Apollo Gold Reports Financial Results For The First Quarter Of 2010

Apollo Gold Corporation (“Apollo” or the “Company”) (TSX: APG) (NYSE Amex: AGT) reports net income of approximately $6.45 million and operating income of approximately $1.79 million for the first quarter ended March 31, 2010 (“Q1 2010”). All dollars reported in this news release are in U.S. currency, unless otherwise noted.

Q1 2010 and year-to-date highlights included:

• Execution of a definitive agreement for a proposed business combination (the “Merger”) by way of a court-approved plan of arrangement with Linear Gold Corp. (“Linear”), whereby Apollo has agreed to acquire all of the outstanding common shares of Linear in exchange for Apollo common shares at an exchange ratio of 5.4742 Apollo shares per Linear share, expected to be adjusted for Apollo’s proposed share consolidation of one post-consolidation common share for every four Apollo common shares outstanding immediately prior to the share consolidation;
• Completion of a Cdn$25.0 million private placement equity subscription by Linear, with Apollo using the proceeds (i) to reduce the principal of the Company’s Black Fox project debt facility by $10.0 million, (ii) to advance the underground mine development at the Black Fox Mine and (iii) for working capital purposes;
• Reduction of the project debt facility by approximately $18.2 million, including a $10.0 million reduction during the quarter from proceeds of the Linear subscription and an $8.2 million reduction as a result of proceeds from the opportunistic closing out of in-the-money Canadian currency hedge contracts subsequent to the end of the quarter;
• Production of 14,175 ounces of gold from approximately 178,000 tonnes of ore processed at an average gold grade of approximately 2.7 grams per tonne during Q1 2010;
• Gold sales during Q1 2010 of 15,796 ounces at total cash costs of $631 per ounce; all of which were delivered into the Company’s gold forward sales contracts at a realized gold price of $875 per ounce;
• Commissioning of a new conveyor and crusher scalping circuit and water management holding facility at the Black Fox Mill in Q1 2010;
• Divestiture of all of the capital stock of the Company’s subsidiary, Montana Tunnels Mining, Inc., which held the Company’s 50 percent joint venture interest in the Montana Tunnels mine and mill.

Financial Overview

For Q1 2010, the Company reported net income of approximately $6.45 million ($0.02 per share) due mainly to (i) an approximate $10.0 million non-cash realized gain on equity-linked financial instruments, related to a mark to market change in the value of the Company’s Canadian dollar denominated warrants, and (ii) an approximate $2.0 million non-cash unrealized gain on derivative instruments related to the mark to market change in fair value of the Company’s Canadian currency and gold forward contracts from December 31, 2009 to March 31, 2010.