United States SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  FORM 10-Q (Mark One) xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2011 OR  ̈TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period fromto  Commission file number:001-31819 GOLD RESERVE INC. (Exact name of Registrant as specified in its charter) Yukon Territory, Canada                                                                                                       NA (Jurisdiction of incorporation or organization)                                                                     (I.R.S. Employer Identification No.)  926 West Sprague Avenue, Suite 200, Spokane, Washington                                                              99201 (Address of principal executive offices)                                                                                         Zip Code (509) 623-1500 (Registrants Telephone, including area code)  Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.xYes ̈No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).xYes ̈No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. Large accelerated filer ̈Accelerated filer ̈Non-accelerated filer ̈Smaller reporting companyx Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ̈YesxNo As of May 12, 2011, 58,969,018 Class A common shares, no par value per share, and 500,236 Class B common shares, no par value per share, were issued and outstanding.


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Item
1. Financial Statements (Unaudited)


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CONSOLIDATED BALANCE SHEETS March 31, 2011(unaudited) March 31,                December 31, U.S. Dollars                                                                                                                             2011                             2010
 ASSETS Current Assets: Cash and cash equivalents (Note 4)                                                                                $       64,240,198            $      58,186,478 Assets held for sale (Note 7)                                                                                                                                         7,968,813 Marketable equity securities (Note 5)                                                                                       2,049,311                      2,263,923 Deposits, advances and other                                                                                                    1,465,145                      1,507,822
 Total current assets                                                                                                                  67,754,654                    69,927,036 Property, plant and equipment, net (Note 7)                                                                          28,474,743                    28,503,330 Totalassets$      96,229,397            $      98,430,366
 LIABILITIES Current Liabilities: Accounts payable and accrued expenses                                                                         $        1,486,303            $        1,633,150 Accrued interest                                                                                                                         1,641,849                         234,550
 Total current liabilities                                                                                                               3,128,152                      1,867,700  Convertible notes (Note 12)                                                                                                  100,997,600                  100,754,404 Total liabilities                                                                                                                       104,125,752                  102,622,104
   Measurement uncertainty (Note 1)  SHAREHOLDERS' EQUITY Serial preferred stock, without par value, none issued                                                                                                                 Common shares and equity units, without par value                                                            243,899,961                  243,582,458 Contributed Surplus                                                                                                                  5,171,603                      5,171,603 Stock options (Note 9)                                                                                                            15,970,882                    14,518,570 Accumulated deficit                                                                                                             (273,737,215)               (268,571,593) Accumulated other comprehensive income                                                                                  909,105                      1,217,915 KSOP debt (Note 8)                                                                                                                   (110,691)                      (110,691)
 Total shareholders' deficit                                                                                                        (7,896,355)                   (4,191,738) Total liabilities and shareholders' deficit                                                                          $      96,229,397            $      98,430,366
 The accompanying notes are an integral part of the consolidated financial statements. Approved by the Board of Directors: s/Chris D. Mikkelsens/Patrick D. McChesney   1


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CONSOLIDATED STATEMENTS OF OPERATIONS For the Three Months Ended March 31, 2011 and 2010(unaudited)  U.S. Dollars                                                                                                                                       2011                     2010
 OTHER INCOME Interest                                                                                                                                      $          44,048            $         64,519 Gain on disposition of marketable securities                                                                                      198,191                     106,551 Gain on sale of equipment                                                                                                                  361,208                       55,874 Foreign currency gain                                                                                                                             3,586                       82,244
 607,033                     309,188 EXPENSES Corporate general and administrative                                                                                              2,704,361                     973,437 Venezuelan operations                                                                                                                       347,741                     450,117 Equipment holding costs                                                                                                                    464,305                     340,754 Corporate communications                                                                                                                183,220                     130,114 Legal and accounting                                                                                                                            87,508                     127,151 Arbitration (Note 3)                                                                                                                           335,025                  1,079,269 4,122,160                  3,100,842
 Loss before interest expense and income tax                                                                                                                             (3,515,127)              (2,791,654)
  Interest expense                                                                                                                             (1,650,495)              (1,633,905) Loss before income tax                                                                                                                  (5,165,622)              (4,425,559)  Income tax benefit                                                                                                                                                                  1,694
 Net loss for the period                                                                                                              $   (5,165,622)        $     (4,423,865)
  Net loss per share, basic and diluted                                                                                        $           (0.09)          $             (0.08)
  Weighted average common shares outstanding                                                                                                                      59,358,254                57,529,117
 The accompanying notes are an integral part of the consolidated financial statements.   CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS For the Three Months Ended March 31, 2011 and 2010(unaudited)  U.S. Dollars2011                        2010
 Net loss for the period                                                                                                               $ (5,165,622)            $ (4,423,865) Other comprehensive income, net of tax: Unrealized gain (loss) on marketable securities                                                                            (110,619)                    221,762 Adjustment for realized gains included in net loss                                                                                                                 (198,191)                  (106,551) 
 Other comprehensive income (loss)                                                                                                (308,810)                    115,211 
 Comprehensive loss for the period                                                                                            $ (5,474,432)            $ (4,308,654) 
 The accompanying notes are an integral part of the consolidated financial statements.   2


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CONSOLIDATED STATEMENTS OF CASH FLOWS For the Three Months Ended March 31, 2011 and 2010(unaudited) U.S. Dollars                                                                                                                                                2011                 2010
 Cash Flows from Operating Activities: Net loss for the period                                                                                                                             $ (5,165,622)      $ (4,423,865) Adjustments to reconcile net loss to net cash used by operating activities: Stock option compensation                                                                                                                      1,454,790                 70,599 Depreciation                                                                                                                                                  23,981                 40,143 Gain on sale of equipment                                                                                                                         (361,208)              (55,874) Amortization of premium on marketable debt securities                                                                                                                                                     47,020 Accretion of convertible notes                                                                                                                    243,196               226,607 Other                                                                                                                                                                                       (5,256) Net gain on disposition of marketable securities                                                                                       (198,191)            (106,551) Shares issued for compensation                                                                                                                  311,400                 57,000 Changes in non-cash working capital: Net decrease (increase) in deposits and advances                                                                                        42,677              (350,210) Net increase in accounts payable and accrued expenses                                                                                                                              1,260,452               439,206 Net cash used in operating activities                                                                                                          (2,388,525)         (4,061,181)
 Cash Flows from Investing Activities: Proceeds from disposition of marketable securities                                                                                        558,941               609,592 Purchase of marketable securities                                                                                                                  (454,948)            (421,535) Purchase of property, plant and equipment                                                                                                      (2,513)            (498,440) Proceeds from sales of equipment                                                                                                                8,337,140            3,865,641 Decrease in restricted cash                                                                                                                                                        494,076 Net cash provided by investing activities                                                                                                    8,438,620            4,049,334
 Cash Flows from Financing Activities: Net proceeds from the issuance of common shares                                                                                            3,625                 32,384 Net cash provided by financing activities                                                                                                           3,625                 32,384
 Change in Cash and Cash Equivalents: Net increase in cash and cash equivalents                                                                                                   6,053,720                  20,537 Cash and cash equivalents - beginning of period                                                                                       58,186,478           60,962,813 Cash and cash equivalents - end of period                                                                                             $ 64,240,198       $ 60,983,350
 The accompanying notes are an integral part of the consolidated financial statements.   3


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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY For the Three Months Ended March 31, 2011 and the Year Ended December 31, 2010(unaudited)  Common Shares                                                             Accumulated Common Shares and Equity UnitsContributed       and Equity Units          Stock         Accumulated   Other Compre-          KSOP Common Shares        Equity Units      Amount               Surplus           Held by Affiliates     Options            Deficit        hensive income           Debt
 Balance, December 31, 2009                    57,694,997        500,236     $ 242,207,200          $ 5,171,603        $ (636,267)  $ 14,448,889    $(246,934,463)     $ (277,225)    $ (110,691) Net loss                                                                                                                                                                                                                                             (21,637,130) Other comprehensive income                                                                                                                                                                                                                                     1,495,140 Stock option compensation                                                                                                                                                                                    99,532 Fair value of options exercised                                                                                 29,851                                                                              (29,851) Common shares issued for: Cash                                                                     150,554                                            43,661 Services                                                              924,300                                      1,503,566 Decrease in shares held by affiliates                                                                                                               (201,820)                                              636,267 Balance, December 31, 2010                    58,769,851        500,236        243,582,458              5,171,603                            -        14,518,570     (268,571,593)       1,217,915        (110,691) Net loss                                                                                                                                                                                                                                               (5,165,622)
 Other comprehensive loss                                                                                                                                                                                                                                             (308,810) Stock option compensation                                                                                                                                                                              1,454,790 Fair value of options exercised                                                                                   2,478                                                                                 (2,478) Common shares issued for: Cash                                                                       12,500                                              3,625 Services                                                              180,000                                         311,400 Balance, March 31, 2011                           58,962,351        500,236     $ 243,899,961          $ 5,171,603                          $-     $ 15,970,882  $(273,737,215)       $ 909,105     $ (110,691)
 The accompanying notes are an integral part of the consolidated financial statements.  4


