EXCERPTS from the Annual Report 2002 RE: Black Fox Property
APOLLO GOLD CORPORATION (TSX: APG)
Letter to Shareholders - R.David Russell, President CEO
I am pleased to present Apollo Gold Corporation’s first annual report to shareholders. When we amalgamated International Pursuit (“Pursuit”) together with Nevoro Gold Corporation (“Nevoro”) in late June to form Apollo Gold Corporation (“the Company”), we stated our mission was to “acquire undervalued and overlooked assets and extract their true value for our shareholders”. We believe this mission has been accomplished, but this is just the beginning for the Company. During the year we acquired two producing mines, one advanced stage development property, and discovered one new ore deposit on property controlled by the Company. In 2003 our production growth profile is expected to increase dramatically over 2002, our cash on hand is adequate, and we have limited debt.
The foundation for a long-term gold producer has been built; yet the Company is still under construction. We are especially optimistic with our portfolio of advanced stage exploration projects and their possibilities for our future growth. We have positioned the Company with opportunities to grow and to leverage our earnings in an improving gold market. Our development and exploration successes in 2002 have largely built the framework for the Company’s future growth.
The first six months of our corporate life were dynamic, exciting, and we believe very successful. With our successes, we are now largely regarded as the “new” small to mid-tier player on the block. As the new player, the gold equity markets have viewed us in a “prove it” capacity. We believe 2003 will be the year in which we do indeed ”prove it”. Although the market viewed us cautiously, our share appreciation was +44% during the year. Additionally, we have positioned our company in a unique niche’ for a small company – a niche’ whereby we have the technical ability and financial strength to not only explore and discover gold deposits but also develop and operate the properties utilizing either open pit or underground techniques. That ability opens many doors for the Company and, as we “prove it” and become more visible in the markets this year, our goal of extracting true value of our assets for our shareholders should be realized.
In September 2002, Apollo acquired the Black Fox Project (which includes the former Glimmer Mine workings) near Timmins, Ontario. After acquisition, an additional CAD$5 million in flow through financing was secured and a 60,000-metre exploration program was initiated late in the year. Initial results of the drill program are most encouraging and are so far confirming our analysis that high grade material is present above and below the Glimmer mine workings and along strike of the Destor-Porcupine Fault.
For example, our first set of drill hole results contained a near surface intercept of 10.5 feet assaying 10.2 ounces per ton and several intercepts graded well in excess of .50 ounce per ton over acceptable mining widths.
Exploration remains a vital component of Apollo’s growth strategy.
Exploration efforts will intensify at the Black Fox Project during this year because early returns have increased the likelihood that this property can be advanced to a relatively high grade, low cost producer from both surface and underground. We expect to have at least four exploration drills operating throughout the year; concurrently, we will increase our permitting and mine planning efforts.
Also, we continue to evaluate new opportunities within our industry following our strategy of acquiring overlooked and undervalued assets. Few companies have the technical ability and financial wherewithal to discover, develop and operate in both open pit and underground environments. We will continue to evaluate opportunities and are confident of future successes.
Building the framework: Our next steps
Having just completed our first six months as a newly incorporated entity, our short-term history has been a story of dynamic change and fast paced growth. Looking to the future, we see no reason to slow this pace. We expect to increase our production to 200,000 ounces in 2003, significantly increase our ore reserve base and lower our cash cost to around $231 per ounce. We have a strong balance sheet and limited debt. The foundation is firmly in place yet the construction of the framework must continue. We will continue to strive to build and to grow a world class gold company. Our entire team in Apollo is dedicated to our objective of “extracting the true value for our shareholders.”
On behalf of the Board of Directors and the employees of Apollo Gold Corporation, we appreciate your interest and support as we look forward to a bright and dynamic future.
Sincerely yours,
R. David Russell
President and CEO
April 10, 2003 |
