the minority
shareholders of Gold Reserve Aruba and Glandon.
As a result of the exchange, the Company issued 1,329,183 Shares,
645,261 of which were issued to the former minority shareholders
of Gold Reserve Aruba and 683,922 of which were issued to the
former minority shareholders of Glandon. In addition, options
for the purchase of 37,334 Shares were issued to the former
minority shareholders of Glandon.
THE WARRANTS. The Company issued 2,000,000 special warrants to a
group of United States and Canadian purchasers on March 15, 1994,
each of which was subsequently exercised for one Share and
one-half Warrant. Each Warrant represents the right to purchase
one share of Common Stock at the price of $13.00 per share at any
time on or before September 15, 1996. The Warrants are not
subject to redemption by the Company and are transferable. The
Warrants may be exercised by the holder thereof, within the
period specified, by delivery to the designated warrant agent,
Transecurities International, Inc., Spokane, Washington, of an
exercise notice, together with payment therefor as specified in
the exercise notice.
The Warrants issued to the purchasers (upon the exercise of the
"special warrants" granted to such purchasers on March 15, 1994)
were issued and are governed by a warrant certificate, also dated
March 15, 1994 which contains provisions that protect the holders
thereof against dilution in certain events, or upon the
occurrence of any reorganization, reclassification or conversion
of the Common Stock, or consolidation, merger or sale of all or
substantially all of the assets of the Company.
In conjunction with the sale and issuance of the Shares and
Warrants, the Company entered into subscription agreements and a
registration rights agreement, each dated March 15, 1994, with
each purchaser, providing for the registration by the Company of
the Shares and Warrants (and the shares of Common Stock issuable
upon exercise of the Warrants) acquired by such purchasers under
the Securities Act. In conjunction with the sale and issuance of
the "special warrants" to the purchasers on March 15, 1994 (which
"special warrants" were subsequently exercised for Shares and
Warrants), the Company also entered into an underwriting
agreement with RBC Dominion Securities Inc. and Burns Fry
Limited, the underwriters of the offering, and a special warrant
<PAGE>
indenture with The R-M Trust Company, the special warrant
trustee, each also dated March 15, 1994, providing for, among
other matters, the registration by the Company, at its expense,
of the Shares and Warrants acquired by such purchasers under the
Securities Act.
SELLING SHAREHOLDERS
- - --------------------
The following table sets out as of July 25, 1996 the name of each
Selling Shareholder known to the Company to own any of the Shares
or Warrants offered hereby; any position, office or other
material relationship between the Selling Shareholder and the
Company within the past three years; the number of shares of
Common Stock known to the Company to be beneficially owned by the
Selling Shareholder at such date; the number of Shares and
Warrants offered hereby by the Selling Shareholder; and the
number of shares of Common Stock and percentage ownership
interest of the Selling Shareholder following this offering.
Pursuant to Rule 429 of the Securities Act, the Form S-3
Registration Statement of which this Prospectus is a part also
updates and amends the Company's registration statements on Form
S-1, S-2 and S-3 that were declared effective on August 9, 1993,
June 22, 1994 and July 10, 1995 respectively. SELLING
SHAREHOLDERS MAY HAVE SOLD ALL OR A PART OF THE SHARES AND
WARRANTS ATTRIBUTED TO THEM SUBSEQUENT TO THE EFFECTIVE DATES OF
THESE EARLIER REGISTRATION STATEMENTS.
<PAGE>
THE FOLLOWING TABLE MAY NOT ACCURATELY REFLECT THE SHAREHOLDINGS
OF THOSE SELLING SHAREHOLDERS WHO ARE NOT AFFILIATED WITH THE
COMPANY AND WITH RESPECT TO WHICH CURRENT SHARE OWNERSHIP
INFORMATION IS NOT AVAILABLE.
