Image taken from Doug Belanger's next Hawaiian vacation

From Bloomie:

“We had a permit and developed the property,” Doug Belanger, president of the Spokane, Washington-based company said today in a phone interview. “We had a permit to construct and they revoked it without a basis in law.” CONTINUES HERE

Meanwhile, if you're long KRY and feeling all shadenwhatnot...big mistake. Fung's funhouse is next.

Breaking: Gold Reserve (GRZ) and Crystallex (KRY) expropriated by Venezuelan government

The Correo de Caroní is today reporting that the Venezuelan government has taken over control of the Brisas (GRZ) and Las Cristinas (KRY) gold projects.

Here's the beginning of the text translated into English:

October 27: The camp of the multinational Canadian Gold Reserve, Brisas del Cuyuní, located in Las claritas, was taken over by functionaries of MIBAM and hand over to the state run Minerven who from now on will be in charge of the installations. Luis Herrera, president of Minerven, was present at the occupation at which the Correo del Caroní was exclusive media witness.

Here's how the original Spanish text begins:

El campamento de la trasnacional canadiense Gold Reserve, Brisas del Cuyuní, situado en Las Claritas, fue tomado por funcionarios del Ministerio del Poder Popular para las Industrias Básicas y Minería (Mibam) y entregado a la estatal Minerven que desde ahora se hará cargo de las instalaciones. Luis Herrera, presidente de Minerven, estuvo presente en la ocupación a la cual asistió en exclusiva Correo del Caroní.



For those who think it's a hoax, here's a scan of the relevant page of today's Correo Del Caroní.

UPDATE: 32 minutes after IKN reports it, GRZ admits it in this news release.

Venezuelan Mining Quiz of the Day, Gold Reserve (GRZ) edition

Question: How many times has Gold Reserve (GRZ) head honcho Doug Belanger visited Venezuela in the time shown on this chart (i.e. this decade)?

Answer: zero.

Does this have something to do with the total balls-up he's made of the project? YOU BE THE JUDGE!

The IKN mining caption competition: THE RESULTS

Wow you guys are simply the best better than all the rest better than anyone anyone I've ever met. There I was expecting a few takers for yesterday's caption competition and I'm bowled over by thirty-two entries! I had no idea this would be a popular thing, so as long as I don't get sued for libel over this week's episode we can make this a semi-regular feature at IKN.

With thirty-two players (some of whom entering multiple captions too) apologies in advance if you don't make the finals page. The standard was high all round but I had to cut it down to a finalists roster otherwise this post would get way long and silly. So I've chosen seven captions as mighty flighty finalists, and winners you all are. We'll go in reverse order. Points were awarded for 1) making me laugh (the most important criteria) 2) shining wit 3) knowledge of mining 4) knowledge of Venezuela. Click on any of the entries to make them bigger.

On with the show!

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Joey comes up with a good one and makes the finals page, showing a clear knowledge of markets and the status quo down in Bolivar State. Nice job, Joey:

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Sixth place goes to reader S, as close as I'm going to get to legal action, methinks. Nevermind...funny...finalist..IN!

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Fifth goes to MM, nailing me a laugh when I saw this. MM is clearly man who knows his audience...

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Fourth place goes to regular reader SM who gets a dig in at the blocked deal with the russkies at RML.v (clearly a cunning linguist):

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MP is in third place and snatches an impressive bronze medal with some subtle mining humour...you really gotta know your Venezuela mining to catch this one.

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The magnificent runner-up is LimeSlime (who forgets to guestpost about Brazil these days but has time for caption competitions it seems...dude we gotta talk). Anyway, nice bizarro OT stuff from Otto's Brazil expert and pal:

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But the winner, and top prize (a night's worth of ice-cold Molson) goes to SM, who manages to combine one of IKN's little ditties about Venezuelan miners into his caption. You rule, SM, the prize is yours:

Dear Mr. Belanger.....

