Oct. 27 (Bloomberg) -- Gold Reserve Inc. said Venezuela took over the Brisas del Cuyuni site where the company spent $300 million to develop a copper and gold mine, sending the shares down as much as 17 percent.

“We had a permit and developed the property,” Doug Belanger, president of the Spokane, Washington-based company, said today in a phone interview. “We had a permit to construct and they revoked it without a basis in law.”

Gold Reserve fell 9 cents, or 8.2 percent, to $1.01 on the American Stock Exchange, after earlier dropping as low as 91 cents, the biggest decline since Sept. 28.

Gold Reserve now has no active operations, Belanger said. The company last week filed for international arbitration to get Venezuela to pay it for the project.

The government plans to mine the Gold Reserve site and the adjacent Las Cristinas mine site where Crystallex International Corp. holds a license, President Hugo Chavez said Jan. 13. The sites may be developed by a joint venture between the government and Rusoro Mining Ltd., Chavez said.

Crystallex fell 1 cent, or 3.9 percent, to 25 Canadian cents on the Toronto Stock Exchange. Rusoro gained 1 cent to 54 Canadian cents.

To contact the reporter on this story: Steven Bodzin in Caracas at sbodzin@bloomberg.net.

Last Updated: October 27, 2009 16:36 EDT