<TABLE>
<CAPTION>
Shares of Common Stock
-------------------------------------------------
Remaining
Beneficially Offered After
Name and Position(s) Held Owned Hereby Offering(1) Percentage
- - -------------------------- ------------ ------- ----------- ----------
<S> <C> <C> <C> <C>
Allen, Corey (1) 25,000 10,000 15,000
Ambrose, Allen 3,348 3,348 -
Bantz , Mark D. 36,091 36,091 -
Bantz, Alison 38,791 38,791 -
Bantz, Connie J. 7,500 7,500 -
Bantz, William B. (1) 123,000 123,000 -
Belanger, A. Douglas (1) 718,022 304,301 413,721 1.80%
Belanger, Dennis - trustee,
Belanger Children Trust 244,863 244,863 -
Boltz, H.W. 4,242 4,242 -
Casanas, Lucia 10,000 5,000 5,000 *
Chastek, Chester 125,000 125,000 -
Crabb, John J. and Helen P. 10,000 10,000 -
Cunningham, Linda S. (1) 175,896 141,098 34,798 *
Czinger, John 254,906 254,906 -
Dacey, John and Shirley 9,400 9,400 -
Degerstrom, N.A., Inc. 214,586 214,586 -
Degerstrom, Neal 16,645 16,645 -
Doyl, Lawrence and Marjorie 85,093 61,991 23,102 *
Etter, James F. Etter 108,578 108,578 -
Farley, Ronald 7,500 7,500 -
Fish, James A. 10,000 10,000 -
Flores, Perfecto (1) 11,697 10,000 1,697 *
Garwood, Robert G. (1) 37,000 37,000 -
Grimm, Jack F. 54,242 54,242 -
(Continued)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shares of Common Stock
-------------------------------------------------
Remaining
Beneficially Offered After
Name and Position(s) Held Owned Hereby Offering(1) Percentage
- - -------------------------- ------------ ------- ----------- ----------
<S> <C> <C> <C> <C>
Hanson, R. A. Co., Inc. 229,696 229,696 -
Hatfield, Paul A. 5,000 5,000 -
Hopkins, Anne - trustee
A.M. McGuinness Trust 1,818 1,818 -
Huamani, Luis 7,000 7,000 -
Hunt & Grimm Partnership 848 848 -
Jochim, Mark 1,000 1,000 -
Johnson, Bruce 2,545 2,545 -
Kettleson, Hal 5,091 5,091 -
Kistler, Robert E. 76,683 31,583 45,100 *
Kovacevich, Robert (2) 18,697 6,197 12,500 *
Larum, Norm 37,500 37,500 -
Layman, John 4,290 4,290 -
Lightner, Fred (1) 6,788 6,788 -
Loretto, John 10,182 10,182 -
Malysa, John 45,485 45,485 - *
Manrique, Alberto 18,666 18,666 -
Mathews, Sandra (1) 5,000 5,000 -
McChesney, Kevin - trustee
McChesney Family Trust 26,921 26,921 -
McChesney, Patrick D. (1) 157,262 62,262 95,000 *
McGuinness, Robert A. (1) 165,916 7,500 158,416 *
McGuire, Rosa L. (1) 3,071 3,071 -
Mikkelsen, Chris D. 10,768 10,768 -
Mikkelsen, Chris D. -
trustee for Rondi Timm 53,841 53,841 -
Nogueira, Alexandrino (1) 47,457 37,457 10,000 *
O'Brien, Robert W. 50,000 50,000 -
(Continued)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shares of Common Stock
-------------------------------------------------
Remaining
Beneficially Offered After
Name and Position(s) Held Owned Hereby Offering(1) Percentage
- - -------------------------- ------------ ------- ----------- ----------
<S> <C> <C> <C> <C>
Paul, Bernardo 281,969 76,811 205,158 *
Pearson, Roy 104,311 104,311 -
Peterson, David A. and
Debra L. 27,713 11,713 16,000 *
Potter, Brian W. and
Jean M. 13,151 5,000 8,151 *
Reeves, James R. (1) 21,998 2,000 19,998
Rhoads, Geneva 500 500 -
Robinson, Karen 7,377 956 6,421 *
Sallee, Betty Revocable
Living Trust 8,601 8,601 -
Sallee, Frank Revocable
Living Trust 11,995 11,995 -
Sallee, Frank W. and
Betty B. 477,317 350,000 127,317 *
Sallee, Gary 5,091 5,091 -
Sandner, Stanley L. (1) 225,000 225,000 -
Sanguinetti, Michael H. 4,242 4,242 -
Stephenson, James 11,833 1,700 10,133
Teneff, Hobart (1) 954,016 885,316 68,700 *
Teneff, Steve 222,079 204,302 17,777 *
Timm, Rockne J. (1) 865,491 427,750 437,741 1.90%
Timm, Shannon I. 53,841 53,841 -
Tracy, Ron (1) 159,494 106,407 53,087 *
Turner, Robert 50,000 50,000 -
Wark, John Wark 10,000 10,000 -
Wright, Alan 42,500 - 42,500 *
Wu, Albert K.F. (1) 42,614 8,917 33,697 *
(Continued)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shares of Common Stock
-------------------------------------------------
Remaining
Beneficially Offered After
Name and Position(s) Held Owned Hereby Offering(1) Percentage
- - ---------------------------- ------------ ------- ----------- ----------
<S> <C> <C> <C> <C>
AFM (Canada) L.P. (4) 16,500 16,500 -
AGF Canadian Resources
Fund 100,000 100,000 -
AGF Growth Equity Fund 300,000 300,000 -
AGF Growth Equity Fund (4) 75,000 75,000 -
Altamira Management Limited 800,000 800,000 -
Banca Nazionale del
Lavoro (4) 75,000 75,000 -
Bank of New York (4) 112,500 112,500 -
Bloom Investment Council,
Inc. 44,000 44,000 -
Bock, George J. 42,000 42,000 -
Brown, Hugh M. 44,000 44,000 -
Burns Fry Limited 110,000 110,000 -
C.P.P. (Canada) L.P. (4) 25,500 25,500 -
Cargill Financial Services
Corporation 80,000 80,000 -
Continental Casualty
Company 300,000 300,000 -
Continental Casualty
Company (4) 150,000 150,000 -
Davie, Mary R. (4) 18,000 18,000 -
Fleming Flagship Inter-
national Equity 38,000 38,000 -
Gam-Cargill Minnetonka
Fund Inc. 40,000 40,000 -
Gentrust Investment
Counsellors, Inc. 100,000 100,000 -
Global Paradigm Manage-
ment (4) 36,000 36,000 -
(Continued)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shares of Common Stock
-------------------------------------------------
Remaining
Beneficially Offered After
Name and Position(s) Held Owned Hereby Offering(1) Percentage
- - ---------------------------- ------------ ------- ----------- ----------
<S> <C> <C> <C> <C>
Global Strategy Canada
