Shares of Gold Reserve (TSX: T.GRZ, Stock Forum) surged 55.5% to 70 cents in early trading Monday before being halted, as Vancouver-based Rusoro Mining (TSX: V.RML, Stock Forum) announced a takeover bid for the company.

The offer values Gold Reserve at $1.08 per share, as Rusoro says it is offering Gold Reserve shareholders and equity unit holders three Rusoro common shares for each Gold Reserve Class A common share and each Gold Reserve equity unit.

"A business combination between Rusoro and Gold Reserve creates the premier Venezuelan gold company and allows us to use our extensive in-country experience to unlock the inherent value of the Brisas Project for the benefit of all shareholders. Not only would Gold Reserve Equityholders benefit from the existing production at our Choco 10 and Isidora mines operating in Venezuela, they will also continue to participate in the development of the Brisas Project through significant ownership in the combined company,” said Andre Agapov, chief executive officer of Rusoro.

Rusoro says that with the business combination, it expects to “reduce duplicated in-country costs while optimizing operations including drilling, the use of construction and mining equipment, ore processing opportunities as well as regulatory and logistical requirements surrounding imports and permitting.”

The company adds that if the offer is accepted Rusoro intends to expedite its development and expansion plans at its Choco 10 mine and Increible 6 project, identify opportunities to optimize the development of Gold Reserve's Choco 5 project and obtain the requisite development permits at the Brisas Project in order to restart construction in a timely manner.

The company says the takeover bid will be open for acceptance until January 21 unless extended or withdrawn by Rusoro.

Shares of Rusoro fell 11% to 32 cents Monday.

On the Gold Reserve Bullboard, guy369 commented: “It's a great deal. Usually they put the buyouts to the market and let the shareholders decide. We were opening HUGE, so it looks like all of us want this to go to $1.08 and the buyout to happen. Maybe there's other companies interested in having a buyout war ;) [sic]…”

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