Message #23 From:
NewsBot Date: January 9, 2007 04:00:00 AM
AGT News Apollo Gold Updates Progress on the Montana Tunnels Mine Joint Venture
DENVER--(BUSINESS WIRE)--Apollo Gold Corporation (“Apollo”
or the “Company”)
(AMEX: AGT) (TSX: APG) is pleased to report on the progress of the
open-pit wall remediation work and the development of the new ramp
system at its Montana Tunnels Mine (the “Mine”
or “MTM”), near
Helena, Montana.
As previously announced, on August 1, 2006, Apollo entered into a joint
venture (the “JV Agreement”)
with Elkhorn Tunnels, LLC (“Elkhorn”),
an affiliate of Calim Private Equity LLC (“Calim”),
in respect of the Company’s Montana Tunnels
Mine. The JV Agreement calls for Elkhorn to earn up to a 50% interest in
the Mine by contributing $13 million over a five-month period, with
monies being contributed on a weekly basis. As of December 31, 2006
Elkhorn had contributed $9.27 million and as of January 4, 2007 this
contribution had risen to a total of $11.0 million.
The parties agreed to amend the JV Agreement effective December 31, 2006
with Elkhorn. Effective as of that date, Elkhorn has informed MTM that
it would complete the full funding of its Initial Contribution, and the
parties have memorialized that obligation by amending the JV Agreement
and by Elkhorn executing a promissory note to evidence its obligation to
complete the full funding of its Initial Contribution. The general terms
of the short-term note contemplate full payment during January 2007 in
the amount of $3.73 million. The final amount now due on the note, after
the most recent contribution, is $2 million.
The Mine commenced the remediation program on August 10, 2006 with the
hiring of key maintenance personnel to repair the mobile equipment fleet
followed by the hiring of mine operating personnel during the first week
of September 2006. On September 10, 2006, the first bench was blasted
and waste rock removal began along with the construction of a new ramp
access to the open-pit ore reserves. To date, we have excavated
approximately 6 million tons and are currently working on the ramp
system below switchback # 4 which is 100 feet from accessing the open
pit bottom and the ore body. (See remediation work progress slides on
the Apollo Gold web site at www.apollogold.com).
Upon reaching the open pit bottom during January 2007, we intend to
proceed to move waste material which will expose the ore body. This
primary waste moving project is projected to wind down by late February.
Mill personnel have been hired to begin maintenance work in preparation
for the mill start up currently estimated at late February or early
March 2007.
David Russell, President and CEO of Apollo, said, “I
am very happy with the remediation progress at the Mine and am looking
forward to the mill start up. We have a solid management team at the
mine headed up by the VP and General Manager, Tim Smith, and the JV
arrangement with Elkhorn is working well and we are optimistic that with
Elkhorn fulfilling its contribution we will bring the mine back into
production thus allowing our shareholders the opportunity to participate
in the prevailing high metal price environment and producing a positive
cash flow in 2007.”
Since the Mine entered production in 1987, it has produced 1,500,000
ounces of gold, 28,000,000 ounces of silver, 390 million pounds of lead
and over 1 billion pounds of zinc. The following is the most recent
information on reserves at the Mine as reported in Apollo’s
Form 10-K filed with the Securities and Exchange Commission for the year
ended, December 31, 2005: 33,241,000 tons of ore with gold grades of
0.016 ounces per ton; silver grades of 0.212 ounces per ton; lead grades
of 0.185 % and zinc grades of 0.598 % for total gold reserve ounces of
535,900.
Elkhorn is an affiliate of Calim, a Colorado-based private equity firm.
Calim Managing Director Patrick Imeson stated, “We
are very pleased with the quick start-up at the Mine and progress to
date and believe the Mine to be a great asset with capable management.
Our strategy is to search out niches where we can develop undervalued
opportunities, that larger players in an industry have overlooked or are
unable to exploit, and Montana Tunnels is such an asset and we look
forward to the successful completion of the remediation project and the
Mine going back into production.”
Apollo Gold Corporation
Apollo is a gold mining and exploration company with a mine as described
above as the Montana Tunnels Mine, the Black Fox advanced stage
development project in Ontario, Canada, and the Huizopa project, an
early stage exploration project in the Sierra Madres in Chihuahua,
Mexico.
Calim Private Equity, LLC
Colorado-based Calim Private Equity LLC focuses on investment and
company development opportunities created by new technologies, expanding
markets or underdeveloped assets.
FORWARD-LOOKING STATEMENTS
This press release includes “Forward-Looking
Statements” within the meaning of section 21E
of the United States Securities Exchange Act of 1934, as amended.
Forward-looking statements can be identified by the use of words such as “may,”“should,”“expects,”“plans,”“anticipates,”“believes,”“estimates,”“predicts,”“intends,”“continue,”or the
negative of such terms, or other comparable terminology. All statements
regarding the commencement of milling operations, planned remediation
activities (including, without limitation, when we will reach the bottom
of the open pit and removal of waste material), financial contributions
by Elkhorn, the ability of the Company to effectively remediate the east
wall instability problems affecting the Montana Tunnels Mine, to
otherwise successfully effect the remediation program for the Montana
Tunnels Mine, to bring the Mine back into production in 2007 and
generate positive cash flow, and statements respecting reserves with
respect or relating to the Montana Tunnels Mine are forward-looking
statements that involve various risks and uncertainties. There can be no
assurance that such statements will prove to be accurate and actual
results and future events could differ materially from those anticipated
in such statements. Important factors that could cause actual results to
differ materially from these forward-looking statements include:
additional operational and remediation problems at the Montana Tunnels
Mine, the failure of Elkhorn to make the expected contributions under
the JV agreement, unexpected changes in business and economic
conditions, political or economic instability, significant decreases in
gold, zinc or lead prices, changes in interest and currency rates, local
and community impacts and issues, labor accidents, environmental risks
and other factors disclosed under the heading “Risk
Factors” in Apollo’s
most recent annual report on Form 10-K filed with the United States
Securities and Exchange Commission and elsewhere in Apollo’s
documents filed from time to time with the Toronto Stock Exchange, The
American Stock Exchange, The United States Securities and Exchange
Commission and other regulatory authorities. All forward-looking
statements included in this press release are based on information
available to Apollo on the date hereof. Apollo assumes no obligation to
update any forward-looking statements.
