UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

Commission File Number: 001-31593

Apollo Gold Corporation

(Exact name of registrant as specified in its charter)

5655 S. Yosemite Street, Suite 200

Greenwood Village, Colorado 80111-3220

(Address of Principal Executive Offices Including Zip Code)

(720) 886-9656

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(B) of the Act: None

Securities registered pursuant to Section 12(G) of the Act: Common Shares, no par value

      Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes þ          No o

      Indicate by a check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

      Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).     Yes þ          No o

      As of June 30, 2004, the approximate aggregate market value of voting stock held by non-affiliates of the registrant was approximately $102,512,882 (based upon the closing price for shares of the registrant’s common shares as reported by the American Stock Exchange on that date).

      As of March 11, 2005, the registrant had 95,173,126 common shares, no par value per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

      Portions of our Definitive Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A in connection with the 2005 Annual Meeting of Shareholders are incorporated by reference to Part III of this Report on Form 10-K.

REPORTING CURRENCY, FINANCIAL AND OTHER INFORMATION

      All amounts in this Report are expressed in US dollars, unless otherwise indicated. Canadian currency is denoted as “Cdn$.”

      Financial information is presented in accordance with accounting principles generally accepted in Canada (“Cdn GAAP”). Differences between accounting principles generally accepted in the US (“U.S. GAAP”) and those applied in Canada, as applicable to Apollo Gold Corporation, are discussed in Note 20 to the Consolidated Financial Statements.

      Information in Part I and II of this report includes data expressed in various measurement units and contains numerous technical terms used in the gold mining industry. To assist readers in understanding this information, a conversion table and glossary are provided below.

      References to “Apollo”, “we”, “our”, and “us” mean Apollo Gold Corporation, its predecessors and consolidated subsidiaries, or any one or more of them, as the context requires.

NON-GAAP FINANCIAL MEASURES

      The cash operating, total cash and total production costs are non — GAAP financial measures and are used by management to assess performance of individual operations as well as a comparison to other gold producers.

      This information differs from measures of performance determined in accordance with generally accepted accounting principles in Canada and the United States and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. These measures are 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. See Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations for a reconciliation of these non-GAAP measures to our Statements of Operations.

STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

      This Form 10-K contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act of 1934, as amended (the “Exchange Act”), with respect to our financial condition, results of operations, business prospects, plans, objectives, goals, strategies, future events, capital expenditure, and exploration and development efforts. Words such as “anticipates,” “expects,” “intends,” “forecasts,” “plans,” “believes,” “seeks,” “estimates,” “may,” “will,” and similar expressions identify forward-looking statements. These statements include comments regarding:

      Although we believe that our plans, intentions and expectations reflected in these forward-looking statements are reasonable, we cannot be certain that these plans, intentions or expectations will be achieved. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk factors set forth below and other factors described in more detail in this Annual Report on Form 10-K:

      Many of these factors are beyond our ability to control or predict. These factors are not intended to represent a complete list of the general or specific factors that may affect us. We may note additional factors elsewhere in this Annual Report on Form 10-K and in any documents incorporated by reference into this Annual Report on Form 10-K. We undertake no obligation to update forward-looking statements.

GLOSSARY OF TERMS

CONVERSION FACTORS AND ABBREVIATIONS

      For ease of reference, the following conversion factors are provided:

      The following abbreviations could be used herein:

Note: All units in this report are stated in metric measurements unless otherwise noted.

PART I

OVERVIEW OF APOLLO GOLD

      The earliest predecessor to Apollo Gold Corporation was incorporated under the laws of the Province of Ontario in 1936. We are the result of the Plan of Arrangement that resulted in the amalgamation of International Pursuit Corporation and Nevoro Gold Corporation in June 2002. Pursuant to the terms of the Plan of Arrangement, Pursuit acquired Nevoro and continued operations under the name of Apollo Gold Corporation. Through our wholly-owned subsidiary, Apollo Gold, Inc. (acquired by Nevoro in March 2002), we own the majority of our assets and operate the majority of our business. In May 2003, Apollo Gold Corporation reincorporated under the laws of the Yukon Territory. Apollo Gold Corporation maintains its registered office at 204 Black Street, Suite 300, Whitehorse, Yukon Territory, Canada Y1A 2M9, and the telephone number at that office is (867) 668-5252. Apollo Gold Corporation maintains its principal executive office at 5655 S. Yosemite Street, Suite 200, Greenwood Village, Colorado 80111-3220, and the telephone number at that office is (720) 886-9656. Our internet address is http://www.apollogold.com. Information contained on our website is not a part of this Annual Report on Form 10-K.

      We are principally engaged in the exploration, development and mining of gold. We have focused our mining efforts to date on two principal properties: Florida Canyon Mine in Nevada and Montana Tunnels Mine in Montana. In 2004, we completed construction of the Standard Mine, located in Nevada near Florida Canyon.

      Our development activities involve our Black Fox property in Ontario and our exploration activities include the Pirate Gold, Nugget Field and newly acquired Willow Creek and Huizopa properties.

      We are a reporting issuer, or the equivalent, in Canada and the United States and we file disclosure documents with Canadian securities regulatory authorities and the United States Securities and Exchange Commission (the “SEC”).

BACKGROUND

Apollo Gold Corporation

      The following chart illustrates our operations and principal operating subsidiaries and their jurisdictions of incorporation. We own 100% of the voting securities of each subsidiary.

      APOLLO GOLD CORPORATION: American Stock Exchange and Toronto Stock Exchange listed holding company which owns and operates the Black Fox development property.

      APOLLO GOLD, INC.: Holding company, employs executive officers and furnishes corporate services.

      MINERA SOL DE ORO S.A. de C.V.: Holds our rights to the Huizopa exploration property.

      MONTANA TUNNELS MINING, INC.: Owns and operates the Montana Tunnels Mine and owns the Diamond Hill Mine.

      FLORIDA CANYON MINING, INC.: Owns and operates the Florida Canyon Mine.

      APOLLO GOLD EXPLORATION, INC.: Holds United States exploration properties not related to any existing operation.

      STANDARD GOLD MINING, INC.: Owns and operates the Standard Mine.

      MINE DEVELOPMENT FINANCE INC.: Provides intercompany loans and other financial services to affiliated companies.

      Our mines primarily produce gold but also produce silver, zinc and lead. We sell our products principally to custom smelters, refiners and metals traders. The percentage of sales contributed by each class of product is reflected in the following table.

      The table below summarizes our metals production and average metals prices for the periods indicated.

      We produced 106,825, 145,935, and 62,699 ounces of gold during the years ended December 31, 2004, 2003, and 2002, respectively. For the year ended December 31, 2004, 68% of our gold production came from our Florida Canyon Mine and 32% from our Montana Tunnels Mine. In 2003, 70% of our gold production came from our Florida Canyon Mine, and 30% from our Montana Tunnels Mine. Approximately 82% of our gold production in 2002 came from our Florida Canyon Mine and the remaining 18% from our Montana Tunnels Mine.

      Most of our revenue is derived from the sale of refined gold in the international market. However, our end product is doré bars. Because doré is an alloy consisting primarily of gold but also containing silver and other metals, doré bars are sent to refiners to produce bullion that meets the required market standard of 99.99% pure gold. Under the terms of our refining contracts, the doré bars are refined for a fee, and our share of the refined gold and the separately recovered silver is paid to us.

      Gold has two primary uses: product fabrication and bullion investment. Fabricated gold has a variety of end uses, including jewelry, electronics, dentistry, industrial and decorative uses, medals, medallions and official coins. Gold investors purchase gold bullion, official coins and high-carat jewelry.

      The worldwide supply of gold consists of a combination of new production from mining and existing stocks of bullion and fabricated gold held by governments, financial institutions, industrial organizations and private individuals.

      The price of gold is volatile and is affected by numerous factors beyond our control such as the sale or purchase of gold by various central banks and financial institutions, inflation or deflation, fluctuation in the value of the US dollar and foreign currencies, global and regional demand, and the political and economic conditions of major gold-producing countries throughout the world.

      The following table presents the high, low and average afternoon fixing prices for gold per ounce on the London Bullion Market over the past ten years.

Data Source: www.kitco.com

      As of March 10, 2005, the high, low, and afternoon fixing prices for gold per ounce on the London Bullion Market were $443, $439 and $440.90 per ounce, respectively.

      Production from the Montana Tunnels Mine also includes the extraction, processing and sale of zinc and lead contained in sulfide concentrates. We produced 26.2, 21.8 and 15.3 million pounds of zinc in 2004, 2003 and 2002, respectively.

      Due to its corrosion resisting property, zinc is used primarily as the coating in galvanized steel. Galvanized steel is widely used in construction of infrastructure, housing and office buildings. In the automotive industry, zinc is used for galvanizing and die-casting, and in the vulcanization of tires. Smaller quantities of various forms of zinc are used in the chemical and pharmaceutical industries, including fertilizers, food supplements and cosmetics, and in specialty electronic applications such as satellite receivers.

Data Source: Standard Bank Metals Report.

      The following table sets forth for the periods indicated the London Metals Exchange’s high and low settlement prices of zinc in U.S. dollars per pound.

      We produced 1,031,156, 471,241, and 275,925 ounces of silver in the years ended December 31, 2004, 2003 and 2002, respectively. Our silver production is a by-product of our gold mining operation. For the year ended December 31, 2004, 94% of our silver production came from our Montana Tunnels Mine and 6% from the Florida Canyon Mine. Approximately 87% of our silver production came from our Montana Tunnels Mine and the remaining 13% from our Florida Canyon Mine in the year ended December 31, 2003.

      Silver has traditionally served as a medium of exchange, much like gold. While silver continues to be used for currency, the current principal uses of silver are for industrial uses, primarily for electrical and electronic components, photography, jewelry and silverware. Silver’s strength, malleability, ductility, thermal and electrical conductivity, sensitivity to light and ability to endure extreme changes in temperature combine to make silver a widely used industrial metal. Specifically, it is used in photography, batteries, computer chips, electrical contacts, and high technology printing. Silver’s anti-bacterial properties also make it valuable for use in medicine and in water purification.

      The following table sets forth for the periods indicated the London Metals Exchange’s high and low settlement prices of silver in U.S. dollars per pound.