....you should have taken the Russky offer, dude.

Hey, remember at the beginning of the year when Gold Reserve (GRZ) shareholders were celebrating the fact that they'd rebuffed the Rusoro (RML.v) hostile bid? It was about the same time as when GRZ was trading in the U$1.10 range.

Here's Reuters' report guaranteed to loosen the bowels of anyone silly enough to still believe the tosh that comes from Doug Belanger's mouth and be long GRZ. Expect to win it back through the courts now, do you? 'Scuse me while I stifle a giggle or twenty-seven.

Venezuela denied a request by a subsidiary of Canadian mining Gold Reserve to extend a grant in the Brisas gold project, informed the Ministry of Basic Industries and Mining through the Official Gazette that circulated on Monday.

Moreover, the resolution declared extinct on the granting mineral rights in (Gold Reserve’s) El Pauji concession for exploration and exploitation of gold and diamonds in southern Latin America .

The ministry claimed that Gold Reserve "is not solvent with the Republic," it proceeded to not renew the grant, which expired on July 20, 2008.

Gold Reserve (GRZ) and the definition of the word "never"

I had to laugh.

Yesterday, Doug Belanger of Gold Reserve (GRZ) and his managerial team sent out this PR that informed its shareholders that it is now "in dispute" with the government of Venezuela and made clear noises to the effect that if they weren't allowed to move forward with their 'Brisas' gold project they'd take Venezuela to court and claim U$5Bn (yep, with a B) in damages. GRZ stock rose this morning on the news, which can only mean that people holding shares in this company are among the top echelons of stupid in the world of stock market investment. Really and truly stupid, stupid, stupid.

The word to understand here is "never". Be clear of its meaning and definition as used in the English language, as you can now be assured, once and for all, that GRZ will never mine or even get close to mining Brisas. GRZ shareholders are quick to point out the (dwindling) cash pile at the company. Well what's the point of having a whole bunch of money when you will never...repeat never...use it? Belanger understood this last year and decided to cancel the ordered equipment. He knows he'll never ever get to use it, so it's better to have a whole stack of money to pay his own salary and benefits for the next five years until he retires.

As for threatening Venezuela with court action...over a concession sitting in the middle of Venezuela? LOL!!!! To begin with any case would take forever to be heard. For seconds Venezuela would never (repeat never) recognize any ruling and for desserts all they need to do is take an army unit down there with one guy holding a piece of paper with "expropriate" wriiten on it and it's all over anyway. Ask Freeport about its claims on Cuba's nickel concessions to get some context about the chances you'd have of ever seeing any of the money.

In the weird world of Belanger, GRZ is currently worth far less than even the cash it has at bank as it's already clear as a bell that the only publicly listed company in the world in a position to buy it out will be blocked at everyturn by the self-serving management at GRZ. There is no point in holding stock in this company. None whatsoever. Why hold a speculative and high risk stock such as a junior gold miner in Venezuela when there is no reward possible? Truly a stock for the stupid.

Rusoro (RML.v): Blocking out the noise (another episode of 'cui bono?')

On Saturday IKN ran and linked the report in The Vancouver Sun that implicated André Agapov, CEO of Rusoro (RML.v), in banking crimes in Thailand that have put people behind bars. So by way of balance (on this blog?..wow) here's the link to the RML.v comeback that went out last night and here's the moneyline(s):

Far from filing any charges against Mr. Agapov, the Thai authorities have sought and obtained his cooperation and assistance. In the early 1990s, Mr. Agapov had a junior position in the Russian banking and commercial organization called "OLBI". In Bangkok he served as a Russian/English translator for a principal of OLBI. As a result, the Thai authorities interviewed him as a friendly witness and assured him that he was not under investigation.

Read the whole thing, because it's a strong reply. "What?", I hear you say, "an unjustified hit-piece in a Vancouver publication about a Canadian junior miner in Venezuela with Russian owners? What a shocker! There otta be a law, ya knowz!!"

