Apollo Gold Prepares For Value Study

Apollo Gold Inc. has hired Salomon Smith Barney Inc. to assess options for increasing shareholder value, including a sale or merger.

The Spokane-based company owns three gold mines in Montana and Nevada. The company was formed in February out of assets from bankrupt Pegasus Gold Inc., and is owned by Pegasus creditors.

“Obviously, some of the shareholders would like to monetize their investment,” said Ron Parker, who took over as company president in February. In addition, “consolidation builds a stronger foundation, that increases your ability to survive during periods of low commodity prices,” he said.

However, the company is producing a profit, even at today’s gold prices, Parker added. It has produced 50,000 ounces of gold during its three months of operation at total cash costs of $222 per ounce. Total cash costs include the cost of removing an ounce of gold, plus taxes and royalties.

Apollo Gold expects to produce 240,000 ounces of gold this year at similar cash costs, Parker said.