Growth Fund 56,000 56,000 -
Great Basin(3) 391,161 391,161 -
Invesco Funds Group 362,000 362,000 -
Jones, Susan J. 50,000 50,000 -
King, Jane Lennox 100,000 100,000 -
Loewen Ondaatji McCutcheon,
S.A. 60,000 60,000 -
M.K. Wong & Associates Ltd. 200,000 200,000 -
MegaGold(3) 125,083 125,083 -
Minnetonka Limited Fund, L.P. 80,000 80,000 -
Morgan Stanley Institution
Fund, Inc. (4) 75,000 75,000 -
O'Connor & Associates (4) 300,000 300,000 -
Odyssey Partners, L.P. 200,000 200,000 -
Odyssey Partners, L.P. (4) 37,500 37,500 -
Polar Partners One (4) 16,500 16,500 -
Provincial Treasurer of
Alberta (4) 340,500 340,500 -
Robert Fleming & Co. Ltd. 94,000 94,000 -
Salzmann, Guent 30,000 30,000 -
Silverton International
Fund Limited (4) 16,500 16,500 -
Sonz Partners, L.P. (4) 75,000 75,000 -
Stanco Investments, Robert
Kovacevich escrow agent (3) 118,785 118,785 -
Sun Valley Gold Inter-
national, Ltd. (4) 150,000 150,000 -
Sun Valley Gold, L.P. (4) 187,500 187,500 -
(Continued)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shares of Common Stock
-------------------------------------------------
Remaining
Beneficially Offered After
Name and Position(s) Held Owned Hereby Offering(1) Percentage
- - ---------------------------- ------------ ------- ----------- ----------
<S> <C> <C> <C> <C>
Swiss Bank Corporation
Geneva (4) 165,000 165,000 -
Tiger Management Corp. (4) 750,000 750,000 -
U.S. World Gold Fund (4) 300,000 300,000 -
Union Bank of Switzerland (4) 60,000 60,000 -
Winburn Investment
Company (4) 18,000 18,000 -
____________________
* less than 1%
</TABLE>
(1) Current or former executive officers, directors or employees
of the Company or its subsidiaries.
(2) Mr. Kovacevich and Mr. Paul are each counsel to the Company.
(3) Great Basin Energies, Inc. and MegaGold Corporation are both
majority-owned subsidiaries of the Company. Stanco is an
indirect wholly-owned subsidiary of the Company.
(4) Includes one Warrant for the purchase of one share of Common
Stock for every two shares of Common Stock held.
PLAN OF DISTRIBUTION
- - --------------------
The Selling Shareholders propose to sell the Shares or Warrants
from time to time or at any time during a period of two years
commencing the date the Registration Statements of which this
Prospectus is a part have become effective, in transactions in
the over-the-counter market, in other permitted public sales, in
privately negotiated transactions or otherwise, at market prices
prevailing at the time of sale or at negotiated prices.
<PAGE>
Some or all of the Shares or Warrants may be sold in transactions
involving broker-dealers, who may act solely as agent or may
acquire Shares or Warrants as principal. Broker-dealers who
participate in such transactions as agent may receive commissions
from Selling Shareholders and, if they act as agent for the
purchaser, also from the purchaser. Selling Shareholders and any
such broker-dealer may be deemed to be "underwriters", as that
term is defined in Section 2(11) of the Securities Act. Any
commissions received by any such broker-dealer in connection with
any such sales, and any profits received from the resale of
Shares or Warrants acquired by such broker-dealer as principal,
may be deemed to be underwriting discounts and commissions
pursuant to the Securities Act.
The Company has agreed to indemnify the Selling Shareholders for
certain liabilities, including liabilities arising under the
Securities Act, in conjunction with the offer and sale of the
Shares and Warrants by the Selling Shareholders pursuant to the
Registration Statement of which this Prospectus is a part.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted pursuant to the foregoing, or to
directors, officers and controlling persons of the Company
pursuant to applicable provisions of the Montana Business
Corporation Act and the Company's bylaws, the Company has been
advised that in the opinion of the Commission, such
indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable. In the event that
a claim for indemnification against such liabilities (other than
the payment by the Company of expenses incurred or paid by a
director, officer or controlling person of the Company in a
successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection
with the Shares and Warrants being registered pursuant to this
Registration Statement, the Company will, unless in the opinion
of its counsel such matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification is against public policy
as expressed in the Securities Act, and will be governed by the
final adjudication of such issue.
DESCRIPTION OF CAPITAL STOCK
- - ----------------------------
The Company is authorized under its Articles of Incorporation, as
amended, to issue up to 50,000,000 shares of capital stock, of
which 40,000,000 shares are designated Common Stock, without par
value, and 10,000,000 shares are designated preferred stock
issuable in one or more series, with such rights, preferences,
limitations and other characteristics as the board of directors
may from time-to-time determine. At July 25, 1996, 24,572,193
shares of Common Stock were outstanding or deemed outstanding,
including 3,246,006 shares issuable pursuant to options and
warrants presently exercisable within 60 days. No shares of
preferred stock were outstanding at such date.
