FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                    For the Quarter Ended September 30, 1998



                            GOLD RESERVE CORPORATION



     State Of Incorporation:                    Montana
     Commission File Number:                    1-8372
     IRS Employer Identification No:            81-0266636

     Address Of Principal Executive Offices:    601 West Riverside
                                                  Avenue, Suite 1940
                                                Spokane, Washington 99201
     Registrant's Telephone Number:             (509) 623-1500

     Securities registered pursuant to Section 12(b) of the Act:

       Title Of Each Class:                     Common Stock
       Name Of Each Exchange On Which
         Registered:                            NASDAQ SmallCap Market
                                                The Toronto Stock
                                                  Exchange

     Securities registered pursuant to 
     Section 12(g) of the Act:                  None


     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 as the registrant was required to file such reports),
     and (2) has been subject to such filing requirements for the past 90
     days. Yes[X]

     The number of shares of common stock outstanding at November 13, 1998
     was 23,176,767.
     <PAGE>
     PART I. FINANCIAL INFORMATION
     Item 1. Financial Statements

     GOLD RESERVE CORPORATION AND SUBSIDIARIES
     QUARTERLY REPORT ON FORM 10-Q
     CONSOLIDATED BALANCE SHEETS
     September 30, 1998 and December 31, 1997 (unaudited)


                                                September 30,  December 31,
                                                    1998           1997
                                                -------------  ------------
     ASSETS

     Current assets:
       Cash and cash equivalents                 $ 5,383,471   $12,524,125
     Investments:
       Held-to-maturity securities                15,048,887     4,054,494
       Accrued interest on investments               207,283       240,757
     Deposits, advances and other                    477,183       411,725
     Litigation settlement held in escrow                 --     4,500,000
                                                 -----------   -----------
             Total current assets                 21,116,824    21,731,101

     Property, plant and equipment, net           40,286,995    38,446,169
     Investments:
       Available-for-sale securities               1,283,767       127,754
       Held-to-maturity securities                 3,498,842    11,521,973
     Other                                         1,343,440     1,465,997
                                                 -----------   -----------
             Total assets                        $67,529,868   $73,292,994
                                                 ===========   ===========
     LIABILITIES

     Current liabilities:
       Accounts payable and accrued expenses     $   411,113   $   646,203
       Note payable - KSOP, current portion          414,771       188,470
       Litigation settlement payable                      --     4,500,000
                                                 -----------   -----------
             Total current liabilities               825,884     5,334,673

     Note payable - KSOP, non-current portion             --       434,390
     Minority interest in consolidated 
       subsidiaries                                  995,121       974,522
                                                 -----------   -----------
             Total liabilities                     1,821,005     6,743,585
                                                 -----------   -----------
     Commitments and contingencies

     <PAGE>
     GOLD RESERVE CORPORATION AND SUBSIDIARIES
     QUARTERLY REPORT ON FORM 10-Q
     CONSOLIDATED BALANCE SHEETS, CONTINUED
     September 30, 1998 and December 31, 1997 (unaudited)


                                                September 30,  December 31,
                                                    1998           1997
                                                -------------  ------------
     SHAREHOLDERS' EQUITY

     Serial preferred stock, without par value
       Authorized:  20,000,000 shares
       Issued:      none
     Common stock, without par value
       Authorized:  480,000,000 shares
       Issued:      1998... 23,176,767; 
                    1997... 22,918,143
       Outstanding: 1998... 22,705,329; 
                    1997... 22,437,099          $ 101,645,109  $102,269,494
     Less, common stock held by affiliates           (403,331)   (1,428,565)
     Accumulated other comprehensive (loss) 
       income-
         Unrealized gain (loss) on available-
           for-sale securities                        (12,500)       11,000
     Accumulated deficit                          (35,105,644)  (33,679,660)
     KSOP debt guarantee                             (414,771)     (622,860)
                                                -------------  ------------
             Total shareholders' equity            65,708,863    66,549,409
                                                -------------  ------------
             Total liabilities and share-
               holders' equity                  $  67,529,868  $ 73,292,994
                                                =============  ============


     The accompanying notes are an integral part of the consolidated
       financial statements.
     <PAGE>
     GOLD RESERVE CORPORATION AND SUBSIDIARIES
     QUARTERLY REPORT ON FORM 10-Q
     CONSOLIDATED STATEMENTS OF OPERATIONS
     For the Three and Nine Months Ended September 30, 1998 and 1997
     (unaudited)