      Production from the Montana Tunnels Mine also includes the extraction, processing and sale of lead contained in sulfide concentrates. We produced approximately 10.1, 10.8 and 5.5 million pounds of lead in 2004, 2003 and 2002, respectively.

      The primary use of lead is in motor vehicle batteries, but it is also used in cable sheathing, solder in printed wiring circuits, shot for ammunition and alloying. Lead in chemical form is used in alloys, glass and plastics.

Data Source: Standard Bank Metals Report.

      The following table sets forth for the periods indicated the London Metals Exchange’s high and low settlement prices for lead in U.S. dollars per pound.

      The price of silver, lead and zinc is affected by numerous factors that are beyond our control. See “Risk Factors.”

Refining Process

      We have an annual evergreen agreement with Johnson Matthey to refine our gold doré to a final finished product. Johnson Matthey receives $0.50 for each ounce of gold it refines, in addition to receiving a fee of 0.50% of the payable metal for silver and 0.10% of the payable metal for gold.

      Our lead and zinc concentrates are shipped by train to Teck Cominco Metals Ltd. in Trail, British Columbia, Canada, approximately five hours from the Montana Tunnels Mine. Our contract with Teck Cominco expires in March 2007. For further information see “Florida Canyon Mine” and “Montana Tunnels Mine.”

2005 OPERATING OUTLOOK

      We expect to produce from 122,000 to 151,000 ounces of gold in 2005 at a total cash cost ranging from $325 to $365 per ounce as estimated below. Total cash cost in 2005 will include approximately $80 per ounce related to deferred stripping at Montana Tunnels and leach pad inventory charges at Florida Canyon.

      Our gold production estimates by quarter for the year ending December 31, 2005 are set forth in the table below.

      At Montana Tunnels Mine we have commenced the permitting process on the next pit expansion by filing an application with the Montana Department of Environmental Quality, with the required permits expected to be received in 2006.

      The Standard Mine, which poured its first ounce of gold in late December 2004, is expected to reach commercial production starting in the second quarter of 2005, with production rates increasing during the year as the available leach pad area expands.

      In March 2005, the Company ceased mining activities at Florida Canyon but continues active leaching of the existing heap leach pad. Forecasted 2005 production is therefore reduced to 27,000 to 36,000 ounces, with the first quarter of 2005 forecast at 9,000 ounces. We expect to decide later in 2005 whether to build the designed and permitted leach pad expansion and recommence mining operations.

Development and Exploration.

      At the Black Fox Project, we completed 84,349 meters of core drilling in 2004, bringing the total drilling by Apollo to 166,963 meters. The 2005 program includes an additional 30,000 meters of underground infill drilling and 21,000 meters of surface drilling, believed to be sufficient to complete the feasibility study in 2005. The feasibility study will include an updated reserve estimate. Estimated expenditures in 2005 at Black Fox are expected to be between $6.0 and $8.0 million.

      The exploration program at the Huizopa Project is expected to continue with scheduled activities including geological mapping and studies, geophysical studies, additional trenching and the commencement of an exploration drilling program scheduled for the first half of 2005.

Mineral Reserves

      Proven and probable reserves were prepared by us and audited by Mine Development Associates. The reserves were calculated based on a gold price of $375 per ounce.

      At Black Fox the above reserves are for an open pit that was audited last year. At the present time, a feasibility study is underway (due for completion in late 2005), where one of the Company’s goals is to add the underground reserves at which time a new reserve statement will be published.

      At the Standard Mine, reserves increased slightly as the 2004 drilling results were finalized.

Employee Relations

      As of December 31, 2004, we had approximately 403 employees and contract employees, including 10 employees at our principal executive office in Greenwood Village, Colorado.

Competition

      We compete with major mining companies and other natural mineral resource companies in the acquisition, exploration, financing and development of new prospects. Many of these companies are larger and better capitalized than we are. There is significant competition for the limited number of gold acquisition and exploration opportunities. Our competitive position depends upon our ability to successfully and economically explore, acquire and develop new and existing mineral prospects. Factors that allow producers to remain competitive in the market over the long term include the quality and size of their orebodies, costs of operation, and the acquisition and retention of qualified employees. We also compete with other mining companies for skilled mining engineers, mine and processing plant operators and mechanics, geologists, geophysicists and other technical personnel. This could result in higher turnover and greater labor costs.

Available Information

      We make available, free of charge, on or through our Internet website links to our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Our Internet address is www.apollogold.com. Our Internet website and the information contained therein or connected thereto are not intended to be incorporated into this Annual Report on Form 10-K.

RISK FACTORS

      The risks below address some of the factors that may affect our future operating results and financial performance.

We have identified a material weakness in our internal controls over financial reporting.

      Section 404 of the Sarbanes-Oxley Act of 2002 requires management to make an assessment of the design and operating effectiveness of our internal controls and our auditors to audit the design and operating effectiveness of our internal controls as well as forming an opinion on management’s assessment. We have identified material weaknesses for the year ended December 31, 2004 in two areas. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. First, we have deficient inventory control and management processes and lack of segregation of procurement and accounting duties at our Florida Canyon Mine, primarily due to a lack of sufficient personnel at the Florida Canyon Mine. Second, we lack appropriate review of non-routine or complex accounting matters, relating accounting entries, and appropriate documentation, disclosure and application of Canadian and U.S. GAAP, primarily due to a lack of sufficient personnel with a level of technical accounting expertise commensurate with our reporting requirements.

      We have hired additional personnel and will implement new controls in the second quarter of 2005 at Florida Canyon Mine. In addition, we have developed and will continue to refine policies and procedures for the review, identification, and documentation of non-routine, complex transactions and the application of accounting standards to ensure compliance with Canadian and U.S. GAAP. However, we have not yet been

able to test and assess the operating effectiveness of these mitigating steps, surrounding the financial reporting process, and testing may reveal similar or additional weaknesses in the design and effectiveness related to the financial reporting process. Since these material weaknesses were not effectively remediated, management has concluded that Apollo’s controls are ineffective. Further, our independent registered chartered accountants have issued an adverse opinion on our internal controls as of December 31, 2004. Because opinions on internal controls have not been issued in the past, it is uncertain what impact an adverse opinion would have on our company or our stock price. Furthermore, any failure to comply with public company reporting requirements could subject us to legal and administrative actions.

The market price of our common shares could experience volatility and could decline significantly.

      Our common shares are listed on the American Stock Exchange and the Toronto Stock Exchange. Securities of small-cap companies have experienced substantial volatility in the past, often based on factors unrelated to the financial performance or prospects of the companies involved. These factors include macroeconomic developments in North America and globally and market perceptions of the attractiveness of particular industries. Our share price is also likely to be significantly affected by short-term changes in gold prices or in our financial condition or results of operations as reflected in our quarterly earnings reports. As a result of any of these factors, the market price of our common shares at any given point in time might not accurately reflect our long-term value. Securities class action litigation often has been brought against companies following periods of volatility in the market price of their securities. We could in the future be the target of similar litigation. Securities litigation could result in substantial costs and damages and divert management’s attention and resources.

If we complete additional equity financings, then our existing shareholders may experience dilution.

      Any additional equity financing that we obtain would involve the sale of our common shares and/or sales of securities that are convertible or exercisable into our common shares, such as share purchase warrants or convertible notes. There is no assurance that we will be able to complete equity financings that are not dilutive to our existing shareholders

The existence of outstanding rights to purchase common shares may impair our ability to raise capital.

      As of March 10, 2005, approximately 28.4 million of our common shares are issuable on exercise of warrants, options or other rights to purchase common shares at prices ranging from $0.75 to $2.11. During the term of the warrants, options and other rights, the holders are given an opportunity to profit from a rise in the market price of our common shares with a resulting dilution in the interest of the other shareholders. Our ability to obtain additional financing during the period such rights are outstanding may be adversely affected, and the existence of the rights may have an adverse effect on the price of our common shares. The holders of the warrants, options and other rights can be expected to exercise them at a time when we would, in all likelihood, be able to obtain any needed capital by a new offering of securities on terms more favorable than those provided by the outstanding rights.

      In addition, there are approximately 11.7 million common shares issuable upon the conversion of the outstanding principal amount of $8,756,000 of our Series B Convertible Debentures at the option of the holder at a conversion price of $0.75 per share.

There may be certain tax risks associated with investments in our company.

      Potential investors that are United States taxpayers should consider that we could be considered to be a “passive foreign investment company” (“PFIC”) for federal income tax purposes. Although we believe that we currently are not a PFIC and do not expect to become a PFIC in the near future, the tests for determining PFIC status are dependent upon a number of factors, some of which are beyond our control, and we can not assure you that we will not become a PFIC in the future. If we were deemed to be a PFIC, then a United States taxpayer who disposes or is deemed to dispose of our shares at a gain, or who received a so-called “excess distribution” on the shares, generally would be required to treat such gain or excess distribution as

ordinary income and pay an interest charge on a portion of the gain or distribution unless the taxpayer makes a timely qualified electing fund election (a “QEF” election). A United States taxpayer who makes a QEF election generally must report on a current basis his or her share of any of our ordinary earnings and net capital gain for any taxable year in which we are a PFIC, whether or not we distribute those earnings. Special estate tax rules could be applicable to our shares if we are classified as a PFIC for income tax purposes.

We have a history of losses and we expect to incur losses in the future.

      Since our inception through a merger in June 2002, we have incurred significant losses. Our net losses were $18,189,000, $2,186,000 and $3,051,000 for the years ended December 31, 2004, 2003 and 2002, respectively. There can be no assurance that we will achieve or sustain profitability in the future.

We have a limited operating history on which to evaluate our potential for future success.

      We were formed as a result of a merger in June 2002 and have only a limited operating history upon which you can evaluate our business and prospects. During this period, we have not generated sufficient revenues to cover our expenses and costs. If we are unsuccessful in addressing these risks and uncertainties, our business, results of operations and financial condition will be materially and adversely affected.

We are dependent on certain key personnel.

      We are currently dependent upon the ability and experience of R. David Russell, our President and Chief Executive Officer; Richard F. Nanna, our Senior Vice President-Exploration; and Melvyn Williams, our Chief Financial Officer, Senior Vice President-Finance and Corporate Development. We believe that our success depends on the continued service of our key officers and there can be no assurance that we will be able to retain any or all of such officers. We currently do not carry key person insurance on any of these individuals, and the loss of one or more of them could have a material adverse effect on our operations.