<PAGE>
COMMON STOCK
Holders of Common Stock are entitled to one vote per share upon
all matters on which they have the right to vote, and with
respect to the election of directors are entitled to cumulate
their votes. Shares of Common Stock do not have preemptive
rights and are not subject to redemption. Holders of Common
Stock are entitled to receive such dividends as may be declared
by the Board of Directors out of funds legally available
therefore. In the event of dissolution or winding up of the
affairs of the Company, holders of Common Stock are entitled to
share ratably in all assets of the Company remaining after
payment of all creditors. The Common Stock is fully paid and
nonassessable. The transfer agent and registrar for the Common
Stock is Transecurities International, Inc., 2510 North Pines,
Suite 200, Spokane, Washington 99206-7624.
PREFERRED STOCK
The board of directors is authorized, subject to the limitations
prescribed by law and the provisions contained in the Company's
corporate by-laws and articles of incorporation, at its option,
from time to time to divide all or any part of the Preferred
Stock into series thereof; to establish from time to time the
number of shares to be included in any such series; to fix the
designations, powers, preferences and rights of the shares of
each such series and the qualifications, limitations or
restrictions thereof; and to determine variations, if any,
between any series so established as to all matters, including,
but not limited to, the determination of (a) the number of shares
constituting each such series and the distinctive designation of
such series; (b) the rate of dividend, if any, and whether
dividends shall be cumulative or noncumulative; (c) the voting
power of holders of such series, if any, including, without
limitation, the vote or fraction of a vote to which such holder
may be entitled, the events upon the occurrence of which such
holder may be entitled to vote, and any restrictions or
limitations upon the right of such holder to vote, except on such
matters as may be required by law; (d) whether or not such series
shall be redeemable and, if so, the terms and conditions of such
redemption, including the date or dates after which the shares
constituting such series shall be redeemable and the amount per
share payable in case of redemption, which amount may vary under
different conditions and at different Redemption dates; e) the
extent, if any, to which such series shall have the benefit of
any sinking fund provisions for Redemption or repurchase of
shares; f) the rights, if any, of such series in the event of the
dissolution of this corporation or upon any distribution of the
assets of this corporation, including, with respect to the
voluntary or involuntary liquidation, dissolution or winding up
of this corporation, the relative rights of priority, if any, of
payment of shares of such series; g) whether or not the shares of
such series shall be convertible and, if so, the terms and
conditions on which shares of such series shall be so
convertible; and h) such other powers, designations, preferences
and relative participating, optional or other special rights, and
such qualifications, limitations or restrictions thereon as are
permitted by law.
<PAGE>
Some corporate and securities law commentators believe that
companies having authorized preferred stock are less vulnerable
to unsolicited takeovers (and by implication, the higher prices
that may be paid to shareholders in an unsolicited takeover),
since preferred stock can be issued by a board of directors as a
defensive strategy to such offers. Other commentators believe
that the issuance of preferred stock as a defensive strategy
increases the price eventually paid to shareholders in a
successful takeover because the specter of such issuance forces
an offeror to negotiate price with the board of directors. The
Company is presently not aware of any unsolicited takeover
attempt and cannot predict whether any such attempt would be made
in the future.
Whether and to what extent the Company would utilize the
preferred stock as a defensive strategy to an unsolicited
takeover attempt has not been determined by the board of
directors. It is the present position of the board of directors
that any such defensive strategy should be adopted, if at all,
only after the terms and conditions of any such takeover attempt
have been made known and the board of directors, together with
its financial advisors, have had an opportunity to study the
offer and its effect on the Company and its shareholders.
LEGAL MATTERS
- - -------------
The legality of the Common Stock offered hereby will be passed
upon for the Company by Randall & Danskin, P.S., 1500 Seafirst
Financial Center, Spokane, Washington 99201.
EXPERTS
- - -------
The consolidated balance sheets of the Company as of December 31,
1995 and 1994, and the consolidated statements of operations,
changes in shareholders' equity and cash flows for each of the
three years in the period ended December 31, 1995 incorporated by
reference in this Prospectus have been incorporated herein in
reliance on the report, which includes an explanatory paragraph
related to uncertainties regarding the Company's ability to
recover its investments in its Brisas mining concession, of
Coopers & Lybrand L.L.P., independent accountants, given on the
authority of that firm as experts in accounting and auditing.
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON IS AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS
PROSPECTUS. ANY INFORMATION OR REPRESENTATION NOT CONTAINED
HEREIN, IF GIVEN OR MADE, MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, BY ANY SELLING SHAREHOLDER OR ANY
UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER
THAN THE SECURITIES TO WHICH IT RELATES. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT
IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
OR INCORPORATED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
ITS DATE.
GOLD RESERVE CORPORATION
-------------------------------
PROSPECTUS
-------------------------------
July 25, 1996
TABLE OF CONTENTS
Page
----
Available Information 2
Prospectus Summary 2
Incorporation of Certain Documents by Reference 3
Risk Factors 4
Background of the Offering 6
Selling Shareholders 8
Plan of Distribution 11
Description of Capital Stock 11
Legal Matters 12
10,933,545 Previously Issued Shares of Common Stock, 1,000,000
Previously Issued Common Stock Purchase Warrants and 1,000,000
Shares of Common Stock Issuable upon Exercise of the Warrants
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
- - --------------------------------------
Item 14. Other Expenses of Issuance and Distribution
- - ----------------------------------------------------
SEC registration fee $ 6,232
NASD filing fee -
Printing costs 5,000 *
Legal fees and expenses 10,000 *
Accounting fees 5,000 *
Listing expenses 7,500
Miscellaneous 500 *
-------
Total $34,232 *
=======
* Estimated.
