DENVER, October 17 /CNW/ - Apollo Gold Corporation ("Apollo") (AMEX: AGT)
(TSX: APG) wishes to announce that its wholly owned subsidiary, Montana
Tunnels Mining Inc. ("MTMI"), has entered into an $8,000,000 debt facility
with RMB Australia Holdings Ltd. arranged by RMB Resources Inc. of Lakewood,
Colorado. All figures are in United States dollars.
Apollo expects that the primary use of funds from this facility will be
the repayment of $8,700,000 aggregate principal amount of convertible
debentures issued by Apollo in November 2004 which mature on December 16,
2007. The convertible debentures are convertible into common shares of Apollo
at a conversion price of $0.75 per share.
The credit facility, which may be drawn from immediately, matures
September 30, 2008 and will bear interest at LIBOR plus 1.25%, repayable in
four quarterly payments beginning December 31, 2007. The loan is guaranteed by
Apollo Gold Inc. and Apollo Gold Corporation and is secured by all of the
assets of MTMI. Upon repayment or conversion of the convertible debentures,
all of Apollo's assets at its Black Fox project will also be pledged as
security for the loan.
In order to meet certain loan criteria, Apollo on October 15, 2007 hedged
2,267 tonnes (approximately 5,000,000 lbs) of lead and 3,418 tonnes
(approximately 7,500,000 lbs) of zinc which equates to approximately 65% and
40% respectively of Apollo's share of lead and zinc production from the
Montana Tunnels Mine during the next 12 months (the term of the facility). No
gold or silver production was hedged. The lead and zinc hedge is in the form
of a no premium collar (buy a put, sell a call) at the following prices.
Lead = put $1.40 per lb, call $1.90 per lb.
Zinc = put $1.20 per lb, call $1.54 per lb.
R. David Russell, President and CEO of Apollo, said, "This financing
removes some of the uncertainty in the market concerning our share price and
our ability to repay the 2004 convertible debentures if they do not convert
into shares. We now have the funds to repay the debentures, if necessary,
without adversely impacting our plans to continue with exploration and
development at our Black Fox and Huizopa projects."
Apollo Gold Corporation
Apollo is a gold mining and exploration company that operates the Montana
Tunnels mine, which is a 50% joint venture with Elkhorn Tunnels, LLC, the
Black Fox advanced stage development project in Ontario, Canada, and the
Huizopa project, an early stage exploration project in the Sierra Madres in
This press release includes forward-looking statements the meaning of
section 21E of the United States Securities Exchange Act of 1934, as amended,
with respect to our financial condition, results of operations, business
prospects, plans, objectives, goals, strategies, future events, capital
expenditure, and exploration and development efforts. 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. These statements include comments regarding the use of proceeds
from the credit facility. These forward looking statements are subject to
numerous risks, uncertainties and assumptions including unexpected changes in
business and economic conditions, the results of current and future
exploration activities, and other factors disclosed under the heading "Risk
Factors" in Apollo's Annual Report on Form 10-K for the year ended December
31, 2006 and elsewhere in documents that Apollo files from time to time with
the Toronto Stock Exchange, the American Stock Exchange, the United States
Securities and Exchange Commission and other regulatory authorities. There can
be no assurance that future developments affecting the Company will be those
anticipated by management. The forecasts contained in this press release
constitute management's current estimates, as of the date of this press
release, with respect to the matters covered thereby. Apollo disclaims any
obligation to update forward-looking statements, whether as a result of new
information, future events or otherwise.
For further information:
For further information: Apollo Gold Corporation Investor Relations:
Marlene Matsuoka, 720-886-9656, ext. 217 Toll Free: 1-877-465-3484