Our earnings may be affected by metals price volatility, specifically the volatility of gold and zinc prices.

      We derive all of our revenues from the sale of gold, silver, lead and zinc and, as a result, our earnings are directly related to the prices of these metals. Changes in the price of gold significantly affect our profitability. Gold prices historically have fluctuated widely, based on numerous industry factors including:

      Gold prices are also affected by macroeconomic factors, including:

      The current demand for, and supply of, gold also affects gold prices. The supply of gold consists of a combination of new production from mining and existing shares of bullion held by government central banks, public and private financial institutions, industrial organizations and private individuals. As the amounts produced by all producers in any single year constitute a small portion of the total potential supply of gold,

normal variations in current production do not usually have a significant impact on the supply of gold or on its price. Mobilization of gold held by central banks through lending and official sales may have a significant adverse impact on the gold price.

      The market prices for silver, zinc and lead are also volatile and are affected by numerous factors beyond our control, including global or regional consumptive patterns, speculative activities, and general global political and economic conditions. Our Montana Tunnels Mine has historically produced approximately 45 million pounds of these metals annually, and therefore the market prices of these metals have a significant effect on our financial condition and results of operations.

      All of the above factors are beyond our control and are impossible for us to predict. If the market prices for gold, silver, zinc or lead fall below our costs to produce them for a sustained period of time, we will experience additional losses and we could also be required by our reduced revenue to discontinue exploration, development and/or mining at one or more of our properties.

Our reserve estimates are potentially inaccurate.

      We estimate our reserves on our properties as either “proven reserves” or “probable reserves.” Our ore reserve figures and costs are primarily estimates and are not guarantees that we will recover the indicated quantities of these metals. We estimate proven reserve quantities based on sampling and testing of sites conducted by us and by independent companies hired by us. Probable reserves are based on information similar to that used for proven reserves, but the sites for sampling are less extensive, and the degree of certainty is less. Reserve estimation is an interpretive process based upon available geological data and statistical inferences and is inherently imprecise and may prove to be unreliable.

      Our reserves are reduced as existing reserves are depleted through production. Reserves may be reduced due to lower than anticipated volume and grade of reserves mined and processed and recovery rates. Our reserve estimates for the Standard Mine property, that has not yet commenced commercial production, may change based on actual production experience.

      Reserve estimates are calculated using assumptions regarding metals prices. These prices have fluctuated widely in the past. Declines in the market price of metals, as well as increased production costs, capital costs and reduced recovery rates, may render reserves uneconomic to exploit. Any material reduction in our reserves may lead to increased net losses, reduced cash flow, asset write-downs and other adverse effects on our results of operations and financial condition. Reserves should not be interpreted as assurances of mine life or of the profitability of current or future operations. No assurance can be given that the amount of metal estimated will be produced or the indicated level of recovery of these metals will be realized.

We may not achieve our production estimates.

      We prepare estimates of future production for our operations. We develop our estimates based on, among other things, mining experience, reserve estimates, assumptions regarding ground conditions and physical characteristics of ores (such as hardness and presence or absence of certain metallurgical characteristics) and estimated rates and costs of mining and processing. In the past, our actual production from time to time has been lower than our production estimates and this may be the case in the future.

      Each of these factors also applies to future development properties not yet in production and to the Standard Mine and Montana Tunnels Mine expansion. In these cases, we do not have the benefit of actual experience in our estimates, and there is a greater likelihood that the actual results will vary from the estimates. In addition, development and expansion projects are subject to unexpected construction and start-up problems and delays.

Our future profitability depends in part, on actual economic returns and actual costs of developing mines, which may differ significantly from our estimates and involve unexpected problems, costs and delays.

      From time to time we will engage in the development of new ore bodies. Our ability to sustain or increase our present level of production is dependent in part on the successful exploration and development of new ore

bodies and/or expansion of existing mining operations. Decisions about the development of Black Fox and other future projects may be based on feasibility studies.

      Development projects are also subject to the successful completion of feasibility studies, issuance of necessary governmental permits and receipt of adequate financing.

      Development projects have no operating history upon which to base estimates of future cash flow. Our estimates of proven and probable ore reserves and cash operating costs are, to a large extent, based upon detailed geologic and engineering analysis. We also conduct feasibility studies that derive estimates of capital and operating costs based upon many factors.

      It is possible that actual costs and economic returns may differ materially from our best estimates. It is not unusual in the mining industry for new mining operations to experience unexpected problems during the start-up phase and to require more capital than anticipated. There can be no assurance that our operations at the Standard Mine or any other development property will be profitable.

Exploration in general, and gold exploration in particular, are speculative and are frequently unsuccessful.

      Mineral exploration, particularly for gold and silver, is highly speculative in nature, capital intensive, involves many risks and frequently is nonproductive. There can be no assurance that our mineral exploration efforts will be successful. If we discover a site with gold or other mineralization, it will take a number of years from the initial phases of drilling until production is possible, during which time the economic feasibility of production may change. Substantial expenditures are required to establish ore reserves through drilling, to determine metallurgical processes to extract the metals from the ore and, in the case of new properties, to construct mining and processing facilities. As a result of these uncertainties, no assurance can be given that our exploration programs will result in the expansion or replacement of existing ore reserves that are being depleted by current production.

We are dependent upon three mining properties.

      All of our revenues are currently derived from our mining and milling operations at the Montana Tunnels Mine, Florida Canyon Mine and the newly developed Standard Mine, which are low-grade mines. During 2004 we experienced problems related to the milling of low-grade ore at the Montana Tunnels Mine and problems associated with the leaching of gold at our Florida Canyon Mine, both of which negatively affected our revenues. Our Standard Mine is in the pre-production stage and commercial production is expected in the second quarter of 2005. If operations at any of these mines or at any of our processing facilities are reduced, interrupted or curtailed for any reason, our results of operations and financial condition could be materially adversely affected.

We do not currently have and may not be able to raise the funds necessary to explore and develop our Black Fox and Huizopa properties and our other properties.

      We do not currently have sufficient funds to complete all of our planned exploration activities at Black Fox and Huizopa or to develop a mine at Black Fox. The development of Black Fox, and exploration of Huizopa and our other properties will require significant capital expenditures. Sources of external financing may include bank and nonbank borrowings and future debt and equity offerings. There can be no assurance that financing will be available on acceptable terms, or at all. The failure to obtain financing would have a material adverse effect on our growth strategy and our results of operations and financial condition.

Most of our assets are pledged to the holders of our 12% Series 2004-B Secured Convertible Debentures and we may not be able to obtain financing from an asset based lender.

      The majority of our assets are pledged to the holders of our 12% Series 2004-B Secured Convertible Debentures as security for our obligations under these debentures. Because we have pledged most of our assets to other parties, it may be difficult for us to raise additional external funds through bank, asset based lenders,

or other types of lenders, which may require us to raise additional funds through future debt and equity offerings. In addition, the inability to pledge significant assets may make it difficult or impossible to obtain financing on acceptable terms, or at all. The failure to obtain acceptable financing may have a material adverse effect on our growth strategy and our results of operations and financial condition.

Possible hedging activities could expose us to losses.

      In connection with a previous financing we have gold hedging contracts covering 8,000 ounces as of March 1, 2005 that involve the use of put and call options. The contracts give the holder the right to buy and us the right to sell stipulated amounts of gold at the upper and lower exercise prices, respectively. The contracts continue through April 25, 2005, with a call option of $345 per ounce and a put option of $295 per ounce. Based on recent gold prices of approximately $420 per ounce, we are realizing about $75 an ounce less than the market price on our currently outstanding hedging positions.

      In the future, we may enter into additional precious and/or base metals hedging contracts that may involve outright forward sales contracts, spot-deferred sales contracts, the use of options which may involve the sale of call options and the purchase of all these hedging instruments. There can be no assurance that we will be able to successfully hedge against price, currency and interest rate fluctuations. In addition, our ability to hedge against zinc and lead price risk in a timely manner may be adversely affected by the smaller volume of transactions in both the zinc and lead markets. Further, there can be no assurance that the use of hedging techniques will always be to our benefit. Some hedging instruments may prevent us from realizing the benefit from subsequent increases in market prices with respect to covered production. This limitation would limit our revenues and profits. Hedging contracts are also subject to the risk that the other party may be unable or unwilling to perform its obligations under these contracts. Any significant nonperformance could have a material adverse effect on our financial condition and results of operations.

      We face substantial governmental regulation.

      Safety. Our U.S. mining operations are subject to inspection and regulation by the Mine Safety and Health Administration of the United States Department of Labor (“MSHA”) under the provisions of the Mine Safety and Health Act of 1977. The Occupational Safety and Health Administration (“OSHA”) also has jurisdiction over safety and health standards not covered by MSHA. Our policy is to comply with applicable directives and regulations of MSHA and OSHA. We have made and expect to make in the future, significant expenditures to comply with these laws and regulations.

      Current Environmental Laws and Regulations. We must comply with environmental standards, laws and regulations that may result in increased costs and delays depending on the nature of the regulated activity and how stringently the regulations are implemented by the regulatory authority. The costs and delays associated with compliance with such laws and regulations could stop us from proceeding with the exploration of a project or the operation or future exploration of a mine. Laws and regulations involving the protection and remediation of the environment and the governmental policies for implementation of such laws and regulations are constantly changing and are generally becoming more restrictive. We have made, and expect to make in the future, significant expenditures to comply with such laws and regulations.

      Some of our properties are located in historic mining districts with past production and abandoned mines. The major historical mine workings and processing facilities owned (wholly or partially) by us in Montana are being targeted by the Montana Department of Environmental Quality (“MDEQ”) for publicly funded cleanup, which reduces our exposure to financial liability. We are participating with the MDEQ under Voluntary Cleanup Plans on those sites. Our cleanup responsibilities have been completed at the Corbin Flats Facility and at the Gregory Mine site, both located in Jefferson County, Montana, under programs involving cooperative efforts with the MDEQ. MDEQ is also contemplating remediation of the Washington Mine site at public expense under the Surface Mining Control and Reclamation Act of 1977 (“SMCRA”). In February 2004, we consented to MDEQ’s entry onto the portion of the Washington Mine site owned by us to undertake publicly funded remediation under SMCRA. In March 2004, we entered into a definitive written settlement agreement with MDEQ and the Bureau of Land Management (“BLM”) under which MDEQ will conduct publicly funded remediation of the Wickes Smelter site under SMCRA and will grant us a site release in

exchange for our donation of the portion of the site owned by us to BLM for use as a waste repository. However, there can be no assurance that we will continue to resolve disputed liability for historical mine and ore processing facility waste sites on such favorable terms in the future. We remain exposed to liability, or assertions of liability, that would require expenditure of legal defense costs, under joint and several liability statutes for cleanups of historical wastes that have not yet been completed.

