Apollo Gold completes sale of Nevada assets (December 19, 2005)

Vancouver — Focused on its cornerstone Black Fox project in northeastern Ontario, Apollo Gold (APG-T, AGT-X) has closed the sale of its Nevada mining subsidiaries to Japanese gold investment company, Jipangu.

The deal has Apollo Gold divesting Florida Canyon Mining, Standard Gold Mining and Apollo Gold Exploration to Jipangu, which is paying US$14 million for the Nevada mines and exploration properties. The Tokyo-based gold investment firm has been looking to make the transition to producer.

Apollo will use about US$11 million of the proceeds to secure convertible debentures, previously backed by the Nevada subsidiaries and assets.

In addition to its Nevada divestiture, Apollo has arranged a private placement financing; it will sell 11.65 million units at 35 apiece to Jipangu for gross proceeds of US$3.5 million. The units are comprised of one common share and 0.17167 of a warrant (for a total of up to 2 million). Each full warrant will be exercisable for a common share at 39 for two years. Jipangu can acquire up to a 19.7% interest in Apollo should all warrants be exercised.

The two mines in the Nevada asset package, Florida Canyon and Standard, recorded gold production of 24,765 oz. and 11,241 oz., respectively, over the first nine months of 2005. Florida Canyon output comes from continued leaching of stacked ore, while production from the Standard mine commenced in June.

A large portion of the balance of asset sale proceeds and financing funds are earmarked towards ongoing advanced exploration and development of its Black Fox gold project near Timmins, Ont. This season’s underground drill program is nearing completion en route to a full feasibility study and planned open-pit underground development in 2006-2007. An updated reserve calculation is anticipated early next year. A 2004 prefeasibility study at Black Fox reviewed open-pit reserves of 3 million tonnes grading 4.8 grams gold per tonne.

Apollo also continues to hold its operating Montana Tunnels mine near Helena, Mont. The operation produced over 39,000 oz. gold in the first nine months of this year.

The company posts a $29-million market capitalization given its 106.6 million shares outstanding and recent 27 share price.