There has been an awful lot of noise around Rusoro recently, of course. The GRZ hostile bid, the court injunction, the non-stop "Chávez's friends" nods and winks from mine chattering (no)class, the oogabooga Russkies are coming noises from those who still buy the J. Edgar Hoover line. Et cetera et cetera et cetera. But there are always manifold sideroads to travel down, not just the ones that those who would control your mind want you to visit. As an illustration, the Vancouver Sun note on Saturday got your humble correspondent looking a little more closely at Rusoro's numbers, projections etc and, it must be said, they really do stack up nicely and make it a junior at least worth considering.

First thing to note is that Rusoro actually produces gold, a fact that immediately separates the company from the other Bolivar State junior miners. Secondly, in 2008 it really made progress on both production levels and cash costs. RML.v produced 111k oz Au in 2008, and the 38k or so in the last quarter came at a very profitable cash cost of U$358/oz. Now if we look at the 2009 projections, the company expects to produce 170,000 to 190,000 ounces of gold and is also expecting to trim that cash cost even further.

I'm going to keep things ballpark here, so for argument's sake (and pick your own numbers if you don't like mine, I've done my XLS spreadsheet and we can split hairs all day on these things) RML.v ends up by netting for itself U$350 of the gross revenues per ounce. By taking 180,000 as our own target that puts us at U$63m profit.

Now a lot has been said about the large share dilution at RML, so let's look at that. Right now there are 391.5m shares out and a fully diluted number of 535.6m (and it should be noted that the vast majority of those warrants are way out the money and shouldn't be worried about too much as an overhang threat right now). To those numbers we have to add the recently announced placement, where RML.v is raising a tad over C$100m by selling 167m new shares (no warrants, and the offering is underwritten by Canaccord). This will bring shares out to 558.5m.

So, back to my very ballpark forecast for RML.v of U$63m in revenues for FY09. That works out as a projected 14.3 Canadian cents per share (using today's forex U$1=C$1.27). With RML.v currently trading at C$0.52, this thing, even after the large dilution, is trading at less than 4X earnings.

That's not bad at all for a gold miner going through its major growth period. Money talks and BS walks?

The above is a rundown of the numbers, for sure. I'm not going into the political side of the RML.v equation at all here. In fact on a personal level I'm still leery and still officially avoiding all things Venezuela investments, as there are clearly issues both real and imagined about the country. But run the numbers on RML.v and the value is obvious. Rusoro didn't need to get control of Brisas to be numerically attractive. The dilution to come is the dilution to come, but it will add C$100m to the coffers that will help bring its own projects online. Look into the company yourself and you'll see that forecast production is set as rising much higher in the years 2010 and onwards, no Belanger required.

There comes a moment when risk is outweighed by reward and each person's tipping point is different. I know people that are happy holders of RML.v. I know others that won't touch the stock. I know of others like me, the fence-sitters (after all, plenty more fish in the sea). All these positions are valid in my opinion. DYODD, I really mean it.

Final thought about that Vancouver Sun hit piece: Do they have something against Canaccord all of a sudden? The games people play, eh..........

UPDATE: Roy Carson at Vheadline can go **** himself. The cyberparasite turd pastes the whole of this article on his site with a tiny link.

Rusoro: "THE BID IS DEAD" (an IKN exclusive)

Oh this is fun, I get to break an exclusive! After hitting "publish" on the trading post underneath I got in touch with George Salamis, President of Rusoro (RML.v) and asked him his views. He told me about what was going on with the courtroom appeal application reported today and I said, "Hey, that's good copy, mind if you go on the record with that?" Here agreed and here's the result. Salamis exclusively told Inca Kola News;

"It's hugely unfortunate that investors view (according to the share price of today) that this appeal represents new life for the bid.