     <TABLE>
     <CAPTION>
                                      Three Months Ended            Nine Months Ended
                                      September 30,                 September 30,
                                      --------------------------    --------------------------
                                      1998           1997           1998           1997
                                      -----------    -----------    -----------    -----------
      <S>                             <C>            <C>            <C>            <C>
      Other Income:
        Interest                      $   328,517    $   483,917    $ 1,008,775    $ 1,451,646
        Foreign currency loss             (45,752)       (26,576)      (156,772)       (46,875)
                                      -----------    -----------    -----------    -----------
                                          282,765        457,341        852,003      1,404,771
                                      -----------    -----------    -----------    -----------
      Expenses:
        General and administrative        183,603        284,085      1,009,296      1,236,224
        Directors' and officers' 
           compensation                   236,499        357,800        993,740      1,008,829
        Legal and accounting               47,630         63,025        198,842        259,751
        Depreciation                        8,735         11,918         29,602         35,189
        Interest expense, net of 
           amount capitalized               8,377          6,428         25,908         15,451
        Minority interest in net 
           income of consolidated 
           subsidiaries                     1,580          9,806         20,599         13,666
                                      -----------    -----------    -----------    -----------
                                          486,424        733,062      2,277,987      2,569,110
                                      -----------    -----------    -----------    -----------
      Net loss                           (203,659)      (275,721)    (1,425,984)    (1,164,339)
      Other comprehensive (loss)
        income                             (2,270)        15,000        (23,500)        18,000
                                      -----------    -----------    -----------    -----------
      Comprehensive loss              $  (205,929)   $  (260,721)   $(1,449,484)   $(1,146,339)
                                      ===========    ===========    ===========    ===========
      Net loss per share - basic
        and diluted                   $     (0.01)   $     (0.01)   $     (0.06)   $     (0.05)
                                      ===========    ===========    ===========    ===========
      Weighted average common 
        shares outstanding             22,679,304     22,365,929     22,547,581     22,321,181
                                      ===========    ===========    ===========    ===========
      </TABLE>

     The accompanying notes are an integral part of the consolidated
       financial statements.

     <PAGE>
     GOLD RESERVE CORPORATION AND SUBSIDIARIES
     QUARTERLY REPORT ON FORM 10-Q
     CONSOLIDATED STATEMENTS OF CASH FLOWS
     For the Nine Months Ended September 30, 1998 and 1997
     (unaudited)
     <TABLE>
     <CAPTION>

                                                              1998           1997
                                                              -----------    -----------
      <S>                                                     <C>            <C>
      Cash Flows from Operating Activities:
        Net loss                                              $(1,425,984)   $(1,164,339)
        Adjustments to reconcile net loss to net cash 
          used by operating activities:
            Depreciation                                           29,602         35,189
            Amortization of premium (discount) on held-to-
              maturity securities                                  70,519       (158,672)
            Foreign currency loss                                 156,772         46,875
            Minority interest in net income of consoli-
              dated subsidiaries                                   20,599         13,666
            Changes in current assets and liabilities:
              Net decrease in current assets                    4,468,016         96,846
              Net (decrease) increase in current liabilities   (4,735,090)        60,502
                                                              -----------    -----------
                Net cash used by operating activities          (1,415,566)    (1,069,933)
                                                              -----------    -----------
      Cash Flows from Investing Activities:
        Proceeds from maturities of held-to-maturity 
          securities                                           13,056,187     12,550,000
        Purchase of held-to-maturity securities               (16,097,968)   (20,551,746)
        Purchase of available-for-sale securities              (1,188,602)            --
        Purchase of property, plant and equipment              (2,027,200)    (7,597,418)
        Other                                                     122,557       (691,567)
                                                              -----------    -----------
                Net cash used by investing activities          (6,135,026)   (16,290,731)
                                                              -----------    -----------
      Cash Flows from Financing Activities:
        Proceeds from issuance of common shares                   409,938      1,236,301
                                                              -----------    -----------
                Net cash provided by financing activities         409,938      1,236,301
                                                              -----------    -----------
      Change in Cash and Cash Equivalents:
        Net decrease in cash and cash equivalents              (7,140,654)   (16,124,363)
        Cash and cash equivalents - beginning of period        12,524,125     30,329,024
                                                              -----------    -----------
      Cash and cash equivalents, end of period                $ 5,383,471    $14,204,661
                                                              ===========    ===========

      </TABLE>

     The accompanying notes are an integral part of the consolidated
       financial statements.
     <PAGE>
     THE COMPANY AND SELECTED NOTES TO THE FINANCIAL STATEMENTS

     THE COMPANY.  Gold Reserve Corporation (the "Company") is a mining
     company incorporated in the state of Montana in 1956 for the purpose
     of exploring, developing and acquiring mining properties with the
     intention of placing them into production. The Company's principal
     asset, the Brisas property, is a late exploration-stage gold and
     copper mineralized deposit located in the KM 88 mining district of the
     State of Bolivar in southeastern Venezuela. 

