December 16, 2008

Gold Reserve Inc.
926 W. Sprague Avenue
Suite 200
Spokane, WA
USA 99201

By Fax: +1 509 623 1634
And email: [email protected]

Attention: Rockne J. Timm, CEO

Dear Sirs,

We write in response to your letter of December 14, 2008.
That letter is substantively incorrect. I draw your attention to the
following.

- Gold Reserve Inc. ("GRZ") engaged Endeavour Financial International
Corporation ("EF") in October 2004 to carry out a debt mandate and an
equity/M&A mandate. GRZ terminated the equity/M&A mandate in September
2007. The debt mandate continued until GRZ first suspended and then, in
October 2008, terminated, its relationship with the four banks who had
agreed to arrange the debt. This termination effectively extended to
terminate the debt mandate as these were the four banks with whom EF had
been engaged to work. The terms of the mandates expressly recognized
that EF had other clients whose interests might conflict with GRZ's.

- In August 2008 EF approached GRZ on behalf of Rusoro with an offer for
a combination of the two companies. GRZ refused the offer. GRZ did not
make any objection to EF's role as Rusoro's adviser. After that meeting
GRZ ceased paying the fees that it owed to EF in connection with the
debt mandate.

- EF has complied with its obligations under its engagement letter with
GRZ and, in particular, the EF team that advised Rusoro with respect to
the bid did not rely on any confidential information. Rusoro has
informed us that the offer was based solely on publicly available
information.

- GRZ's press release of 15 December 2008 violates the Disclosure of
Engagement term of the EF/GRZ mandate letter of 19 September 2007.
Pursuant to the Termination clause of that letter the mandate is
terminated.

In short: EF has not violated any duty to GRZ; Rusoro's bid is not based
on any information in respect of which GRZ has a confidentiality
interest; and GRZ management has known for months that EF is advising
Rusoro and complained, for the first time, only when Rusoro advised that
it would make a bid.

We note your press release of today's date in respect of an action in
the Ontario Superior Court of Justice against us and against Rusoro. We
will vigorously defend this action to ensure that your shareholders are
provided with the opportunity to consider Rusoro's bid on its merits.

Rusoro's bid makes available to the shareholders of GRZ the option of
seeing Brisas developed by GRZ's current management team or by Rusoro's.
GRZ's efforts appear to be focused on stopping the bid irrespective of
what is in the best interests of the GRZ shareholders. If your board has
determined that the bid is inadequate, that case should be made to the
shareholders themselves, rather than attempting to prevent the
shareholders from making the determination.

We are disappointed that GRZ is making false accusations against
Endeavour for the purpose of distracting the shareholders from the fact
that they have the opportunity to tender their shares at a very large
premium to the market value that incumbent management has achieved for
them.

Sincerely,

"Bill Koutsouras"
Director, Executive Vice President & CFO

CC: Andre Agapov, Rusoro CEO