"A couple of things to make clear. One, the bid is dead. We are not entertaining any discussions with, or about, Gold Reserve whatsoever. Two, we were extremely disappointed wth the findings of the court on matters of both fact and law. Accordingly, we have followed through with our public commitment to our shareholders to vigorously defend ourselves. Any success in the appeal will clarify our legal position, but we should be clear; success on this appeal will not trigger the revival of the bid."

UPDATE: Reuters playing catchup

More on the Rusoro / Gold Reserve ruling today

Otto has managed to get his grubby hands on a copy of the ruling today and the scanned copy of said 19 pages of fascinating legalese can be yours by clicking right here. As it turns out, no surprises that Endeavour Financial was the spanner in the works, but more interest is the role a certain Frank Giustra (yeah him...PIK.v, Clinton's pal, partner in crime of Casey in the Uranium pump-of-the-century) who had his fingers in the pie all along.

Meanwhile, Rusoro (RML.v) did the only thing left to do and withdrew its bid for Gold Reserve (GRZ) after the bell today. For the record I managed to unload my small amount of GRZ at U$1.07 this afternoon so the whole thing has cost me zero dollars and zero cents. I was pretty surprised that Mr. Market allowed me to get out so well today. Let's see what happens to GRZ tomorrow morning when the world wakes up and realizes that nobody wants them and their negotiation position in Venezuela is just the same as it was the day before RML.v made a bid for the company. A Pyrrhic victory if ever there was one (for shareholders at least).

Y'know, just for a minute there I thought that some serious goldmining would get done at Brisas/LC. Back to hibernation mode for the long-sufferers. Meanwhile, RML.v shareholders will have their new 100,000oz/year facility at Increible to soften their blow at the end of this year. Precisely 100,000oz more than Doug Belanger has ever mined in Venezuela over the last gawdknows how many years.

Rusoro's bid for GRZ is blocked

GRZ will now drop some with me on board. OK, i'll sell and take the loss...such is the way of the market

This from G&M a few seconds ago. Thank you reader MP for passing this one

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Court halts Rusoro takeover bid for Gold Reserve

ANDY HOFFMAN

Tuesday, February 10, 2009

An Ontario judge has halted a hostile takeover bid
by Rusoro Mining Ltd. for rival Gold Reserve Inc.,
ruling that the offer is tainted because Rusoro had
access to confidential information from a financial adviser who acted for
both companies.

Justice Peter Cumming granted an interlocutory injunction restraining
Vancouver-based Rusoro from proceeding with an all-stock offer for Gold
Reserve, pending the outcome of a trial.

Rusoro's financial adviser on the offer, Endeavour Financial, is prohibited
from acting on behalf of Rusoro regarding a potential takeover until the
trial concludes.

Lawyers for Gold Reserve had argued that Rusoro had an unfair advantage over
other potential bidders because Endeavour possessed confidential information
it acquired when it was an adviser etc etc here

Gold Reserve (GRZ) and Rusoro (RML.v): If memory serves.....

...today's the day we find out if Gold Reserve's attempt to block the Rusoro hostile take over via the courtroom gets a judgment. My head might still be full of sand and saltwater, though (well, beer really).

GRZ has continued its defensive PRs, it seems. Y'know, for a company that was trumpeting about how few people had tendered by the first deadline GRZ seems to be protesting rather a lot, methinks. Also, from what Otto is picking up from his NYC contacts RML.v is likely to get a lot more love from larger holders if any court decision goes its way.

I'm still holding my few GRZs here and FWIW they are UNCH since purchase. The only reason to like GRZ now is the possible buyout, though. If it's blocked the PPS will sink quickly.

If it were me......

........in a hostile bidding war to take over a company, and the stock of the company I wanted to buy out was fairly tightly held but still at an ostensible discount to the price I was offering, I'd probably run the stock up some, buying small bits wherever posisble, then let the stock dump from a short-term high to rattle holders into either selling to me or submitting to my bid.

Just thinking out loud during the last hour of the trading year. Move along now, nothing to see here.