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Selected Notes to Consolidated Financial Statements For the Three Months Ended March 31, 2011

and 2010(unaudited) Expressed in U.S. Dollars
 1.The Company and Significant Accounting Policies The Company.Gold Reserve Inc.
(the “Company”) is engaged in the business of acquiring, exploring and
developing mining projects. The Company is an exploration stage company
incorporated in 1998 under the laws of the Yukon Territory, Canada and is the successor issuer to Gold Reserve Corporation which was incorporated in
1956. In
February 1999, the shareholders of Gold Reserve Corporation approved a plan of
reorganization whereby Gold Reserve Corporation became a subsidiary of Gold Reserve Inc., the successor issuer (the “Reorganization”). Generally, each shareholder of Gold Reserve Corporation received one Gold Reserve Inc. Class A common share for each common
share owned of Gold Reserve Corporation. Certain U.S. holders of Gold Reserve Corporation elected, for tax reasons, to receive equity units in lieu of Gold Reserve Inc. Class A common shares. An equity unit is comprised of one Gold Reserve Inc. Class B common share and one Gold Reserve Corporation Class B common share.
Each equity unit is substantially equivalent to a Class A common share and is
immediately convertible into a Gold Reserve Inc. Class A common share, upon
compliance with certain procedures. 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.  Unless otherwise
noted, general references to common shares of the Company include Class A
common shares and Class B common shares as a combined group. From
1992 to 2008 the Company focused substantially all of its management and
financial resources on the development of the Brisas gold and copper project
located in the Kilometre 88 mining district of the State of Bolivar in
south-eastern Venezuela (which we refer to as the “Brisas Project” or
“Brisas”).  As further detailed in Note 3, we discontinued development of the
Brisas Project after it was seized by the Bolivarian Republic of Venezuela (“Venezuela”). While we are resolving our investment dispute, either through arbitration
or settlement with Venezuela, we are also seeking to invest in or acquire
alternative mining projects. The Company has no revenue producing mining
operations at this time. All amounts shown herein are expressed in U.S. dollars
unless otherwise noted. Basis of Presentation.For
fiscal years commencing in 2011, the Company changed its basis of accounting
and financial reporting from Canadian GAAP to comply with US GAAP.  The Company has accounted for this change in
presentation on a retroactive basis.  The balance sheet amounts as of December
31, 2010 and the comparative operating results for the three months ended March
31, 2010 were restated accordingly.   A reconciliation of Canadian GAAP to
US GAAP is included in Note 19 of the Company’s financial statements as of
December 31, 2010 and for the year then ended. These unaudited interim
consolidated financial statements do not conform in all respects to the
requirements of generally accepted accounting principles for annual financial
statements.  The unaudited interim financial statements reflect all normal
adjustments which in the opinion of management are necessary for a fair
statement of the results for the periods presented.  These unaudited interim
consolidated financial statements should be read in conjunction with the
audited annual consolidated financial statements for the year ended December
31, 2010. Principles of Consolidation.
These consolidated financial statements include the accounts of the Company,
Gold Reserve Corporation, four Venezuelan subsidiaries, two Barbadian
subsidiaries and one Aruban subsidiary which were formed to hold the Company’s
interest in its foreign subsidiaries or for future transactions. All
subsidiaries are wholly owned. All intercompany accounts and transactions have
been eliminated on consolidation. The Company’s policy is to consolidate those
subsidiaries where control exists. Prior to 2011, the consolidated financial
statements also included the accounts of two domestic subsidiaries, Great Basin
Energies, Inc. (“Great Basin”) and MGC Ventures Inc. (“MGC Ventures”).   Great Basin and MGC Ventures were 45% and 44% owned, respectively until December 2010 when
the Company disposed of its equity interest in the subsidiaries. See Note 10 to
the consolidated financial statements. Cash and Cash Equivalents. The
Company considers short-term, highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents for purposes
of reporting cash equivalents and cash flows. Cash and cash equivalents are
designated as held-for-trading and recorded at fair value.  The Company manages
the exposure of its cash and cash equivalents to credit risk by diversifying
its holdings into major Canadian and U.S. financial institutions. Exploration and Development Costs. Exploration costs incurred in locating areas of potential
mineralization are expensed as incurred. Exploration costs of properties or
working interests with specific areas of potential mineralization are
capitalized at cost pending the determination of a property’s economic
viability. Development costs of proven mining properties not yet producing are
capitalized at cost and classified as capitalized exploration costs under
property, plant and equipment. Costs related to staffing and maintenance of
offices and facilities in Venezuela are charged to operations. Property holding
costs are charged to operations during the period if no significant exploration
or development activities are being conducted on the related properties. Upon
commencement of production, capitalized exploration and development costs would
be amortized based on the estimated proven and probable reserves benefited.
Properties determined to be impaired or that are abandoned are written-down to
the estimated fair value. Carrying values do not necessarily reflect present or
future values.  5


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Selected Notes to Consolidated Financial Statements For the Three Months Ended March 31, 2011

and 2010(unaudited) Expressed in U.S. Dollars
 Property, Plant and Equipment. Property, plant and equipment are recorded at cost
less accumulated depreciation. Replacements and major improvements are
capitalized. Maintenance and repairs are charged to expense as incurred. The
cost and accumulated depreciation of assets retired or sold are removed from
the accounts and any resulting gain or loss is reflected in operations.
Depreciation is provided using straight-line and accelerated methods over the
lesser of the useful life or lease term of the related asset. Assets
Held for Sale.Long-Lived assets are classified as held for sale in
the period in which certain criteria are met. Assets held for sale are measured
at the lower of carrying amount or fair value less cost to sell and are not
depreciated as long as they remain classified as held for sale. Impairment of Long Lived Assets.The Company reviews long-lived assets for impairment
whenever events or changes in circumstances indicate that the carrying amount
of the assets may not be recoverable. If the sum of the expected future net
cash flows to be generated from the use or disposition of a long-lived asset (undiscounted
and without interest charges) is less than the carrying amount of the asset, an
impairment loss is recognized and the asset is written down to fair value. Fair
value is generally determined by discounting estimated cash flows, using quoted
market prices where available or making estimates based on the best information
available. Foreign Currency.The U.S. dollar is the Company’s and
its foreign subsidiaries’ functional currency. Accordingly, foreign currency
amounts are translated into U.S. dollars using the temporal method.
Non-monetary assets and liabilities are translated at historical rates,
monetary assets and liabilities are translated at current rates and revenue and
expense items are translated at average exchange rates during the reporting
period, except for depreciation which is translated at historical rates.
Translation gains and losses are included in operating expenses. Stock Based Compensation. The
Company uses the fair value method of accounting for stock options. The fair
value of options granted to employees is computed using the Black-Scholes
method as described in Note 9 and is expensed over the vesting period of the
option. For non-employees, the fair value of stock based compensation is
recorded as an expense over the vesting period or, if earlier, upon completion
of performance. Consideration paid for shares on exercise of share options, in
addition to the fair value attributable to stock options granted, is credited
to capital stock. Fair value of restricted stock issued as compensation is
based on the grant date market value and expensed over the vesting period. The Company also maintains the Gold Reserve Director and
Employee Retention Plan. Units granted under the plan become fully vested and
payable upon a change of control. Each Unit granted to a participant entitles
such person to receive a cash payment equal to the fair market value of one
Gold Reserve Class A Common Share (1) on the date the Unit was granted or (2)
on the date any such participant becomes entitled to payment, whichever is
greater. Income Taxes. The Company uses the liability method of accounting for
income taxes. Future tax assets and liabilities are determined based on the
differences between the tax basis of assets and liabilities and those amounts
reported in the financial statements. The future tax assets or liabilities are
calculated using the enacted tax rates expected to apply in the periods in
which the differences are expected to be settled. Future tax assets are
recognized to the extent that they are considered more likely than not to be
realized. Use of Estimates. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. Measurement Uncertainty.The
realizable value of the remaining processing and related equipment, originally
purchased for the Brisas Project, may be different than management’s current
estimate. Any operations we may have are subject to the effects of changes in
legal, tax and regulatory regimes, political, labor and economic developments,
social and political unrest, currency and exchange controls,  import/export
restrictions and government bureaucracy in the countries in which we may
operate. The Company operates and files tax returns in a number of
jurisdictions. The preparation of such tax filings requires considerable
judgment and the use of assumptions. Accordingly, the amounts reported could
vary in the future. Net Loss Per Share. Net loss per share is computed by dividing net loss by
the combined weighted average number of Class A and B common shares outstanding
during each year. In periods in which a loss is incurred, the effect of
potential issuances of shares under options and convertible notes would be
anti-dilutive, and therefore basic and diluted losses per share are the same. Convertible Notes.Convertible notes
are classified as a liability and are initially recorded at face value, net of
issuance costs. The notes are subsequently accreted to face value using the
effective interest rate method over the expected life of the notes, currently
estimated to be June 15, 2012, with the resulting charge recorded as interest
expense. Comprehensive Income.Comprehensive
income includes net income or loss and other comprehensive income. Other
comprehensive income may include unrealized gains and losses on
available-for-sale securities, gains and losses on certain derivative
instruments and foreign currency gains and losses from self sustaining foreign
operations. The Company presents comprehensive income and its components in the
consolidated statements of comprehensive loss.  6


