Apollo Gold Reports Third Quarter 2009 Results

http://www.businesswire.com/news/home/20091116006834/en

DENVER--(Business Wire)--
Apollo Gold Corporation ("Apollo" or the "Company") (TSX: APG) (NYSE Amex: AGT)
announced today a net loss of $14.0 million, or $0.05 per share, for the three
months ended September 30, 2009, as compared to net income of $0.5 million, or
$0.00 per share, for the three months ended September 30, 2008. There was a net
loss for the nine months ended September 30, 2009, of $37.5 million, or $0.16
per share, compared to net income of $2.9 million, or $0.02 per share, for the
same period in 2008. Unless otherwise indicated, all dollar amounts are reported
in US currency.

$10.2 million of the loss in the third quarter 2009 is a result of recording an
unrealized loss on derivative contacts comprised of (1) an unrealized loss of
$14.3 million for the change in value recorded for gold forward sales contracts
held as of September 30, 2009, and (2) an unrealized gain of $4.1 million for
the change in value of Canadian dollar foreign exchange contracts held as of
September 30, 2009. Both the gold forward sales contracts and Canadian dollar
foreign exchange contracts were entered into on February 20, 2009, in connection
with its $70 million project financing facility with respect to its Black Fox
project (the "Project Facility").

R. David Russell, President and CEO of Apollo, said, "This third quarter was our
first full quarter of production and I think we made good progress at Black Fox
by producing approximately 20,000 ounces of gold with the mill operating at
approximately 1,800 tonnes per day as per our target. We will now attempt to
increase throughput to reach our next goal of 2,000 tonnes per day by the end of
this year. Our total cash cost per ounce was higher than we projected but we saw
many additional costs of commencing production at both the mine and mill and one
of our focuses going forward will be to lower our overall cost of production.
One example would be that we estimate that the commissioning of our conveyor and
high pressure screening system in late November will reduce our costs by
approximately $20 per ounce of gold. On the exploration front, our drilling
program at Grey Fox has been a success and I look forward to the results of the
next group of drill assays and achieving our objective, which is to turn the
results into a resource during the first quarter 2010. I was also pleased to
acquire the Pike River property during the third quarter because it means that
we now have a 6.5 kilometer land package on which to continue our exploration
program."

Third Quarter Highlights and Other Recent Developments

Black Fox

During the third quarter of 2009, we mined 1,644,000 tonnes of material of which
217,000 tonnes was gold ore. The Black Fox mill processed 160,900 tonnes of ore
(1,749 tonnes per day), at a grade of 4.05 grams per tonne, achieving a recovery
rate of 94%, for total gold production of 19,718 ounces. St Andrew Goldfields
custom milled on our behalf an additional 62,600 tonnes of lower grade ore, with
a grade of 1.51 grams gold per tonne at a recovery rate of 92% for additional
gold production of 2,760 gold ounces. Therefore, total gold produced was 22,478
ounces during the third quarter. Gold ounces sold during the third quarter of
2009 were 19,848 ounces. All gold sold was against the forward sales contracts
at a realized price of $875 per ounce. The total cash cost1 per ounce of gold
for the quarter was $575. Black Fox is scheduled to complete the overall mill
site upgrade project in the fourth quarter of 2009 with the commissioning of the
new conveyor and the re-commissioning of the high pressure screen system this
December. An expanded tailings dam water management system is also expected to
be completed in the fourth quarter of 2009. Gold production in the fourth
quarter of 2009 is estimated to be approximately the same as the third quarter
of 2009.

1 The term "total cash cost" is a non-GAAP financial measure. Please see the
note regarding non-GAAP financial measures at the end of this press release.

Grey Fox

We commenced a drilling program on our Grey Fox property, located about 3.5
kilometers southeast of the Black Fox mine, in August 2009 and, through the end
of October, thirty-four holes had been completed. Assay results have been
released on the first thirteen holes. The results show continuity in shallow,
multiple, mineralized zones with two holes hitting high grade gold with
individual one meter samples that intercepted grades from 45.19 to 61.44 grams
per tonne (1.32 to 1.79 ounces gold per ton). Hole GF09-24 also contained a
mineralized zone 15.26 meters thick (true width) with an average grade of 3.36
grams per ton. This year`s drilling follows the drilling program of 16 holes
completed by Apollo in 2008 which was successful in intersecting gold
mineralization in rocks similar to the host rocks of the Black Fox Deposit and
included high grade mineralization of 3.5 meters grading 455 grams gold per
tonne (13.27 ounces of gold per ton). For complete drilling results release to
date, see our website at www.apollogold.com.

Huizopa Project

On July 7, 2009, we filed a Canadian National Instrument 43-101 for the Huizopa
project. This 43-101 more fully describes the property and the drilling results
from our 2008 drilling program, but does not contain any resources or reserves.