DYODD, dude.

I know why the caged bird sings

Dec. 30 (Bloomberg) -- Rusoro Mining Ltd., a Russian-funded company buying gold deposits in Venezuela, expects tostart production of the precious metal at its Increible-6 minein the second quarter after securing government approval. The company will revise its production forecast for nextyear after Venezuela´s government approved technical andenvironmental studies for the mine, Chief Executive OfficerAndre Agapov said today in a phone interview.

Venezuela´s Official Gazette announced the mine´s approval on Dec. 23. “It’s fantastic news,” Agapov said of the decision. “Itchanges our projections for 2009,” he said, without providing further information on the Vancouver-based company´s forecasts.

Rusoro is the government’s preferred partner to also setup a joint venture to exploit Las Cristinas, which hasVenezuela’s biggest known gold deposit, Agapov said Nov. 14.The company already operates the Choco10 mine in Venezuela andhas a “lot of common ground´´ with the government, he said.

The company is attempting to take over Gold Reserve Inc.,which has rights to exploit the Brisas gold mine in the LatinAmerican nation. The company wants to create a joint venturewith Venezuela to develop the mine, Agapov said.

Rusoro rose 6 cents, or 9.7 percent, to 68 Canadian centstoday in Toronto. It has fallen 58 percent this year.

“We’re trying to be very proactive,” Agapov said of the offer for Gold Reserve. “It looked like we were the only interested party, and we took advantage of it. If 2009 is a similar story, we’ll be even more proactive.”

Oh...I wonder where that might be?

Chávez today:

"Next year, we are going to duplicate gold production. We are taking back some concessions that were given out by previous governments and are still valid for some rich guys that take the gold away, exploiting the miners."

He's making a big speech on Thursday January 1st to commemorate the 50th anniversary of the Cuban revolution. It's gonna be a doozie, methinks.

Trespass to take drill samples? Whaaaat??? The GRZ/RML.v saga goes from bizarre to totally whacko

Just when you thought it couldn't get any weirder, it did. Here's Globe&Mail's Andy Hoffman on the contents of the Gold Reserve suit filed against Rusoro (RML.v). Note the highlighted part for the Kafka input.

.

$550m? LOL! Scorch my earth, baby. Gotta love this Belanger guy! My thanks to reader 'BF' for the headsup.

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Gold Reserve sues Rusoro and adviser Endeavour

Andy Hoffman
00:00 EST Wednesday, December 17, 2008

Rusoro Mining Ltd.'s ambitions to become a major gold producer in mineral-rich but politically challenging Venezuela hit a potential roadblock yesterday when takeover target Gold Reserve Inc. launched a $550-million lawsuit against Rusoro and its adviser Endeavour Financial International Corp.

.

The statement of claim, filed in Ontario Superior Court, alleges that Rusoro trespassed on Gold Reserve's property in Venezuela to take drill samples and accuses Endeavour of having a conflict of interest because it acted as an adviser to both companies and had access to Gold Reserve's proprietary and confidential information. None of the allegations have been proved in court. Gold Reserve wants the court to grant an injunction preventing Rusoro from proceeding with its three-shares-for-one hostile takeover offer valued at $47-million. GRZ (TSX) rose 1 cent to 74 cents; RML (TSXV) rose 2.5 cents to 28 cents.

Rusoro, Gold Reserve, Crystallex, Gold, Venezuela, Brisas, Las Cristinas, Bloomberg and Inca Kola News

Andre Agapov and a serious bow-tie

Yeah, a whole range of fave raves in the title line, and all because of this little report out of (the rapidly improving) Bloomie Venezuela. They even get to name a decent source of information for once. I may have missed on the Ecuador story (and I'll write a longer post on that tomorrow), but this one is coming to pass as seen.

This is off the wires, so no link as yet (but it's kosher). Once the story makes it to the open internet I'll add.