      Environmental laws and regulations may also have an indirect impact on us, such as increased costs for electricity due to acid rain provisions of the Clean Air Act Amendments of 1990. Charges by refiners to which we sell our metallic concentrates and products have substantially increased over the past several years because of requirements that refiners meet revised environmental quality standards. We have no control over the refiners’ operations or their compliance with environmental laws and regulations.

      Potential Legislation. Changes to the current laws and regulations governing the operations and activities of mining companies, including changes to the U.S. General Mining Law of 1872, and permitting, environmental, title, health and safety, labor and tax laws, are actively considered from time to time. We cannot predict which changes may be considered or adopted and changes in these laws and regulations could have a material adverse impact on our business. Expenses associated with the compliance with new laws or regulations could be material. Further, increased expenses could prevent or delay exploration or mine development projects and could therefore affect future levels of mineral production.

We are subject to environmental risks.

      Environmental Liability. We are subject to potential risks and liabilities associated with environmental compliance and the disposal of waste rock and materials that could occur as a result of our mineral exploration and production. To the extent that we are subject to environmental liabilities, the payment of such liabilities or the costs that we may incur to remedy any non-compliance with environmental laws would reduce funds otherwise available to us and could have a material adverse effect on our financial condition or results of operations. If we are unable to fully remedy an environmental problem, we might be required to suspend operations or enter into interim compliance measures pending completion of the required remedy. The potential exposure may be significant and could have a material adverse effect on us. We have not purchased insurance for environmental risks (including potential liability for pollution or other hazards as a result of the disposal of waste products occurring from exploration and production) because it is not generally available at a reasonable price or at all.

      Environmental Permits. All of our exploration, development and production activities are subject to regulation under one or more of the various state, federal and provincial environmental laws and regulations in Canada, Mexico and the U.S. Many of the regulations require us to obtain permits for our activities. We must update and review our permits from time to time, and are subject to environmental impact analyses and public review processes prior to approval of the additional activities. It is possible that future changes in applicable laws, regulations and permits or changes in their enforcement or regulatory interpretation could have a significant impact on some portion of our business, causing those activities to be economically reevaluated at that time. Those risks include, but are not limited to, the risk that regulatory authorities may increase bonding requirements beyond our financial capabilities. The posting of bonding in accordance with regulatory determinations is a condition to the right to operate under all material operating permits, and therefore increases in bonding requirements could prevent our operations from continuing even if we were in full compliance with all substantive environmental laws.

We face strong competition from other mining companies for the acquisition of new properties.

      Mines have limited lives and as a result, we may seek to replace and expand our reserves through the acquisition of new properties. In addition, there is a limited supply of desirable mineral lands available in the United States, Canada and Mexico and other areas where we would consider conducting exploration and/or production activities. Because we face strong competition for new properties from other mining companies, some of which have greater financial resources than we do, we may be unable to acquire attractive new mining properties on terms that we consider acceptable.

The titles to some of our properties may be uncertain or defective.

      Certain of our United States mineral rights consist of “unpatented” mining claims created and maintained in accordance with the U.S. General Mining Law of 1872. Unpatented mining claims are unique U.S. property interests, and are generally considered to be subject to greater title risk than other real property interests because the validity of unpatented mining claims is often uncertain. This uncertainty arises, in part, out of the complex federal and state laws and regulations that supplement the General Mining Law. Also, unpatented mining claims and related rights, including rights to use the surface, are subject to possible challenges by third parties or contests by the federal government. The validity of an unpatented mining claim, in terms of both its location and its maintenance, is dependent on strict compliance with a complex body of federal and state statutory and decisional law. In addition, there are few public records that definitively control the issues of validity and ownership of unpatented mining claims.

      In recent years, the U.S. Congress has considered a number of proposed amendments to the General Mining Law. Although no such legislation has been adopted to date, there can be no assurance that such legislation will not be adopted in the future. If ever adopted, such legislation could, among other things, impose royalties on gold production from unpatented mining claims located on federal lands or impose fees on production from patented mining claims. If such legislation is ever adopted, it could have an adverse impact on earnings from our operations, could reduce estimates of our reserves and could curtail our future exploration and development activity on federal lands or patented claims.

      While we have no reason to believe that the existence and extent of any of our properties are in doubt, title to mining properties are subject to potential claims by third parties claiming an interest in them.

We may lose rights to properties if we fail to meet payment requirements or development or production schedules.

      We derive the rights to most of our mineral properties from unpatented mining claims, leaseholds, joint ventures or purchase option agreements which require the payment of maintenance fees, rents, or purchase price installments, exploration expenditures, or other fees. If we fail to make these payments when they are due, our rights to the property may lapse. There can be no assurance that we will always make payments by the requisite payment dates. In addition, some contracts with respect to our mineral properties require development or production schedules. There can be no assurance that we will be able to meet any or all of the development or production schedules. Our ability to transfer or sell our rights to some of our mineral properties requires government approvals or third party consents, which may not be granted.

Our operations may be adversely affected by risks and hazards associated with the mining industry.

      Our business is subject to a number of risks and hazards including adverse environmental effects, technical difficulties due to unusual or unexpected geologic formations, and pit wall failures.

      Such risks could result in personal injury, environmental damage, damage to and destruction of production facilities, delays in mining and liability. For some of these risks, we maintain insurance to protect against these losses at levels consistent with our historical experience and industry practice. However, we may not be able to maintain current levels of insurance, particularly if there is a significant increase in the cost of premiums. Insurance against environmental risks is generally too expensive or not available for us and other companies in our industry, and, therefore, we do not maintain environmental insurance. To the extent we are subject to environmental liabilities, we would have to pay for these liabilities. Moreover, in the event that we are unable to fully pay for the cost of remedying an environmental problem, we might be required to suspend or significantly curtail operations or enter into other interim compliance measures.

You could have difficulty or be unable to enforce certain civil liabilities on us, certain of our directors and our experts.

      We are a Yukon Territory, Canada, corporation. Substantially all of our assets are located outside of Canada and our head office is located in the United States. Additionally, a number of our directors and the

experts named in this Annual Report on Form 10-K are residents of Canada. Although we have appointed Lackowicz, Shier & Hoffman as our agents for service of process in the Yukon Territory, it might not be possible for investors to collect judgments obtained in Canadian courts predicated on the civil liability provisions of securities legislation. It could also be difficult for you to effect service of process in connection with any action brought in the United States upon such directors and experts. Execution by United States courts of any judgment obtained against us, or any of the directors, executive officers or experts named in this Annual Report on Form 10-K, in United States courts would be limited to the assets or the assets of such persons or corporations, as the case might be, in the United States. The enforceability in Canada of United States judgments or liabilities in original actions in Canadian courts predicated solely upon the civil liability provisions of the federal securities laws of the United States is doubtful.

      If we cannot successfully operate our production properties or raise additional funds to finance our Black Fox Property we may not be able to continue as a going concern.

      The Company’s ability to continue as a going concern is dependent on its ability to successfully operate the Montana Tunnels Mine and Florida Canyon Mine, as well as the new Standard Mine. The Company will not have sufficient resources from existing operations to finance the development of the Black Fox project. The Company is actively seeking financing for the Black Fox exploration activities and plans in the future to seek financing for development; however, the availability and timing of this financing is not certain at this time.

Florida Canyon

      The Florida Canyon Mine is located approximately 42 miles southwest of Winnemucca, Nevada, and has operated since 1986 and was purchased by Apollo in June 2002. Mining operations and facilities are on Sections 1, 2, 3, 10, 11, and 12 of T31N, R33E, Mount Diablo Base and Meridian, Pershing County, Nevada. The mineralization and facilities extend to the north in Sections 34 and 35 of T32N, R33E, Mount Diablo Base and Meridian.

      For the year ended December 31, 2004, a total of 6,257,953 tons of ore containing 102,628 ounces of gold were placed on the leach pad and 72,573 ounces of gold were recovered. During 2004, the Florida Canyon Mine sold 73,082 ounces of gold and 60,405 ounces of silver. Historically, the Florida Canyon Mine has produced approximately 105,000 ounces of gold and 75,000 ounces of silver annually. In the third quarter 2004, mining activity was reduced to one shift and we suspended the operation of the crusher and therefore all ore placed on the pad was run of mine. On March 1, 2005, we ceased mining at Florida Canyon Mine, but we are continuing to leach the existing ore on the leach pad. We expect to decide later this year whether to build the leach pad expansions, which are fully permitted, and recommence mining.

      We have historically processed approximately 9 million tons of ore annually at the Florida Canyon Mine, with an average of 30,000 tons of high grade material processed daily.

      The following table details the Florida Canyon Mine production and cash cost per ounce history for the last three years ended December 31. All production is subject to a 2.5% net smelter return (NSR) royalty.

      Total mined gold ounces were 91% of the ore reserve model in 2002, 92% of model in 2003, and 88% of model in 2004.

      The Florida Canyon Mine is a low grade, open pit, heap leach operation that has generally mined several pits at the same time. The land that we own, lease or control at the Florida Canyon Mine covers a total of 16,016 acres. Fee lands total 4,075.81 acres, while 19 patented claims total 359.9 acres. We also maintain 579 unpatented claims that total 11,580 acres. All of the fee lands and patented claims and most of the unpatented claims have been surveyed. Land lease and option payments and unpatented claim maintenance fees totaled $823,975 for 2002 and 2003. As of January 1, 2004, the total land cost is $115,900 annually. Florida Canyon Mine’s operating permit area consists of 5,522 acres. We have disturbed approximately 1,958 acres of land, consisting of 1,034 acres of public lands and 923 acres of fee (private) lands. Mining the remaining reserves will add 77 acres of disturbance, of which 24 acres are public lands and 53 acres are private lands.