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Selected Notes to Consolidated Financial Statements For the Three Months Ended March 31, 2011

and 2010(unaudited) Expressed in U.S. Dollars
 Financial Instruments.The Company’s
financial instruments consist of cash and cash equivalents, marketable
securities, accounts payable, accrued expenses and convertible notes. Cash and
cash equivalents are classified as held for trading and any changes in fair
value are charged to the statement of operations. Marketable equity securities
are classified as available for sale with any unrealized gain or loss recorded
in other comprehensive income. Marketable debt securities are classified as
held-to-maturity and are measured at amortized cost using the effective
interest rate method. Other financial liabilities are accounted for at cost or
amortized cost. 2.             New
Accounting Policies In January 2010, the FASB
issued new guidance (ASU 2010-06) that requires new disclosures for fair value
measurements and provides clarification for existing disclosures requirements.
More specifically, it requires reporting entities to 1) disclose separately the
amount of significant transfers into and out of Level 1 and Level 2 fair-value
measurements and to describe the reasons for the transfers, and 2) provide
information on purchases, sales, issuances and settlements on a gross basis
rather than net in the reconciliation of Level 3 fair-value measurements. This
guidance is effective for interim and annual reporting periods beginning after
December 15, 2009, except for the Level 3 fair-value measurements disclosures
that are effective for fiscal years beginning after December 15, 2010. The
adoption of the updated guidance did not have an effect on the Company’s
financial statements. 3.             Expropriation of Brisas Project by
Venezuelan Government and Related Arbitration From
1992 to 2008 the Company focused substantially all of its management and
financial resources on the development of the Brisas gold and copper project
located in the Kilometer 88 mining district of the State of Bolivar in
south-eastern Venezuela. After approval of the Brisas operating plan by the
Ministry of Mines and the Environmental and Social Impact Study by the Ministry
of Environment in 2003 and early 2007, respectively, the Ministry of
Environment issued in March 2007, the Authorization to Affect which authorized
the commencement of construction activities on the Brisas Project.  In April
2008, the Ministry of Environment revoked the Authorization to Affect without
prior notification. On
October 21, 2009 the Company filed a Request for Arbitration under the
Additional Facility Rules of the International Centre for Settlement of
Investment Disputes (“ICSID”), against Venezuela (“Respondent”).  On October 26, 2009, Venezuelan government personnel
arrived at the Brisas Project camp site, claimed ownership of the Brisas
Alluvial Concession, seized assets, expelled our personnel and took physical
possession of the property. Subsequently, on November 4, 2009, Venezuela notified the Company through the issuance of an Administrative Act, dated October
20, 2009, of its intent to cancel the Company’s underlying hard rock concession
which was formally cancelled in June 2010. In
November 2009 the Company’s Request for Arbitration was registered by ICSID
(Gold Reserve Inc. v. Bolivarian Republic of Venezuela (ICSID Case No.
ARB(AF)/09/1)). The Company is seeking compensation of $1.98 billion in
the arbitration for all of the loss and damage resulting from Venezuela’s wrongful conduct which includes the full market value of the legal
rights to develop the Brisas Project. In compliance with the schedule
set by the Tribunal, the Company filed its initial written submission, known as
the Memorial, on September 24, 2010 and more recently the Respondent submitted its reply or Counter-Memorial to
the Company on April 14, 2011. The Company will submit its reply to the
Respondent’s Counter-Memorial on or before July 15, 2011. Subsequently on
October 15, 2011, the Respondent is required to file its final submission. The
oral hearings are scheduled to commence on February 6, 2012. See “Part II-
Other Information- Item 1. Legal Proceedings- Arbitration.” 4.             Cash
and Cash Equivalents March
31,            December 31, 2011                       2010
 Bank deposits                                                                                                                             $
58,871,373           $ 52,307,918 Money market funds5,368,825                5,878,560 Total                                                                                                                                           $
64,240,198           $ 58,186,478 
 At March 31, 2011 and December 31, 2010, the Company
had approximately $7,000 and $39,000 respectively, in Venezuela and banks outside Canada and the U.S.  7


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Selected Notes to Consolidated Financial Statements For the Three Months Ended March 31, 2011 and 2010(unaudited) Expressed in U.S. Dollars
  5.             Marketable Equity Securities March 31,              December 31, 2011                        2010
  Fair value at beginning of year                                                                                                     $  2,263,923            $    598,825 Acquisitions                                                                                                                                       454,948                  778,144 Dispositions, at cost                                                                                                                        (360,750)                (667,166) Realized gain on sale                                                                                                                        (198,191)                 (241,621) Unrealized gain (loss)(110,619)                1,795,741 Fair value at balance sheet date                                                                                                   $  2,049,311            $  2,263,923 
  The Companys marketable equity securities are classified as available-for-sale and are recorded at quoted market value with gains and losses recorded within other comprehensive income until realized. As of March 31, 2011 and December 31, 2010 marketable securities had a cost basis of $1,140,206 and $1,046,009, respectively. 6.             Financial Instruments  The fair values as at March 31, 2011 and December 31, 2010 along with the carrying amounts shown on the consolidated balance sheets for each classification of financial instrument are as follows: March 31, 2011December 31, 2010 Carrying                    Fair                       Carrying                      Fair Classification                  Amount                   Value                       Amount                   Value Cash and cash equivalents                  held for trading         $ 64,240,198       $ 64,240,198               $ 58,186,478       $ 58,186,478
 Marketable equity securities              available for sale            2,049,311            2,049,311                    2,263,923            2,263,923 A/P and accruals                    other financial liabilities             1,486,303            1,486,303                    1,633,150            1,633,150 Accrued interest                     other financial liabilities            1,641,849            1,641,849                       234,550               234,550 Convertible notes                   other financial liabilities        100,997,600          69,496,477                100,754,404          69,477,790 
  Fair value estimates for marketable securities are made at the balance sheet date by reference to recent market transactions. The convertible notes are not listed on an exchange but are traded on a limited basis in a grey market. Fair value estimates for convertible notes are based on an assessment of available market information. ASC 820establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: Level 1 inputs are quoted prices in active markets for identical assets or liabilities, Level 2 inputs are inputs other than quoted prices included within Level 1 that are directly or indirectly observable for the asset or liability and Level 3 inputs are unobservable inputs for the asset or liability that reflect the entitys own assumptions.  Fair value March 31, 2011               Level 1                Level 2                Level 3 Cash and cash equivalents                                              $ 64,240,198           $ 64,240,198                                                
 Marketable equity securities                                               2,049,311                2,049,311                                                
  Fair value December 31, 2010           Level 1                Level 2                Level 3 Cash and cash equivalents                                              $ 58,186,478           $ 58,186,478                                                
 Marketable equity securities                                               2,263,923                2,263,923                                                
   8


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Selected Notes to Consolidated Financial Statements For the Three Months Ended March 31, 2011 and 2010(unaudited) Expressed in U.S. Dollars
  The Company is exposed to various risks including credit risk, liquidity risk, currency risk and interest rate risk as described below: a)Credit risk is the risk that a counter party will fail to meet its obligations to the Company. The Companys primary exposure to credit risk is through its cash and cash equivalents. The Company diversifies its cash holdings into major Canadian and U.S. financial institutions. b)Liquidity risk is the risk that an entity will encounter difficulty in meeting its obligations associated with its financial liabilities. The Company has historically managed this risk by maintaining adequate cash balances through equity and debt offerings to meet its current and foreseeable obligations. The following table presents the Companys payments due on accounts payable and accrued expenses and its undiscounted interest and principal payments due on its convertible notes, based on the estimate that the term of the notes will end on June 15, 2012. If the notes were to reach their contractual maturity date of June 15, 2022, additional interest payments would amount to $56.3 million over the additional ten year term of the notes. Payments due by Period
 Less thanMore Than Total                       1 Year                     1-3 Years               4-5 Years            5 Years
 A/P and accruals          $     1,486,303             $ 1,486,303                                                                                    Interest8,443,793                5,629,195           $   2,814,598                                                      Principal                         102,349,000                                          102,349,000                                                      Total                           $ 112,279,096             $ 7,115,498          $ 105,163,598                                                      
 c)The Company is subject to currency risk mainly due to its operations in Venezuela, which are limited. Transactions denominated in foreign currency are exposed to exchange rate fluctuations which have an impact on the statement of operations.  The Companys cash and other monetary assets and liabilities that are held in Venezuelan and Canadian currency are subject to fluctuations against the US dollar. A 10% weakening of those currencies against the US dollar would have increased the Companys net gain from the translation of foreign currency denominated financial instruments, for the three months ended March 31, 2011 and 2010, by the amounts shown below. 2011                       2010
 Venezuelan Bolívar$   46,722                  $ 20,417 Canadian dollar                                                                            568                       4,252 Total                                                                                   $  47,290                  $ 24,669
 The Company limits the amount of currency held in non-U.S dollar accounts, but does not actively use derivative instruments to limit its exposure to fluctuations in foreign currency rates. d)The Company is subject to the risk that changes in market interest rates will cause fluctuations in the fair values of its financial instruments. Cash and cash equivalents earn floating market rates of interest. Other current financial assets and liabilities are generally not exposed to this risk because of their immediate or short-term maturity. The interest rate on the Companys convertible notes is fixed and therefore the interest payments are not subject to changes in market rates of interest.  9