UPDATE MONDAY AM: Rusoro bids for GRZ. Still doubt?

Enjoy.

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Venezuela Gold Projects May Be Joined, Rusoro Says (Update1)
2008-12-12 23:42:33.830 GMT

(Adds Gold Reserve comments from 11th paragraph.)

By Steven Bodzin
Dec. 12 (Bloomberg) -- Two Venezuelan mines containing about $25 billion worth of gold most likely will be developed as a single project, according to Andre Agapov, chief executive officer of Rusoro Mining Ltd.

The projects, known as Las Cristinas and Brisas and controlled by Crystallex International Corp. and Gold Reserve Inc., are “one ore body, and it would be naive to think it would be more than one company” involved in development, Agapov said in a telephone interview from London. He suggested a Russian miner would get the job.

The mines have been in limbo since both Toronto-based Crystallex and Gold Reserve of Spokane, Washington, failed toget needed environmental permits in April. On Nov. 14, Agapov said that Rusoro was Venezuela’s “preferred partner” to develop the site. Agapov considers his Vancouver-based company Russian because he and the other founders are Russian.

“Only a Russian mining company can afford” to remedy problems at the site, Agapov said today. “Which company, I don’t know, but it’s the only way it’s going to be resolved,” he said. “I see resolution in the first half of 2009.”

Government Take-Over

Venezuela’s Mining and Basic Industries Minister Rodolfo Sanz said Nov. 5 that the country would take over the mines and administer them.

Rusoro, which has taken part in Russian diplomatic} missions to Venezuela, already operates the country’s Choco10 mine.

At Las Cristinas and Brisas, “it would be naive to believe it will be two ownerships, two permits. That will never work” for Venezuela’s mining and environment ministries, Agapov said today.

Together, the two mines contain more than 31 million ounces of proven and probable reserves, valued at more than $25 billion at today’s price.

Gold futures for February delivery fell $6.10, or 0.7 percent, to $820.50 an ounce in New York. The price reached a record of $1,033.90 on March 17.

Rusoro gained 5 cents, or 16 percent, to 36 Canadian cents in Toronto Stock Exchange trading.

Agapov declined to comment on a report on mining blog Inca Kola News that his company may try to take over Gold Reserve after being rebuffed in September. “They’re perfectly positioned for some transaction,” he said. “I don’t know if it will happen or not. It’s the end of the year. Maybe some brave ones will step in.”

Shares Jump

Gold Reserve President Douglas Belanger said he knew nothing about any attempt to take over his company and said today’s 30 percent surge in the share price was most likely the result of rising gold prices and the stock being worth half the company’s breakup value.

“There are no bids, not that we’re aware of,” he said. “We wouldn’t comment anyway.”

Gold Reserve rose 9 cents to 39 cents. It has plunged 92 percent in the past year.

Belanger said he recently converted non-trading Class B shares into sellable Class A shares because the stock’s value had dropped enough that he could trade out of the Class B stock without tax liability.

“It was just simple accounting, a chance to clean something up that had been around for years,” he said in a phone interview. “If I had converted them at $10, I would have had about $9.70 taxable income. I just took advantage of the low price.”

He also said the company’s debt remains outstanding and hasn’t been bought back. Crystallex spokesman Richard Marshall didn’t immediately return a call seeking comment. The stock declined 1 cent, or 7.1 percent, to 13 cents in New York. It has fallen 94 percent in the past year.

Related Post
Why Gold Reserve (GRZ) may about about to sell out to Rusoro (RML.v)

30 million ounces of gold; a real problem for any Russian millionaire

No jokes in Spanish about salami, please

But fear ye not! Because although being handed 30m oz of gold on a plate may be a real problem for any aspiring miner, Andre Agapov of Rusoro (RML.v) says he's broad-shouldered enough to take on this grave responsibility.