Montana Tunnels

During the third quarter of 2009, the Company adopted a plan to dispose of
Montana Tunnels Mining, Inc. ("MTMI"), which includes the Montana Tunnels and
Diamond Hill mines. The Montana Tunnels mine, a 50% joint venture ("Montana
Tunnels"), is an open pit mine and mill that produced gold dore and lead-gold
and zinc-gold concentrates, located in the State of Montana. Montana Tunnels was
placed under care and maintenance on April 30, 2009. The Diamond Hill mine, also
located in the State of Montana, is currently under care and maintenance. On
September 30, 2009, the Company signed a letter of intent to sell MTMI to the
current 50% joint venture partner, Elkhorn Goldfields, Inc., for cash of $5.0
million payable in installments through May 2010 and a 4% net smelter royalty on
future production at Montana Tunnels up to a maximum of $4.0 million. The
consummation of the sale is subject to negotiation of definitive documents
relating to the sale and payment of the $5.0 million cash purchase price. As of
September 30, 2009, the Company recorded an impairment of $1.6 million on the
net assets of MTMI. MTMI has been classified as a discontinued operation as of
September 30, 2009.

Project Facility of $70 million

As at September 30, 2009, we were in compliance with the various operational
covenants of the Project Facility. However, as a result of lower than planned
gold production, during the third quarter of 2009 a "review event" as defined in
the Project Facility was triggered. The occurrence of a review event allows the
Banks to review the Project Facility and determine if they wish to continue with
the Project Facility. On September 28, 2009, the Banks agreed to defer (i) the
first scheduled repayment of $9,300,000 due on September 30, 2009, under the
Project Facility and (ii) the requirement to fund the associated debt service
reserve account also due on September 30, 2009, which, in accordance with the
terms of the Project Facility, requires a reserve amount equal to, at all times
after initial funding, the greater of $5,000,000 or the aggregate repayment
amount due on the next repayment date. This deferral will enable the Banks and
the Company to complete an ongoing technical review of the Black Fox project
with the objective of rescheduling the quarterly repayment installments under
the Project Facility. If we are not able to satisfactorily reschedule the
quarterly repayment installments, then the payment of $9,300,000 and the reserve
account funding obligation, each originally due on September 30, 2009, must be
satisfied on the earlier to occur of (i) the completion of the Bank`s technical
review process of the Black Fox mine and (ii) December 31, 2009.

Consolidated Financial Results Summary

(All Dollars in US, 000's, except per share data) Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
Revenues from sale of minerals for the period (1) $ 19,131 $ 0 $ 23,840 $ 0

Loss from continuing operations (2) $ (11,719 ) $ (2,234 ) $ (33,690 ) $ (7,040 )
(Loss) income from discontinued operations (2,269 ) 2,782 (3,785 ) 9,913
Net (loss) income for the period $ (13,988 ) $ 548 $ (37,475 ) $ 2,873

Basic and diluted net (loss) earnings per share $ (0.05 ) $ 0.00 $ (0.16 ) $ 0.02

(1) During the third quarter of 2009, the Company adopted a plan to dispose of
Montana Tunnels Mining, Inc., making it a discontinued operation. Due to this,
the revenues from the mine are now recorded in Loss from discontinued
operations.

(2) $10.2 million of the loss in the third quarter 2009 is a result of recording
an unrealized loss on derivative contacts comprised of (1) an unrealized loss of
$14.3 million for the change in value recorded for gold forward sales contracts
held as of September 30, 2009 and (2) an unrealized gain of $4.1 million for the
change in value of Canadian dollar foreign exchange contracts held as of
September 30, 2009. Both the gold forward sales contracts and Canadian dollar
foreign exchange contracts were entered into on February 20, 2009, in connection
with the Project Facility.

Apollo Gold Corporation

Apollo is a gold mining and exploration company which operates the Black Fox
mine in Ontario, Canada, and the Huizopa project, an early stage exploration
project in the Sierra Madres in Chihuahua, Mexico. Apollo also owns the Montana
Tunnels mine, which is a 50% joint venture with Elkhorn Tunnels, LLC, in
Montana, which was placed on care and maintenance on April 30, 2009. A letter of
intent to sell the Montana Tunnels mine was signed on September 30, 2009.

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,"
"schedules," "predicts," "intends," "continue," or the negative of such terms,
or other comparable terminology. All statements regarding: the status of Black
Fox, the ability of the Company to continue to produce gold at the Black Fox
mill, the ability of the Company to resolve the Review Event with the Banks in a
satisfactory manner, the ability of the Company to reschedule the quarterly
repayment installments under the Project Facility, to maintain throughput at the
mill of 1,800 tonnes per day, to improve recoveries towards a target of 95% and
to increase mill throughput to 2,000 tonnes per day, all statements regarding
the timing of the mill grade upgrade at Black Fox, including the commission of
the conveyor and high-pressure screening system, the expansion of the tailing
dam management system, the 2009 drilling program at Grey Fox, and the ability of
the Company to successfully obtain indicated and measured resource status 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: difficulties or delays
in permitting at Black Fox, results of drilling and other exploration activities
at Huizopa, 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 NYSE Amex, 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
found on the Consolidated Statements of Operations and includes by-product
credits for payable silver, lead, and zinc production. We have included total
cash cost information to provide investors with information about the cost
structure of our 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.

Apollo Gold Corporation
Marlene Matsuoka, 720-886-9656 Ext. 217
Toll Free: 1-877-465-3484
Investor Relations
ir@apollogold.com
www.apollogold.com

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