Apollo receives Standard mine permits

Vancouver — After 18 months of engineering and environmental studies, Apollo Gold (APG-T) has received an operating permit for the Standard mine, near Winnemucca, Nev.

The Denver-based company spent US$7.5 million bringing the small, open-pit, heap-leach mine into production. It will be the first new mine built in the state since the Ken Snyder gold-silver mine was opened in 1998.

Situated 5 miles south of Apollo’s Florida Canyon operation, the Standard mine resulted from a grassroots discovery made by the company’s exploration team. It will be operated in conjunction with Florida Canyon, now Apollo’s largest gold producer. This open-pit, heap-leach operation turned out 101,811 oz. gold, plus minor amounts of silver, last year. Cash costs averaged US$285 per oz., while total costs came in at US$325 per oz.

Costs have risen at the aging mine in recent years, owing to longer haulages from the new pits and marginally lower grades, which lowered overall production.

Once the new Standard mine is up and running in early 2005, gold production from the combined Florida Canyon and Standard mines will reach 140,000 oz. annually. The company expects that synergies between these similar operations will serve to reduce production costs. The Standard mine also will have lower stripping ratios and shorter haulage distances to the pads than those of Florida Canyon.

The existing resource, containing about 400,000 oz. gold, is deemed sufficient for at least five years of production. The company plans to explore several newly identified targets, such as the Buffalo Canyon project, which could extend the mine life even further.

Elsewhere in North America, Apollo plans to spend US$10.5 million advancing the Black Fox project, near Matheson, Ont. The bulk of funds will be used to convert underground mineralization into gold reserves and complete a feasibility study. The company added this asset to its portfolio in 2002 by acquiring what was then known as the Glimmer mine property.

Apollo is also active in Mexico, namely at the newly acquired Huizopa project in the Sierra Madre belt of Mexico’s Chihuahua state.

The Sierra Madre region has a mining history dating back more than 400 years, and the region is now enjoying a revival, with many new deposits being explored by domestic and foreign mining companies

Apollo notes that the Huizopa project was in private hands for many decades and consequently saw little modern exploration. It includes an area that was mined from the late 1890s into the 1930s.

The company plans to carry out geochemical and geophysical surveys, as well as geological mapping, to develop targets for subsequent trenching and drilling. The company sees potential for high-grade bonanza zones, as well as broad, stockwork mineralization amenable to open-pit and underground mining.

Apollo can acquire 51% of Huizopa in return for work commitments and payments totalling US$5.2 million. This can be increased to 71% upon completion of a feasibility study.