     The Company has no revenue producing mining operations at this time.
     Development of the Brisas property is currently the Company's primary
     activity. The initial stage of a feasibility study, a pre-feasibility
     report, was completed in February 1998 and subsequently modified in
     August 1998. Further studies are ongoing and management anticipates
     that the final feasibility study will be completed in early 1999.

     A number of significant events must occur before the Company could
     proceed with commercial production on the Brisas property, including
     the establishment of proven and probable reserves, obtaining financing
     for anticipated mine development costs and the procurement of needed
     regulatory permits and approvals. 

     The Company's strategy for growth is to develop mining and process
     operations at its Brisas property through the successful development
     of mineable reserves and by making selective property or corporate
     acquisitions.

     FINANCIAL INFORMATION.  The December 31, 1997 balance sheet has been
     derived from the Company's 1997 audited consolidated financial
     statements.  The notes to the consolidated financial statements as of
     December 31, 1997 as set forth in the Company's 1997 Form 10-K, apply
     to these interim financial statements at September 30, 1998 and are
     not repeated here.  The financial information given in the
     accompanying unaudited financial statements reflects all normal,
     recurring adjustments which, in the opinion of management, are
     necessary for a fair presentation for the periods reported.

     CONSOLIDATED FINANCIAL STATEMENTS.  The Company's operations in
     Venezuela are conducted through subsidiary corporations. The
     consolidated financial statements include the accounts of the Company,
     three Venezuelan subsidiaries, Gold Reserve de Venezuela, C.A.
     (GLDRV), Compania Aurifera Brisas del Cuyuni, C.A. (Brisas), Compania
     Minera Unicornio, C.A. (Unicorn), two domestic majority-owned
     subsidiaries, Great Basin Energies, Inc. (Great Basin) and MegaGold
     Corporation (MegaGold) and seven Aruban subsidiaries which were formed
     to hold the Company's interest in its foreign subsidiaries or for
     future transactions. All significant intercompany accounts and
     transactions have been eliminated in consolidation. The Company's
     policy is to consolidate those subsidiaries where majority control
     exists and is other than temporary. 
     <PAGE>
     NET LOSS PER SHARE.  Net loss per share (basic and diluted) is based
     on the weighted average number of common shares outstanding during
     each period which has been reduced by the Company's proportionate
     ownership of common shares owned by Great Basin and MegaGold. As of
     September 30, 1998 and 1997, there were 3,510,484 and 2,911,410 shares
     available for issuance pursuant to the exercise of previously granted
     stock options, respectively.  These options were not included in the
     computation of diluted loss per share as a loss was incurred in each
     of the periods presented and their inclusion would be anti-dilutive.


     Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
     AND RESULTS OF OPERATIONS

     FORWARD LOOKING STATEMENTS
     --------------------------
     The information presented in or incorporated by reference in this
     Quarterly Report on Form 10-Q includes both historical information and
     "forward-looking statements" (within the meaning of Section 27A of the
     Securities Act of 1933, as amended (the "Securities Act"), and Section
     21E of the Securities Exchange Act of 1934, as amended (the "Exchange
     Act")), relating to the future results of the Company (including
     projections and business trends), which involve risks and
     uncertainties. Prospective investors are cautioned not to put undue
     reliance on forward-looking statements, and should not infer that
     there has been no change in the affairs of the Company since the date
     of this Quarterly Report on Form 10-Q that would warrant any
     modification of any forward-looking statement made in this document or
     other documents filed periodically with the Securities and Exchange
     Commission ("SEC"). All subsequent written and oral forward-looking
     statements attributable to the Company or persons acting on its behalf
     are expressly qualified in their entirety by this notice. The Company
     disclaims any intent or obligation to update publicly these forward-
     looking statements, whether as a result of new information, future
     events or otherwise.