      The Florida Canyon deposits are situated in the Basin and Range physiographic province of northwestern Nevada, typified by a series of northward-trending elongated mountain ranges separated by alluvial valleys. The deposits are located in the Humboldt Range, which is formed by north-trending folding and faulting. The Florida Canyon Mine area is dominated by a major regional structural zone, termed the Humboldt Structural Zone, which is a 200 km wide northeasterly-trending structural zone with left-lateral strike slip movement. Permo-Triassic rocks of the Rochester Rhyolite, Prida Formation, Natchez Pass Formation, and Grass Valley Formation are all exposed in the Florida Canyon area. The Humboldt City Thrust separates the Natchez Pass and Grass Valley formations from the underlying Prida Formation. There is a strong N30 degrees E to N50 degrees E structural fabric prevalent in and adjacent to the Florida Canyon Mine deposits, as evidenced by the alignment of quartz veining, shear zones, and well-developed joint sets.

      Mineralization at the Florida Canyon Mine consists of native gold and electrum, an alloy of gold and silver associated with quartz, iron oxides, pyrite, marcasite, and arsenopyrite. Quartz is the major gangue mineral. Secondary minerals identified in the Florida Canyon Mine deposits include gypsum (likely remobilized from the Grass Valley Formation), alunite, barite, native sulfur, calcite, dolomite, anhydrite, pyrargyrite, pyrrhotite, and stibnite.

      The Florida Canyon Mine has four carbon absorption plants on the property and one stripping, regeneration, and refinery plant. The mine, when operating, was run with twelve 150-ton haul trucks, two hydraulic 23-yard shovels, and additional support equipment. Apollo leases or owns all of the equipment utilized at the Florida Canyon Mine, and all of the equipment is in good working condition. A portion of the mine equipment at the Florida Canyon Mine is held under installment purchase agreements and capital leases with Caterpillar Financial Services Corporation. In the fourth quarter of 2004, we paid off a capital lease agreement with ATEL Equipment Financing for the financing of our two hydraulic shovels and our drilltech drills. The total initial purchase price of the mine equipment was approximately $34.72 million. As of February 28, 2005, the balance owed on our remaining leased equipment was approximately $3.21 million.

      Two types of ore are typically processed at the Florida Canyon Mine: (i) higher grade material ranging from 0.016 to 0.022 ounces of gold per short ton, and (ii) run-of-mine material generally ranging from 0.006 and 0.0016 ounces of gold per short ton. Approximately 45% of the ore processed at the Florida Canyon Mine is higher grade material and is crushed to 80% passing 0.75 inch and transported to the heap leach pad by a radial stacking conveyor for leaching. The remaining 55% of ore is run of mine and is dumped on the heap leach pad by 150-ton trucks without crushing, then bulldozed prior to leaching.

      Material is leached in three stages by drip systems. Each drip system applies 8,000 gallons per minute of leach solution to the heap pad. The first stage leaches ore that has been placed on the pad first.

      The second stage may leach younger ore or run of mine, or may be a recycled leach from stage one. The third stage leaches the most recently crushed material on the pad. Through this process, the grade of the leach solution builds as it travels through each stage. After the leach solution has traveled through all three stages, the solution is stored in the pregnant leach solution pond.

      The pregnant leach solution is processed in one of the carbon absorption plants by absorbing the gold in the leach solution onto activated carbon. After the carbon has absorbed sufficient gold, the carbon is transported to the stripping, regeneration, and refinery plant. The carbon is stripped and the concentrated gold solution is pumped through electrowinning cells, at which point the gold is plated onto cathodes and then refined into gold/silver doré bars. Most of the makeup water used for leaching comes from a geothermal source located near the plant site.

      The operation uses a six-month recovery cycle to model gold recovery for both run of mine and crushed materials. Bottle roll tests show an ultimate recovery of 71% at Florida Canyon for crusher or high grade ores. The same tests show ultimate recoveries of 58% for run of mine production.

      The drilling on the Florida Canyon and Standard Mine properties between 1969 and December 31, 2004, totals over 1.9 million feet in 4,476 drill holes.

      The Florida Canyon Mine reserves include the remaining material from several pits with prior mining and some new areas that have not been mined. The pits for the new areas were designed using Whittle pit optimization at $400/ounce gold price to complete the design, and cut off grades based on $375/ounce gold price to determine reserves. The new areas are generally further up the slope of the Humboldt Range. The tables below summarize Florida Canyon Mine reserves at December 31, 2004, which conform to the definitions ascribed by the Canadian Institute of Mining (“CIM”), Metallurgy and Petroleum and guidelines adopted by CIM Council on August 20, 2000 and the SEC Industry Guide 7 definitions of Proven and Probable reserves.

      Our reserve estimates were prepared by Mine Development Associates. The following chart shows the Florida Canyon Mine reserves at December 31, 2004.

      Other Florida Canyon Mine property is subject to royalties as disclosed in the table below.

      We have paid royalties of $668,575, $898,104, and $508,000 in the years ended December 31, 2004, 2003, and 2002, respectively.

      The annual holding costs of Florida Canyon Mine, exclusive of property taxes, are shown below.

      The Florida Canyon Mine has been in continuous operation since 1986. The original permit to operate was granted by the BLM and the Nevada Department of Environmental Protection Reclamation Permit 126. The remaining reserves are the subject of the 17 sequentially numbered amendments to the Florida Canyon Mine operating plan. An 18^th amendment (“APO 18”) was submitted in December 2003 seeking approval to mine additional reserves identified in the Switchback Pit area and expand the existing heap leach pad to accommodate approximately 20 million tons of ore. This permit was received in mid 2004; however, the Company has delayed the decision to expand the leach pad pending further analysis expected in mid 2005. An environmental assessment and third party cost estimate has been prepared and completed. This document will be used as the basis for the accounting of the Company’s reclamation liabilities on a going forward basis. Any development of additional reserves will require additional amendments.

      We are required to maintain reclamation bonds covering the costs of reclaiming all disturbances at our mines as established by regulatory authorities from time to time. Bonding requirements for the Florida Canyon Mine were met by the following bond instruments:

      The first two reclamation bonds totaling $17,456,130 were issued by Safeco Insurance Company of America (“Safeco”). In 1999, Safeco cancelled the first bond in the amount of $16,936,130; however, prior to the effective date of cancellation, the U.S. District Court for the District of Nevada entered a declaratory judgment holding that Safeco’s cancellation does not affect the BLM’s right to treat the bond as remaining “outstanding” as part of the required bonding for the Florida Canyon Mine and that ongoing mining under our plan of operation does not affect Safeco’s obligations under the bond upon eventual completion of mining. In reliance on that judgment, BLM has counted the cancelled Safeco bond towards satisfaction of our bonding requirements and has permitted us to continue to mine both inside and outside the area covered by the cancelled Safeco bond. On May 29, 2003, a not-for-publication memorandum decision was delivered by a three-judge panel of the Ninth Circuit Court of Appeals affirming the U.S. District Court judgment in our favor. Safeco did not file notice of any further appeal within the period permitted, and the District Court judgment has become final and unappealable.

      We have not yet made arrangements for meeting increased bonding requirements likely to be imposed in connection with the potential expansion of Florida Canyon.

      Like all mine operators, we always face the risk of redetermination of bonding requirements as a result of changes in regulatory agency assumptions and methodology used to establish bonding requirements, and there can be no assurance that our bond requirements will remain the same.

      As of December 31, 2004, we estimate accrued closure costs at the Florida Canyon Mine to be an aggregate of $12.8 million. This amount corresponds with a third party study. Following approval of APO 18, internal closure costs are estimated to increase by approximately $1.8 million, to include the bonding of the Switchback pit, and a trust fund to monitor groundwater quality.

      In the first quarter of 2004, we completed 28 reverse circulation drill holes at Florida Canyon Mine, totaling 6,400 feet. The holes were targeted at up-dip expansions of mineralization from the Northeast Extension pit. Parts of this area contain ore grade material that can be mined in the future. In addition, during the first and second quarters of 2004, seven drill holes were completed in Ikes, totaling 2,050 feet. Further evaluation is necessary to determine where the pit boundaries lie in this area.

Standard Mine

      Apollo acquired the Standard Mine in June of 2002. In May 2004, the necessary operating permits for our Standard Mine were received and mine construction began immediately thereafter. The main access road, heap leach pad, ponds, and water supply system were completed by the end of the third quarter. In the fourth quarter of 2004, processing systems and initial mine development were completed and heap leaching commenced. In the first quarter 2005, the loading of the pad will be increased and the project should be in

commercial production in the second quarter 2005. Total capital spending at the Standard Mine in 2004 was $9.01 million ($10.6 with reclamation bonding costs). The mine is operated in conjunction with our Florida Canyon operation where the carbon is stripped, gold produced, and administrative costs are shared.

      The Standard Mine is located approximately five miles south of the Florida Canyon Mine near Winnemucca, Nevada. Generally, the Standard Mine pits are side hill access, not deep, and do not require an in-pit ramp system.

      The Standard Mine poured its first ounce of gold in late December 2004 and is expected to reach commercial production in the second quarter of 2005, achieving an estimated 30,000 to 40,000 ounces of gold for the year 2005. Production is expected to increase during the year, as more ore is placed on the leach pad and leaching increases.

      The land that we own or lease at the Standard Mine covers a total of 6,087 acres, and fee lands total 1,927 acres. We also maintain 208 unpatented claims that total 4,160 acres. The initial phase of mine development is all located on private land owned by Apollo Gold. The mine has one absorption plant at the heap leach pad area and trucks the loaded carbon to our Florida Canyon operation for further processing to produce doré. The mine runs five 150 ton haul trucks and one front end loader, plus additional support equipment. Apollo leases or owns all of the equipment and it is all in good working condition.

      The Standard Mine deposits are similar to those of the Florida Canyon Mine. Please refer to the section titled “Mineral Reserves at Florida Canyon Mine” for more information.

