Each one in plain English, with the numbers worked through for a shareholder.
24 Mar 2010business combination● Neutral
On March 24, 2010 Apollo issued a press release on Black Fox's 2010 outlook: 100,000 oz of gold at about 2,000 tonnes per day, total cash costs of $500-$550 per ounce, and about $33m of capital spending. Underground development is to start in Q2 2010 and first underground ore in Q3 2010, with 110,000-120,000 oz targeted for 2011. It also posted a Linear merger presentation and repeated the merger timetable (definitive agreement by March 31, shareholder meetings in June, close by end of Q2). This continues the Black Fox underground plan and the Linear merger; the filing does not itself change any terms.
23 Mar 2010capital raising announcement▲ GoodMajor
The Cdn$25m Linear private placement closed on March 19, 2010: Linear bought 62,500,000 Apollo shares at Cdn$0.40, about 18.6% of Apollo. Apollo will use US$10m to repay part of the Black Fox facility and the rest for working capital (the press release says about US$10m is for underground development). The merger terms were amended on March 18: the board is now three Apollo, three Linear and one agreed technical nominee; CEO David Russell would resign at closing with payments up to about US$1.7m and Wade Dawe would become CEO. The press release says the Linear-held shares would be cancelled at closing and that current Apollo holders would own 52.2% of the new company. The lenders RMB and Macquarie agreed to a lock-up on their shares and warrants until Dec 31, 2010 and to support the merger. The merger has not yet closed; the release targets the end of Q2 2010.
9 Mar 2010capital raising announcement● NeutralMajor
On March 9, 2010 Apollo signed a binding letter of intent to merge with Linear Gold Corp. by court-approved arrangement, with each Linear share swapped for 5.4742 Apollo shares; Linear holders would own about 42.9% of Apollo (fully diluted). Linear would also buy about 62,500,000 new Apollo shares at Cdn$0.40 (Cdn$25m). A definitive agreement is targeted by March 31, 2010; a Cdn$4m break fee applies in some cases of termination. The deal needs shareholder and court approval, would bring a new company name, a seven-person board chaired by Linear's Wade Dawe, and about Cdn$3.4m of Linear management payouts. Existing Apollo holders would be diluted. The filing is truncated, so the termination terms are incomplete.
Two debt matters. RAB's US$4.29m convertible debentures, due Feb 23, 2010, were extended to Aug 23, 2010; Apollo will pay US$772,200 of accrued interest in cash and issue RAB 800,000 shares and 2,145,000 new warrants at US$0.50 expiring Feb 23, 2011. The project-facility lenders again deferred the US$9.3m first repayment, the reserve funding and the US$6.0m second repayment, now to the earlier of finishing their Black Fox technical review or March 31, 2010. These are further delays; the debts remain outstanding.
On February 1, 2010 Apollo's subsidiary signed the definitive agreement and closed the sale of all Montana Tunnels Mining stock to Elkhorn, ending the long-running exit process. In return Apollo received Calais/Aardvark notes of about $7.7m (matured 2005, 12.9% interest, secured on the Caribou property in Colorado), rights to a further ~$1.45m loan and a ~$380,000 note (matured 2006, 12%). The notes are past due, and Apollo agreed to hold off enforcing them until Feb 1, 2011. Elkhorn can buy the notes back for $8.75m plus interest by July 1, 2010, or buy half of any Caribou joint venture interest for $5m plus a $3.75m contribution. Eight Montana Tunnels employees will be leased to Apollo for Black Fox, with Apollo reimbursing the cost. Tim Smith stays with Apollo. The filing gives no cash price at closing.
On January 8, 2010 Apollo, Elkhorn and Calais agreed to push the deadline for meeting the conditions of the Montana Tunnels sale from January 8 to January 15, 2010. The sale was still not completed; this is another delay.
On December 30, 2009 the lenders agreed to defer the first US$9.3m repayment and reserve funding again, and also the US$6.0m repayment due Dec 31, 2009, until the earlier of the end of their technical review of Black Fox or Feb 28, 2010. Separately, the closing deadline for the Montana Tunnels sale to Elkhorn was extended from Dec 30, 2009 to Jan 8, 2010. Both are further delays; the debt is still outstanding and the sale is not completed.