     The Company cautions that numerous factors which are disclosed in the
     Company's Annual Report on Form 10-K under the heading "Risk Factors"
     and elsewhere in documents filed from time to time with the SEC,
     including this Quarterly Report on Form 10-Q, could cause actual
     results to differ materially from those in the forward-looking
     statements, including without limitation the risk that one or more of
     the following matters may negatively affect the Company: the Company's
     Brisas feasibility study may conclude that development of the Brisas
     property would be uneconomic or actual ore reserves, costs, recovery
     rates, construction schedules and metals production levels may vary
     considerably from those used in the feasibility study. Likewise,
     continued low metals prices, production volatility, concentration of
     operations and assets in Venezuela, regulatory, environmental
     (including concerns with the Imataca Forest Reserve), political and
     economic issues associated with investments in Venezuela, anticipated
     or estimated future project development costs, need for additional
     <PAGE>
     funding, dependence upon the abilities and continued participation of
     certain key employees of the Company, the impact of year 2000 issues,
     and the uncertainty normally incident to the operation and development
     of mining properties may also cause adverse results for the Company. 


     BRISAS PROPERTY
     ---------------
     OWNERSHIP.  The Brisas property consists of the Brisas alluvial
     concession, the Brisas hardrock concession beneath the alluvial
     concession, other applications for mineralization (primarily nominal
     values of copper and silver) in the material contained in the alluvial
     concession and other mineralization (primarily gold, copper and
     molybdenum) on small land parcels contiguous to the existing alluvial
     and hardrock concessions.

     The Company acquired Brisas (which was granted the Brisas alluvial
     concession in 1988) in 1992 and was granted the underlying Brisas
     hardrock concession in March 1998. The Brisas alluvial and hardrock
     concessions have original terms of twenty (20) years, renewable for
     two subsequent ten year periods at the discretion of the Ministry of
     Energy and Mines ("MEM") and provide for a three to four percent (3%
     to 4%) tax on sales of gold production outside of Venezuela and a
     seven percent (7%) mine-mouth tax on copper production. Gold sold
     directly to the Central Bank of Venezuela (the "Central Bank") is
     taxed at one percent (1%). 

     The Brisas property is located within the Imataca Forest Reserve (the
     "Imataca"), which is comprised of 3.6 million hectares in the State of
     Bolivar. In 1986, an area (in which the Brisas property is located) in
     the southwestern part of the Imataca was authorized, by presidential
     decree, for mining exploration and exploitation activities. Subsequent
     legislation in 1997 identified additional uses and activities within
     the Imataca including mining. The 1997 legislation and previously
     issued regulations allowing mining activities within the Imataca were
     later challenged by several parties as unconstitutional. In response
     to this challenge, the Venezuelan Supreme Court (the "Court") issued
     an order prohibiting the MEM from granting new concessions pursuant to
     the 1997 legislation, but excluded challenges to previous legislation
     authorizing mining in certain regions of the Imataca. The Company has
     been advised by its Venezuelan attorneys that it is unlikely that
     future rulings by the Court related to this issue will impact the
     Company's concessions, but there can be no assurance that an adverse
     ruling that affects the Company will not occur. 


     DEVELOPMENT.  In July 1997, the Company engaged JE MinCorp and a
     number of other independent consultants to assist the Company in the
     preparation of a feasibility study on the Brisas mineralized deposit.
     The initial stage of the study, a pre-feasibility report, was
     completed in February 1998 and subsequently modified in August 1998.
     <PAGE>
     The original report included a "Base Case" analysis of the proposed
     project assuming $375 per ounce gold and $1 per pound copper as well
     as additional whittle-pit designs using $350 and $300 per ounce gold
     and $.90 and $.80 per pound of copper, respectively. 

     In August 1998, certain modifications to the Brisas pre-feasibility
     report were completed which include a revised mine operating plan and
     an on-site copper production process coupled with the revised mine
     operating plan.  The supplement to the pre-feasibility report, more
     limited in scope than the original pre-feasibility report, was
     prepared by the Company and JE MinCorp, a Denver, Colorado-based
     division of Jacobs Engineering Group Inc of Pasadena, California. 

     The original pre-feasibility report with modifications is preliminary
     and based on a number of assumptions which are subject to change.
     Since the Company has not completed its final feasibility study on the
     property, proven and probable reserves have not been established under
     standards promulgated by the SEC. 