---



Selected Notes to Consolidated Financial Statements For the Three Months Ended March 31, 2011 and 2010(unaudited) Expressed in U.S. Dollars
 7.             Property, Plant and Equipment Accumulated Cost                          Depreciation                         Net
 March 31, 2011
 United States Machinery and equipment                                                           $        28,071,469                $                                $         28,071,469 Furniture and office equipment                                                                   508,852                          (443,796)                            65,056 Leasehold improvements                                                                              41,190                            (39,338)                              1,852 $         28,621,511                $        (483,134)           $        28,138,377
  Venezuela
 Buildings                                                                                     $              403,286                $         (293,462)           $             109,824 Furniture and office equipment                                                                   480,751                          (467,177)                            13,574 Transportation equipment                                                                          164,482                          (160,895)                              3,587 Machinery and equipment                                                                          497,808                          (288,427)                          209,381 1,546,327                       (1,209,961)                          336,366
 Total                                                                                            $        30,167,838                $     (1,693,095)           $        28,474,743
   Accumulated Cost                     Depreciation                                   Net
 December 31, 2010
 United States Machinery and equipment                                                           $        28,071,469                $                                $         28,071,469 Furniture and office equipment                                                                   506,339                          (435,224)                            71,115 Leasehold improvements                                                                              41,190                            (38,874)                              2,316 $         28,618,998                $        (474,098)           $        28,144,900
  Venezuela
 Buildings                                                                                     $             403,286                $        (285,696)           $              117,590 Furniture and office equipment                                                                  480,751                          (462,208)                            18,543 Transportation equipment                                                                         214,112                          (201,196)                            12,916 Machinery and equipment                                                                         497,808                          (288,427)                          209,381 1,595,957                       (1,237,527)                          358,430
 Total                                                                                            $        30,214,955                $     (1,711,625)           $        28,503,330
  Machinery and equipment includes amounts paid for equipment previously intended for use on the Brisas project. At December 31, 2010 certain equipment with a carrying value of approximately $8.0 was reclassified to assets held for sale. During the first quarter of 2011, this equipment was sold for $8.3 million and the Company recorded a gain on sale of $0.3 million. 8.             KSOP Plan The KSOP Plan, adopted in 1990 for the benefit of employees, is comprised of two parts, (1) a salary reduction component, or 401(k), and (2) an employee share ownership component, or ESOP. Unallocated shares are recorded as a reduction to shareholders equity. Allocation of common shares or cash contributions to participants accounts, subject to certain limitations, is at the discretion of the Companys board of directors. The fair market value of the shares when allocated is recorded in the statement of operations with a reduction of the KSOP debt account. The Company made cash contributions to eligible participants for the Plan years 2011, 2010, and 2009 of $0, $175,174, and $57,292, respectively. As of March 31, 2011, 22,246 common shares remain unallocated to plan participants.  10


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Selected Notes to Consolidated Financial Statements For the Three Months Ended March 31, 2011 and 2010(unaudited) Expressed in U.S. Dollars
 9.             Stock Based Compensation Equity Incentive Plans The Company has two equity incentive plans; the 1997 Equity Incentive Plan (last amended in March 2006 and last re-approved by the shareholders in June 2009, the 1997 Plan) and the 2008 Venezuelan Equity Incentive Plan (approved by the shareholders in June 2008, the Venezuelan Plan).  Both plans permit the grants of stock options, stock appreciation rights and restricted stock, or any combination thereof, and each shall be 10% of the Companys outstanding shares, from time to time.  The grants will be for terms up to ten years with vesting periods ranging from immediate to up to 3 years. Combined share option transactions for the three months ended March 31, 2011 and 2010 are as follows: 2011                                                    2010
 Weighted                                             Weighted Average                                               Average Exercise                                                Exercise  Shares              Price                            Shares              Price
 Options outstanding at beginning of period                              3,178,102            $ 2.39                       4,573,318          $ 2.67 Options exercised                                                                         (12,500)              0.29                        (111,666)            0.29 Options expired                                                                                                                                    (40,000)            3.69 Options forfeited                                                                                                                                  (71,917)            2.74 Options granted                                                                        2,843,000               1.82                                                       Options outstanding at end of period                                       6,008,602              2.13                        4,349,735             2.72
 Options exercisable at end of period                                         3,876,352           $ 2.29                       3,921,946           $ 2.99
  Options available for
 grant at end of period under 1997 plan                                                                     821,826                                              2,232,890 Options available for
 grant at end of period under Venezuelan plan                                                        5,062,090                                              5,088,955
  The following table relates to stock options at March 31, 2011: Outstanding Options
     
     Exercisable OptionsExercise Price Range
     Number
     Weighted Average Exercise Price
     Aggregate Intrinsic Value
     Weighted Average Remaining Contractual Term (Years)
     
     Number
     Weighted Average Exercise Price
     Aggregate Intrinsic Value
     Weighted Average Remaining Contractual Term (Years)$0.29 -$0.29
     1,109,189
     $0.29
     $1,575,048
     2.68
     
     1,109,189
     $0.29
     $1,575,048
     2.68$0.73 - $0.73
     535,000
     $0.73
     524,300
     2.96
     
     535,000
     $0.73
     524,300
     2.96$1.82 - $1.82
     2,843,000
     $1.82
     
     4.76
     
     710,750
     $1.82
     
     4.76$3.95 - $4.19
     686,000
     $4.12
     
     0.52
     
     686,000
     $4.12
     
     0.52$4.30 - $4.62
     298,500
     $4.57
     
     0.67
     
     298,500
     $4.57
     
     0.67$4.83 - $4.83
     257,913
     $4.83
     
     0.16
     
     257,913
     $4.83
     
     0.16$5.07 - $5.36
     279,000
     $5.19
     
     0.67
     
     279,000
     $5.19
     
     0.67$0.29 -$5.36
     6,008,602
     $2.13
     $2,099,348
     3.14
     
     3,876,352
     $2.29
     $2,099,348
     3.14
   11


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Selected Notes to Consolidated Financial Statements For the Three Months Ended March 31, 2011 and 2010(unaudited) Expressed in U.S. Dollars
 The Company recorded compensation expense during the three months ended March 31, 2011 and 2010 of $1.5 million and $0.1 million, respectively, for stock options granted. As of March 31, 2011, $2.5 million of compensation expense related to unvested options remains to be recognized. During the three months ended March 31, 2011 and 2010, 2,843,000 and 0 new options were granted, respectively.  The weighted average grant date fair value of options granted in 2011 was calculated at $1.39 and the total fair value of options vested during 2011 was $1.0 million. The fair value of options granted in 2011 was determined using the Black-Scholes model based on the following assumptions: 
 Weighted average risk free interest rate                                                                         1.88% Expected Term                                                                                                         4.7 years Expected volatility                                                                                                          107% Dividend yield                                                                                                                   nil
  Retention Units Plan In addition to the equity incentive plans, the Company also maintains the Gold Reserve Director and Employee Retention Plan.  Units granted under the plan become fully vested and payable upon achievement of certain milestones related to the Brisas project or in the event of a change of control.  The Companys Board of Directors is currently evaluating modifying the vesting provisions of the units to more adequately reflect the current business objectives of the Company including successful arbitration, settlement of our dispute with Venezuela, reacquiring an interest in the Brisas Project and successful acquisition of a new business opportunity meeting specific parameters. Each Unit granted to a participant entitles such person to receive a cash payment equal to the fair market value of one Gold Reserve Class A Common Share (1) on the date the Unit was granted or (2) on the date any such participant becomes entitled to payment, whichever is greater.  As of March 31, 2011 an aggregate of 1,607,500 unvested Units have been granted to directors and executive officers of the Company and 315,000 Units have been granted to other employees.  The Company currently does not accrue a liability for these units as events required for vesting of the units have not yet occurred. The value of these units, based on the grant date value of the Class A shares, was approximately $8.4 million. 10.          Related Party Transactions: MGC Ventures. The Chief Executive Officer, President, Vice President-Finance and Vice President-Administration of the Company are also officers and/or directors and shareholders of MGC Ventures. On December 15, 2010, the non-affiliated shareholders of MGC Ventures approved the redemption of all of the shares of MGC Ventures common stock held by Gold Reserve. Gold Reserve received $0.9 million and recorded a gain on sale of subsidiary of $0.2 million. Prior to the redemption, Gold Reserve owned 12,062,953 common shares of MGC Ventures which represented 44% of its outstanding shares. MGC Ventures owned 258,083 common shares of the Company at March 31, 2011 and December 31, 2010.  During the last three years, the Company sublet a portion of its office space to MGC Ventures for $6,000 per year. Great Basin. The Chief Executive Officer, President, Vice President-Finance and Vice President-Administration of the Company are also officers and/or directors and shareholders of Great Basin. On December 15, 2010, the non-affiliated shareholders of Great Basin approved the redemption of all of the shares of Great Basin common stock held by Gold Reserve. Gold Reserve received $1.2 million and recorded a gain on sale of subsidiary of $0.3 million. Prior to the redemption, Gold Reserve owned 15,661,595 common shares of Great Basin which represented 45% of its outstanding shares. Great Basin owned 491,192 common shares of the Company at March 31, 2011 and December 31, 2010. During the last three years, the Company sublet a portion of its office space to Great Basin for $6,000 per year.  12