      The Standard Mine reserves include the remaining material from several pits with prior mining activity dating back to the 1950s as well as some new areas that have not been mined. The pits for the new areas were designed using Whittle pit optimization at $400/ounce gold price to complete the design, and cut off grades based on $375/ounce gold price to determine reserves. The Standard Mine reserves at December 31, 2004 are as disclosed in the table below. The definitions are ascribed by the CIM, Metallurgy and Petroleum and guidelines adopted by CIM Council on August 20, 2000 and the SEC Industry Guide 7 definitions of Proven and Probable reserves.

      Our reserve estimates were prepared by Mine Development Associates. The following chart shows the Standard Mine reserves at December 31, 2004.

      Average run of mine recoveries of 65% gold and 25% silver were used in the reserve evaluation.

      The holding costs of Standard Mine include annual payments on 208 unpatented mining claims. These claims are administered by the BLM and the annual cost is $20,800.

      As of December 31, 2004, we estimate accrued closure costs at the Standard Mine to be an aggregate of $1.6 million. The bonding is covered by an insurance policy for up to $6 million in disturbance.

      The bonding requirements for the Standard Mine development project were met by the following bond instruments:

      The bonding requirement has increased by a material amount upon approval of the Standard Mine area permit applications that were approved in May of 2004. The Company has contracted with AIG Insurance Co. through their agents, JCH Insurance Brokers to insure the reclamation at the Standard Mine. Insurance policy NO. EPP 778 3897 was issued in May of 2004. This contract has an eight year term for up to $6.0 million in reclamation insurance. The Company will finance the payment of this insurance and related premiums for the three years beginning in May of 2004. The first payment of $1.4 million has been paid with corresponding payments of $1.1 million due in May of 2005 and 2006.

      We are engaged in developmental drilling in five areas around the Standard Mine: Buffalo Canyon, High Standard, North Pit, South Pit, and Star. In addition, we expect to begin developmental drilling at Valerie, a sixth area at the Standard Mine, in the future.

      The following table discloses the Standard Mines drilling totals for the year ended December 31, 2004.

      A phase 1 drilling program was completed at the Buffalo Canyon Target during November/ December, 2003 testing three targets: 1) the southward extension of South Pit-style mineralization called the “Northern Target”; 2) a southeastward continuation of mineralization along the Humboldt City Thrust Fault called the “Eastern Target” and 3) the faulted and folded, iron-stained platy limestone above the Humboldt City Thrust Fault called the “Central Target”. A phase 2 drilling program focusing on the Northern Target began February 2004 and was completed during the first quarter. This phase included 17 holes totaling 7,170 feet. This drilling supports the working geologic model. Zones of silicification and alteration, at the thrust fault, separate silty limestone in the upper plate from carbonaceous limestone basement in the lower plate. Sporadic mineralized zones are associated with the thrust. The thrust fault dips more steeply to the west in this area than it does north of the South Pit where it is folded into a synform.

      Although the thrust fault at Buffalo Canyon is an important target, the primary target for thicker zones of mineralization is in the upper plates which is strongly gold mineralized at the South Pit. At Buffalo Canyon, upper plate mineralization is hosted by steeply dipping splays off the thrust fault. We have not found the broader and thicker gold mineralized zones as are found to the north. Further drilling will be needed in this area.

      Twenty-eight drill sites were located and constructed. The objective of the drilling program was to expand upon a small Whittle pit based on previous drilling and to test new targets along a S30W shear zone which trends onto Section 1, east of Buffalo Canyon. This drilling has established the main north-northwest trend of mineralization and established edges for parts of the zone. The completed resource model for High Standard was used to complete Whittle pit studies and “Due To” analysis. Initial bottle roll tests from High Standard suggested a higher recovery of 83.8%.

      The 2004 drilling program was 5 holes totaling 1,540 feet.

      Drilling was initiated in the first quarter on the projected extension of mineralization on the north edge of the South Pit. Drilling indicated a continuation of the jasperoid zone. The mineralization is shallower to the north as the zone seems to be ramping up and topography is dropping. Phase two drilling at South Pit commenced in late June 2004 and traced the extension of the mineralized zone to the north. Two styles of mineralization are found to converge in this area; thrust fault-related silicification at the contact between Natchez Pass Limestone and Prida Formation footwall and Cordex-style mineralization at the Grass Valley Formation/ Natchez Pass Limestone contact.

      Forty-three drill sites were located and constructed. The objective of the program was to expand the reserve and test some peripheral targets. The majority of the holes penetrating 5 to 30 feet of 0.01x opt Au at the mineralized contact between argillite and limestone basement. The completed resource model for Star was used to complete Whittle pit studies and “Due To” analysis. Bottle roll tests from Star appear to be consistent with other areas at Standard (63.6% recovery).

      Thirty-five drill logs from the 1983-1984 Pegasus projects were relogged based on Standard Mine lithology codes and entered into the Gemcom data base along with assays and 10 foot bench composites, the results of which indicate sufficient gold to warrant a future drilling program of 16 holes to confirm the data.

Montana Tunnels Mine

      The Montana Tunnels Mine is an open pit poly-metallic mine located about five miles west of Jefferson City, Montana and has been operated since 1987. Apollo purchased the Montana Tunnels Mine in June 2002. The Montana Tunnels Mine is located in the historic “Wickes-Corbin” mining district in Section 8 of Township 7 North, Range 4 West, while the permit boundary covers portions of Section 4, 5, 8, 9, 15, 16, 17, and 20.

      For the year ended December 31, 2004, a total of 33,743 ounces of gold and 970,751 ounces of silver were produced. When in full production, over the past five years, the Montana Tunnels Mine has produced

approximately 70,000 ounces of gold, 20,000 tons of zinc, 8,500 tons of lead and 1,200,000 ounces of silver annually. We recently completed waste stripping at Montana Tunnels, which is expected to extend the life of the mine into 2007. In the future, we expect production to be closer to historical averages.

      The following table sets forth annual production levels for gold, silver, lead and zinc at the Montana Tunnels Mine since 2002.

      About half of Section 8 lands are our owned fee lands. Mining claims that cover the pit are listed in table below.

      We own or lease an aggregate of 5,023.2 acres in fee and patented lands at the Montana Tunnels Mine. The property consists of 136 wholly or partially owned patented claims (2,345.14 acres), three patented leased claims (45.19 acres) which we hold pursuant to a mining lease expiring on March 19, 2014, and 2,632.87 acres of owned fee lands. All patented claims and fee lands have been surveyed. In addition, 213 unpatented claims are maintained (4,260 acres). We estimate that 90% of the unpatented claims have been surveyed. A number of claims outside the contiguous mining claims and fee land are isolated.

      None of the Montana Tunnels Mine reserves are subject to royalties, but we do have three leased claims that contain mineralization which will be subject to a 4.5% net smelter return royalty if they are mined. The annual holding costs of Montana Tunnels Mine lands, exclusive of property taxes, total approximately $47,000 as disclosed in the table below.

      The Montana Tunnels Mine deposit is hosted in the central part of the Montana Tunnels Mine diatreme, an upward-sloping passage forced through sedimentary rock by volcanic activity. The Montana Tunnels Mine diatreme is a heterolithic breccia, characterized by a sand-size fragmented matrix of quartz latitic composition surrounding subangular to well-rounded fragments of Cretaceous Elkhorn Mountains Volcanics, Tertiary Lowland Creek Volcanics, and clasts derived from the Cretaceous Butte Quartz Monzonite pluton.

      There are two main zones of mineralization in the Montana Tunnels Mine: a central, pipe-like core of contiguous mineralization, and discontinuous zones of mineralization peripheral to the core deposit, termed fringe mineralization. The core of the deposit in plan view is oblong in shape and ranges from about 200 feet to 1000 feet in width, and from 1400 to 2000 feet in length, with a vertical extent of at least 2000 feet. The core zone strikes approximately N30 E and dips steeply (60 degrees to 80 degrees) to the northwest. Metallurgical projections are based on historical feed grade versus tails grade trends; mill throughput tonnage; ore properties relative to pit location and bench elevation; and ore blending requirements.

      The mine has three hydraulic shovels and runs fifteen 150-ton haul trucks and five 85-ton haul trucks plus additional support equipment. The beneficiation plant includes a primary and a secondary crusher. We are currently operating a 16,500-ton per day flotation plant (upgraded in 2003 and 2004) and open pit mine at Montana Tunnels. All of the equipment at Montana Tunnels is in good condition.

      Open pit mining at Montana Tunnels Mine is conducted 24 hours per day seven days per week with an equipment fleet either leased, owned or being purchased under installment notes. The Montana Tunnels Mine produces approximately 15% of its annual gold production in the form of doré, which is then further refined. The remainder of the mine’s production is in the form of concentrates: a zinc-gold concentrate and a lead-gold concentrate. The concentrates are shipped to a smelter and, after smelting charges, we are paid for the metal content. Currently, mine production averages approximately 60,000 tons per day of ore and waste, of which 16,500 tons per day of ore is shipped to the crusher. The plant uses a conventional flotation process to produce lead and zinc concentrates. Gold and silver are also recovered using a gravity circuit and refined at the plant to produce a doré.

      Flotation is a process used to concentrate the grade of the sulfide ore material to allow the economic shipment of higher grade material to a smelter. The flotation process uses chemicals that are added to the crushed and milled ore and waste slurry. The concentrate that is created rises to the surface and overflows while the waste material sinks to the bottom of a tank. The concentrate is collected and dried and then shipped to a smelter. The waste material is collected and becomes the tailing material which is deposited in the tailing impoundment at the mine site.

      Gravity concentration is a process used to separate materials that have significantly different densities. Gravity separation is especially useful with gold recovery since gold is a very dense material.

      Gold and silver doré is shipped to Johnson Matthey in Salt Lake City, Utah for further refining, and our lead and zinc concentrates are shipped to Teck Cominco Metals Ltd. in British Columbia, Canada. The smelter that we use is in reasonable proximity to our mine; if we used a different smelter, we would incur additional transportation costs.

      The Montana Tunnels Mine was idle for approximately four months in 2002, while we removed waste rock under our Phase I stripping program. Limited production resumed in October 2002, and full production on the K-Pit resumed in April 2003. Since that time, the Montana Tunnels Mine has experienced pit wall problems, that have resulted in significant changes to the mine plan, including an accelerated Phase II stripping schedule to remove 25 million tons of material that slid off the southwest pit wall. With the completion of Phase II in December 2004, the mine is expected to have a three year mine life and more typical gold production levels.

