Rusoro extends deadline for Gold Reserve offer

Less than 3% of Gold Reserve‘s (GRZ-T) shares have been tendered so far in Rusoro Mining‘s (RML-V) hostile takeover bid, prompting Rusoro to extend the deadline another month to Feb. 18.

“Gold Reserve shareholders are sending a clear message to Rusoro — that the offer is opportunistic, financially inadequate and significantly undervalues Gold Reserve’s assets and its overall contribution to the combined company,” Doug Belanger, Gold Reserve’s president, said in a prepared statement. Belanger urged shareholders not to tender their shares and for those who have to withdraw them.

The Russian-controlled company is offering three shares of Rusoro for each Gold Reserve share or equity unit. The offer represented a premium of 140% based on the Dec. 12 2008 closing prices for Rusoro and Gold Reserve on the TSX Venture Exchange and the Toronto Stock Exchange, respectively. (Gold Reserve’s shares closed at 45¢ on Dec. 12 on the TSX and on the NYSE Alternext U. S. at US39¢.)

Rusoro says extending the deadline allows the company to deal with an injunction that Gold Reserve filed in court on Dec. 30, which would prevent it from moving forward with the offer. A court hearing is slated for Feb. 4.

Gold Reserve holds the rights to the Brisas deposit, a development-stage gold and copper open-pit project in Venezuela’s Bolivar state and the Choco 5 gold exploration property.

In a press release today, Rusoro noted that since the unsolicited bid was made in December, the company has attained positive quarterly cash flow at its Choco 10 mill in Venezuela, which processes ore from both its Choco 10 mine and the Isidora mine.

In addition Rusoro pointed out that the Choco mill achieved record production of 38,868 ounces of gold in the fourth quarter, where cash costs came in at US$358 per oz. gold.

Gold Reserve closed up 12¢ or 10% at $1.32 per share. The company has a trading range of 29¢-$6.00 per share and 56.9 million shares outstanding.

Rusoro Mining closed down 1¢ or 1.49% to 66¢ per share. The company has a 52-week trading range of 23.5¢-$1.93 per share and has 360.43 million shares outstanding.