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Selected Notes to Consolidated Financial Statements For the Three Months Ended March 31, 2011

and 2010(unaudited) Expressed in U.S. Dollars
 11.          Shareholder
Rights Plan The Company instituted a shareholder rights plan (the
“Rights Plan”) in 1999. Since the original approval by the shareholders, the
Rights Plan and the Rights Plan agreement have been amended and continued from
time to time. In June 2009, the shareholders approved certain amendments to the
Rights Plan including continuing the Shareholder Rights Plan until June 30,
2012. The Rights Plan is intended to give adequate time for shareholders of the
Company to properly assess the merits of a take-over bid without pressure and
to allow competing bids to emerge. The Rights Plan is designed to give the
Board of Director’s time to consider alternatives to allow shareholders to
receive full and fair value for their common shares. One right is issued in
respect of each outstanding share. The rights become exercisable only when a
person, including any party related to it or acting jointly with it, acquires
or announces its intention to acquire 20% or more of the Company’s outstanding
shares without complying with the “permitted bid” provisions of the Rights
Plan. Each right would, on exercise, entitle the holder, other than the
acquiring person and related persons, to purchase Class A common shares of the
Company at a 50% discount to the market price at the time. 12.          Convertible
Notes In May 2007, the Company
issued $103,500,000 aggregate principal amount of its 5.50% Senior subordinated
convertible notes. The notes are unsecured, bear interest at a rate of 5.50%
annually, pay interest semi-annually in arrears and are due on June 15, 2022. 
The notes are convertible into Class A common shares of the Company at the
initial conversion rate, subject to adjustment, of 132.626 shares per $1,000
principal amount (equivalent to a conversion price of $7.54). Upon conversion,
the Company will have the option, unless there has occurred and is then
continuing an event of default under the Company’s indenture, to deliver common
shares, cash or a combination of common shares and cash for the notes
surrendered. The note holders have the option to require the Company
to repurchase the notes on June 15, 2012, at a price equal to 100% of the
principal amount of the notes plus accrued but unpaid interest. The Company may
elect to satisfy its obligation to pay the repurchase price, in whole or in
part, by delivering Common Shares. In the event of a change of control of the
Company, the Company may be required to offer to repurchase the notes at a
purchase price equal to 100% of the principal amount of the notes plus accrued
but unpaid interest unless there has occurred and is continuing certain events
of default under the Company’s indenture. At any time on or after June 16, 2010, and until June
15, 2012, the Company may redeem the notes, in whole or in part, for cash at a
redemption price equal to 100% of the principal amount being redeemed plus
accrued and unpaid interest if the closing sale price of the Common Shares is
equal to or greater than 150% of the conversion price then in effect and the
closing price for the Company’s Common Shares has remained above that price for
at least twenty trading days in the period of thirty trading days preceding the
Company’s notice of redemption. Beginning on June 16, 2012, the Company may, at
its option, redeem all or part of the notes for cash at a redemption price
equal to 100% of the principal amount being redeemed plus accrued and unpaid
interest. The covenants contained in the 5.50% convertible note
indenture are limited to administrative issues such as payments of interest,
maintenance of office or agency location, delivery of reports and other related
issues. Likewise, events of default are defined as failure to pay interest and
principal amounts when due, default in the performance of covenants, failure to
convert notes upon holder’s exercise of conversion rights and similar
provisions or the Company’s failure to give notice of a fundamental change
which is generally defined as events related to a change of control in the Company. The
notes are classified as a liability and were initially recorded at face value,
net of issuance costs. The notes are accreted to face value using the effective
interest rate method over the expected life of the notes, currently estimated
to be June 15, 2012, with the resulting charge recorded as interest expense. The Company capitalized interest and accretion on the
notes until October, 2009, when the Company filed for arbitration and when Venezuela seized the Brisas Project. Thereafter all interest and accretion on the notes has
been expensed. As of March 31, 2011, convertible notes with a face value of
$1,151,000 had been settled in cash or repurchased by the Company at a total
cost of approximately $451,000.   13


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ITEM 2.  Management’s
Discussion and Analysis of Financial Condition and Results of Operations Overview This
Management’s Discussion and Analysis of Financial Condition and Results of
Operations, dated May 12, 2011 is intended to assist in understanding and
assessing our results of operations and financial condition and should be read
in conjunction with the consolidated financial statements and related notes. Gold
Reserve, an exploration stage company, is engaged in the business of acquiring,
exploring and developing mining projects. From 1992 to 2008 we focused
substantially all of our management and financial resources on the development
of the Brisas gold and copper project located in the Kilometer 88 mining
district of the State of Bolivar in south-eastern Venezuela (which we refer to
as the “Brisas Project” or “Brisas”). On
October 26, 2009, in apparent response to our filing on October 21, 2009 of a
Request for Arbitration under the Additional Facility Rules of the
International Centre for Settlement of Investment Disputes (“ICSID”) against
the Bolivarian Republic of Venezuela (“Venezuela”), government personnel
arrived at the project site, claimed ownership of the Brisas Alluvial
Concession, seized assets, expelled our personnel, and took physical possession
of the property. Subsequently, on November 4, 2009, Venezuela notified us
through the issuance of an Administrative Act, dated October 20, 2009, of its
intent to cancel our underlying hard rock concession which it formally
completed in June 2010. See Part II, Item 1. Legal Proceedings – Arbitration. The
Company’s historical results of operations and current financial position are a
product of the Company’s decision to incur substantial operating deficits and
project development costs since 1992 and more recently, subsequent to the issuance
of the Authorization to Affect, to place orders to acquire approximately $125
million of equipment, raise $183 million through the issuance of convertible
notes and common shares in our quest to develop the Brisas Project into an
operating mine. Likewise, our October 2009 Request for Arbitration under the
Additional Facility Rules of ICSID and the write-off of the costs associated
with our Venezuelan operations continues to influence the financial position
and results of operations of the Company. We expect the arbitration process,
which commenced in April 2009 when we advised Venezuela of our claims pursuant
to the Canada – Venezuela Bilateral Investment Treaty (the “Canada – Venezuela
Treaty”), to last three to five years from commencement and consume substantial
management time and financial resources. Consistent
with our 2010 efforts, our primary 2011 objectives are to manage the
arbitration claim against Venezuela, to accelerate its completion and to
minimize costs to the extent possible. Our other major objectives for 2011 are
to continue to: (1) pursue an amicable settlement with Venezuela that may
include a monetary agreement and/or project participation; (2) dispose of
previously purchased Brisas Project assets, which originally cost approximately
$39 million and are recorded on the balance sheet at their estimated net
realizable value of $28 million; (3) pursue alternative industry opportunities
for participation; and (4) evaluate the Company’s options to redeem,
restructure or otherwise modify the terms of the 5.50% convertible notes the
outcome of which, among other things, is subject to the sale of the Brisas
Project assets. The
successful execution of these objectives will be facilitated by the Company’s
senior management team, which has extensive technical, financial and
administrative experience in the mining industry- substantially all of whom
have been employed by the Company for over 15 years with a single focus of
developing the Brisas Project. These individuals not only possess valuable
historical knowledge related to the Brisas Project which is important to the
successful execution of our arbitration efforts but they also play a critical
role in the Company’s ongoing evaluation and monitoring of mining opportunities
for potential participation by the Company. The timing of any such new
investment or transaction if any, and the amounts that may be required cannot
be determined at this time and are subject to available cash, sale of equipment
originally slated for the Brisas Project and/or future financings, if any. In
October 2010, the Company attended a meeting with representatives from the
Venezuelan Attorney General’s office and the Ministry of Basic Industry and
Mines (“MIBAM”) to discuss our dispute and possible resolutions. Shortly after
our meeting, the Attorney General’s office experienced a change in personnel
which limited our ability in the short term to conduct further formal
discussions. However, in early 2011 the Company informally communicated a
number of times with a member of the Attorney General’s Office who participated
in the October 2010 meeting and we expect to continue more formal efforts with
the appropriate government representatives to continue our discussions in the
near future. In
December 2010, Venezuela filed a request with the Tribunal for the production
of documents over and above the 33 volumes of hard copy exhibits and thousands
of pages of electronic appendices which accompanied the Company’s September 24,
2010 Memorial and also filed a jurisdictional objection claiming that Gold
Reserve did not have the right to present a claim under the Canada –Venezuela
Treaty.  Venezuela further requested a suspension of the proceedings on the
merits so that the jurisdictional objections could be treated as a preliminary
matter separate from the merits.  14


