Mr. Douglas Belanger reports
GOLD RESERVE PROVIDES UPDATE ON PREVIOUSLY ANNOUNCED RETURN OF CAPITAL TRANSACTION
Gold Reserve Inc. is providing an update regarding its previously
announced intention to return between $90-million (U.S.) and $100-million (U.S.) in the
aggregate to holders of its Class A common
shares, pursuant to a return-of-capital
transaction.
Following the government of Canada's decision on April 15, 2019, to
impose sanctions against 43 additional individuals under the Special
Economic Measures (Venezuela) Regulations of the Special Economic
Measures Act, Gold Reserve's board of directors has determined that it is in the best interests of the company and its
shareholders to reduce the aggregate amount of capital to be returned to
shareholders pursuant to the return-of-capital transaction to
approximately $75-million (U.S.), or approximately 76 U.S. cents per Class A share.
The imposition of the April 15, 2019, sanctions poses a significant
impediment to the company's ability to work with government officials
related to the development of the Siembra Minera gold copper project,
and the company's ability to work with government officials responsible
for the payment and transfer of funds associated with the settlement
agreement.
The company expects to apply for a licence from the U.S. Treasury
Department's Office of Foreign Assets Control (OFAC) to allow the
company to pursue payments under the settlement agreement and allow
international financial institutions to facilitate such transactions to
North America at least in the near term without violating United States sanctions
on Venezuela. The company may also pursue similar relief from sanctions
imposed under Canadian law. There can be no assurance that the company
will obtain such relief or licences.
Receipt of interim order
Gold Reserve is pleased to announce that it has obtained an interim
order of the Alberta Court of Queen's Bench authorizing, among other things, the holding of the company's annual
general and special meeting of shareholders. At
the meeting, among other things, the shareholders will be asked to
consider and vote on a special resolution approving a statutory plan of arrangement whereby, subject to the terms and conditions of the arrangement, the
company will complete the distribution of $75-million (U.S.), or
approximately 76 U.S. cents per Class A share pursuant to the return-of-capital transaction.
The meeting will be held on June 13, 2019, at 9:30 a.m. at 999 W.
Riverside Ave., seventh floor, Masthead suite, Spokane, Wash., United States.
Meeting materials, including a notice of annual general and special
meeting and information circular, will be mailed shortly to shareholders
of record as of the close of business on April 24, 2019. The meeting
materials will also be available for review on the company's website under 2019 annual shareholder meeting and under the company's profile on
SEDAR.
Assuming approval of the arrangement at the meeting, the company will
return to the court on June 13, 2019, to seek a final order to implement
the arrangement. Assuming such final order is obtained, the company
expects to implement the arrangement and complete the return-of-capital
transaction on or about June 14, 2019. All
registered and beneficial shareholders as of the effective date will be
entitled to receive the distribution of approximately 76 U.S. cents per Class
A share, to be made pursuant to the return-of-capital transaction.
The company's board of directors has unanimously approved the
arrangement and recommends that shareholders vote for
the special resolution.
Full details of the return-of-capital transaction will be described in
the company's management information circular and other related
materials. Those documents are expected to be mailed to shareholders,
filed with applicable Canadian securities regulatory authorities, and
made available without charge on SEDAR
and on EDGAR,
and posted on the company's website
on or about May 9, 2019.
We seek Safe Harbor.
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