I may be scathing of Bloomberg some (!) of the time, but every now and again they come out with a gem of a report. That happened today with this note linked here. Go read all of "Rusoro Says It Is 'Preferred Partner' for Gold Mine" by Stewart Bailey but don't miss this killer line from the interview he got from Agapov;

"Gold Reserve and Crystallex had to find common ground and approach the ministry and they would have gotten their permit a long time ago.'' The delay "is causing us problems. People are losing faith. I'm willing to make it my problem and solve the situation.''

So, RML.v wants to muscle in and steal the concessions with the help of the Venezuelan gov't (which will happen), but the delay the victims have been experiencing with getting permits to mine is a big problem for Rusoro! File this in the "you can't make this shit up" file. Truly wonderful.

Breaking news on GRZ

Bad news for KRY shareholders: they've already changed the name

I nailed that sucker. This from the wires.

VENEZUELA SAYS TO OFFER RUSSIAN RUSORO VENTURE AT LAS BRISAS, NOW OPERATED BY GOLD RESERVE


UPDATE: here's the Reuters version.

Venezuela to offer Russians Crystallex gold project
Thu Nov 6, 2008 12:56pm EST

CARACAS, Nov 6 (Reuters) - Venezuela said it will offer a joint venture to Russian-owned miner Rusoro (RML.V: Quote, Profile, Research, Stock Buzz) to operate the Las Cristinas and Brisas gold projects, currently under contract to two Canadian companies, Mining minister Rodolfo Sanz on Thursday.

He told a Russian delegation that a memorandum of understanding would soon be signed with Rusoro.

It appeared that Sanz intends to replace the Canadian companies who operate the projects that contain some of Latin America's largest gold deposits, with Rusoro, but he did not mention their names.

Las Cristinas is currently operated by Canada's Crystallex (KRY.TO: Quote, Profile, Research, Stock Buzz), which had waited for years for an environmental permit to start building a mine at the site. The minister on Wednesday said that the government was taking control of Las Cristinas and would start the mine next year.

Nearby Brisas is operated by Gold Reserve (GRZ.TO: Quote, Profile, Research, Stock Buzz) which had also been waiting for permits to start mining the gold and copper deposit. (Reporting by Brian Ellsworth; Writing by Frank Jack Daniel)



UPDATE 2: Now you know this story is gonna get a lot of fun!!! LOL!!!

CARACAS (Dow Jones)--Venezuelan Mining Minister Rodolfo Sanz denied Thursday that the government was planning to offer the Las Cristinas gold mine, one of the largest in Latin America, to Rusoro Mining Ltd. (RML.V) after taking back the mine from Crystallex (KRY).


UPDATE 3: ALL ABOARD!! GRZ insider filings from today

Nov 06/08	Nov 05/08	Timm, Rockne	Direct Ownership	Common Shares Class A Common Shares	46 - Compensation for services	50,000	$0.550
Nov 06/08	Nov 05/08	Timm, Rockne	Direct Ownership	Rights Unvested Restricted Shares	57 - Exercise of rights	-50,000
Nov 06/08	Nov 05/08	Geyer, James	Direct Ownership	Common Shares Class A Common Shares	46 - Compensation for services	30,000	$0.550
Nov 06/08	Nov 05/08	Geyer, James	Direct Ownership	Rights Unvested Restricted Shares	57 - Exercise of rights	-30,000
Nov 06/08	Nov 05/08	Stewart, Douglas	Direct Ownership	Common Shares Class A Common Shares	46 - Compensation for services	20,000	$0.550
Nov 06/08	Nov 05/08	Stewart, Douglas	Direct Ownership	Rights Unvested Restricted Shares	57 - Exercise of rights	-20,000
Nov 06/08	Nov 05/08	Smith, Mary	Direct Ownership	Common Shares Class A Common Shares	46 - Compensation for services	17,000	$0.550
Nov 06/08	Nov 05/08	Smith, Mary	Direct Ownership	Rights Unvested Restricted Shares	57 - Exercise of rights	-17,000
Nov 06/08	Nov 05/08	Belanger, A. Douglas	Direct Ownership	Common Shares Class A Common Shares	46 - Compensation for services	45,000	$0.550
Nov 06/08	Nov 05/08	Belanger, A. Douglas	Direct Ownership	Rights Unvested Restricted Shares	57 - Exercise of rights	-45,000

Stop the world! IKN makes Canada's Financial Post!