     The original pre-feasibility study concluded that, assuming a gold
     price of $375 per ounce, copper price of $1.00 per pound and assuming
     open pit mining methods, the Brisas property is estimated to contain a
     mineralized deposit consisting of approximately 249.2 million tonnes
     with an average grade of 0.70 grams of gold per tonne and 0.14%
     copper. The estimate of mineralization uses an internal cutoff grade
     of 0.40 grams per tonne gold equivalent and assumed waste rock
     material of 419.2 million tonnes, resulting in a strip ratio of 1.68:1
     (waste to mineralization). Total material expected to be moved, under
     the original pre-feasibility report, is estimated to be 668 million
     tonnes. Alternatively, assuming a gold price of $350 and $300 per
     ounce and copper price of $0.90 and $0.80 per pound, the Brisas
     property is estimated to contain (based on a preliminary Whittle pit
     design) approximately 239.3 and 177.1 million tonnes with an average
     grade of 0.71 and 0.80 grams per tonne gold and 0.14% and 0.12%
     copper, respectively. The pre-feasibility report estimates that the
     Company may achieve gold recovery at 83% and copper recovery at 73% at
     the Brisas property, but there can be no assurance that such rates can
     be achieved or, if achieved, maintained. 

     The following charts represent, as determined by the original pre-
     feasibility report, an estimation of mineralized material assuming
     certain gold and copper prices and open pit mining methods. The
     Company has not completed its final feasibility study. Therefore, the
     Brisas mineralized deposit does not yet qualify as a commercially
     mineable ore body under standards promulgated by the SEC and may so
     qualify only after a positive comprehensive economic, technical and
     legal feasibility study has been completed. Once the final feasibility
     study is completed, a continued low gold price (currently
     approximately $290 per ounce) would have a material adverse effect on
     the Company's current plans for the Brisas property. 
     <PAGE>
     <TABLE>
     <CAPTION>
                                                                            Average Grade
                                                                            -------------
                                                                Tonnes      Gold   Copper
      Pre-Feasibility Estimated Mineralized Deposit assuming:   (millions)  gpt    percent
      --------------------------------------------------------  ----------  ----   ------
      <S>                                                       <C>         <C>    <C>
      $375 per ounce gold and $1.00 per pound copper            249.2       0.70   0.14
      $350 per ounce gold and $0.90 per pound copper            239.3       0.71   0.14
      $300 per ounce gold and $0.80 per pound copper            177.1       0.80   0.12
      Average Recovery                                                      83%    73%

      </TABLE>

     Based on the original pre-feasibility report, and contingent on
     positive completion of the final feasibility study, the Company
     currently plans to develop on the Brisas property a large scale open
     pit mining operation consisting of drilling, blasting, loading, and
     truck haulage to carry ore to the crusher and waste to the waste
     repository.  The Company currently estimates that the plant would
     process 55,000 tonnes per day, yielding an estimated average annual
     production of as much as 335,000 ounces of gold and 38.3 million
     pounds of copper, over a mine life of 14.2 years.  These are initial
     estimates based on the pre-feasibility report and there can be no
     assurance, however, that such production will occur at such levels, if
     at all.

     The processing flowsheet contained in the original pre-feasibility
     report and developed from metallurgical testwork completed by three
     independent laboratories includes conventional crushing with a primary
     gyratory crusher and grinding with SAG mill and ball mills followed by
     gravity separation to recover coarse gold, flotation and cyanidation
     of cleaner flotation tailings. Based upon the results of the pre-
     feasibility report, the Company currently expects the final products
     of the operation on the Brisas property to be a gold copper
     concentrate and gold dore. The Company expects to transport the
     concentrates to Puerto Ordaz and then ship them to a smelter for final
     processing. 

     The Company expects most operating supplies to be imported, probably
     from North America. Electrical power is expected to be available from
     a major new transmission line which is planned to run south from
     Puerto Ordaz into Brazil, passing within a few kilometers of the
     Brisas property. There can be no assurance, however, that the power
     line will be completed as planned, if ever. If the power line is not
     completed as planned, the Company will be required to obtain
     alternative sources of electrical power, which may significantly
     increase the capital and operating costs to the Company and have a
     material adverse affect on the Company. A sufficient supply of water
     is available in the area, and the Company expects project requirements
     to be met by water pumped from the pit de-watering system, and by
     rainfall stored in the tailings water pond. On-site accommodations
     will be provided for employees, who will be drawn from both the local
     area and from the industrialized area around Puerto Ordaz. 
     <PAGE>
     In April 1998, Behre Dolbear & Company, Inc. completed an independent
     review of the Company's mineralized deposit modeling and ore reserve
     methodology utilized for the pre-feasibility report. They concluded
     that estimating techniques used were an accurate representation for
     the reserves; drill hole spacing was sufficient to generate future
     estimates of proven and probable reserves; and the database was
     correct and reliable. This recent study compliments Behre Dolbear &
     Company, Inc.'s audit of sampling and assaying procedures at the
     Brisas property completed in August 1997. 