Item 15. Indemnification of Directors and Officers
- - --------------------------------------------------
The only statutes, charter provisions, by-laws, contracts or
other arrangements under which a controlling person, director or
officer of the Company is insured or indemnified in any manner
against liability which he may incur in his capacity as such are
Sections 35-1-451 through 31-1-459 of the Montana Business
Corporation Act and Article 7 of the Company's Bylaws. Taken
together, these statutory and bylaw provisions generally allow
the Company to indemnify its directors and officers against
liability, and to advance the costs of defending any such person
against liability, provided (i) such indemnification or
advancement of expenses is authorized by the vote of those
directors who are not parties to the proceeding upon which such
liability is predicated (or, in certain instances, by alternate
disinterested means), (ii) the director or officer was acting on
behalf of the Company in his official capacity as a director or
officer and (iii) such director or officer conducted himself in
good faith and believed his conduct was in, or not opposed to,
the best interests of the Company (or in the case of any criminal
proceeding, that he had no reasonable cause to believe his
conduct was unlawful. The Company may not indemnify a director
or officer, however, if such director or officer is adjudged
liable to the Company, or if the director or officer is adjudged
to have derived an improper personal benefit.
Indemnification permitted by these provisions is limited to
reasonable expenses incurred in connection with the proceeding
upon which liability is predicated, which includes the amount of
any such liability actually imposed.
Sections 35-1-141 through 35-1-459 of the Montana Business
Corporation Act are set forth in their entirety as follows:
<PAGE>
35-1-451. DEFINITIONS.
- - --------- -----------------------------------------------------
As used in 35-1-451 through 35-1-459, the following
definitions apply:
(1) "Corporation" includes any domestic or foreign
predecessor entity of a corporation in a merger or
other transaction in which the predecessor's existence
ceased upon consummation of the transaction.
(2)(a) "Director" means an individual who is or was a
director of a corporation or an individual who, while
a director of a corporation, is or was serving at the
corporation's request as a director, officer, partner,
trustee, employee, or agent of another foreign or
domestic corporation, partnership, joint venture,
trust, employee benefit plan, or other enterprise. A
director is considered to be serving an employee
benefit plan at the corporation's request if the
director's duties to the corporation include duties or
services by him to the plan or to participants in or
beneficiaries of the plan.
(2)(b) Director includes, unless the context requires
otherwise, the estate or personal representative of a
director.
(3) "Expenses" include attorney fees.
(4) "Liability" means the obligation to pay a judgment,
settlement, penalty, or fine, including an excise tax
assessed with respect to an employee benefit plan, or
to pay reasonable expenses incurred with respect to a
proceeding.
(5)(a) "Official capacity" means: (i) when used with respect
to a director, the office of director in a
corporation; or (ii) when used with respect to an
individual other than a director, as contemplated in
35-1-457, the office in a corporation held by the
officer or the employment or agency relationship
undertaken by the employee or agent on behalf of the
corporation.
(5)(b) Official capacity does not include service for any
other foreign or domestic corporation or any
partnership, joint venture, trust, employee benefit
plan, or other enterprise.
(6) "Party" includes an individual who was, is, or is
threatened to be made a named defendant or respondent
in a proceeding.
(7) "Proceeding" means any threatened, pending, or
completed action, suit, or proceeding, whether civil,
criminal, administrative, or investigative and whether
formal or informal.
<PAGE>
35-1-452. AUTHORITY TO INDEMNIFY.
- - --------- -----------------------------------------------------
(1) Except as provided in subsection (4), an individual
made a party to a proceeding because he is or was a
director may be indemnified against liability incurred
in the proceeding if: (a) he conducted himself in good
faith; (b) he reasonably believed: (i) in the case of
conduct in his official capacity with the corporation,
that his conduct was in the corporation's best
interests; and (ii) in all other cases, that his
conduct was at least not opposed to the corporation's
best interests; and (c) in the case of any criminal
proceeding, he had no reasonable cause to believe his
conduct was unlawful.
(2) A director's conduct with respect to an employee
benefit plan for a purpose the director reasonably
believed to be in the interests of the participants in
and beneficiaries of the plan is conduct that
satisfies the requirement of subsection (1)(b)(ii).
(3) The termination of a proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo
contendere or its equivalent is not, of itself,
determination that the director did not meet the
standard of conduct described in this section.
(4) A corporation may not indemnify a director under this
section: (a) in connection with a proceeding by or in
the right of the corporation in which the director was
adjudged liable to the corporation; or (b) in
connection with any other proceeding charging improper
personal benefit to the director, whether or not
involving action in the director's official capacity,
in which the director was adjudged liable on the basis
that personal benefit was improperly received by the
director.
(5) Indemnification permitted under this section in
connection with a proceeding by or in the right of the
corporation is limited to reasonable expenses incurred
in connection with the proceeding.
35-1-453. MANDATORY INDEMNIFICATION.