      Monitoring of the pit walls continued throughout 2004 and old monitoring instrumentation was removed to allow mining activity and three new GPS stations were re-established at the crest of the new cut in the east sector. Two new GPS monitoring stations were also installed in the vicinity of the mine operations offices. The new stations indicate minimal creep movement. The deterioration is expected to be manageable as it will occur over a relatively longer period of time than we have seen in previous laybacks in this sector because of the flatter overall slope design. The slope above the haul ramp continued its steady movement pattern, typical of the type of movement experienced in this sector in the past.

      In the upper south sector six new prism monitoring instruments were placed in the lower portion of this wall in October 2004. No discernible movement trend is evident in the monitoring instrumentation.

      During 2004, in an effort to supply the mill with feed, larger ore zones of a lower grade were mined, most of it outside of our modeled zones. The reconciliation to the model was skewed as long as we mined large amounts of low grade outside the model to supply mill feed. This was complicated by the fact that the mill produces more gold than mine sampling can detect. Generally we mined the ounces of gold we predicted but we mined many more tons of low grade ore to produce that gold than the model predicted.

      The following table summarizes the reconciliation for the year ended December 31, 2004.

      Our reserve estimates were prepared by Mine Development Associates. The following table shows the Montana Tunnels Mine reserves at December 31, 2004.

      Reserves are determined utilizing an Internal Net Block Value (“INBV”) calculation with the proven and probable blocks in the model. The INBV applies all costs with the exception of mining costs against the metal value of a modeled block. If the recovered metal value from a block meets or exceeds the direct costs assigned to each ton, the block is assigned the positive dollar value and counted as ore. On average, all ore tons must be worth at least $5.46, the internal cutoff value. The INBV formula is a function of revenues for gold/silver/ lead/zinc, mill and smelting recoveries for each individual metal, less treatment charges and all

site costs, with the exception of mining. For the year-end 2004 reserves, the INBV formula is based on the following metal prices:

      The following table shows mill recoveries for the years ended December 31, 2004, 2003, and 2002, respectively.

      In 1998, the citizens of Montana passed Initiative I-137, which banned cyanide leach processing of gold and silver. This initiative was upheld in the election of 2004. We believe Initiative I-137 will have minimal, if any, impact on our mine located in Montana. Although we use cyanide in our leaching processes, the cyanide is not used in a manner prohibited by Initiative I-137. In addition, we have a permit to utilize cyanide in our leaching process at our Diamond Hill Mine. As of the date hereof, we are not aware of any other state or local regulation that would have a material impact on our operations.

      Our current tailings dam is permitted to accommodate tailings from the 19.6 million ton combined ore reserved from Pits K and L, which are currently scheduled to be mined out in the second quarter of 2007. Further, if we receive approval from the Montana Department of Environmental Quality of our expansion plans, we plan to renew a phased lifting of our tailings dam to accommodate processing of an additional 28.7 million ore tons which would result from such expansion plans.

      The bonding requirements for the Montana Tunnels Mine were met by the following bond instruments:

      Our obligations to reimburse TD Canada Trust for any drawing under the letter of credit are secured by our maintenance of an amount equal to the amount available for drawing in a deposit account pledged to TD

Canada Trust. We pay an annual letter of credit fee equal to 1% of the amount available for drawing. We earn interest on the deposit account at a rate established by TD Canada Trust from time to time.

      National Fire Insurance Company of Hartford, a unit of Continental Casualty Company (“CNA”), provides $14,987,688 of the total reclamation bonding for the Montana Tunnels Mine plan of operations at a deferred bond premium cost of $14 per $1,000 of bonding under a Term Bonding Agreement dated as of August 1, 2002.

      Bonding requirements are subject to adjustment by the State of Montana for various reasons from time to time. As noted above, the bonding requirement for the Montana Tunnels Mine increased from $15,413,297 to $15,888,955 over the course of 2004.

      As of December 31, 2004, the Montana Tunnels Mine database contains 896 reverse circulation, rotary, core and blasthole drill holes, totaling 470,299 feet, that were drilled from the mid-1970s to the present by numerous mining and exploration companies.

      From 2002 through 2004 thirteen reverse-circulation holes for 11,000 feet were drilled as part of a larger program to increase confidence levels in the M2-Pit reserve. The drill holes were placed as mine development phases provided locations to collar specific holes. Results from both the 2002 and 2004 drilling programs were favorable, providing a higher degree of definition to the current ore reserve and established the geometric distribution of the polymetallic grade mineralization in the M pit design. The drilling continued to increase confidence level in the down dip reserve base within the hanging wall portion of the M-pit reserve below Clancy Creek. With the addition of the new drilling, the model was updated in 2004.

      Five of the most recent development holes drilled in 2004 were completed as pit development logistics provided suitable and economically practical collar sites. Additional development drilling is planned in 2005. The in-fill drilling program will consist of approximately 16 drill holes for 8,000 feet. We expect this program will achieve nominal 100’x150’ sample definition on the hanging wall portion of the “core” ore throughout the M2-Pit mineralization.

      Gold is analyzed by fire assay methods with a duplicate assay for each sample. Silver, lead, and zinc are analyzed by atomic absorption spectroscopy with a duplicate analysis once every 24 samples and are standard analyzed once every 12 samples. The majority of drill samples are analyzed at our onsite laboratory. Comparison of gold fire assay check samples indicate high sample variance, though the average grade of the check sample datasets, as a whole, agreed closely. There is good correlation between silver, lead, and zinc duplicate samples.

      The Montana Tunnels Mine drill hole spacing is generally within the gold variogram range of 30 feet to 140 feet in the core.

Black Fox Project

      On September 9, 2002, we completed the acquisition of certain real estate and related assets of the Glimmer Mine, now known as the Black Fox Project, from Exall Resources Limited and Glimmer Resources Inc. The Glimmer Mine was a former gold producer that ceased operations in May 2001 due to the low price of gold. We paid to Exall and Glimmer an aggregate purchase price consisting of $2 million in cash and an aggregate of 2,080,000 of our common shares. Pursuant to the terms of the acquisition, an additional Cdn $3 million is payable to Exall and Glimmer when Black Fox reaches commercial production (defined to mean a minimum of 30 consecutive days of production with an average of 300 tonnes per day, or more, of output).

      Following a tender procedure conducted in the third quarter 2004 AMEC, a Canadian engineering company, was awarded the contract to complete a feasibility study on Black Fox during 2005 with completion scheduled for late 2005.

      Black Fox is located near Timmins, Ontario and is our only development stage property. The Black Fox development project is located in the Larder Lake Mining District, approximately five miles east of Matheson and 40 miles east of Timmins, Ontario. Lake Abitibi is six miles northwest of the project site. The property encompasses over 1,638 acres within the Hislop and Beatty Townships. The majority of the property is private fee land.

      Black Fox sits astride the Destor-Porcupine (DF) Fault System, which is a deep break in the Precambrian rocks of the Abitibi Greenstone Belt. This fault system hosts many of the deposits in the Timmins area. The system regionally strikes east-west and dips variably to the south. Black Fox lies on the southern limb of a large scale fold on a flexure in the DF Fault where the strike changes from east-west to southeast. Folded and altered ultra mafic and mafic are the host rocks for mineralization. Gold occurs as free gold in quartz veining and stockworks in altered ultra mafics and in gold associated with pyrite in altered tholeiitic basalts.

      We purchased Black Fox as an advanced exploration project. We believe the potential for the property lies in new ore zones at depth and along strike of the Destor-Porcupine Trend. We are testing the potential of this property in several stages.

      In 2004, we focused our exploration efforts on Black Fox. The development and commercialization of the property will require three phases. The first phase, commenced in early 2003, involved a shallow drilling program to test the open pit potential by drilling 297 core holes with depths varying from 200 to 500 meters. As a result of this drilling, we identified proven and probable gold reserves at Black Fox of 457,000 ounces. Upon completion of the first phase, the second phase commenced in February 2004 with a program which required the development of the existing ramp system down to the 235 meter level and the construction of a 913 meter drift to allow drilling of the orebody from underground. During the year, 210 underground holes totaling 41,065 meters were drilled and 105 surface holes were completed, totaling another 43,284 meters. We also began the permitting process for the third phase of the project, which includes the construction phase, and anticipate that this process will require approximately two years based on a plan for combined open pit and underground mining, with on-site milling, at a capacity of 1500 metric tonnes of ore per day at an aggregate estimated cost of approximately $60.0 million.

      Mineral Reserves. The Black Fox reserves were developed by completing a pre-feasibility study of developing an open pit mine on the Black Fox property. This study did not consider underground mining as an option; this will be addressed in the 2005 feasibility study.

      Pit optimization studies were completed using the following parameters for the deposit.

      The result of the pit optimization study illustrates that the size of the ultimate pit does not change much between $300 and $375/oz gold prices, but does increase significantly at $400.

      Our reserve estimates were prepared by Mine Development Associates. The following chart shows the Black Fox reserves at December 31, 2004.

      Waste includes 12.18 million tonnes of overburden

      Recovery of gold is expected to be approximately 97%.

      As of December 31, 2004, we had completed a total of 398 surface diamond drill holes totaling over 125,898 meters as well as 210 underground holes totaling 41,065 meters giving a to-date total for both of 166,963 meters as shown in the table below.

      Our drilling supplemented the data from the 284 surface and 720 underground drill holes drilled by the previous owners. A table of total drill holes is show below.

      The objectives for the 2004 surface drilling were: 1) to better define the open pit reserves, 2) to extend our resources along strike 3) to extend resources in the eastern and western extensions of the main structure, bracketing or undercutting known gold-bearing zones and 4) to explore known geophysical targets.

      In April 2004, the surface exploration drilling discovered a new orebody in the footwall of the Dester-Porcupine Fault. The discovery hole was based on the extension of an IP anomaly. There are two components to the mineralization, the quartz breccia veins and the massive sulfide mineralization (Pb, Zn, Ag). These appear to be two mineralizing events sharing the same “plumbing system.” Very good gold mineralization is evident within easy reach of our surface rigs and this will be a target for the 2005 drilling program. The system appears to be quite extensive.