     The pre-feasibility report estimates that base case initial capital
     required to bring the Brisas property into commercial production at
     the planned 55,000 tonnes per day will be approximately $293 million.
     Ongoing life of mine capital requirements are estimated at $53
     million, and working capital needs are estimated at $15 million. The
     ultimate design of the plant is subject to the results of the final
     feasibility study, and there can be no assurance that the final
     feasibility study will conclude that the planned operation will be
     economically feasible. Construction of the planned facility is
     expected to take approximately 18 to 24 months, with commissioning and
     achievement of commercial production expected shortly thereafter.
     Under the timetable presently contemplated by the Company, initial
     production would commence no earlier than early 2000, with full
     production expected to commence no earlier than mid-2001.  There can
     be no assurance, however, that the Company will begin or complete such
     construction according to this schedule, or that, if completed, the
     facility will begin commercial production as planned. 

     Base case pre-feasibility report estimates of pre-tax operating cash
     costs, including mining, processing, concentrate transportation,
     smelting and refining expenses, total $222 per ounce of gold net of
     copper revenues.  Total pre-tax costs per ounce of gold produced,
     including life of mine capital, are estimated at $295, excluding
     previously incurred sunk costs of approximately $38 million or
     approximately $8 per ounce.  Exploitation taxes and royalties add
     approximately $9 per ounce of gold to the total cost per ounce.  The
     base case pre-tax net present value of the project (assuming $375 per
     ounce of gold and $ 1.00 per pound of copper) at 0% is $354.9 million,
     with an internal rate of return of 11.8%.

     Modified Pre-feasibility Study
     ------------------------------
     The Company and its consultants continue to develop alternatives to
     the assumptions utilized in the initial pre-feasibility report. In
     August 1998 certain modifications to the Brisas pre-feasibility report
     were completed which include (1) a revised mine operating plan,
     resulting in a 7% reduction in cash operating cost to $206 per ounce
     of gold, net of copper credit and, (2) an on-site copper production
     process coupled with the revised mine operating plan, resulting in a
     24% reduction in cash operating cost to $169 per ounce of gold, net of
     copper credit. The supplement to the pre-feasibility report, more
     limited in scope than the original pre-feasibility report, was
     prepared by the company and JE MinCorp, a Denver, Colorado-based
     division of Jacobs Engineering Group Inc of Pasadena, California.
     <PAGE>
     <TABLE>
     <CAPTION>
                                                                                    On-Site
                                                                                    Copper
                                                      Pre-Feasibility    Revised    Production
                                                      Study              Mine       and Revised
      U.S. $                                          (March 98)         Plan       Mine Plan
      ---------------------------------------------   ---------------    -------    -----------
      <S>                                             <C>                <C>        <C>
      Pit design gold price ($/oz.)                          $375           $335         $335
      Pit design copper price ($/lb.)                       $1.00           $.90         $.90
      Mine cut-off  grade (grams of gold per tonne)          0.40           0.50         0.50

      Mineralized deposit (mm tonnes)                         249            200          200
      Mineralized deposit (mm gold ozs.)                      5.6            5.0          5.0
      Gold grade (grams/tonne)                               0.70           0.77         0.77
      Copper grade %                                         0.14           0.14         0.14
      Throughput (tonnes/day)                              55,000         55,000       55,000
      Average annual gold production (oz.)                335,000        362,000      362,000
      Average annual copper production (mm lbs.)               38             39           39
      Strip ratio (waste to ore)                           1.68:1         1.97:1       1.97:1
      Mine life (Years)                                      14.2           11.5         11.5

      Initial capital cost (mm)                              $293           $299         $344
      Working capital (mm)                                    $15            $20          $20
      Ongoing capital (mm)                                    $53            $42          $42
      Total cost (per tonne)                                $6.28          $6.40        $5.78
      Operating cash cost (per oz.)*                         $222           $206         $169
      Total cash and operating costs (per oz.)**             $295           $288         $262

      *   Net of copper credit
      **  Pre tax and independent of costs incurred to-date

      </TABLE>

     In addition to the modifications to the pre-feasibility report, the
     Company is currently proceeding with metallurgical testing and ore
     reserve modeling both of which are an ongoing process. An update to
     the mine model, which will be verified by an independent engineering
     firm, is expected later this year. The Company is proceeding with the
     completion of the final feasibility study expected next year.

