Gold Reserve Inc. Provides Update to ICSID Arbitration

Gold Reserve Inc. (TSX:GRZ) (NYSE-Amex:GRZ) announced the filing of its
Reply on July 29, 2011, to Venezuela′s Counter-Memorial relating to the
arbitration claim against the Bolivarian Republic of Venezuela with the
World Bank′s International Centre for Settlement of Investment Disputes
('ICSID?), in accordance with the provisions of the Canada-Venezuela
Bilateral Investment Treaty ('BIT?).

Gold Reserve′s claim alleges violations of three provisions of the
Canada-Venezuela BIT culminating in the effective expropriation of Gold
Reserve′s sizable investments in the world-class Brisas gold/copper
project and the promising Choco 5 property.

Gold Reserve claims that Venezuela′s wrongful conduct caused it to lose
the entire value of its rights to develop the Brisas Project and Choco
5. As a result, Gold Reserve is seeking compensation corresponding to
the restitution, or fair market, value of the rights to develop the
Brisas Project and Choco 5, as of the date of the award. After accepting
a few proposed corrections noted in Venezuela′s Counter-Memorial and
updating the interest calculations to reflect the measure of Gold
Reserve′s losses as of June 30, 2011, the revised claim now approximates
$2.1 billion.

Venezuela is scheduled to file its Rejoinder by November 14, 2011. At
that point the written phase of the arbitration will be complete and the
final hearing on the merits and jurisdictional issues is scheduled for a
10-day hearing to commence on February 6, 2012, in Washington, D.C.

Doug Belanger, President, stated, 'The filing of our Reply is the
culmination of an extensive effort by counsel, technical, legal and
financial experts and Company personnel. With only six months to the
final hearing we are very pleased with the progress and the pace of the
arbitration. However, we always remain ready to evaluate and possibly
enter an amicable settlement that would compensate Gold Reserve for its
losses in addition to possibly retaining an interest in the project in
exchange for the transfer of the extensive technical information that
will allow the project to proceed on a fast-track basis rather than to
take years to duplicate. Any settlement would only be accepted if it
were beneficial to the shareholders and stakeholders of the company. Our
objective is to pursue both the arbitration and settlement until the
process is concluded.?

Please visit our website at www.goldreserveinc.com
under Investor Relations: SEDAR Filings or SEC Filings.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This release contains forward-looking statements that state Gold
Reserve's or its management's intentions, hopes, beliefs, expectations
or predictions for the future. In this release, forward-looking
statements are necessarily based upon a number of estimates and
assumptions that, while considered reasonable by management at this
time, are inherently subject to significant business, economic and
competitive uncertainties and contingencies.

We caution that such forward-looking statements involve known and
unknown risks, uncertainties and other risks that may cause the actual
outcomes, financial results, performance, or achievements of Gold
Reserve to be materially different from our estimated outcomes, future
results, performance, or achievements expressed or implied by those
forward-looking statements.

Numerous factors could cause actual results to differ materially from
those in the forward-looking statements, including, without limitation:
the outcome of our arbitration under the Additional Facility Rules of
the International Centre for Settlement of Investment Disputes of the
World Bank, in Washington, D.C., to determine compensation claimed by us
resulting from our claims against the Venezuelan government and its
agents and agencies; corruption and uncertain legal enforcement;
political and social instability; requests for improper payments;
competition with companies that are not subject to or do not follow
Canadian and U.S. laws and regulations; regulatory, political and
economic risks associated with Venezuela, including changes in laws and
legal regimes; the result or outcome of the litigation regarding the
enjoined hostile takeover bid for us; impact of currency, metal prices
and metal production volatility; our dependence upon the abilities and
continued participation of certain key employees; the value of our 5.50%
senior subordinated convertible notes due on June 15, 2022, and
potential volatility of our Class A common shares (also referred to
herein as 'Common Shares'), including potential dilution as a result of
the conversion of the convertible notes into our common shares by either
us or the holder; the prospects for exploration and development of
alternative projects by us; the potential delisting of our Common Shares
and uncertainty regarding any appeal thereof; and risks normally
incident to the exploration, development and operation of mining
properties.

This list is not exhaustive of the factors that may affect any of
Gold Reserve's forward-looking statements. Investors are cautioned not
to put undue reliance on forward-looking statements. All subsequent
written and oral forward-looking statements attributable to Gold Reserve
or persons acting on its behalf are expressly qualified in their
entirety by this notice. Gold Reserve disclaims any intent or obligation
to update publicly or otherwise revise any forward-looking statements or
the foregoing list of assumptions or factors, whether as a result of new
information, future events or otherwise, subject to its disclosure
obligations under applicable rules promulgated by the SEC.

In addition to being subject to a number of assumptions,
forward-looking statements in this release involve known and unknown
risks, uncertainties and other factors that may cause actual results and
developments to be materially different from those expressed or implied
by such forward-looking statements, including those factors outlined in
the 'Cautionary Statement Regarding Forward-Looking Statements' and
'Risks Factors' contained in Gold Reserve's filings with the Canadian
provincial securities regulatory authorities and U.S. Securities and
Exchange Commission, including Gold Reserve's Annual Information Form
and Annual Report on Form 10-K for the year ended December 31, 2010,
filed with the Canadian provincial securities regulatory authorities and
U.S. Securities and Exchange Commission, respectively.

Gold Reserve Inc.

A. Douglas Belanger, President, 509-623-1500

Fax:
509-623-1634

www.goldreserveinc.com