- - --------- -----------------------------------------------------
Unless limited by its articles of incorporation, a
corporation shall indemnify a director who was wholly
successful, on the merits or otherwise, in the defense
of any proceeding to which the director was a party
because he is or was a director of the corporation,
against reasonable expenses incurred by the director
in connection with the proceeding.
<PAGE>
35-1-454. ADVANCE FOR EXPENSES.
- - --------- -----------------------------------------------------
(1) A corporation may pay for or reimburse the reasonable
expenses incurred by a director who is a party to a
proceeding in advance of final disposition of the
proceeding if: (a) the director furnishes the
corporation a written affirmation of the director's
good faith belief that the director has met the
standard of conduct described in 35-1-452; (b) the
director furnishes the corporation a written
undertaking, executed personally or on the director's
behalf, to repay the advance if it is ultimately
determined that the director did not meet the standard
of conduct described in 35-1-452; and (c) a
determination is made that the facts then known to
those making the determination would not preclude
indemnification under 35-1-451 through 35-1-459.
(2) The undertaking required by subsection (1)(b) must be
an unlimited general obligation of the director but
need not be secured and may be accepted without
reference to financial ability to make repayment.
(3) Determinations and authorizations of payments under
this section must be made in the manner specified in
35-1-456.
35-1-455. COURT-ORDERED INDEMNIFICATION.
- - --------- -----------------------------------------------------
Unless a corporation's articles of incorporation
provide otherwise, a director of the corporation who
is a party to a proceeding may apply for
indemnification to the court conducting the proceeding
or to another court of competent jurisdiction. On
receipt of an application, the court, after giving any
notice the court considers necessary, may order
indemnification if it determines that the director:
(1) is entitled to mandatory indemnification under
35-1-453, in which case the court shall also order the
corporation to pay the director's reasonable expenses
incurred in obtaining court-ordered indemnification;
or (2) is fairly and reasonably entitled to
indemnification in view of all the relevant
circumstances, whether or not the director met the
standard of conduct set forth in 35-1-452 or was
adjudged liable as described in 35-1-454(2). If the
director was adjudged liable as described in
35-1-452(4), the director's indemnification is limited
to reasonable expenses incurred.
35-1-456. DETERMINATION AND AUTHORIZATION OF INDEMNIFICATION.
- - --------- -----------------------------------------------------
(1) A corporation may not indemnify a director under
35-1-452 unless authorized in the specific case after
a determination has been made that indemnification of
the director is permissible in the circumstances
because the director has met the standard of conduct
set forth in 35-1-452.
<PAGE>
(2) The determination must be made: (a) by the board of
directors by majority vote of a quorum consisting of
directors not at the time parties to the proceeding;
(b) if a quorum cannot be obtained under subsection
(2)(a), by majority vote of a committee designated by
the board of directors, in which designated directors
who are parties may participate, consisting solely of
two or more directors not at the time parties to the
proceeding; (c) by special legal counsel: (i) selected
by the board of directors or its committee in the
manner prescribed in subsection (2)(a) or (2)(b); or
(ii) if a quorum of the board of directors cannot be
obtained under subsection (2)(a) and a committee
cannot be designated under subsection (2)(b), selected
by a majority vote of the full board of directors in
which selected directors who are parties may
participate; or (d) by the shareholders, but shares
owned by or voted under the control of directors who
are at the time parties to the proceeding may not be
voted on the determination.
(3) Authorization of indemnification and evaluation as to
reasonableness of expenses must be made in the same
manner as the determination that indemnification is
permissible, except that if the determination is made
by special legal counsel, authorization of
indemnification and evaluation as to reasonableness of
expenses must be made by those entitled under
subsection (2)(c) to select counsel.
35-1-457. INDEMNIFICATION OF OFFICERS, EMPLOYEES, AND AGENTS.
- - --------- -----------------------------------------------------
Unless a corporation's articles of incorporation
provide otherwise:
(1) an officer of the corporation who is not a director is
entitled to mandatory indemnification under 35-1-453
and is entitled to apply for court-ordered
indemnification under 35-1-455 to the same extent as a
director;
(2) the corporation may indemnify and advance expenses
under 35-1-451 through 35-1-459 to an officer,
employee or agent of the corporation who is not a
director to the same extent as to a director; and
(3) a corporation may also indemnify and advance expenses
to an officer, employee, or agent who is not a
director to the extent, consistent with public policy,
that may be provided by its articles of incorporation,
bylaws, general or specific action of its board of
directors, or contract.
<PAGE>
35-1-458. INSURANCE.
- - --------- -----------------------------------------------------
A corporation may purchase and maintain insurance on
behalf of an individual who is or was a director,
officer, employee, or agent of the corporation or who,
while a director, officer, employee, or agent of the
corporation, is or was serving at the request of the
corporation as a director, officer, partner, trustee,
employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust,
employee benefit plan, or other enterprise, against
liability asserted against or incurred by him in that
capacity or arising from his status as a director,
officer, employee, or agent, whether not the
corporation would have power to indemnify him against
the same liability under 35-1-452 or 35-1-453.
35-1-459. APPLICATION.
- - --------- -----------------------------------------------------
(1) A provision treating a corporation's indemnification
of or advance for expenses to directors that is
contained in its articles of incorporation, its
bylaws, a resolution of its shareholders or board of
directors, a contract, or other instrument is valid
only if and to the extent the provision is consistent
with 35-1-451 through 35-1-459. It articles of
incorporation limit indemnification or advance for
expenses, indemnification and advance for expenses are
valid only to the extent consistent with the articles
of incorporation.