     Outlook
     -------
     The primary focus of the Company in the upcoming 12 to 18 months while
     considering the current price of gold and copper continues to be
     activities related to securing permits, acquiring additional sites for
     process facility infrastructure, completion of the final feasibility
     study and investigation of funding sources needed to finance the
     construction of the Brisas mining facility. 

     A period of 12 to 18 months is anticipated in the overall project
     schedule for permitting as well as completion of the final feasibility
     study. In addition, continuation or completion of metallurgical
     testing, geotechnical and hydrological investigations, electrical
     power supply and concentrate sales agreements, and development and
     condemnation drilling will occur prior to completion of the final
     feasibility study. It is estimated that an additional $5 million will
     be spent for completion of the final feasibility study. 
     <PAGE>
     LIQUIDITY AND CAPITAL RESOURCES
     -------------------------------
     Cash and investments combined decreased approximately $3 million from
     December 31, 1997 to September 30, 1998. Changes in the financial
     position of the Company are more fully discussed below.

     Operations
     ----------
     Cash used by operations for the nine months ended September 30, 1998
     compared to the same nine-month period in 1997 increased approximately 
     $0.3 million. The increase in the use of funds by operations is
     primarily a result of an increase in net loss due to a reduction in
     the amount of cash flow from invested funds and a reduction in
     accounts payable over the same period in 1997.

     Investing
     ---------
     Net cash flow used by investing activities decreased approximately
     $10.2 million for the nine months ended September 30, 1998 compared to
     the same nine-month period in 1997. This change is primarily comprised
     of a net reduction in purchases of investments of approximately $3.8
     million and a reduction in exploration and development expenditures
     related to the Brisas property of approximately $5.6 million. Amounts
     recorded as property, plant and equipment (capitalized exploration and
     development costs) include all costs associated with the Brisas
     property, including personnel and related administrative expenditures
     incurred in Venezuela, drilling and related exploration costs,
     capitalized interest and general support costs related to the Brisas
     property. 

     Financing 
     ---------
     As of October 31, 1998, the Company held approximately $25 million in
     cash and current and long-term held-to-maturity securities. The 1998
     budget, which excludes any future construction costs related to the
     proposed mining facilities, is expected to total approximately $4.3
     million. Management anticipates that its current cash and investment
     positions are adequate to cover estimated operational and capital
     expenditures (excluding estimated mine construction costs) associated
     with the remainder of 1998 and all of 1999.

     Future construction costs and development expenses, and the cost of
     placing the Brisas property or additional future properties into
     production, if warranted, are expected to be financed by a combination
     of the sale of additional common stock, bank borrowings or other
     means. Whether and to what extent additional or alternative financing
     options are pursued by the Company depends on a number of important
     factors, including if and when mine development activities are
     commenced on the Brisas property, management's assessment of the
     financial markets, the price of gold, the potential acquisition of
     additional properties or projects and the overall capital requirements
     of the consolidated corporate group. There can be no assurances that
     financing will be available on favorable terms or at all.
     <PAGE>
     RESULTS OF OPERATIONS
     ---------------------
     September 30, 1998 compared to September 30, 1997. 

     Consolidated net loss for the three and nine months ended September
     30, 1998 amounted to $203,659 and $1,425,984 or $0.01 and $0.06 per
     share respectively compared to consolidated net loss of $275,721 and
     $1,164,339 or $0.01 and $0.05 per share respectively, for the same
     periods in 1997. 

     Changes in operating results were caused by the following factors:
     Other income for the current three and nine month periods decreased
     from the comparable periods in 1997 due to decreased interest income
     from lower average levels of invested cash as well as increased
     foreign exchange loss due to the depreciation of the Venezuelan
     currency.  General and administrative expenses and legal and
     accounting expenses for the current three and nine month periods
     decreased from the comparable periods in 1997 primarily due to
     decreases in expenses associated with administering activities in
     Venezuela and decreases in promotional activities in the United
     States. Directors' and officers' compensation during the three months
     ended September 30, 1998 decreased from the comparable period in 1997
     due to the timing of the payment of fees to directors.

