Gold Reserve to redeem $27.5 million 11% convertible, interest notes

By Wendy Van Sickle

Columbus, Ohio, June 29 – Gold Reserve Inc. will redeem at total of $27.5 million of its 11% senior secured convertible notes due 2018 and 11% senior secured interest notes due 2018 on July 14.

The notes will be redeemed at 120% of the principal amount, or $33 million, plus accrued interest to the redemption date, according to a press release.

On June 16, the company announced the execution of an amendment to its settlement agreement with Venezuela, under which Venezuela has made an initial payment of $40 million.

Receipt of the initial payment obligates Gold Reserve to redeem a portion of the outstanding notes.

The company is using the proceeds of the initial payment, net of applicable taxes, to redeem a pro rata portion of each holder’s outstanding notes, as the proceeds are insufficient to redeem all of the notes.

As additional payments are made by Venezuela, Gold Reserve said it will continue to use proceeds to redeem the notes as required by the indenture.

Gold Reserve is based in Spokane, Wash.

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