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In February 2011, the Tribunal issued a procedural
order granting in part Venezuela’s request for the production of certain
documents while granting view-only access to documents deemed to be proprietary
by the Company. In a subsequent February procedural order, the Tribunal denied Venezuela’s petition to bifurcate the arbitration into a jurisdiction phase and a merits phase
ruling that Venezuela’s jurisdictional objections would be addressed together
with the merits. During this time period the Tribunal also established a
revised schedule for the remaining written submissions including granting Venezuela a five week extension from March 7, 2011 to April 14, 2011 to file its response
or Counter-Memorial to the Company’s Memorial.  The oral hearing date of
February 6, 2012 remains unchanged. On
April 14, 2011 Venezuela submitted its Counter Memorial, expert testimony and
witness statements to ICSID. Management, its arbitration counsel and expert
advisors are fully engaged in fulfilling the Company’s obligation to respond to
  Venezuela by submitting its reply to ICSID on or before July 15, 2011. The
Company no longer characterizes historically reported mineralization as
“reserves”. The information contained in this Quarterly Report on Form 10-Q
relating to our past development efforts, regulatory process and reported
mineral reserves for the Brisas Project and Choco 5 property are presented only
for informational and historical purposes and should not be construed as an indication
of our expectations regarding the future development and operation of these
properties or the outcome of the arbitration proceedings. We
have no commercial production at this time and, as a result, we have no revenue
or cash flows from mining operations and continue to experience losses from
operations, a trend we expect to continue unless and until the investment
dispute regarding Brisas is resolved favorably to the Company and/or we acquire
or invest in an alternative project. Historically we have financed the
Company’s operations through the issuance of common stock, other equity
securities and convertible debt. The Company has only one operating segment,
the exploration and development of mineral properties. For
fiscal years commencing in 2011, the Company changed its basis of accounting
and financial reporting to comply with accounting principles generally accepted
in United States. See Note 1 to the consolidated financial statements.
Investors are urged to read our filings with U.S. and Canadian securities
regulatory agencies, which can be viewed on-line at www.sec.gov, www.sedar.com
or at the Company’s website, http://www.goldreserveinc.com which also includes
the Company’s corporate governance policies. Additionally, you can request a
copy of any of these documents directly from us. Financial Overview Cautionary
Statement Regarding Forward-Looking Statements The
information presented or incorporated by reference in this Quarterly Report on
Form 10-Q contains both historical information and forward-looking statements
(within the meaning of Section 27A of the Securities Act, Section 21E of the
Exchange Act and the Securities Act (Ontario)) that may state our intentions,
hopes, beliefs, expectations or predictions for the future. In this report, forward-looking
statements are necessarily based upon a number of estimates and assumptions
that, while considered reasonable by us 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 our actual financial
results, performance, or achievements of the Company to be materially different
from our estimated future results, performance, or achievements expressed or
implied by those forward-looking statements. These
forward-looking statements involve risks and uncertainties, as well as
assumptions that may never materialize, prove incorrect or materialize other
than as currently contemplated which could cause our results to differ
materially from those expressed or implied by such forward-looking statements.
The words “believe,” “anticipate,” “expect,” “intend,” “estimate,” “plan,”
“may,” “could” and other similar expressions that are predictions of or
indicate future events and future trends which do not relate to historical
matters, identify forward-looking statements. Any such forward-looking
statements are not intended to give any assurances as to future results.
Numerous factors could cause actual results to differ materially from those in
the forward-looking statements. Due to risks and uncertainties, including the
risks and uncertainties identified in our Annual Report on Form 10-K- “Part I-
Item 1A. Risk Factors”, actual results may differ materially from current
expectations. 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; ·the realizable value of the
remaining processing and related equipment may be different than management’s
current estimate ·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;  15


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·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 other mining projects by us; ·and risks normally incident to the exploration, development and operation of mining properties. Investors are cautioned not to put undue reliance on forward-looking statements, and investors should not infer that there has been no change in our affairs since the date of this report that would warrant any modification of any forward-looking statement made in this document, other documents filed periodically with securities regulators or documents presented on our website. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this notice. We disclaim 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 our disclosure obligations under applicable rules promulgated by the relevant securities regulators. Liquidity and Capital Resources At March 31, 2011 the Company had cash and cash equivalents of approximately $64.2 million which represents an increase from December 31, 2010 of approximately $6.1 million. The increase was primarily due to proceeds from sales of equipment of $8.3 million offset by cash used by operations of $2.4 million. The components of changes in cash are more fully described in the Operating, Investing and Financing Activities section below. 2011
     2010
     ChangeCash and cash equivalents
     $  64,240,198
     $  58,186,478
     $ 6,053,720
 As of March 31, 2011, our total financial resources, which include cash and cash equivalents and marketable securities, totaled approximately $66.3 million. In addition to cash and cash equivalents and investments, the Company holds Brisas Project related equipment that it intends to dispose of in 2011. This equipment is carried at its estimated net realizable value of approximately $28.1 million (historical cost of approximately $39 million). The primary future obligation of the Company is the $103.5 million 5.50% convertible notes which may be settled in cash or common shares in the event the holder chooses the one-time option to put the notes back to the Company for repurchase on June 15, 2012. See Note 12 to the consolidated financial statements and Contractual Obligations below. With the ability to settle any call for redemption of the convertible notes with common shares, we believe that cash and investment balances and funds available from potential future equipment sales will be sufficient to enable us to fund our activities through 2012. As of May 12, 2011 we had approximately $65 million in cash and investments which are held primarily in US dollar denominated accounts. The timing and extent of additional funding, if any, depends on a number of important factors, including, but not limited to the timing and outcome of our investment dispute with Venezuela, the timing and the amount of proceeds, if any, from the sale of Brisas Project related equipment, the extent of future acquisitions or investments, if any, status of the financial markets and our share price. Operating Activities Cash flow used by operating activities in the quarter ended March 31, 2011 was approximately $2.4 million compared to approximately $4.1 in 2010. Cash flow used by operating activities in the quarter ended March 31, 2011 consisted of a net operating loss of approximately $5.2 million (the components of which are more fully discussed below) adjusted for certain non-cash income and expense items primarily related to gains on sale of equipment and marketable securities, accretion of convertible notes, stock options and common shares issued in lieu of cash compensation and certain non-cash changes in working capital. Cash flow used by operating activities during the quarter ended March 31, 2011 represented a decrease from the prior comparable period of approximately $1.7 million which is primarily attributable to: 1) a decrease in costs associated with arbitration as a result of the reduction in hours incurred by arbitration counsel and 2) a net increase in accounts payable and accrued expenses which is related to the timing of payments for costs already incurred but not yet paid. Investing Activities During the quarter ended March 31, 2011, net cash provided by investing activities amounted to approximately $8.4 million, a $4.4 million increase over the comparable period in 2010. This change was primarily due to the further sale of Brisas Project related equipment which the Company has been actively engaged in efforts to dispose of since the revocation of the Authorization to Affect. As of March 31, 2011, with no remaining equipment purchase commitments related to the Brisas Project, the Company held approximately $28.1 million of equipment intended for future sale. 2011
     2010
     ChangeProceeds (net of purchases) of marketable securities
     
     
     $   103,993
     $    188,057
     $    (84,064)Purchase of property, plant and equipment
     
     
     (2,513)
     (498,440)
     495,927Proceeds from sale of equipment
     
     
     8,337,140
     3,865,641
     4,471,499Decrease in restricted cash
     
     
     
     494,076
     (494,076)$ 8,438,620
     $ 4,049,334
     $ 4,389,286
  16


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Financing Activities The Company had no significant financing activities in 2011 and 2010. Net proceeds from the issuance of commons shares relate to the exercise of employee stock options and totaled $3,625 and $32,384 during the first quarter of 2011 and 2010, respectively. Contractual Obligations The following table sets forth information on the Companys material contractual obligation payments for the periods indicated as of March 31, 2011: Payments due by PeriodTotal
     Less than 1 Year
     1-3 Years
     More Than 5 YearsConvertible Notes(1)
     $110,792,793
     $5,629,195
     $105,163,598
     