     YEAR 2000 READINESS
     -------------------
     The Company has made a preliminary assessment of its requirements
     regarding year 2000 issues, which generally refers to the inability of
     hardware, software and control systems to correctly identify two-digit
     references to specific years, beginning with the year 2000. The
     Company's present business operations are not dependent upon
     sophisticated information systems and, as a result, management's
     preliminary conclusions are that the Company's operations will not be
     materially impacted by year 2000 issues. Further, the ongoing Brisas
     feasibility study is also expected to include an evaluation of year
     2000 issues as they relate to the proposed future development of the
     Brisas property. Although management believes that the feasibility
     study will adequately address such issues and prevent significant
     future business disruptions, subsequent work may lead to discovery of
     material issues or costs. In addition, compliance-related failures,
     including those of material third-party suppliers, could also result
     in temporary delays in the Company's future operations. Based on the
     current information available to management, the impact of future
     business disruption as a result of year 2000 issues cannot be
     estimated at this time.
     <PAGE>
     NEW ACCOUNTING PRONOUNCEMENTS
     -----------------------------
     In June 1998, Statement of Financial Accounting Standards No. 133
     (SFAS 133). "Accounting for Derivative Instruments and Hedging
     Activities" was issued. SFAS 133 establishes accounting and reporting
     standards for derivative instruments, including certain derivative
     instruments embedded in other contracts, (collectively referred to as
     derivatives) and for hedging activities. It requires that an entity
     recognize all derivatives as either assets or liabilities in the
     statement of financial position and measure those instruments at fair
     value. SFAS 133 is effective for all fiscal quarters of fiscal years
     beginning after June 15, 1999. The Company does not believe the
     adoption of this standard will have a material impact on the financial
     condition or results of operations of the Company. 

     The Company adopted the provisions of SFAS No. 130, "Reporting
     Comprehensive Income" and SFAS No. 131,  "Disclosures about Segments
     for an Enterprise and Related Information" in 1998. The implementation
     of these new standards did not have a material impact on the
     presentation of the consolidated financial statements.

     PART II  OTHER INFORMATION
     --------------------------

     Item 4.  Submission of Matters To a Vote Of Security Holders.  

     The Annual meeting of Security Holders was held on June 16, 1998 in
     Spokane, Washington.  The following matters were submitted to a vote
     of the shareholders: 1) Election of Directors; 2) Approval of the
     purchase of common stock by the combined 401(k) Salary Reduction and
     Employee Stock Ownership Plan and 3) Ratification of
     PricewaterhouseCoopers LLP as the Company's independent auditor for
     the year ending December 31, 1998 and any interim period. 

     The Company's articles of incorporation require a minimum of 50% of
     all shareholders eligible to vote either in person or by proxy be
     present at the annual meeting in order for a quorum to be obtained.
     The Company failed to obtain a quorum at its original meeting on June
     16, 1998 and, after four postponements on July 14, August 13,
     September 15 and October 15, 1998, the Company still had not obtained
     a quorum of shareholders. Since a quorum was not obtained prior to the
     required 120 days from the date of the original meeting, the
     previously elected directors will continue to serve until their
     successors can be elected in the future.

     Item 5.  Other information

     In accordance with recent amendments to Rule 14a-4 under the
     Securities Exchange Act of 1934 (the "Exchange Act"), if notice of a
     non-Rule 14a-8 shareholder proposal is to be raised at the next annual
     meeting of shareholders and it is received at the principal executive
     offices of the Company after March 15, 1999 (45 days prior to the
     month and date in 1999 corresponding to the date on which the Company
     mailed its proxy materials for the 1998 annual meeting), proxy voting
     <PAGE>
     on that proposal when and if raised at the 1999 annual meeting will be
     subject to the discretionary voting authority of management proxy
     holders and without any discussion of the matter in the Company's
     Proxy Statement for the 1999 annual meeting. As stated in the
     Company's 1998 Proxy Statement, any shareholder proposal to be
     considered for inclusion in the Company's 1999 Proxy Statement must be
     received at the principal executive offices of the Company no later
     than December 16, 1998 [old 120 day rule].

     Item 6.  Exhibits and Reports on Form 8-K.

     a) Exhibit 27   Financial Data Schedule
     b) There were no reports on Form 8 K for the quarter ended 
        September 30, 1998
     <PAGE>
     SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934,
     the Registrant has duly caused this report to be signed on its behalf
     by the undersigned thereunto duly authorized.

                                   GOLD RESERVE CORPORATION

                                   By:  /s/ Robert A. McGuinness
                                        ----------------------------------
                                        Vice President - Finance
                                        Chief Financial Officer
                                        November 13, 1998

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