Apollo drills Black Fox (April 07, 2005)

Ongoing drilling on the Black Fox property 75 km east of Timmins, Ont., continues to return encouraging results for owner Apollo Gold (APG-T).

Highlights from the latest batch of holes include:

• Hole 417 1.6 metres of true width (beginning 66 metres below surface) grading 89.9 grams gold per tonne;
• Hole 426 2.8 metres (from 23.5 metres) averaging 33.9 grams gold;
• Hole 213 8.4 metres (from 96 metres) of 16.9 grams gold;
• Hole 223 1.1 metres (from 149 metres) of 32.7 grams gold;
• Hole 231 1 metre (from 237.6 metres) running 67.9 grams gold;
• Hole 232 3.3 metres (from 250 metres) containing 42.2 grams gold, and 2.8 metres (from 262.2 metres) of 20.4 grams gold; and
• Hole 238 3.5 metres (from 134 metres) averaging 35 grams gold.

The remaining 17 holes generally returned grades of around 4-17 grams gold over similar widths.

Apollo plans to continue underground and surface drilling ahead of a full feasibility study slated for completion by yearend. The feasibility study will contain an updated reserve estimate, which will include underground mineralization.

A prefeasibility study completed in early 2004 pegged open-pit reserves at 2.95 million tonnes grading 4.8 grams gold. Additional unclassified mineralized material is estimated at 1.4 million tonnes running 4.8 grams.

Since those estimates, the company has sunk some 315 core holes for 43,280 metres from surface, and 41,065 meters worth of underground drilling along a newly developed 920-metre drift on the 235-metre level. The company expects reserves to increase significantly.

Initial plans at Black Fox envisage a combined open-pit and underground operation, with the open pit running at a planned rate of 1,500 tonnes per day for more than five years. Average annual life-of-mine gold production from the pit is pegged at 81,000 oz. of gold. The underground portion of the operation would include a mill and tailing impoundment facility.

Permitting is expected to be complete by early 2006 with full production underway as early as 2007.

The Black Fox deposit straddles the southern limb of the east-west trending Destor-Porcupine fault system, which is host to many of the deposits in the Timmins area. Its is situated on a flexure in the fault where the strike changes to southeast. Free gold occurs in quartz veins and stock works hosted by altered ultramafic rocks and with pyrite in altered tholeiitic basalts.

Apollo current exploration plans also include continued surface drilling of the Base Metal zone at Black Fox, where drilling earlier this year returned 16.5 metres (true width) grading 12.5% zinc, 3.8% lead and 65 grams silver per tonne.

The zone is situated in the footwall of the Destor-Porcupine fault system. It was found last year following a new interpretation of geological and geophysical data.

Apollo shares were off a penny at 46 in heavier-than-normal afternoon trading following the news on April 7.