Apollo Gold Corporation (“Apollo”)
(TSX: APG) (AMEX: AGT) is pleased to announce that it has retained
Macquarie Bank Ltd. (“Macquarie”)
and RMB Resources Inc. (“RMB”)
as joint arrangers and underwriters for a U.S.$75 million project
finance facility to fund development capital for the Black Fox Gold
Project (“Black Fox”)
located in Ontario, Canada. The retention of Macquarie and RMB does not
constitute a financing offer and any such financing offer will be
subject to receipt of formal internal credit approvals, due diligence
and delivery and acceptance of a binding term sheet.
“Completion of the feasibility study was the
first important step on the road to production at Black Fox and the
retaining of RMB and Macquarie as arrangers and underwriters for the
debt component of funding is the second important step for this robust
project,” said David Russell, President & CEO
of Apollo. “Macquarie and RMB are quality
project financing banks and they will be working closely with Apollo and
our consultants during the coming weeks to minimize the time required to
access project financing. Having a significant debt component in the
overall development cost of Black Fox will reduce equity dilution and
should increase shareholder returns.”
On April 15, 2008 Apollo announced the results of the bankable
feasibility study (“BFS”
or “Study”) for
Black Fox. The Study was prepared by SRK Consulting (“SRK”),
Denver, Colorado. As used herein the term “bankable
feasibility study” means a comprehensive
analysis of a project’s economics (+/- 15%
precision) which Apollo believes would be acceptable to a lender in
making a determination as to whether to provide financing.
Highlights of the Bankable Feasibility Study include:
Net Present Value (“NPV”)
of $302 million using a gold price per ounce of $750,
Preproduction capital costs of $86.9 million,
Internal Rate of Return (“IRR”)
of over 62% and capital payback of 2.0 years,
Gold production of over 150,000 ounces annually over the life of the
project,
Average total cash costs for first three years of production estimated
at $326 per ounce,
1.33 million contained ounces of gold in probable reserves.
The mineral reserves shown in the table below formed the basis of the
BFS and were calculated based on a gold price of U.S.$650/oz.
Black Fox Probable Reserve Statement as of February 29, 2008
Mining Method
Cut-off Au(grams of goldper tonne)
Tonnes
Grade (grams ofgold per tonne)
Contained oz Au
Open Pit
1
4,350,000
5.2
730,000
Underground1
3
2,110,000
8.8
600,000
Total
1,330,000
1Underground Reserves assume 95% mining
recovery 17% planned dilution and 5% unplanned dilution both at 0
gpt grade.
Apollo Gold Corporation
Apollo is a gold mining and exploration company which operates the
Montana Tunnels Mine, which is a 50% joint venture with Elkhorn Tunnels,
LLC, in Montana, 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.
This press release has been reviewed and approved for release by Richard
Nanna, Professional Geologist, Apollo's Senior Vice-President,
Exploration and Development. Mr. Nanna is designated a “Qualified
Person” under Canadian Instrument NI 43-101.
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 estimated reserves and resources of the Black Fox project, the
stated assumptions contained in the Study, commencement of production at
Black Fox statements regarding development of a mine at Black Fox, the
commencement of production at Black Fox, successful completion of
project financing at Black Fox are forward-looking statements that
involve various risks and uncertainties. There is no assurance that the
proposed $75 million project financing facility will be finalized. 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: increases in anticipated cash costs, operating
costs, mining costs, capital expenditures and other costs; decreases in
anticipated plant gold recoveries and gold prices; delays or problems in
construction, permitting and start-up; variations in ore grade, mining,
or processing problems or issues, and other factors disclosed under the
heading “Risk Factors”
and elsewhere in Apollo 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.
NON-GAAP FINANCIAL MEASURES
The term "total cash costs" is a non-GAAP financial measure and is used
on a per ounce of gold basis. Total cash cost is equivalent to direct
operating cost as would be found in our financial statements and would
include by-product credits for payable silver production. We have
included total cash cost information to provide investors with
information about the planned cost structure of Black Fox mining
operation. This information differs from measures of performance
determined in accordance with GAAP in Canada and in the United States
and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with GAAP. This measure
is not necessarily indicative of operating profit or cash flow from
operations as determined under GAAP and may not be comparable to
similarly titled measures of other companies.
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