fwp
 

Free Writing Prospectus
Filed Pursuant to Rule 433
Registration No. 333-142656
May 15, 2007
     
Gold Reserve Inc
$90,000,000 Convertible Senior Subordinated Notes due 2022
  (GOLD RESERVE LOGO)
 
 
     
Security Information    
 
Company name
  Gold Reserve Inc
Security
  Convertible Senior Subordinated Notes
Registration format
  Registered
CUSIP
  38068NAB4
ISIN
  US38068NAB47
Ranking
  Senior Subordinated
Common stock ticker
  AMEX: “GRZ” / TSX: “GRZ”

                 
Size        
    Bonds   Deal size
Base deal
     90,000     $ 90,000,000  
Underwriters’ option
     13,500     $ 13,500,000  
 
                
Total
     103,500     $ 103,500,000  
         
Terms        
Par amount per bond
   $ 1,000  
Issue price
   $ 1,000  
Coupon
     5.50 %
Last sale of common
   $ 6.00  
Price of common offering
   $ 5.80  
Conversion price
   $ 7.54  
Conversion rate
     132.6260  
         
Dates        
 
Trade Date
     05/15/07  
Settlement Date
     05/18/07  
Maturity
   15 years
Maturity Date
     06/15/22  
Coupon Payment Dates
     06/15,12/15  
First Coupon Date
     12/15/07  
     
(JPMORGAN LOGO)   (RBC LOGO)
 
                 
Call Schedule        
Provisional call date   Call trigger   Call Price
6/16/2010 - 06/15/2012
     150.00 %     100 %
Freely callable thereafter
                
         
Put Schedule    
Put schedule   Put Price
6/15/2012
     100 %
                 
Underwriters’ Economic Breakdown   Economics
 
Bookrunners
   JPMorgan     60.00 %
 
   RBC Capital Markets     30.00 %
 
                
Co-manager
   Cormark Securities     10.00 %
 
                
Underwriting discount and commissions
       $ 42.50  
 
                
Selling concessions
           $ 25.50  
Management fee
           $ 8.50  
Underwriting fee
           $ 8.50  
The issuer has filed a registration statement (including a prospectus) with the Securities and Exchange Commission, or SEC, for the offerings to which this communication relates. Before you invest, you should read the prospectuses (and the supplements thereto) in those registration statements and other documents the issuer has filed with the SEC for more complete information about the issuer and these offerings. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in these offerings will arrange to send you the prospectus if you request it by calling toll free 1-866-430-0686.

 

Adjustment to shares delivered upon conversion upon certain fundamental changes
         
Assumptions        
Price of common offering
   $ 5.80  
Conversion premium
     30.00%  
Conversion price
   $ 7.54  
Face value
   $ 1,000.00  
Conversion rate
     132.6260  
Share price
 
                                                                                 
Effective date   $5.80   $7.00   $9.00   $11.00   $13.00   $15.00   $17.00   $19.00   $21.00   $23.00
05/18/07
     39.7878       34.5009       21.4924       14.4905       10.3102       7.6156       5.7757       4.4618       3.4900       2.7512  
06/15/08
     39.7878       32.5417       19.2638       12.4086       8.4881       6.0702       4.4831       3.3894       2.6036       2.0199  
06/15/09
     39.7878       29.9607       16.1232       9.3646       5.8018       3.8099       2.6318       1.8952       1.4077       1.0668  
06/15/10
     39.7878       27.1963       12.1968       4.3679       0.8623       0.1727       0.0996       0.0757       0.0572       0.0418  
06/15/11
     39.7878       23.5384       8.7303       1.1634       0.0000       0.0000       0.0000       0.0000       0.0000       0.0000  
06/15/12
     39.7878       12.3687       0.6551       0.0000       0.0000       0.0000       0.0000       0.0000       0.0000       0.0000  
The exact share prices and effective dates may not be set forth in the table above, in which case:
•   If the share price is between two share price amounts in the table or the effective date is between two effective dates in the table, the number of additional shares will be determined by a straight-line interpolation between the number of additional shares set forth for the higher and lower share price amounts and the two dates, as applicable, based on a 365-day year.
 
•   If the share price is greater than $23.00 per share (subject to adjustment), no additional shares will be issued upon conversion
 
•   If the share price is less than $5.80 per share (subject to adjustment), no additional shares will be issued upon conversion.
Notwithstanding the foregoing, in no event will the total number of common shares issuable upon conversion exceed 172.4138 per $1,000 principal amount, subject to adjustments in the same manner as the conversion rate as set forth under “— Conversion Rate Adjustments.”