(2) Sections 35-1-451 through 45-1-459 do not limit a
corporation's power to pay or reimburse expenses
incurred by a director in connection with the
director's appearance as a witness in a proceeding at
a time when the director has not been made a named
defendant or respondent to the proceeding.
Article 7 of the Company's Bylaws is set forth in its entirety as
follows:
ARTICLE 7
- - ---------
INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES, AND OTHER
AGENTS
7.1 DIRECTORS AND OFFICERS.
- - ---- ----------------------------------------------------------
The corporation shall indemnify its directors and officers
to the fullest extent permitted by the Montana Business
Corporation Act, as the same exists or may hereafter be
amended (but, in the case of alleged occurrences of actions
or omissions preceding any such amendment, only to the
extent that such amendment permits the corporation to
provide broader indemnification rights than the Montana
Business Corporation Act permitted the corporation to
provide prior to such amendment).
<PAGE>
7.2 EMPLOYEES AND OTHER AGENTS.
- - ---- ----------------------------------------------------------
The corporation shall have power to indemnify its employees
and other agents as set forth in the Montana Business
Corporation Act.
7.3 NO PRESUMPTION OF BAD FAITH.
- - ---- ----------------------------------------------------------
The termination of any proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or
its equivalent shall not, of itself, create a presumption
that the person did not act in good faith and in a manner
which the person reasonably believed, in the case of
conduct in the person's official capacity, the person's
conduct was in the corporation's best interests and in all
other cases, the person's conduct was at least not opposed
to the corporation's best interests, and with respect to
any criminal proceeding, that the person had reasonable
cause to believe that the conduct was lawful.
7.4 ADVANCES OF EXPENSES.
- - ---- ----------------------------------------------------------
The expenses incurred by a director or officer in any
proceeding shall be paid by the corporation in advance at
the written request of the director or officer, if the
director or officer:
A. furnishes the corporation a written affirmation of such
person's good faith belief that such person is entitled
to be indemnified by the corporation; and
B. furnishes the corporation a written undertaking to
repay such advance to the extent that it is ultimately
determined by a court that such person is not entitled
to be indemnified by the expenses and without regard to
the person's ultimate entitlement to indemnification
under this bylaw or otherwise.
7.5 ENFORCEMENT.
- - ---- ----------------------------------------------------------
Without the necessity of entering into an express contract,
all rights to indemnification and advances under this bylaw
shall be deemed to be contractual rights and be effective
to the same extent and as if provided for in a contract
between the corporation and the director or officer who
serves in such capacity at any time while this bylaw and
relevant provisions of the Montana Business Corporation Act
and other applicable law, if any, are in effect. Any right
to indemnification or advances granted by this bylaw to a
director or officer shall be enforceable by or on behalf of
the person holding such right in any court of competent
jurisdiction if (a) the claim for indemnification or
advances is denied, in whole or in part, or (b) no
disposition of such claim is made within ninety days of
request therefor. The claimant in such enforcement action,
if successful in whole or in part, shall be entitled to be
paid also the expense of prosecuting a claim. It shall be
a defense to any such action (other than an action brought
<PAGE>
to enforce a claim for expenses incurred in connection with
any proceeding in advance of its final disposition when the
required affirmation and undertaking have been tendered to
the corporation) that the claimant has not met the
standards of conduct which make it permissible under the
Montana Business Corporation Act for the corporation to
indemnify the claimant for the amount claimed, but the
burden of proving such defense shall be on the corporation.
Neither the failure of the corporation (including its board
of directors, independent legal counsel or its
shareholders) to have made a determination prior to the
commencement of such action that indemnification of the
claimant is proper in the circumstances because the
claimant has met the applicable standard of conduct set
forth in the Montana Business Corporation Act, nor an
actual determination by the corporation (including its
board of directors, independent legal counsel or its
shareholders) that the claimant has not met such applicable
standard of conduct, shall be a defense to the action or
create a presumption that the claimant has not met the
applicable standard of conduct.
7.6 NON-EXCLUSIVITY OF RIGHTS.
- - ---- ----------------------------------------------------------
The rights conferred on any person by this bylaw shall not
be exclusive of any other right which such person may have
or hereafter acquire under any statute, provision of the
articles of incorporation, bylaws, agreement, vote of
shareholders or disinterested directors or otherwise, both
as to action in the person's official capacity and as to
action in another capacity while holding office. The
corporation is specifically authorized to enter into
individual contracts with any or all of its directors,
officers, employees or agents respecting indemnification
and advances, to the fullest extent permitted by the law.
7.7 SURVIVAL OF RIGHTS.
- - ---- ----------------------------------------------------------
The rights conferred on any person by this bylaw shall
continue as to a person who has ceased to be a director,
officer, employee or other agent and shall inure to the
benefit of the heirs, executors and administrators of such
a person.
7.8 INSURANCE.
- - ---- ----------------------------------------------------------
To the fullest extent permitted by the Montana Business
Corporation Act, the corporation, upon approval by the
board of directors, may purchase insurance on behalf of any
person required or permitted to be indemnified pursuant to
this bylaw.