On December 9, 2009 Apollo replaced the October letter of intent with Elkhorn. Instead of US$5m cash, Apollo would receive Calais Resources/Aardvark notes of about US$7.7m, rights to a further ~US$1,382,091 loan and a ~US$380,000 note, all tied to the Caribou property in Colorado, for Montana Tunnels' stock. Elkhorn could buy back the notes or half a joint venture interest for cash by July 1, 2010 ($8,750,000 plus interest, or $5,000,000 plus a $3,750,000 contribution). Closing needs Apollo's diligence, board and lender approvals and formal agreements by Dec 30, 2009; if not met or terminated, Elkhorn has three business days to pay arrears under the original LOI. A financial advisor got Cdn$31,406 and 300,000 shares. This changes the sale from cash to notes and replaces the second US$250,000 payment due Nov 25, 2009.
Apollo signed a letter of intent (Sept 30, 2009; side letter Oct 21) to sell Montana Tunnels Mining, Inc. to Elkhorn Goldfields for US$5 million in staged cash payments through May 31, 2010, plus up to US$4 million via a 4% royalty once Elkhorn starts production. A US$250,000 non-refundable deposit was received around Oct 19. Montana Tunnels has been on care and maintenance since May 1, 2009. This moves toward exiting the Montana Tunnels JV and Diamond Hill, and follows the earlier Elkhorn options.
On September 28, 2009 the lenders under the US$70m facility agreed to defer the US$9.3m repayment due Sep 30, 2009 and the debt service reserve funding, on condition that Apollo supplies a new resource model and life of mine plan by Nov 15, 2009. Both are now due on the earlier of the end of the lenders' technical review of Black Fox or Dec 31, 2009, and the project completion test deadline moves from Oct 31, 2009 to Mar 31, 2010. This follows the August review event and delays rather than removes the payment.
Three developments. Apollo bought the Pike River Property next to Black Fox and Grey Fox from Newmont for Cdn$100,000, a perpetual 2.5% royalty, and a further Cdn$1 million if 500,000 oz is defined or commercial production starts; Newmont also gets a first right to negotiate on any disposal of Black Fox. St Andrew will toll-mill 100,000 tonnes of low-grade Black Fox ore from a ~120,000 tonne stockpile. Black Fox poured its first gold in May 2009 (Q2 11,840 oz, about 7,000 oz in August) and Apollo targets 100,000-120,000 oz in 2010. Lower-than-expected ore grades triggered a 'review event' under the US$70m facility, and Apollo is in talks with the banks about rescheduling repayments due from Sep 30, 2009. A lawsuit from Joe Green and Minas de Coronado (Nevada, Sept 4, 2009) claims a 20% Huizopa JV interest and seeks to undo the 80/20 arrangement and return the properties; Apollo says it is without merit.
20 July 2009capital raising announcement● NeutralMajor
On July 15, 2009 Apollo closed the placement announced June 26: 12,221,640 common shares at Cdn$0.45 and 13,889,390 flow-through shares at Cdn$0.54, with gross proceeds stated as Cdn$13,000,000 (the filing text garbles the figure). Haywood and Blackmont get a Cdn$845,000.56 commission and 1,566,662 options at Cdn$0.45 for 24 months. Apollo agreed not to issue equity for 120 days, with exceptions, and to register the shares for resale. The placement was upsized from the announced Cdn$10m and adds to dilution.
26 June 2009capital raising announcement● NeutralMajor
On June 26, 2009 Apollo announced a bought-deal private placement of 13,888,889 flow-through shares at Cdn$0.54 and 5,555,556 common shares at Cdn$0.45 for Cdn$10,000,000 gross, possibly increased to Cdn$13,000,000, closing around July 15, 2009. Flow-through money is for exploration at Black Fox and Grey Fox; common share money is for working capital. The release also says Montana Tunnels was placed on care and maintenance on April 30, 2009. More shares will be issued, diluting existing holders.