 1In May 2007, the Company issued $103,500,000 aggregate principal amount of its 5.50% convertible notes. As of March 31, 2011, $102,349,000 remains outstanding. The notes pay interest semi-annually and are due on June 15, 2022.  The notes are recorded on the balance sheet at amortized cost of approximately $101 million. Subject to certain conditions, the notes may be converted into Class A common shares of the Company, redeemed or repurchased. The note holders have the option to require the Company to repurchase the notes on June 15, 2012, at a price equal to 100% of the principal amount of the notes plus accrued but unpaid interest. The Company may elect to satisfy its obligation to pay the repurchase price, in whole or in part, by delivering Common Shares. If in the future we elect to repurchase the notes with common shares, we would be required to issue shares based on the share price on June 15, 2012. At any time on or after June 16, 2010, and until June 15, 2012, the Company may redeem the notes, in whole or in part, for cash at a redemption price equal to 100% of the principal amount being redeemed plus accrued and unpaid interest if the closing sale price of the Common Shares is equal to or greater than 150% of the conversion price then in effect and the closing price for the Companys Common Shares has remained above that price for at least 20 trading days in the period of 30 trading days preceding the Companys notice of redemption. Beginning on June 16, 2012, the Company may, at its option, redeem all or part of the notes for cash at a redemption price equal to 100% of the principal amount being redeemed plus accrued and unpaid interest. The convertible notes are trading in the gray market often at a significant discount to face value. The terms of the indenture provide that the Company may repurchase the convertible notes in open market purchases or negotiated transactions. As of March 31, 2011, $1,151,000 face value of convertible notes have been settled in cash or repurchased by the Company at a total cost of $451,000. The amounts shown above include the interest and principal payments due based on the estimate that the term of the notes will end on June 15, 2012. If the notes were to reach their contractual maturity date of June 15, 2022, additional interest payments would amount to $56.3 million over the additional ten year term of the notes. The covenants contained in the 5.50% convertible note indenture are limited to administrative issues such as payments of interest, maintenance of office or agency location, delivery of reports and other related issues. Likewise, events of default are defined as failure to pay interest and principal amounts when due, default in the performance of covenants, failure to convert notes upon holders exercise of conversion rights and similar provisions or the Companys failure to give notice of a fundamental change which is generally defined as events related to a change of control in the Company. In the event of a change of control of the Company, the Company will be required to offer to repurchase the notes at a purchase price equal to 100% of the principal amount of the notes plus accrued but unpaid interest with cash or Common Shares unless there has occurred and is continuing certain events of default under the Companys indenture.   17


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Results of Operations Summary Results of Operations Consolidated net loss for the three months ended March 31, 2011 was approximately $5.2 million or $0.09 per share compared to a net loss for the three months ended March 31, 2010 of $4.4 million or $0.08 per share. 2011
     2010
     ChangeOther Income
     $  607,033
     $ 309,188
     $ 297,845Total expenses
     (5,772,655)
     (4,733,053)
     (1,039,602)Net Loss
     $(5,165,622)
     $ (4,423,865)
     $ (741,757)
  Other Income We have no commercial production at this time and as a result, other income is often variable from period to period due to one-time or otherwise variable sources of income such as gains on disposition of marketable securities and sales of equipment. As noted below, the increase in other income was primarily due to an increase in gain on sale of equipment and gain on disposition of marketable securities of $0.3 million and $0.1 million, respectively. These increases were partially offset by decreases in interest income and foreign currency gain. 2011
     2010
     ChangeInterest
     $ 44,048
     $ 64,519
     $ (20,471)Gain on disposition of marketable securities
     198,191
     106,551
     91,640Gain on sale of equipment
     361,208
     55,874
     305,334Foreign currency gain
     3,586
     82,244
     (78,658)$ 607,033
     $ 309,188
     $ 297,845
  Expenses Total expenses increased to $5.8 million from $4.7 million in the three months ended March 31, 2011 and 2010, respectively, a net increase of approximately $1.0 million. This increase was primarily comprised of a non-cash increase in costs associated with the issuance of stock options and restricted shares from both Plans totaling approximately $1.8 million partially offset by a decrease in arbitration costs of approximately $0.8 million. Substantially all of the increase in corporate general and administrative and corporate communications expense is due to non-cash costs associated with the issuance of stock options and to a lesser degree restricted shares. A total of approximately 2.6 million share purchase options expired in 2010 or will expire by the end of 2011 and be returned to the plans. During the quarter ended March 31, 2011, the Company issued approximately 3.0 million share purchase options and restricted shares. Pursuant to generally accepted accounting principles, the Company records a non-cash expense associated with the issuance of options using the fair value method of accounting which is computed using the Black-Scholes method and expensed over the vesting period of the option (see Note 9, Stock Based Compensation).  The Company does not recover any of the previously expensed amounts associated with expired share purchase options. Excluding non-cash charges associated with the issuance of stock options and restricted shares, expenditures during the three months ended March 31, 2011 compared to the same period in 2010 decreased by approximately $0.8 million, primarily due to a reduction in costs associated with the arbitration effort and Venezuelan operations, partially offset by increases in equipment holding costs. With the filing of Venezuelas Counter Memorial on April 14, 2011, management expects costs associated with the arbitration to again increase as we prepare and submit our response on or before July 15, 2011, but not to the extent of the costs incurred during 2010 related to our effort to prepare and submit our initial filing or Memorial in September 2010.   18


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2011
     2010
     ChangeCorporate general and administrative
     $ 2,704,361
     $ 973,437
     $ 1,730,924Venezuelan expenses
     347,741
     450,117
     (102,376)Corporate communications
     183,220
     130,114
     53,106Legal and accounting
     87,508
     127,151
     (39,643)3,322,830
     1,680,819
     1,642,011Equipment holding costs
     464,305
     340,754
     123,551Arbitration
     335,025
     1,079,269
     (744,244)Interest expense
     1,650,495
     1,633,905
     16,590Income tax benefit
     -
     (1,694)
     1,6942,449,825
     3,052,234
     (602,409)Total Expenses for the Period
     $ 5,772,655
     $ 4,733,053
     $ 1,039,602
  Off-Balance Sheet Arrangements The Company is not a party to any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on the Companys financial condition, changes in financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources. Adoption of US GAAP in 2011 For fiscal years commencing in 2011, the Company changed its basis of accounting and financial reporting to comply with US GAAP.  The Company has accounted for this change in presentation on a retroactive basis.  The balance sheet amounts as of December 31, 2010 and the comparative operating results for the three months ended March 31, 2010 were restated accordingly.   A reconciliation of Canadian GAAP and US GAAP is included in Note 19 of the Companys financial statements as of December 31, 2010 and for the year then ended. Transactions with Related Parties MGC Ventures. The Chief Executive Officer, President, Vice President-Finance and Vice President-Administration of the Company are also officers and/or directors and shareholders of MGC Ventures. On December 15, 2010, the non-affiliated shareholders of MGC Ventures approved the redemption of all of the shares of MGC Ventures common stock held by Gold Reserve. Gold Reserve received $0.9 million and recorded a gain on sale of subsidiary of $0.2 million. Prior to the redemption, Gold Reserve owned 12,062,953 common shares of MGC Ventures which represented 44% of its outstanding shares. MGC Ventures owned 258,083 common shares of the Company at March 31, 2011 and December 31, 2010.  During the last three years, the Company sublet a portion of its office space to MGC Ventures for $6,000 per year. Great Basin. The Chief Executive Officer, President, Vice President-Finance and Vice President-Administration of the Company are also officers and/or directors and shareholders of Great Basin. On December 15, 2010, the non-affiliated shareholders of Great Basin approved the redemption of all of the shares of Great Basin common stock held by Gold Reserve. Gold Reserve received $1.2 million and recorded a gain on sale of subsidiary of $0.3 million. Prior to the redemption, Gold Reserve owned 15,661,595 common shares of Great Basin which represented 45% of its outstanding shares. Great Basin owned 491,192 common shares of the Company at March 31, 2011 and December 31, 2010. During the last three years, the Company sublet a portion of its office space to Great Basin for $6,000 per year. ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed to various risks including credit risk, liquidity risk, currency risk and interest rate risk as described below: Credit risk is the risk that a counter party will fail to meet its obligations to the Company. The Companys primary exposure to credit risk is through its cash and cash equivalents. The Company diversifies its cash holdings into major Canadian and U.S. financial institutions and corporations. Liquidity risk is the risk that an entity will encounter difficulty in meeting its obligations associated with its financial liabilities. The Company has historically managed this risk by maintaining adequate cash balances through equity and debt offerings to meet its current and foreseeable obligations.  19


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The Company is subject to currency risk mainly due to
its operations in Venezuela. Transactions denominated in foreign currency are
exposed to exchange rate fluctuations which have an impact on the statement of
operations.  The Company’s cash and other monetary assets and liabilities that
are held in Venezuelan and Canadian currency are subject to fluctuations
against the US dollar. The Company limits the amount of currency held in
non-U.S dollar accounts, but does not actively use derivative instruments to
limit its exposure to fluctuations in foreign currency rates. The
Company is subject to the risk that changes in market interest rates will cause
fluctuations in the fair values of its financial instruments. Cash and cash
equivalents earn floating market rates of interest. Other current financial
assets and liabilities are generally not exposed to this risk because of their immediate
or short-term maturity. The interest rate on the Company’s convertible notes is
fixed and therefore the interest payments are not subject to changes in market
rates of interest.  ITEM 4.CONTROLS AND PROCEDURES During
the fiscal period covered by this report, the Company’s management, with the
participation of the Chief Executive Officer and Chief Financial Officer,
carried out an evaluation of the effectiveness of the design and operation of
the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e)
and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)). Based on such evaluation, the Company’s Chief Executive Officer and
Chief Financial Officer have concluded that, as of the end of the period covered
by this report, the Company’s disclosure controls and procedures are effective
to ensure that information required to be disclosed by the Company in reports
that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the required time periods and are designed to
ensure that information required to be disclosed in its reports is accumulated
and communicated to the Company’s management, including the Chief Executive
Officer and Chief Financial Officer, as appropriate to allow timely decisions
regarding required disclosure. There has been no change in the Company’s
internal control over financial reporting during the most recent fiscal quarter
that has materially affected, or that is reasonably likely to materially
affect, the Company’s internal control over financial reporting.  20