<PAGE>
7.9 AMENDMENTS.
- - ---- ----------------------------------------------------------
Any repeal of this bylaw shall only be prospective and no
repeal or modification hereof shall adversely affect the
rights under this bylaw in effect at the time of the
alleged occurrence of any action or omission to act that is
the cause of any proceeding against any agent of the
corporation.
7.10 SAVINGS CLAUSE.
- - ---- ----------------------------------------------------------
If this bylaw or any portion hereof shall be invalidated on
any ground by any court of competent jurisdiction, the
corporation shall indemnify each director, officer or other
agent to the fullest extent permitted by any applicable
portion of this bylaw that shall not have been invalidated,
or by any other applicable law.
7.11 CERTAIN DEFINITIONS.
- - ---- ----------------------------------------------------------
For the purposes of this bylaw, the following definitions
shall apply:
A. "corporation" shall include any domestic or foreign
predecessor entity of a corporation in a merger or
other transaction in which the predecessor's existence
ceased upon consummation of the transaction, and any
domestic or foreign subsidiary corporation.
B. "director" shall mean an individual who is or was a
director of a corporation or an individual who, while a
director of a corporation, is or was serving at the
corporation's request as a director, officer, partner,
trustee, employee, or agent of another foreign or
domestic corporation, partnership, joint venture,
trust, employee benefit plan, or other enterprise. A
director is considered to be serving an employee
benefit plan at the corporation's request if the
director's duties to the corporation also impose duties
on, or otherwise involve services by, the director to
the plan or to participants in or beneficiaries of the
plan. "Director" includes, unless the context requires
otherwise, the estate or personal representative of a
director.
C. "expenses" shall include counsel fees.
D. "official capacity" shall mean: when used in regard to
a director, the office of director in a corporation or
to an individual other than a director, as contemplated
in the Montana Business Corporation Act, the office in
a corporation held by the officer or the employment or
agency relationship undertaken by the employee or agent
on behalf of the corporation. "Official capacity" does
not include service for any other foreign or domestic
corporation or any partnership, joint venture, trust,
employee benefit plan, or other enterprise.
E. "proceeding" shall mean any threatened, pending, or
completed action, suit or proceeding, whether civil,
criminal, administrative, or investigative and whether
formal or informal.
<PAGE>
Item 16. Exhibits
- - ------------------
An Index to Exhibits appears at page E-1.
Item 17. Undertakings
- - ----------------------
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other
than the payment of the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication
of such issue.
(a) The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are
being made, a post-effective amendment to this
registration statement to include any material
information with respect to the plan of distribution
not previously disclosed in the registration statement
or any material change to such information in the
registration statement;
(2) that for the purpose of determining any liability under
the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement
relating to the securities offered therein, and the
offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof;
and
(3) to remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the time of the
offering.
The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each
filing of the registrant's annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and
has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City
of Spokane, State of Washington, on July 25, 1996.
GOLD RESERVE CORPORATION
By: /s/ Rockne J. Timm
---------------------------------------
Rockne J. Timm, Director,
President and Chief Executive Officer
Dated: July 25, 1996
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below constitutes and
appoints Rockne J. Timm his attorney-in-fact, with the power of
substitution, for him in any and all capacities, to sign any
amendments to this registration statement, and to file the same
with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that said attorney-in-fact or his
substitute or substitutes may do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.
By: /s/ A. Douglas Belanger
------------------------------------
A. Douglas Belanger, Director
Date: July 25, 1996
By: /s/ Patrick D. McChesney
------------------------------------
Patrick D. McChesney, Director
Date: July 25, 1996
By: /s/ Jean Charles Potvin
------------------------------------
Jean Charles Potvin, Director
Date: July 25, 1996
By: /s/ James H. Coleman
------------------------------------
James H. Coleman, Director
Date: July 25, 1996
By: /s/ Robert A. McGuinness
------------------------------------
Robert A. McGuinness, Principal
Financial and Accounting Officer
Date: July 25, 1996
<PAGE>
INDEX TO EXHIBITS
The following exhibits are filed as part of this amendment to
registration statement. Exhibits previously filed are
incorporated by reference, as noted. Exhibits filed herewith
appear beginning at page E-2.
Page
Number
Exhibit in This
Number Exhibit in this Report Report
- - ------- -------------------------------------------- -------
1.0 *
2.0 *
4.0 *
5.1 Opinion of Randall & Danskin, P.S. regarding
legality of securities offered. Previously
filed
8.0 *
12.0 *
15.0 *
23.1 Consent of Coopers & Lybrand L.L.P. Filed
herewith. E-2
23.2 Consent of Randall & Danskin, P.S. Previ-
ously Filed
24.1 Powers of attorney. Included in the signa-
ture page to this registration statement.
25.0 *
26.0 *
27.0 *
28.0 *
__________________
* Items denoted by an asterisk have either been omitted or are
not applicable.
Exhibit 23.1 to
Form S-3 Registration Statement
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement of Gold Reserve Corporation on Form S-3 (File No.
33-60779) of our report, which includes an explanatory paragraph
relating to a change in accounting for investments in 1994 and
income taxes in 1993, dated March 15, 1996, on our audits of the
financial statements of Gold Reserve Corporation. We also
consent to the reference to our firm under the caption "Experts".
/s/ Coopers & Lybrand L.L.P.
Spokane, Washington
July 29, 1996