Now who is that insightful blogger they be talkin' bout, huh?

UPDATE: I've had two mails so far so let's nip this in the bud now. No, that photo is not me. I just plugged "shocked expression" into Google images and picked that one.

Why Gold Reserve (GRZ) may be about to sell out to Rusoro (RMLv)

Let's count up the coincidences, shall we?

1) The GRZ "Brisas" project stands right next door to (quite literally..they back onto each other) the KRY 'Las Cristinas' that's about to be taken away by the Venezuelan government.

2) On August 27th, GRZ confirmed it had been approached by Rusoro Mining (RML.v), the Russian gold miner in Venezuela that has been making unrefusable offers all round the place (the latest to sell out to them at a deep discount was Hecla (HL)). Details of the previously discussed deal and my views can be found on this earlier post.

3) On October 10th, GRZ announced it was selling mining equipment it had planned to use at Las Brisas.

Taking into account that Rusoro and the Venezuelan gov't have already set a couple of precendents on how they work (they JV and split everything down the middle 50/50), it would make a lot of common sense for Venezuela to get its hands on Las Cristinas, Rusoro to get its hands on the slightly smaller but fairly comparative Brisas and then put together one massive mine operation between them.

Strangely, MIBAM might have unwittingly let the cat of the bag, as in its e-mail reported by Bloomberg today it said Las Cristinas has 31m oz of gold. That's way too high a number, in fact, but if you add the two properties together (LC approx 20m oz Au, Brisas approx 11m oz Au) 31m ounces of gold is right in the ballpark.

But finally, there's this. Doug Belanger, President and main man at GRZ, for some reason converted 205,000 class B shares of GRZ to class A shares on October 28th 2008.

Nov 03/08	Oct 28/08	Belanger, A. Douglas	Direct Ownership	Common Shares Class A Common Shares	36 - Conversion or exchange	205,000
Nov 03/08	Oct 28/08	Belanger, A. Douglas	Direct Ownership	Common Shares Class B Shares	36 - Conversion or exchange	-205,000

This seems to be related to a 1999 reorganization of the GRZ company structure. Here's (what I think) is the relevant GRZ SEC filings passage:

In February 1999, Gold Reserve Corporation (predecessor to the  Issuer)    
became a subsidiary of the Issuer.  Generally, each shareholder of Gold    
Reserve Corporation received one Common Share of the Issuer for one share of
Gold Reserve Corporation.  Certain U.S. holders elected, for tax reasons, to
receive Equity Units in lieu of Common Shares.  An "Equity Unit" is comprised
of one Class B common share of the Issuer and one Gold Reserve Corporation 
Class B common share.  An Equity Unit is substantially equivalent, including
voting rights, to a Common Share and is convertible into a Common Share at 
any time at the election of the holder.  Equity Units are not listed for   
trading on any stock  exchange, but subject to compliance with applicable  
federal, provincial and state securities laws, may be transferred.

What this seems to mean (in a nutshell) is that if Belanger didn't convert those "equity units" to true common shares they wouldn't have been recognized or included in any buyout deal. It certainly rings a lot of bells that the President of the company waits nine full years to convert this remnant of stock into common stock (I say remnant because Belanger already owns plenty million GRZ shares) right at the time when all sorts of other wheels seem to be in motion.

I think the big deal between GRZ and Rusoro is about to go down, folks. It's not a trade for the faint of heart, but I think there's value to be had in GRZ stock right now. Don't bet the farm though, and you MUST do your own DD on this one.