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PART II – OTHER INFORMATION  ITEM 1.LEGAL PROCEEDINGS Arbitration On
October 21, 2009 we filed a Request for Arbitration under the Additional
Facility Rules of ICSID, against the Bolivarian Republic of Venezuela (“Respondent”). In November 2009 our Request for Arbitration was registered by
ICSID (Gold Reserve Inc. v. Bolivarian Republic of Venezuela (ICSID Case No.
ARB(AF)/09/1)).  The Tribunal held
its first session with the parties on April 23, 2010 during which time several
procedural matters were agreed to, including the time schedule for the
Arbitration. In compliance with that schedule, we filed our initial written
submission, known as the Memorial, on September 24, 2010. The Company is
seeking US $1.928 billion compensation in the arbitration for all of the loss
and damage resulting from Venezuela’s wrongful conduct
which includes the full market value of the legal rights to develop
the Brisas Project. The Respondent filed its reply to the Company’s
Memorial, known as the Counter-Memorial, on April 14, 2011. The Company will
submit its reply to the Respondent’s Counter-Memorial on or before July 15,
2011. Subsequently on October 15, 2011, the Respondent is required to file its
final submission. The oral hearings are scheduled to commence on February 6,
2012. The
Canada-Venezuela Treaty requires as a precondition to bringing an arbitration
claim under the Treaty that an investor and any enterprise the
investor owns directly or indirectly that has suffered losses that form
the basis of a claim by the investor to "waive[ ]  its right to
initiate or continue any other proceedings in relation to the measure that is
alleged to be in breach of  [the Treaty]  before the courts
or tribunals of the Contracting Party concerned or in a dispute settlement
procedure of any kind."  As a result, the Company and its relevant
subsidiaries waived their right to commence or continue before
Venezuelan courts or tribunals with other legal or administrative challenges to
the conduct that forms the basis of the ICSID claim, including the
revocation of the Authorization to Affect and the denial of the extension
of the Brisas Alluvial and El Pauji Concessions. Litigation On
December 15, 2008, Rusoro Mining Ltd. (“Rusoro”) commenced an unsolicited offer
to acquire all of the outstanding shares and equity units of the Company in
consideration for three shares of Rusoro for each Company share or equity unit.
On December 16, 2008, the Company filed an action in the Ontario Superior Court
of Justice against Rusoro and Rusoro’s financial advisor Endeavour Financial
International Corporation (“Endeavour”) seeking an injunction restraining
Rusoro and Endeavour from proceeding with Rusoro’s unsolicited offer, significant
monetary damages, and various other items. Endeavour was the Company’s
financial advisor from 2004 until shortly after the commencement of Rusoro’s
offer. On
February 10, 2009, the Ontario Superior Court of Justice granted an
interlocutory injunction restraining Rusoro from proceeding with any hostile
takeover bid to acquire the shares of the Company until the conclusion and
disposition at trial of the action commenced by the Company. The injunction was
granted by the Court following a motion by the Company on the basis that Rusoro
had access to or benefited from the use of the Company’s confidential
information as a result of Rusoro’s relationship with Endeavour. The Court also
issued an interlocutory injunction restraining Endeavour from having any involvement
with a hostile takeover bid for the Company. The Court further required that
Rusoro, Endeavour and their agents return to the Company both all the
confidential information of the Company and also anything produced from that
confidential information and pay the court costs. Following the issuance of the
interlocutory injunctions, Rusoro withdrew its unsolicited offer to acquire the
outstanding shares and equity units of the Company. On
February 15, 2009, Rusoro and Endeavour both served a motion with the Ontario
Superior Court of Justice seeking permission to appeal to the Divisional Court the February 10, 2009 order that was granted against them. The Company
opposed these motions which were heard in Toronto on April 2, 2009 and on April
6, 2009 the permission to appeal was denied.  Rusoro has filed a counterclaim
against the Company for, among other things, damages of Cdn $102.5 million
allegedly arising from the Company’s successful motion for an interlocutory
injunction. Endeavour has filed a $0.5 million counter claim against the
Company relating to the lost opportunity to earn a success fee from the
successful completion of the Rusoro offer. In 2010, the Company developed its strategy for the execution of
this action, added two additional defendants and amended the claim
for monetary damages and collected all its relevant documents, including
electronically stored information and began the process of proceeding to
depositions. More recently in 2011, management with the assistance of counsel
has begun developing strategies related to claims for monetary damages.   21


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ITEM 1A.RISK FACTORS The
risk factors for the quarter ended March 31, 2011 are substantially the same as
those disclosed and discussed in Item 1A of our Annual Report on Form 10-K
for the year ended December 31, 2010.  ITEM 2.UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS- None ITEM 3.       DEFAULTS UPON SENIOR SECURITIES- None ITEM 4.       [REMOVED AND RESERVED] ITEM 5.OTHER INFORMATION- None  ITEM 6.       EXHIBITS  31.1 Certification of Principal
Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002  31.2 Certification
of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002  32.1 Certificate
of Principal Executive Officer pursuant to 18 U.S.C. 1350 (Section 906 of the
Sarbanes-Oxley Act of 2002)  32.2 Certificate of Principal
Financial Officer pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley
Act of 2002)   22


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EXHIBIT
31.1CERTIFICATION
OF THE CEO PURSUANT TO SECTION 302  I, Rockne J Timm, certify that: 1. I have reviewed this report on Form 10-Q of Gold
Reserve Inc.; 2. Based on my knowledge, this report does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this report; 3. Based on my knowledge, the financial statements, and
other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and I are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have: a) designed such disclosure controls
and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to
the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this
report is being prepared; b) designed such internal control over
financial reporting, or caused such internal control over financial reporting
to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles; c) evaluated the effectiveness of the
registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such
evaluation; and d) disclosed in this report any change
in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth
fiscal quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and 5. The registrant’s other certifying officer and I have
disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of registrant’s
board of directors (or persons performing the equivalent functions): a) all significant deficiencies and
material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the
registrant’s ability to record, process, summarize and report financial
information; and b) any fraud, whether or not material,
that involves management or other employees who have a significant role in the
registrant’s internal control over financial reporting.   /s/
 Rockne J. Timm Rockne J. Timm Chief Executive Officer May 12, 2011    23


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EXHIBIT 31.2CERTIFICATION OF THE CFO PURSUANT TO
SECTION 302   I, Robert A. McGuinness, certify that: 1. I have reviewed this report on Form 10-Q of Gold
Reserve Inc.; 2. Based on my knowledge, this report does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this report; 3. Based on my knowledge, the financial statements, and
other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and I are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have: a) designed such disclosure controls
and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to
the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this
report is being prepared; b) designed such internal control over
financial reporting, or caused such internal control over financial reporting
to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles; c) evaluated the effectiveness of the
registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such
evaluation; and d) disclosed in this report any change
in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth
fiscal quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and 5. The registrant’s other certifying officer and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of
registrant’s board of directors (or persons performing the equivalent
functions): a) all significant deficiencies and
material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the
registrant’s ability to record, process, summarize and report financial
information; and b) any fraud, whether or not material,
that involves management or other employees who have a significant role in the
registrant’s internal control over financial reporting.   /s/
Robert A. McGuinness Robert
A. McGuinness Vice President Finance and Chief
Financial Officer May 12, 2011     24


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EXHIBIT32.1 CERTIFICATION OF THE CEO PURSUANT TO SECTION 906 Certification of Principal Executive Officer Pursuant to 18 U.S.C. 1350 (Section 906 of the
Sarbanes-Oxley Act of 2002) I, Rockne J. Timm, Chief Executive Officer of Gold
Reserve Inc., certify, to the best of my knowledge, based upon a review of the
Quarterly Report on Form 10-Q for the period ended March 31, 2011 of Gold
Reserve Inc. that: (1) The Quarterly Report on Form 10-Q fully complies
with the requirements of Section 13(a) of the Securities Exchange Act of
1934, as amended; and (2) The information contained and incorporated by
reference in the Quarterly Report on Form 10-Q fairly presents, in all material
respects, the financial condition and results of operations of Gold Reserve
Inc.   /s/
 Rockne J. Timm Rockne J. Timm Chief Executive Officer May 12, 2011  25


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EXHIBIT32.2 CERTIFICATION OF THE CFO PURSUANT TO SECTION 906 Certification of Principal Financial Officer Pursuant to 18 U.S.C. 1350 (Section 906 of the
Sarbanes-Oxley Act of 2002)  I, Robert A. McGuinness, Vice President Finance and
Chief Financial Officer of Gold Reserve Inc., certify, to the best of my
knowledge, based upon a review of the Quarterly Report on Form 10-Q for the
period ended March 31, 2011 of Gold Reserve Inc. that: (1) The Quarterly Report on Form 10-Q fully complies
with the requirements of Section 13(a) of the Securities Exchange Act of
1934, as amended; and (2) The information contained and incorporated by
reference in the Quarterly Report on Form 10-Q fairly presents, in all material
respects, the financial condition and results of operations of Gold Reserve
Inc.   /s/
Robert A. McGuinness Robert
A. McGuinness Vice President Finance and Chief
Financial Officer May 12, 2011  26


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