Exploration Stage Properties

      The Huizopa Project is located in the northern part of the Sierra Madre Gold Belt in the state of Chihuahua, Mexico, near the border with the State of Sonora, and encompasses a block of mining concession claims of approximately 22 sq. km. Huizopa is located about 17 km southwest of the Dolores Project and approximately 33 km to the northeast of the Mulatos Project. Mulatos and Dolores are both multi-million ounce gold-silver deposits owned by other companies that are currently in development. Sporadic shallow underground mining limited to a few high-grade zones was done in the past but no mining has taken place at Huizopa since 1936. The property is very remote and will be accessed initially by helicopter.

      Apollo’s initial earn-in for a 51% interest includes a payment of $125,000, issuance of 48,978 shares of Apollo’s common stock, completion of a $3.0 million exploration and drilling program over the next four years, and land payments totaling approximately $2.1 million over the next three years, with $1.7 million due in October 2007. After the initial 51% earn-in Apollo may earn an additional 10% with the completion of a feasibility study, and a further 10% if Apollo brings the project into commercial production or a net smelter return if it does not. These earn-in arrangements are currently being restructured.

      The geology is characterized by a series of parallel, low sulfidation gold-silver, quartz veins hosted by Tertiary-age volcanic rocks. Silver to gold ratios in the veins and from the material on historic mine dumps indicate the Huizopa area hosts an extensive gold-bearing hydrothermal system. Two major parallel quartz vein systems with north trending structures contain many single vein outcrops 7 to 10 meters thick suggesting a series of stacked veins. Strike lengths are over 2.0 km on the property with untested down dip potential. The stratigraphy of the Huizopa area has two sections of relatively mafic lava flows with intercalated volcaniclastics. The dominant strike azimuths of faults are 340° and 160° with dips ranging from vertical to 33°. Most of these structures, including the major faults with associated thick gouge or breccia zones, dip eastward. These east dipping faults are the faults associated with quartz veins, brecciation, and mineralization.

      Initial favorable geochemical sampling and field studies by Argonaut Mines in December 2003 were confirmed by a review of the data and a field evaluation by Apollo between February and March 2004.

      Mapping of the mining concession began in June 2004 and was substantially completed by September 2004. Results were compiled and transferred to our new topography maps and to our air photos as well as the Mexican government’s Chabacan topographical sheet which has been enlarged from 1:50,000 scale to 1:10,000. Geologic mapping suggests that the faults that host gold-silver mineralization may be more numerous and more continuous than earlier field work indicated. Petrographical examination revealed the presence of native gold, silver, and electrum in many samples and widespread vein features indicative of repeated boiling and explosive brecciation. Overall vein textures are consistent with high-level exposures of epithermal quartz-adularia and/or fault breccia veins.

      We also acquired a new claim that completely surrounds the old Huizopa land position and expands our land position to a total of 128 sq. km.

Other Exploration Stage Properties

      We also have several exploration stage assets including Willow Creek, Pirate Gold Prospect and the Nugget Field Prospect, each located in Nevada. We also own the Diamond Hill Mine, a shut-down mine located in Montana.

      The Pirate Gold Prospect is located approximately 30 miles south of the Florida Canyon Mine on the northern end of the Eugene Mountain range and the Mill City Mining District in Humboldt County, Nevada in T35N, R34E, Section 2l and T35N, R35E, Section 18. The prospect consists of 43 unpatented mining claims and shares many similar attributes with our Florida Canyon Mine, with the most prominent being amounts of visible gold. Intersecting faults and dikes have allowed the formation of very high-grade ore shoots.

      The claim block is made up of interbedded phyllite, limestone and sandstone of the Triassic to Jurassic age Auld Lang Syne group. Bedding generally strikes northeast, with dips being variable. Quaternary alluvium covers most of the flat areas and the valley. High angle northeast and northwest trending faults transect the project area. In the southern part of the Eugene Mountains, near the Stank Mine, the Stank Fault occurs. It strikes northwest and is reported to dip at approximately 45 degrees to the southwest in underground exposures. It has been interpreted as being a thrust fault.

      Gold occurs in veins that range in width from one to 20 feet. The gangue, or base rock in which the gold is found, is quartz and calcite, with multiple stages of mineralization being visible.

      There has been previous production at Pirate. Four tunnels access several small ore shoots. A small amount of development waste rock exists in the dump of the lower adit. It appears that nearly all of the material mined in the upper three adits was direct shipping ore, as virtually no waste dump material exists. The upper adits access a stope which daylights to the surface. This stope is estimated to have an average width of 15 feet and to be 50 feet in both height and length. This would indicate that approximately 2,700 tons of high-grade material was removed. Abundant visible gold can still be panned from ore material remaining on the stope wall. It is estimated that this material would grade multiple ounces of gold per ton. There are a series of other similar stopes that have been mined but are not currently accessible. A second high-grade vein was exposed in a bulldozer cut, located approximately 500 feet east of the adits. This second vein indicates the likelihood of a series of subparallel mineralized veins in this area. Substantial specimens of free gold (gold nuggets found on the ground) from this site have been recovered by predecessor owners. Visible gold was also present in the upper portions of some of the larger mines near this property.

      We believe that the high-grade veins seen on the surface may be an indication of a much larger system at depth. The rocks exposed on the surface are phyllites. The phyllites could form bulk tonnage gold deposits if they were first silicified and then shattered. A low-angle intrusive would make an effective cap to the mineralizing fluids. Over-pressuring of the system and subsequent breakage of the cap would cause wide spread silicification and gold mineralization of the phyllites. Repeated brecciation, boiling and rehealing of the cap would form a large high-grade deposit. We believe the high-grade veins at the surface would only be indications of the feeding structures at depth.

Nugget Field Prospect

      Nugget Field is located in Nevada approximately 30 miles southwest of the Pirate Gold Prospect, on the east side of the Majuba Mountains, within the Antelope Mining District. Thirty-two unpatented lode mining claims have been located in T32N, R32E, Section 18.

      The rocks surrounding the Nugget Field are principally Triassic age slates and phyllites. Faults trending northeast and northwest have been documented to offset the sediments. Pre-tertiary age dacite and diorite dikes and sills have intruded the area. The project area is mostly covered by quaternary alluvium. The alluvium has been the host for abundant placer gold.

      The gold that has been historically recovered often still shows crystals and other delicate textures. It is apparent that the gold has traveled very little, if at all. The claim block lies on a paleo-shoreline of ancient Lake Lahontan in the Great Basin, Nevada, which was once a large body of water but is now nearly dried up. The gold was probably weathered from portions of the underlying rocks and deposited nearby.

Willow Creek Prospect

      Willow Creek is located in the east range of Pershing County, Nevada. In 2003, two and one-half square miles were staked at Willow Creek in the East Range in Pershing County, Nevada, including the E1/2 of Section 10, Section 14 and Section 11, T31N, R36W. In 2004 we acquired the SW¹/4 of Section 11, T31N, R36W containing the Wadley Mine giving us 2³/4 square miles of mineral rights in the Willow Creek Mining District.

      Willow Creek is underlain by thrust-faulted (Willow Creek Thrust) early Paleozoic sedimentary rocks which have been intruded by mid-Mesozoic granodiorite. All units have been cut by late Tertiary diabase sills and dikes.

      Gold was discovered in the District in the 1860’s. Rich placers were extensively worked from 1938 to 1964 downstream from the Wadley Mine. Production from the Wadley Mine was reported as very high grade (1 ounce of gold per pound) from thin veins associated with the Willow Creek Thrust. Historical production from Willow Creek is estimated at anywhere from 2,832 ounces of gold to as high as 10,000 ounces of gold.

      On the property, strong northeast trending faults can be seen intersecting strong north trending faults, one of which cuts through the Wadley Mine and continues south through Sections 14 and 24. These intersections projected down to the more favorable Comus Formation host rocks at depth and are our principal exploration targets. There is a large window into the lower plate Comus Formation on our property indicating Comus at depth. The Comus is intruded by a small plug of dacite porphyry with associated northeast trending dikes. The Comus limestones are black and sooty with carbon. Small amounts of quartz/limonite stockwork veining were evident and we believe this an excellent host rock.

      Geologic mapping, sampling and target definition is planned for late in 2005 for this new exploration project.

Diamond Hill

      Diamond Hill is an underground gold mine and is located approximately 28 miles southeast of Helena, Montana, in Broadwater County and on the east flank of the Elkhorn Mountains, within the Hassel Mining District. Diamond Hill was in production from 1996 to 2000 when operations ceased. During that period, 775,000 tons of ore were mined at an average grade of 0.233 ounces of gold per ton.

      Diamond Hill covers over 2,590 acres of patented and unpatented claims. We have 100% ownership of the main patented claims that contain the current deposits, subject to a 0.5 to 1% net smelter return and a 10% net profits royalty. We also have 50% ownership of four additional patented claims, which are peripheral to the main land package. As of December 31, 2004, we hold 103 unpatented claims and lease 19 unpatented claims. The current mine permit covers 270 acres with most of the disturbance within a 27-acre area.

      The Diamond Hill orebodies and mine workings are in solid unfractured rock and accordingly are amenable to low cost sublevel open stoping methods. Ore was transported to the Montana Tunnels mill facility by truck where it was processed in a separate circuit designed for Diamond Hill ore. Most of the gold was recovered into a high grade pyrite concentrate and sold to Japanese smelters.

      The deposit is classed as a skarn hosted sulfide deposit where the predominant ore mineralogy is gold associated with pyrite and lesser other metal sulfides. The bonding requirements for Diamond Hill total about $623,000.

      We are not currently subject to any material pending legal proceedings. We are, however, engaged in routine litigation incidental to our business. No material legal proceedings, involving us or our business are pending, or, to our knowledge, contemplated, by any governmental authority. We are not aware of any material events of noncompliance with environmental laws and regulations.

      No matters were submitted to a vote of security holders during the fourth quarter of 2004.

PART II — OTHER INFORMATION

      Our common shares are listed on the American Stock Exchange under the trading symbol “APG” and on the Toronto Stock Exchange under the trading symbol “AGT.” As of March 2, 2005, 95,173,120 common shares were outstanding, and we had 1,650 shareholders of record. On March 2, 2005, the closing price per share for our common shares as reported by the American Stock Exchange was $0.63 and as reported by the Toronto Stock Exchange was Cdn$0.76.

      The following table sets forth, for the periods indicated, the reported high and low market closing prices per share of our common shares: