Apollo sees red in 2002

Apollo sees red in 2002Vancouver Mid-tier gold miner Apollo Gold (APG-T) felt the impact of non-cash charges during its inaugural year of operation.

The Denver-based company posted a loss of $4.78 million, or $0.25 per share in 2002. Nearly half of the loss came in the final three months of year, when Apollo Gold had revenue of $15 million but lost $1.87 million or $0.05 per share. Driving the loss was a $964,000 expensing charge for the issuance of shares to members of senior management and $600,000 of reclamation expenses. For the year ended Dec. 31, revenue tallied $32 million, while direct operating costs hit $23 million.

"The year of 2002 was a very exciting year for Apollo Gold," says company President, David Russell. "Our company has only been in existence for nine months and we are ready to commence a full year of production at all operations."

In the fourth quarter, the Florida Canyon mine in Nevada produced 29,552 oz. of gold at a total cash cost of US$237 per oz. bringing its yearly total to 121,516 oz at a total cash cost of US$243 per oz. Silver production hit 72,567 oz.

At the nearby, Standard Mine project permitting phase and development work continued throughout the year with some 30,000 metres of reverse circulation drilling completed. Expenditures for the project came in at $1.3 million. Limited production is scheduled to begin in the third quarter of 2004, gradually ramping up to full production of 60,000 oz of gold per year.

The Montana Tunnels operation near Helena, where full production is poised to resume in the second quarter of 2003, added 6,687 development oz and 13,400 gold oz equivalents in the fourth quarter and 33,344 oz at a total cash cost of US$178 per oz for the year. Milling operations were restarted on a limited basis in Oct. by processing mineralized material encountered during the pre-strip phase. Capital costs including maintenance, mill upgrade projects, and a tailings impoundment lift were completed during the year at a cost of $9.1 million. Pre-stripping moved 19.8 million tonnes of waste during the year at a cost of $26.8 million.

Overall, total cash costs to produce an oz of gold over the entire year came in at US$232. For the fourth quarter, the company realized gold price was US$323 per oz. and US$309 for the year.

"We produced over 121,000 ounces of gold at our Florida Canyon property in 2002 and have completed in excess of 80% of the stripping at Montana Tunnels," adds Russell. "Based on these results, we currently expect to produce an aggregate of 200,000 ounces of gold in 2003."

Publicly listed since last summer, Apollo Gold is the result of a reverse-takeover by International Pursuit of a creditor-held company, also called Apollo Gold. The creditor company was running the last two Pegasus Gold gold mines still operating after the latter went bankrupt in 1999 (T.N.M., June 10/02).

At Dec. 31, 2002, Apollo had $13.3 million in cash and working capital of $23.5 million.